Early-retirement wannabe

Pat38493

Funnily enough, I was just today on a large global meeting with the senior leader of our department.  My current plan is to stop working, or at least go to 60%, in Summer 2025, or latest Summer 2026.

Our industry generally including my company is having a very bad year this year for the first time in almost a decade.  They have been given cost and headcount reduction targets for all departments globally including mine.

He mentioned that we should make it known if we are looking for early retirement and/or reducing our working hours to 80% or 60% in the next years.

Therefore I will talk to my bosses (in large companies you often end up with multiple matrix bosses) about this - can't do any harm I guess. 

Could be handy as I am on contractual severance terms from an very old work contract which would probably pay me about 2 years salary to go, which would bridge the gap nicely.  Not holding my breath because I doubt they will want to pay out 2 years of money this year, but you never know. 

hugheskevi

Another update, as today marked 400 days on the road. My wife and I have reached Mendoza in Argentina, so we are now closing in on Ushuaia to complete the Alaska to Ushuaia (mostly) overland part of our trip. 



We have decided to return to the UK in January, which will be exactly 500 days after we departed on the trip. Most people are constrained by either time or money for their travels, but when neither is a constaint then it becomes a matter of how much stamina for travel you have. Travelling through the high altitude and low humidity of the high Andes is quite taxing after a couple of months (eg short of breath after going up a few flights of stairs due to altitude, minor respiratory system issues due to low humidity, etc), and for a while now both of us are getting a bit over travel. I found the same on previous travels - once you hit a year on the road, travel fatigue really sets in. I did have a previous plan to travel across Indonesia immediately after this trip, but that will have to wait for another day.

I would definately say that travel is better when younger - I've done several big trips in my 20s, just one in my 30s and this one now in my 40s. I think the ones when I was younger were better in all aspects except education - I am much more interested in history and geography now, and have learnt much more about the places we have travelled through on this trip. The other big trips were living, travelling and working in Australia on a Working Holiday visa, a trans-Africa trip from Gibraltar to Cape Town, a trip from London to Bangkok overland via the Trans-Siberian railway, a trip from London to Singapore overland through Iran, Pakistan, India and Nepal, a few months going around New Zealand, and a trip overland from the east coast of Africa to the west coast of Africa. The map below shows the trips, which took a total of about 4.5 years of travel outside Europe.



The cost of our trans-Americas trip on an annualised basis is about £43,000. That includes everything we spend, and in particular the flights to and from the UK. So despite mostly staying in apartments and usually eating out at least once if not twice a day, we are only spending slightly more than if we were living in London and just living a normal life. Deducting the rent we get from our London house, we are only spending about £20,000 on an annualised basis so it is considerably cheaper to do this type of travel than it would be to be retired and living in the UK.

Some of the big ticket items on the trip to date are: 

• 8 day Alaska cruise
• 6 week, 6,000 mile drive in a hire car around Western USA, visiting sites such as Yellowstone, Las Vegas, Grand Canyon, Los Angeles, Yosemite, and San Francisco
• 10 days in the Galapagos Islands
  
• 10 days on a private expedition deep into the Amazon, hiring a boat, captain, guide and cook.
• 4 day hike on the Salkantay Trail to Macchu Pichu
• 3 day drive through the salt flats of Bolivia into Chile

I estimate the cost of long-term travel to be about 20-30% of the cost of seeing things on a typical 2 week fly-in holiday, factoring in rent received. 

When we return to the UK, we will both be aged 46. We will have a net income of £65-£70K from age 55 from our pensions (protected pension ages), and as things currently stand, could take an income of £46K p/a until age 55 from savings and investments.

Our plan is to return to work in London, returning to our house which is currently rented out, and work for a year - primarily to settle back in to the UK and enjoy some time not travelling! Then market our house in February 2025, quit work when contracts are exchanged, and move to a new house somewhere around the North West to retire. By that time, we will probably have increased our savings for the pre age 55 stage to enable spend of something like £60-£65K per year - we only spend about £35K per year, so already should have far more than we need so I'm not especially concerned with exact dates, targets or milestones.

