Early-retirement wannabe

mgdavid

Uglymug wrote: »

I always planned to retire early, and a few months ago just prior to my 57th birthday I took early retirement.
............ So at age 57 I’m living on a pension of £14K. ........　

sounds awfully low to me, how on earth do you have a life on that little? or have you a still-working partner?

Uglymug

mgdavid wrote: »

sounds awfully low to me, how on earth do you have a life on that little? or have you a still-working partner?

I never knew one has to spend lots of money to have a life.

My partner gave up work a few years ago to baby-sit grandchildren. She has a modest pension of circa £3K per annum. This is her spending money, I pay all the bills.

I’ve got a little switch in my head that for the last 35 years has been set to save. I’ve just toggled it and it’s now it’s set to spend. (I even managed to save the max £5K+ into a cash ISA last year from my, as explained, net income of £25.5K)

I’ll get my SP in 9 years (unless they change it again) . I’ll then be on circa £20K. When my partners’ SP kicks in she’ll be on circa £10K, I’ve already mentioned we’ve got enough savings to cover any shortfall between now and then (about £200k).

If it all goes wrong and in 30 years we find we’re broke, we’ve decided we’ll have to downsize to release some funds from the 4 bed roomed detached we’re currently rattling around in.

My parents are in their 80s, they still have a full life with plenty of holidays (they‘re currently off caravanning somewhere), my father informed me recently that they’re still saving money, I certainly don’t feel the need to still be saving when in my eighties, and instead, have decided to become a spender and to leave the rat race at the fairly young age of 57.

　

ermine

mgdavid wrote: »

sounds awfully low to me, how on earth do you have a life on that little? or have you a still-working partner?

I similarly greatly overestimated the amount of money needed to 'have a life' while I was working. Many costs are work-associated, and a lot of others are because you have to pay others to do the stuff you don't have time to do yourself. Money Mustache has a diverting post on the 'how on earth do you have a life on that little' question.

It is amazing how much less you need to live on when you don't owe anybody any money. Lose the mortgage and not paying >100% for your consumer spending by not borrowing it does most of the heavy lifting.

Advertising has us chasing cars and clothes, working jobs we hate so we can buy !!!!!! we dont need. - Tyler Durden

Living by the light of your own lamps and internal values does the rest.

I never realised just how much working for a living was costing me until I stopped doing it. I salute uglymug for his determination to wring the most out of the pension system!

Uglymug

ermine wrote: »

I similarly greatly overestimated the amount of money needed to 'have a life' while I was working. Many costs are work-associated, and a lot of others are because you have to pay others to do the stuff you don't have time to do yourself.

Exactly, I’ve just spent the last 10 weeks leisurely digging up my back garden and laying about 100 metres of turf. I paid someone to do a similar job to my front lawn a few years ago and I believe I did a much better job, and I know there’s no flags lying just beneath the surface which I’ll find in 2 years from now. My next job is to paint about 50 fence panels, then seal the drive. I’ve got a bathroom and en-suite to re-fit, a hall and living room to decorate, a garage to tidy up and organise - enough work to keep me going for a while. We’re off to Ireland soon and we’re planning to visit a friend in New York who owns an Irish Bar when we can find a cheap enough flight. So all in all plenty to keep us busy.

ermine wrote: »

I salute uglymug for his determination to wring the most out of the pension system!

When I started I calculated that it would take less than 8 years for my Sipp contribution to be cost neutral (all things being equal). After 8 years I will have got more out of my Sipp than what I would have got as salary after paying tax and NI. After 8 years every payment from my Sipp will be free money.

Bigmoney2

mgdavid wrote: »

sounds awfully low to me, how on earth do you have a life on that little? or have you a still-working partner?

I t0o took early retirement on a similar amount to uglymug.
I'm single so only me to feed , still have a small mortgage, and get some interest from savings and a share dividend.
Finding it quite easy to manage so far and will also downsize at some point if needed.

Lots of things are free or cheap, and its quite easy to not drive for a few days if need be, unlike when at work. I really feel for those who have long daily journeys with the price of fuel.

