Early-retirement wannabe

hugheskevi · 2 May at 11:36PM

Out of interest, do you have any plans to help keep your brain ticking over? Have you had a private project brewing for years that is finally going to get the green light?

Not as such. The plan is to enjoy normal UK life, as I haven't really had much of that to date, having spent so many years travelling. To date, I've spent a cumulative 4.79 years travelling outside of Europe, and that was all travel, not work. Adding in the time spent travelling around the UK and Europe and that will be well over 5 years on the roads, more than 10% of my entire life to date.

So I'm doing things I've enjoyed in the past, which includes starting to play the card game bridge again for the first time in many years, and will soon involve gym classes and swimming. More computer games and perhaps reading might play a role, and whatever may come along.

Once we get to autumn I'll turn my mind to travel again, having not been out of the UK after returning from 500 days travelling the Americas back in January 2024. A few of the trips/areas I'm particularly interested in going to are:

An overland trip from Kuala Lumpur down through Sumatra to Denpasar, seeing Lombok and Komodo islands, then fly to Darwin and travel down to Alice Springs. Then fly to Sydney to meet old friends and see the area I used to live in back in 2000. That will be split into at least 2 separate legs, and tick off a lot of things I want to see, as well as completing a London to Sydney overland trip.
A Roof of Africa overland trip, from Morocco to Egypt, if the route ever opens up again.
A trip from Addis Ababa up to Alexandria, if Ethiopia and Sudan open up again. That would complete a London to Cairo overland trip via the eastern route.
Mt Nyiragongo in eastern Congo, and a few other things in that area. I have only seen mountain gorillas in that area, none of the other attractions, but like the other places it hasn't been very safe for some years now.
Various places in Turkey - I have visited a number of times, but there are so many great historical sites that I keep finding new areas I would like to see.
A Silk Road route through the 'Stans, probably in a couple of separate legs
China - a huge country with a lot of interesting things
Indonesia and Phillipines - very big places I have barely seen.

Out of that lot, Turkey may well be the first, sometime next winter.

Easy enough to do a real terms model with frozen tax thresholds to see how large the impact might be at 58, 68, 78 etc. Assume say 3% pa inflation?

Mathematically, it is trivial, but it is just making guesses at politics rather than financial forecasting. The standard neutral long-term assumption is that all thresholds move in line with earnings, otherwise everyone eventually becomes an additional rate taxpayer. However, the long-term might be very long, and it is just guesswork what parties might do with thresholds, and when they will do it.

Triple Lock has much the same issue - it is all political guesswork.

Usually, the rate of inflation would be largely irrelevant, as everything would broadly increase either in line with it, or at a slightly different but highly correlated rate. But politics has made it a very real consideration, and nobody can sensibly forecast inflation more than about 2 years out.

So at best any modelling is just scenario and sensitivity analysis. The results of that would not affect my actions, so I don't bother with it other than thinking about how it might influence decisions.

The main decision that it will affect will be around when I commence DB benefits, as they are inflexible once in payment so are particularly vulnerable to political/policy change risk. What does seem clear is that it will be more likely that keeping DB and State Pension income as low as possible will be the lowest political risk, so having a lower income from these sources for longer will be preferable than choosing a higher income from them for a shorter period. Even if when I get to age 55, thresholds are broadly as they are now, it will still be preferable to take a lower pension for longer, as that will mean I have more in DC which is more flexible and hence easier to respond should thresholds get played with at any future date.

MallyGirl · 3 May at 8:25AM

learning bridge is certainly exercising my brain, and I am doing some weight bearing strength classes and lots of Pilates to try and get the body in a fit state to enjoy the opportunities that retirement offers. It's all good stuff

SimonSeys · 3 May at 2:26PM

EDIT: Just reread your post and noticed that your wife is indeed doing this! Apologies …

Thanks and congratulations. I’ve benefitted from your posts here, and am in a similar situation. I need to do more analysis of our expenditure though

One question / suggestion, but can you put your wife’s redundancy into a DC pension? Inflation is such that by my calculations I’ve got big underspends in the annual allowance from previous years and if my place goes down the VES route* then that’s what I’d do to avoid tax.

Or is it needed for bridging between now and 55?

Congrats and well done once again!

Si

*Sadly I don’t think VR will be an option