I've always tried to make our savings plan as tax-efficient as posisble, so our income sources will be:

• Age 46-47 Earnings
• 48-55 Cash Savings and ISAs (currently invested, will mostly be transferred to cash before retiring)
• 55-68 DB and DC pensions
• 68-     DB and State Pensions

I can definitely thank higher rate tax for a lot of the travel - dreaming up ways to avoid paying lots of tax led me to take either a year out spread across 2 tax years, or 18+ months spread across 3 tax years, thus avoiding higher rate tax in the year of departure and also the year of return. I could also save up leave (and also use a lot up in advance when I returned) to turn leave into cash. It is amazing just how much you have coming in when you are still getting paid for a while after leaving, receiving rent, getting tax rebates through PAYE once pay ceases and also getting any bonuses which might come your way. We received more than the entire cost of our 16 month trip from these sources, so funding a trip like this is far easier than it may initially appear.

Then of course pensions are a great tax avoidance tool, which strongly incentivised pension contributions earlier in life to avoid tax, and will fund most of our early retirement. I did think about retiring even earlier, but that is increasingly tax-inefficient, and I preferred to have fun whilst younger - I viewed a year spent travelling when young as an extra year I will have to work, and it is a good trade to make.

I am increasingly viewing things from an expenditure rather than savings perspective now - the key stats I consider are how much I will have to spend each year after tax, and what level of risk is entailed. The DB pension takes away a huge slice of risk (indexed to CPI without a cap both before and after commencement), so the closer I am to age 55 when I retire the lower the total risk - another reason to avoid retiring a long time before age 55. The key risk will be at age 54 - as non-pension assets will be at their lowest point but pensions not yet accessible. When I retire aged 48, I will probably put most of my ISA investments into cash, given they will only have a 7 year horizon. Prior to that, I can keep them all cautiously invested, as any shocks can just be made good by a bit more time spent working.

So, hopefully 2 years from now I will be fully retired It has been a fun journey, in all senses of the word.

eastcorkram

@hugheskevi

Great update. 
Any plans for Japan?

george_jetson

hugheskevi said:

I would definately say that travel is better when younger 

I would absolutely agree with this. 

Now in my late 50s, nothing compares to the trips I took in my 20s and 30s backpacking and staying in hostels. 

I still enjoy getting away but those earlier trips were just more fun. Partly it’s a result of getting older (and possibly more jaded) but the nature of travel has changed. 

Pre internet when your only source of information was a six month old Rough Guide, I’d hop on a plane or train on a wing and a prayer. The internet is a valuable resource but I think it can reduce spontaneity.

hugheskevi

eastcorkram said:

Any plans for Japan?

Japan is a country I won't visit on principle, due to the way their Govt. is responsible for the abuse of whales and dolphins. I very much doubt I will ever visit there.

george_jetson said:

Pre internet when your only source of information was a six month old Rough Guide, I’d hop on a plane or train on a wing and a prayer. The internet is a valuable resource but I think it can reduce spontaneity.

I thought when the internet sprang up that it would revolutionise travel. It is the perfect way to connect small companies, remote places, different people etc, etc.

It is a tragedy that instead it has largely led to people all flocking to the same places, in some cases literally the same place to get the same instagram photo that millions of others have taken. From a UK perspective, it was interesting to see how so many people want to visit the States and Canada, but not so much the other countries in the Americas despite the far more interesting history of central and south America. It was primarily young Dutch and Germans who are now the most intrepid travelers, going to the less popular areas.

