Early-retirement wannabe

gallygirl

Do you still keep your income separate - I know my brother and his wife do that and they've been married longer than we have but I remember when we had separate finances man years ago I was always lending my wife mone to pay off her credit cards! Anyway we have pooled our finances for the last 20 years (although Mrs. ML has not been working for a large part of that).

Yes we do - we don't live together so that will be an interesting change :eek: - we do have joint accounts and I see us continuing with joint & separate money. That way we can bicker endlessly about who gets the best out of it, otherwise we'd have nothing to talk about :rotfl:.

I have thought about property but to be honest we have not been very lucky with property during our married life (probably the only people in the world who have not) so we tend to steer clear of it. Also, I am not sure I want the hassle.

Me too tbh. The alternative is to sell up and live off the interest. It makes sense to keep for now, especially if house prices are finally starting to rise, as we can get the same income from rents and hopefully some capital growth. We have good workmen to call on but there are also bits and pieces I will do - our plan is to have someone on a small retainer who will pop round and do little jobs and arrange access etc. My concern is about making the judgement calls - when does a repair tip over to a replacement etc. Also we have long term tenants in 2 houses so I'm happy to keep hold of them.

One thought you should consider is health insurance when you move to Spain. I am not sure what the local provision is but you may need to consider private insurance which will be costly.

This was a given till a few months ago, but we've heard bad reports of private cover and glowing reports of local services. Plenty time to research.

I've never had a sports car, or had a hankering for one and don't see the need to change furniture all the time etc. We have a lovely place in Spain - we could afford somewhere bigger, detached with own pool, but I genuinely don't want the size or hassle. All annual leave is used on holidays, I resent taking days off in this country, but we're happy to fly sleazyjet to Spain. One winter holiday to Canaries or further afield but to 'nice' accommodation rather than luxury. I'm a cheap date really .

I've given DD a house deposit and will do same for DS. Helped them through uni (though they needed loans, I couldn't pick up all costs as not on great wage at the time). Using Millionaire Next Door to justify giving them no more .

cyclonebri1

We pooled resources before we were married, and that's 40 year ago this year, (better not forget that one). I don't see how trust can really exist if you don't. I may be wrong, maybe it's not the modern way but it's what we do, however we do each have our own current account in addition to our joint current account that covers all our planned incomings and out goings.

We have these for several reasons, not least because we both feel the need to have instant access to money and there is the financial concern that we could run the account into the red by not knowing what the other was doing. We don't want a situation what was this draw out for etc etc.

Don't get me wrong, we each only ever have about £1k max in these accounts, but if we both simultaneously commit to something, we know the liquidity of our own accounts.

Also, I have always been the higher earner and by a good margin, it would feel wrong to me to have a pile that was way in excess of my wife's.

Tax issues? that's never been a concern to either of us, apart from savings, we don't
earn enough or have complicated incomes.

We both share account details and have access to each other account so nothing hidden, but I can pick just the right moment to tell her I have just blown my pot on a new Browning 12 gauge, or her, another pair of shoes:D:D:D

Marine_life

Over the weekend I finally got around to running some up-to-date numbers on where things stand and here is the position. I have divided my thinking between our early retirement pot (s), property and my retirement pot (s).

Early retirement pots
Cash - €650k
Shares and other liquid (ish) investment €250k
Illiquid investments €100k (I only get this back when I leave my job)
So that makes our early retirement pot at the moment about €1 million

Property
House – Value €650k mortgage €300
Holiday apartment Value €150k
So net property equity around €500
We expect to dip into the cash pot this year to pay off the mortgage which is at a relatively high 4.4%.
Once we retire we expect to downsize property and would be looking to pay no more than the next equity we have today.

Retirement pots

Early retirement scheme (age 60)
Current gross value of pot €590k (value is fully taxable and does not increase – other than by additional contributions) so value will be eroded by inflation. Expected value of that scheme at age 50 = €790k - due to additional contributions. Scheme pays out over 5 years commencing age 60. Note: these schemes are allowable in Germany but not the UK.