Some of the estimates on here of what is needed in retirement are considerably more than I earned, so I suppose its all relative.

mgdavid

I still don't get it; I'm a year off retirement, my pension income will be circa.double uglymug's current amount and I'm concerned we won't have as much spare for travel and holidays as we would like. The utilities, council tax, heating fuels and house insurances are 6k per annum; same again for comestibles and consumables. Then there's 2 vehicles to tax, insure, maintain and fuel up, say another 5k. Big ticket items like boiler replacement, new white goods, clothes, presents, pocket money could amount to another 5k. Not much left for savings, holidays, car replacement fund, potentially nothing for healthcare, eating out, wine trips to France or expensive hobbies. I detest DIY and do not intend spending my retirement laying turf or painting fences; short-term contracts or part-time working suddenly look very attractive...:eek:

gallygirl

mgdavid wrote: »

I still don't get it; I'm a year off retirement, my pension income will be circa.double uglymug's current amount and I'm concerned we won't have as much spare for travel and holidays as we would like. The utilities, council tax, heating fuels and house insurances are 6k per annum; same again for comestibles and consumables. Then there's 2 vehicles to tax, insure, maintain and fuel up, say another 5k. Big ticket items like boiler replacement, new white goods, clothes, presents, pocket money could amount to another 5k. Not much left for savings, holidays, car replacement fund, potentially nothing for healthcare, eating out, wine trips to France or expensive hobbies. I detest DIY and do not intend spending my retirement laying turf or painting fences; short-term contracts or part-time working suddenly look very attractive...:eek:

Do you NEED 2 cars or just want 2 cars? You'd need to be pretty unlucky for 5k to be needed a year for white goods etc - even if they all took part in a mass suicide pact you'd be well under 5k for years to come. Do you need to save anything?

Personally, by the time I took travel time, tax & NI into account I'd need to be on a very large hourly rate to make the hassle of going to work preferable to painting my own fences.

To be honest, it sounds like a case of 'just one more year to be safe' nerves. (Which I can completely understand, as I freaked out last night when I calculated possible changes could bring forward my date to 2 years - :T and :eek: in equal measures ).

Moby

ermine wrote: »

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.

Excellent post that needed to be bumped! I read your blog every week....don't understand some of the investing entries....because I'm not really investing literate...but your 'values' comments are spot on!

ermine

Then there's 2 vehicles to tax, insure, maintain and fuel up, say another 5k. Big ticket items like boiler replacement, new white goods, clothes, presents, pocket money could amount to another 5k.

I know a retired couple who run two cars and dogs on a shade under 20k while going on typically three holidays a year, indeed four this year. They don't seem short of white goods in good working order!

Obviously if your view of a good time includes buying lots of consumer goods then short-term contracts/P/T working is the way to go. There's absolutely nothing wrong with that, if this is what success looks like to you then you know what you need to do. It is the generalisation that it's impossible to have a very good life on less that is being challenged, not your individual lifestyle choices which is obviously a reflection of your values and priorities

You utilities/CT bill looks remarkable, I've added mine up and it's less than half yours. Your boiler replacement and white goods needs to be amortised across the service life of these items.

Retirement is a chance to live your values on your own terms. If you want a lot of stuff then you need to make different choices, though having a decent background income still makes the experience a lot better than while working. You probably have enough income for the essentials, and can choose to look for work to match the elective parts of your lifestyle. Whereas before you probably had to work to meet the basics of life.

Having the FU money matters - it gives you the opportunity to evaluate what matters to you in life each and every day. It's worth taking the time out to ask yourself the question though, probably after you've retired.

Sit on the top of a green grass hill in summer with the bees buzzing around and maybe a glass of Pimms. And ask yourself (and any significant other)

Self, what does a good life look like to me?

It probably won't look exactly like it did while you were working full time, and if it does you are probably not stretching your imagination This is terribly hard to do while still working, by the way. You tend to end up saving a bit too much, which at least is failsafe!

gfplux

I am a very occasional contributes to this long, long thread and to me there is in the posts a distinct difference in attitude between those looking FORWARD to retirement and those (like me) looking back having already retired.
I don't think anyone still working has any idea what being retired means. They can certainly imagine it but I think they will find the reality a lot different to their imaginings.
Perhaps it's a little like while in full time education we imagined what working for a living would be like and how wrong we were.
For me the this phrase says it all
"Retirement is a foreign country"
What do others who have retired think?