Even within individual countries, there is an obsession with the one or two big things people have heard of. In Peru it was astonishing just how many people were there only to see Macchu Pichu, yet I think the scenery of Huaraz in the north is much better for trekking, and the archeological remains of the Temple of Sun and Temple of the Moon outside Trujillo in the north is much better than Macchu Pichu, as well as being hundreds of years older. Yet in the north of Peru we only came across a single Western tourist, compared to the thousands around Cusco.

cfw1994

Thanks for the update: your trip sounds utterly amazing…but I get how it must get tiring: over a decade older than you, we managed 2 months Interrailing earlier this year: absolutely loved it, will likely do it again one day, but likely no more than a month!

robatwork

hugheskevi said:

eastcorkram said:

Any plans for Japan?

Japan is a country I won't visit on principle, due to the way their Govt. is responsible for the abuse of whales and dolphins. I very much doubt I will ever visit there.

Isn't that a bit exhausting and problematic, working out which governments fit your criteria of "clean hands"? I only mention as form your map it looks like you have visited China, and lots of places in Africa and Asia where the regimes are at best bonkers, and at worst cruel and inhumane?  (Sorry for the OTness)

barnstar2077

robatwork said:

hugheskevi said:

eastcorkram said:

Any plans for Japan?

Japan is a country I won't visit on principle, due to the way their Govt. is responsible for the abuse of whales and dolphins. I very much doubt I will ever visit there.

Isn't that a bit exhausting and problematic, working out which governments fit your criteria of "clean hands"? I only mention as form your map it looks like you have visited China, and lots of places in Africa and Asia where the regimes are at best bonkers, and at worst cruel and inhumane?  (Sorry for the OTness)

I get your point, but it is also easy to do nothing because lots of people/companies/countries are bad etc, so why bother?  We all have to draw our own line in the sand, where we are most comfortable.

Sometimes when people realise I'm a vegetarian they say "Why aren't you a vegan, cows and chickens still suffer and die because of you?"  My answer is, when the majority of people join me in being vegetarian I will take the next step and become vegan.

If we make no changes at at all, then the world will always be the same.

Nebulous2

robatwork said:

hugheskevi said:

eastcorkram said:

Any plans for Japan?

Japan is a country I won't visit on principle, due to the way their Govt. is responsible for the abuse of whales and dolphins. I very much doubt I will ever visit there.

Isn't that a bit exhausting and problematic, working out which governments fit your criteria of "clean hands"? I only mention as form your map it looks like you have visited China, and lots of places in Africa and Asia where the regimes are at best bonkers, and at worst cruel and inhumane?  (Sorry for the OTness)

We all have our own red lines of what is and isn't acceptable to us, and our decisions are our own, regardless of whether other people agree or not. 

There is a town on a prominent route for us, where I often used to stop for food, or occasionally overnight, when journeying. They elected a politician who was one of my favourite hate figures, and I boycotted the whole town for a long time. 

I know a farmer who took umbrage at Danish bacon, and still boycotts anything Danish, some 40 years later.

Those examples probably mean very little to others, but were meaningful to us. 

Pat38493

Nebulous2 said:

robatwork said:

hugheskevi said:

eastcorkram said:

Any plans for Japan?

Japan is a country I won't visit on principle, due to the way their Govt. is responsible for the abuse of whales and dolphins. I very much doubt I will ever visit there.

Isn't that a bit exhausting and problematic, working out which governments fit your criteria of "clean hands"? I only mention as form your map it looks like you have visited China, and lots of places in Africa and Asia where the regimes are at best bonkers, and at worst cruel and inhumane?  (Sorry for the OTness)

We all have our own red lines of what is and isn't acceptable to us, and our decisions are our own, regardless of whether other people agree or not. 

There is a town on a prominent route for us, where I often used to stop for food, or occasionally overnight, when journeying. They elected a politician who was one of my favourite hate figures, and I boycotted the whole town for a long time. 

I know a farmer who took umbrage at Danish bacon, and still boycotts anything Danish, some 40 years later.

Those examples probably mean very little to others, but were meaningful to us. 

I guess everyone does what they think is right and you can always find some way to challenge it - e.g. maybe the food place you used to eat in that town was run by people who hated the politician as well and they were horrified that this politician was elected.