Non-contributory pension (age 62)
Current value (current prices) €24k per annum (equivalent to a pension pot of c. €500k)
Value age 50 (applying same principles) €44k per annum (equivalent value c. €900k)
The big increase between now and age 50 is due to the way the benefit accrues - essentially fully vested at age 50.

Frozen DB pension
Current value (current prices) €14k per annum (equivalent value c. €280k)

Other (age 62)
- UK pension pot (Mrs ML) – c.€35k
- UK pension pot (Mr ML) – c. €35k
- German private pension pots – c. €30k
- Total c. €100 pot, estimate value per annum c. €5k

State pension (age 67?)
Have full 30 years of contributions (19 from UK and 11 from Germany)
Uncertain of annual value – estimate annual value c.€15k

So we are pretty happy with where we are in terms of long term plans and piece we are still working on is the current pot (essentially the bit we have to live on between whenever we retire and when the first pensions start kicking in).

When i set the numbers out like that it reinforces my thinking to go at 50 (17 months).

atush

You need 35 years for the new state pension if you are retiring after 2016?

But 50 is really very young, so do have some part time or voluntary work lined up?

gadgetmind

Marine_life wrote: »

When i set the numbers out like that it reinforces my thinking to go at 50 (17 months).

Yup, particularly with those guaranteed pensions later on. Other than state pensions in a mere 17 years time, Mrs Gadgetmind and myself have no guaranteed pensions, just a load of equity/etc investments.

This is why I'm active on investment and pensions boards!

AlwaysLearnin

It'll be tight, but you might just about be able to manage on that....:D

Presuming you're not getting 4.4% net on your cash savings, why not pay the mortgage asap?

itm2

I'd kill for your numbers marine_life. I've decided to jump in a few weeks @53 with this lot:
- Joint savings/investments: £330k (half of which is wrapped in ISA's)
- SIPP: £200k
- Other Personal Pensions available at age 60 with guaranteed annuity rate of 9%: £112k (current value)
- Other half's occupational pensions: £50k (current value)
- Main property: £1m (no mortgage)
- 2nd property: £200k (no mortgage) - currently delivering £10k p/a gross rental income
I only have 26 qualifying years, but intend to make additional contributions up to the full 35 years between now and state retirement age.
My wife is 48 and currently doing part time work which brings in about £8k gross p/a
I intend to look for occasional sources of minor income (e.g. helping people out with technology problems) but my cashflow forecast doesn't depend on that.
So we're nowhere near as comfortable as some, but we have pretty low outgoings and are good at tightening our belts if needs be. It's all a bit scary but the appeal of ditching the stress of the day job is too strong to resist

gadgetmind

itm2 wrote: »

I only have 26 qualifying years, but intend to make additional contributions up to the full 35 years between now and state retirement age.

If you register as self employed, you can pay around £130pa of NI per annum to get qualifying years.

My wife is 48 and currently doing part time work which brings in about £8k gross p/a

Did you know she can pay up to that £8k pa into a SIPP and get tax relief on the lot even though she won't be paying any tax? So £10k pa extra into her pension, 25% out tax free at 55, and she's unlikely to be paying much tax in retirement even after SP kicks in.

itm2

gadgetmind wrote: »

If you register as self employed, you can pay around £130pa of NI per annum to get qualifying years.

Did you know she can pay up to that £8k pa into a SIPP and get tax relief on the lot even though she won't be paying any tax? So £10k pa extra into her pension, 25% out tax free at 55, and she's unlikely to be paying much tax in retirement even after SP kicks in.

Thanks gadgetmind - both of those two were news to me!

cyclonebri1

atush wrote: »

You need 35 years for the new state pension if you are retiring after 2016?

But 50 is really very young, so do have some part time or voluntary work lined up?

:rotfl::rotfl::rotfl::rotfl::rotfl:

Please don't find this offensive but I just fell off my perch:rotfl::rotfl:

If I'd spent the whole of my working life striving to get in a position to take early retirement, and do something I wanted to do, voluntary work would not be in my vocab.

We must be very different people atush, I live for my hobbies and families interests, I won't say more than that other than to say ML won't be short of things to do.


But ML, again this thread really has been lifted into dreamland as far as the vast majority are concerned, good luck, you have obviously earned it, but you have just left many despondant with those figures:eek: