Early-retirement wannabe

silverwhistle

Some of the figures bandied about here just make me chuckle. I got my reduced pension at 50 and it's just over £12k. To that I add whatever I can earn part-time freelancing here in the Alps as an English teacher. I'm pretty selective, as the tax and NI rates are so high and besides, I'd rather go skiing with my local regional skipass. Most of the figures I don't recognise as necessary for my well-being and comfortable life [she said as she sipped her Alasia Brut Alta Langa DOC Metodo Classico 2008... slightly past it in truth!;-) ].

Not only that, I'm shortly moving back to the UK for various reasons, and finance doesn't come into it. In the future I'll be back here on holiday and staying with friends - so I reckon I'll get the best of both worlds...

A word of warning to people who research on expat forums before they take the plunge of retiring abroad... don't always believe them! "I've never seen an Italian drunk" they say.. don't know who they hang out with, but if I had a € for every one I've seen, I'd be drinking Franciacorta tonight!:-)

elantan

Silver whistle I find it interesting myself ... Although way way way outa my league, I only earn about 13k a year just now so only looking or that ( roughly ) in a pension, but I am enjoying learning about other people's plans to meet their needs... Maybe something will help me plan better

N1AK

brewerdave wrote: »

CAUTION!!!
I started planning for early retirement in my early 40s ramping up my savings in equities/ISAs and cash (as far as possible with two young kids!);the Company I was then with, had an Early Retirement Facility that would have allowed me to retire at 55 on a "full" pension with the Company's permission.
HOWEVER, things changed rapidly in the mid/late 90s with the result that I was made redundant at the age of 49. Got another job at a lower rate of pay and much less generous pension scheme,so revised target retirement to 60. Got made redundant again at 56, not able to retire and out of work for several months so took a job at a lower salary again.
Got made redundant again after 2 years - couldn't get another job so was forced into taking original Company pension early.
My finances are considerably worse now at 60 than my original plan - we will survive but many of the luxuries that we had originally planned for retirement "have gone up in smoke"!
The point I'm trying to make is that any early retirement plan should include worse case scenarios especially a loss of a well paid job.

Sorry things didn't work out as you had planned brewer

It's always difficult to know what to do. Obviously if you had known then what would happen you would plan differently but the challenge is balancing the risk of a 'worst case' with how frugal you should be to protect against it.

You should have a pretty good idea where you'd end up in the worst case, but the worst case could be losing your job tomorrow and never finding another one. You can't really do much in that situation.

kidmugsy

Marine_life wrote: »

You mean something like this http://www.rightmove.co.uk/property-for-sale/property-35134702.html?premiumA=true

It's decades since I visited Rockcliff but I can confirm that when I knew it it was a lovely place. It would be a particularly fine spot for grandchildren to visit in summer - rocks and sand and a Bronze Age fort. What more could you ask?

I did laugh at "Nearest station: Maryport (15.6 miles)" - yeah but that's on the other side of the Solway. Your nearest useful station is Dumfries.

kidmugsy

Or this might be nice, though I'd have photographed the sea view when the tide was up, myself.

http://www.rightmove.co.uk/property-for-sale/property-34941602.html?premiumA=true

N1AK

Just want to thank many of the contributors to this thread. Just had a good read through most of it and there's some really good information and discussion.

I'm still trying to define what my goal is and how to plan to get there (in my defence I'm saving in the meanwhile...) and this thread has definitely helped.

Marine_life

kidmugsy wrote: »

It's decades since I visited Rockcliff but I can confirm that when I knew it it was a lovely place. It would be a particularly fine spot for grandchildren to visit in summer - rocks and sand and a Bronze Age fort. What more could you ask?

I did laugh at "Nearest station: Maryport (15.6 miles)" - yeah but that's on the other side of the Solway. Your nearest useful station is Dumfries.

Especially since I am a rubbish swimmer!

Goldiegirl

Marine_life wrote: »

I has a quick look at some potential retirement dates today and on a pure day calculation that is 480 days. But when I plus in "business days" (which takes out weekends) then that number falls to around 340. If I factor in my remaining holidays for this year (47 - which includes a backlog from last year) and next years vacation of 30 days that brings me well under 300 which is no a lot of potential work days left. I digress.

I have been thinking about retirement living expenses but unlike many on here I have not been able to really document my expenses. I have been procrastinating mainly because I know the current figures are so horrendous (with mortgage overpayments and school fees) I know the number will depress me! Ostrich policy.

There I got to think about the "number" thread and it seems that most believe that next earnings of around 25-27k seem to be about right. Really? I suppose it depends on what people really want out of their retirement but it seems rather low to me if you want to "live life to the full". For me this mainly involves travel but then I wonder whether there are other luxuries that I will be unprepared to give up? So here i am beginning to think about the subject of numbers. Here are some initial thoughts on figures:

Health insurance (c. €9,000 per annum). I am afraid that's what it cost's here and I'm not prepared to give up private health insurance.

Home heating and utilities (c. €4,500 p.a.). Sounds like a lot but its a decent sized house and we have oil fired central heating which is not cheap. We may decide to downsize!

Home maintenance and repairs (c. €3,000 p.a) No idea what for but I expect a figure in that sort of magnitude.

Insurance (c. €1,500)

Car expenses (petrol and maintenance) (c. €7,500). We expect to do a decent amount of driving so the bulk of that would be fuel @ c. €100 per week. Maybe need to think about a more ecoonomical car.

Food (no idea but I would guess c. € 5,000)

Clothing (again, no real idea but lets say €4,000) I am not an extravagent dresser.

So that brings me to around €35k before we have thought about having any "fun". Is there anything missing from my list? Does anything seem over / undercooked?

I am guessing that on top of that I could imagine two "big" trips a year at around €6,000 per trip and a number of smaller trips at say €3-4,000. So lets call that €16,000 for holidays.

If I then allow €4,000 to deal with random expenditure including presents etc. Then the toal brings me to €60,000 which feels like a reasonably comfortable budget.

Would welcome observations and thoughts from people.

I think it depends on what level of income and expenditure you are used to in your current life.

For the majority of people, they don't earn £60k per annum at the height of their earning powers, let alone into retirement.

I'm planning on retiring in about 3 years time, and together with my husband, we anticipate a joint income of around 25k per annum at current figures. It would be another 10 years after I retire before I get my state pension, so I'm not factoring this into my calculations.

We feel we'll be able to live quite comfortably on this, with days out, meals out and at least two cruises a year. To supplement our annual income, we'll be dipping into savings to pay towards cruises, but that's what we have saved for, our retirement fun.

I personally think that some one could live very well indeed on much less than £60k per annum, and if required they could dip into their capital.

I can't take it with me when I die, and have no children to leave it to, so I'm going to spend my money during my active retirement. When you slow down, you don't get out and about, and you need much less money.

I'm by no means frugal, but I can't help thinking some of your figures are rather extravagant.

For example do you really need to spend over £300 every month on clothes?

None of my business of course, but you did ask for observations!

Marine_life

Goldiegirl wrote: »

I think it depends on what level of income and expenditure you are used to in your current life.

For the majority of people, they don't earn £60k per annum at the height of their earning powers, let alone into retirement.

I'm planning on retiring in about 3 years time, and together with my husband, we anticipate a joint income of around 25k per annum at current figures. It would be another 10 years after I retire before I get my state pension, so I'm not factoring this into my calculations.

We feel we'll be able to live quite comfortably on this, with days out, meals out and at least two cruises a year. To supplement our annual income, we'll be dipping into savings to pay towards cruises, but that's what we have saved for, our retirement fun.

I personally think that some one could live very well indeed on much less than £60k per annum, and if required they could dip into their capital.

I can't take it with me when I die, and have no children to leave it to, so I'm going to spend my money during my active retirement. When you slow down, you don't get out and about, and you need much less money.

I'm by no means frugal, but I can't help thinking some of your figures are rather extravagant.

For example do you really need to spend over £300 every month on clothes?

None of my business of course, but you did ask for observations!

Thanks for taking an interest.

You are of course right - its actually more than enough money. The problem (if you can call if a problem) in many cases is "you never miss what you never had". Actually ramping down from a high level of spending to a retirement level of spending is actually pretty scary (and difficult) although please don't think in any way that is asking for sympathy.

Nevertheless if I take a top down view our expenses at the moment are somewhat - errr - non representative of where we will be in a couple of years. For a start we have been maxxing out our mortgage repayments which means that last year we paid around €75,000 off the mortgage. On top of that we have our sons school fees (€20,000) and our daughters costs at university (about another €15,000) which makes €110,000 of committed expenditure. :eek:

I suspect that our "regular" living expenses are around the €60-70 k bracket at the moment BUT - and its a big but - we haven't really taken a big holiday is a long time and that's what we want to do in retirement. Our first plan is New Zealand as a 50th birthday present to me.

