Early-retirement wannabe

JoeCrystal

BeatTheSystem wrote: »

I would take a pay cut from say 75K to 30K if it meant I could retire and not have to take corporate B.S.

Then you only merely need to be a path in order to generate that £30,000 per year either through savings or other means. To be honest, what people really need to do is to pay in enough toward retirement provision to provide a sufficient amount to live on. Every person got almost unique situations and amounts to aim for.

Cheers,
Joe

Marine_life

gadgetmind wrote: »

I've always got huge amount to do, with projects and people to manage, problems to solve, new markets to explore, large customers to keep happy, competitors to fight, meetings long into most evenings, but can't say that I suffer from stress as such.

I've got financial plans in place that should (stock market permitting!) allow early retirement, but I still look forward to Monday mornings at the moment!

And there's the rub.

Its about being able to distinguish the macro from the micro. As in the following:

1. One day I will die. And that will be it. Nothing anymore, finished, over etc.

2. But on Monday when I have to get up for work do I hate it? No? Is it fun, challenging, interesting, frustrating? Yes it is. Does it drive me crazy and am I keen to go home at the end of the day? yes I am!

How to close that gap? How to ratioanlize that gap and make sense of it?

The problem with work goes back to my earlier post. Nobody is expendable. If you get run over by a bus, people will be sad but within a few weeks they will have forgotten about you.

I have to work until I am 50 (to qualify for my full pension at 62) so I need security until April 1 2014. My work is project based and without projects I have no anchor to my job. This week we won a project that will keep me busy until December 2013 and possibly until March 2014.

I am (potentially) done.

cyclonebri1

mgdavid wrote: »

more like 95% if wikipedia is to be believed...
http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom

Well there you go then, something else, like early retirement that the vast majority can only dream about.;);)

But I have to say this.

Many if not most of the posters in this thread appear to be in that 5% earnings group. When you aren't, early retirement is a whole different ball game which makes this thread pie in the sky for an awful lot of people.

I hope that doesn't offend anyone here, it isn't intended to, I'm just trying to keep things reasonably "real"

BeatTheSystem

cyclonebri1 wrote: »

Well there you go then, something else, like early retirement that the vast majority can only dream about.;);)

But I have to say this.

Many if not most of the posters in this thread appear to be in that 5% earnings group. When you aren't, early retirement is a whole different ball game which makes this thread pie in the sky for an awful lot of people.

I hope that doesn't offend anyone here, it isn't intended to, I'm just trying to keep things reasonably "real"

Don't get hung up on the numbers, my point in my previous post is that someone regardless of salary may think it worthwhile to take a much reduced income in order to get back control of their lives, this is just as valid from a 30K to 15K, or 20K to 10K etc.

But of course early retirement with a decent income is only realistic for high earners and/or medium earners that have had a long term retirement plan.

If an individuals circumstances mean that early retirement is not realistic then they should get a plan and do something about it such that early retirement is an option. Their is no excuse for someone under 40. 10 years ago I had 50K in pensions, today I have 1050, it is possible, it depends on how hard someone wants it and what sacrifices they are willing to make. I grant that getting a million pound pension pot is not easy for many but that should not stop them from trying as they will get a lot further by trying than by deciding at the outset that the mountain is impossible to climb.

gadgetmind

cyclonebri1 wrote: »

Many if not most of the posters in this thread appear to be in that 5% earnings group. When you aren't, early retirement is a whole different ball game which makes this thread pie in the sky for an awful lot of people.

The same fundamental principles apply. Additionally, the state pension and/or occupational pensions will cover more of your basic needs so you don't need as much in the way of non-pension savings to "bridge the gap".

There are also many on £75k+ who have no sensible pension plan.

So, high earnings (however you choose to define this) are neither necessary nor sufficient to let you achieve early retirement.

http://en.wikipedia.org/wiki/Necessity_and_sufficiency

cyclonebri1

BeatTheSystem wrote: »

Don't get hung up on the numbers, my point in my previous post is that someone regardless of salary may think it worthwhile to take a much reduced income in order to get back control of their lives, this is just as valid from a 30K to 15K, or 20K to 10K etc.

But of course early retirement with a decent income is only realistic for high earners and/or medium earners that have had a long term retirement plan.

If an individuals circumstances mean that early retirement is not realistic then they should get a plan and do something about it such that early retirement is an option. Their is no excuse for someone under 40. 10 years ago I had 50K in pensions, today I have 1050, it is possible, it depends on how hard someone wants it and what sacrifices they are willing to make. I grant that getting a million pound pension pot is not easy for many but that should not stop them from trying as they will get a lot further by trying than by deciding at the outset that the mountain is impossible to climb.