Long and short of it - I suspect we can live our regular life to a sensible budget but its the big (potential) chunks of spend that are the imponderables.

ermine

Marine_life wrote: »

believe that next earnings of around 25-27k seem to be about right. Really? I suppose it depends on what people really want out of their retirement but it seems rather low to me if you want to "live life to the full".

I was tickled by this post. FWIW I've never earned as much as your target retirement income though not hugely short. I also just don't have many of your costs, they aren't things I have or would place any value on.

And I absolutely respect the thing that each of us is different. However, I'd make an observation, which is probably coloured by the fact I am a Myers-Briggs INTJ, and I'd guess you aren't.

For me "living life to the full" is just as much about what goes on in my head as much as without. Getting control of how I spend my day did nearly all the heavy lifting there. For you it seems a lot about what you can and can't do, and you don't want the restriction on that, which is fine

All that travelling - the last time I was in an airport was for work, to go to the US in 2007. It was Stansted I think, and something must have been up, it was full and heaving. And I vowed from then on never to do that to myself again. I hated each and every one of my fellow human beings packed in whith me, the stupid prats who didn't read the instructions on hand luggage and brought huge bags who held up the queue, the rugrats milling about, the whole security theatre, the fact that airline seats recline at all.

I only travel overland by ferry or Eurostar now. I will make the airline exception sometimes in future, but I will research what the least desired time to travel is, if I have to get up at 3am to get to the airport I'll do it, if I have to pay more so be it and I wouldn't dream of using scum like Ryanair. I just don't know why people do it to themselves, but each to their own.

All my working life I have been at a disadvantage due to being introverted - the world of work absolutely luuuuurves extroverts and promotes them earlier and glad-hands them because they serve the purposes of business better, they're better salesmen, motivators, leaders of men.

But in early retirement I find the extrovert-introvert advantages reversed. I'm still short of time, it takes about 10,000 hours to get to really master something and there's a lot of stuff to master in the world. I focus on the inner world, though I am not a recluse by any chalk - last week I met more people than I typically would have met at work, and took on a bottle of calvados with an old friend (the calvados won).

If I had half of your target annual income I still wouldn't know what to do with some of it. I'd save it, I suppose. I don't draw my pension at the moment because what would I do with it? I can still fill my ISAs from savings, and you can't make a return on cash that's worth the effort these days.

For me the transformation is that life is about what I am and what I become, as well as what I do. I spent far too much time doing and buying crap when I was working, and ignored the important work of knowing myself and those close to me better.

Healthcare? When I was working I'd get out of the house, walk to the car, drive to work and walk a few hundred yards to the office. And do it again on the way back. In the spring and summer I'd sometiimes bike the 13 mile roundtrip to work - but it was a chore, to save money, becasue it was a little bit outside my natural range.

Now I like to get out of the house and walk a couple of miles a day. I bike to get to places and get stuff and see people. I had private healthcare at work, though I'm happy to say I never personally used it but my wife benefitted a couple of times. The increased level of activity is far better value than healthcare - I feel better, I am stronger and have greater stamina.

What private healthcare does is let you jump the queue a bit, but when I look at what it costs I would actually have been better off just paying cash on the nail to the Nuffield hospital for it. Even something like a hip replacement seems to be about 12k. I was lucky enough to stop work before the lifestyle damaged my physical health but if that's what it takes and I want private treatement then I'll pay them cash. I'd say those walks and bike rides are a better investment that my private health insurance was.

I'm not knocking your choices, you've thought long and hard and these are clearly the right calls for you. It was an interesting thought experiment if somebody said to me here's 60k, go spend it this year and you must have nothing left in a year and you aren't allowed to save it or spend it on stored capital, what the hell would I actually do with it?

And for me, well, I'd have to save well over half of it, because I don't have the desire to do or buy all those goods and services, it would take me away from the process of individuation. If I had to spend all that it wouldn't be living life to the full for me. It would be a maelstrom of activity and distraction, I wouldn't be able to find the centre. Now obviously if I had 60k p.a. I'd be able to ramp up my lifestyle to use it over a few years. It's not enough to buy myself out of the airport experince with a Learjet but certainly enough to buy finer wines and more comfortable travel

Yours is an interesting defintion of "living life to the full". It caused me to ask myself whether finance is limiting me, and if not, why. I came ot the conclusion no, it's still time that I am short of.

Even after five decades of life experience it's still occasionally a surprise to see just how different we are from each other. I wish you well - I think you will live life to the full, and this whole exercise of working out what that means to you helps both you and others to work out the balance of how much of our life-force we surrender to The Man in return for the gold we turn into Stuff and Experiences.