I'm trying not to get hung up on the numbers but this post just amplifies what I'm saying, you are speaking from the perspective of someone with £1,050,000 in their pension fund, that really is pie in the sky for the vast majority today and I don't think you can honestly say it isn't

I'll give you some figures, they are mine.
I busted a gut, that was my downfall eventually, in order to put myself in a position to retire early.
My earning were not exceptional, I did earn £39K in 1 year 10 years before my retirement, but inline with reduced physical effort I took a more stressful job that only ended up at £30K pa 10 years later.
(this is all set 6 years ago).

I had additional earnings from moonlighting, and I'm the sort of bloke that pays for nothing in terms of labour, jack or all trades etc. so massive saving there.
I put together a pension pot of £0.25 million, a quarter of yours enough to live on, but that's all, plus I define anyone other than a gambler to get more out of their earning than I did.

There is something that escapes many in this thread, disposable income.
If you need a salary of £20k, (not income), to live, then you can't pay into a pension, conversely, anything left from a salary over that figure can be used to fund the future.

What I'm saying is that there is a point at which retirement planning becomes a reality, below that it's a dream.

BeatTheSystem

cyclonebri1 wrote: »

I'm trying not to get hung up on the numbers but this post just amplifies what I'm saying, you are speaking from the perspective of someone with £1,050,000 in their pension fund, that really is pie in the sky for the vast majority today and I don't think you can honestly say it isn't

I'll give you some figures, they are mine.
I busted a gut, that was my downfall eventually, in order to put myself in a position to retire early.
My earning were not exceptional, I did earn £39K in 1 year 10 years before my retirement, but inline with reduced physical effort I took a more stressful job that only ended up at £30K pa 10 years later.
(this is all set 6 years ago).

I had additional earnings from moonlighting, and I'm the sort of bloke that pays for nothing in terms of labour, jack or all trades etc. so massive saving there.
I put together a pension pot of £0.25 million, a quarter of yours enough to live on, but that's all, plus I define anyone other than a gambler to get more out of their earning than I did.

There is something that escapes many in this thread, disposable income.
If you need a salary of £20k, (not income), to live, then you can't pay into a pension, conversely, anything left from a salary over that figure can be used to fund the future.

What I'm saying is that there is a point at which retirement planning becomes a reality, below that it's a dream.

You have not done too badly, better than many. Suppose someone is on 40K, which in todays worlds is achievable, even your average IT numpty bull$hit boy can earn this, a teacher after 10 years similar etc, builder with OT etc. So it is not pie in the sky to get 1 1M pot. e.g. copy and paste this into a cell in excel:

=FV(7%,28,-12000,0)

7% growth

28 years to grow, i.e. starting at 40 when you should either be at the top of your game (whatever that is)

-12000 equals 12 * 1K PCM contributions (this will leave a salary of 28K based on a not too unrealistic 40K salary.

After 28 years the fund will be worth 968K, not far off the 1M target. This assumes you don't have anything put by in a pension prior to age 40.

I do not dispute that many of the posters on this thread are in the top 5%, but this should serve as inspiration for someone in their 20's or 30's and wants the same. It is not impossible.

Cheers

BTS

p.s. don't mean to offend anyone in IT but I have met some right clowns demanding silly salaries.

mark55man

No offence BTS but we guys in IT have met some right muppets in sales, management and bean counting (one of which I presume you are) pulling down far more money for far more silliness

Thrugelmir

BeatTheSystem wrote: »

7% growth

Would be nice to achieve that consistantly. Unfortunately one doesn't.

AlwaysLearnin

BeatTheSystem wrote: »

e.g. copy and paste this into a cell in excel:

=FV(7%,28,-12000,0)

7% growth

28 years to grow, i.e. starting at 40 when you should either be at the top of your game (whatever that is)

-12000 equals 12 * 1K PCM contributions (this will leave a salary of 28K based on a not too unrealistic 40K salary.

After 28 years the fund will be worth 968K, not far off the 1M target. This assumes you don't have anything put by in a pension prior to age 40.

If it's monthly contributions, should it not be FV(7%/12,28*12,-1000), which would actually take it over the £1m mark.

There are a lot of assumptions there though (sustainability of 30% contribution rate, 7% returns, impacts of inflation etc ). Appreciate the sentiment, but not sure it brings it within reach of 'the average man'...