Early-retirement wannabe

kmoney

Morning all, my business is a partnership (not LTD) as we have very low bad debt and no individual debtor of a level that could end the business. We are just now considering going ltd but are meeting with the accountant to decide if it is suitable.

This level of salary is very new to me. In the first three years I earned no more than my previous salary as an employee, but due to investment in the company and growth over the past two years, well, things are moving quite fast, upwardly. I've always lived well within my salary, even at an early stage, so my outgoings per month are around £1000. Maybe throw an extra £50 for coffee shop visits. This year I have seriously over-done holidays, with 2 ski trips and an extended break in Vegas already under my belt. But this is the extreme.

At present £30,000 per annum spending is well within my budget. With kids on the horizon this might indeed change.

Beat the System - The business is both bricks and mortar and online, so fully sellable down the line or indeed I can plan to remove myself further when FI is reached and let it run itself. Its 10 years away and with anything in business, subject to change, so I'm focussing on each small win to make the big goal.

AlwaysLearnin wrote: »

The reduced annual allowances now make that harder. It's down to 40k next year, so even 600k will need continued contributions after the planned 40 'retirement'

You are absolutely right! I didnt even think of the time it takes to contribute that money to the SIPP. I must look into VCTs. To be honest I hadn't heard of them before this thread. But they are on my radar now.

Thanks so much guys

atush

If you have children, do prepare to raise that RA to 50 lol. I have 3 (planned on 2 but had twins) and they are VERY expensive creatures esp if they go on to /Uni or if you consider private education.

And yes, I would stress you need more ISAs if you want to retire under 55 as having the LTA in a pension will not help you retire at 40. Paying off your mtg helps too (but don't concentrate on this if you have a low rate).

Mr_Proctalgia

I have read this thread end to end now, lots of thoughful ideas from many of the posters. However, I simply cannot afford to retire yet, but, I can afford to retire "a bit" in a couple of years. I am doing this by means of saving as much as I can afford whilst working full time and reducing my eventual outgoings - Never going to be really wealthy but my pension on todays fugures will be higher than my wages are now. (Which isn't hard BTW - Shelves don't stack themselves)

I was inspired by the words of gfplux when they wrote - (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.)

So can one really semi retire, is it necessary to keep the "I'm a Worker" head firmly in place in order to perform ones functions at work or can one develop the "I'm retired now" mindset? Is it possible to have both thoughts at once?

I think I would struggle with both, I struggle with one mindset sometimes!

So I sit and think about crossing this personal Rubicon, is it really a journey taken once and no going back, can you dabble a toe in the water to see how it feels or is it confusing or worse, futile?
Part of me says that you are either retired or you are working and drawing a pension, but therefore cannot be retired - It smacks of being a bit pregnant..

Your thoughts would be appreciated.

diveleader

I am enjoying this thread:T

One question I have is when calculating the return from your investments etc. what % above inflation do you use?

Reading online this seems to be 5% after inflation, although this strikes me as being a tad optimistic.

We will be looking to retire in the next few years and I am keen to know your feelings on the % after inflation (ie the income to live on, leaving your capital unmolested) you are using in your calculations.

Thanks

gadgetmind

diveleader wrote: »

Reading online this seems to be 5% after inflation, although this strikes me as being a tad optimistic.

Tend to use inflation plus 2% as I like surprises to be on the upside!

cyclonebri1

gadgetmind wrote: »

Tend to use inflation plus 2% as I like surprises to be on the upside!

I tend to be a tad pessimistic, I think I will die the year after I take my pension, what return should I expect?:A:A

redbuzzard

Mr_Proctalgia wrote: »

I was inspired by the words of gfplux when they wrote - (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.)

So can one really semi retire, is it necessary to keep the "I'm a Worker" head firmly in place in order to perform ones functions at work or can one develop the "I'm retired now" mindset? Is it possible to have both thoughts at once?

I think I would struggle with both, I struggle with one mindset sometimes!

So I sit and think about crossing this personal Rubicon, is it really a journey taken once and no going back, can you dabble a toe in the water to see how it feels or is it confusing or worse, futile?
Part of me says that you are either retired or you are working and drawing a pension, but therefore cannot be retired - It smacks of being a bit pregnant..

Your thoughts would be appreciated.

Tricky one. I am mostly retired (more so than I intended - I do some freelance work but don't get that much, so far).

Part of the problem is that the more you enjoy the retirement part, the more de-institutionalised you become. I was never a great one for corporate bull droppings, and now I can't play the game properly because it seems so stupid - and you see the politics for what it is. A friend of mine was redundant about 3 years ago from a high powered marketing job with a well known drinks company - he hoped to wind down rather than retire but having had a year off said he became unemployable!

You don't need so much money when you aren't working, for the basics of existence anyway - and you have more time to save money. I just changed my own brake discs and pads, and last week I replaced the broken screen on my eye-phone. I also grind exceeding small on my car insurance renewals, and shop like an Aberdonian.

One thing I am conscious of as a mere 60 year old is that the possible spread of life expectancy is quite large - on the one hand, I know we have enough savings to survive the next 5 years and still have a decent amount in the bank when then the full retirement income is due, inflation permitting. In principle, I think we should spend money enjoying ourselves while we have the health, and now the time. On the other hand, I might want those savings to last a long time...should I spend 5% a year, or 10%, or even more?

I keep trying to persuade myself that the rainy day has arrived and instead of stinting on umbrellas I should indulge in some luxuries and decent holidays - but the shift in outlook required to move from always spending less than our income, to wilfully spending a lot more, is difficult to get comfortable with after a lifetime of saving.

I have also developed mañana syndrome - I have to force myself do today, anything that can be put off until tomorrow. Watch out for that one.

atush

cyclonebri1 wrote: »

I tend to be a tad pessimistic, I think I will die the year after I take my pension, what return should I expect?:A:A

You? Nothing lol.

Your Spouse? They will do very well

Mint1955

I am 57 and not working OH is 47 and he works on contract in the IT industry at the moment.

I will get state pension at 66 he will get a work pension of £14000 annum at 55 another 5000 at 60 and state pension at 67

We have a house in North Cyprus and we are thinking of in 2015 selling our uk house paying of the mortgages and moving out there. We would have approx £220000.00 to bank. We are thinking of living of the interest which at present is 7% but I am working on 4% which will be 8.5k year and then taking 500 maximum per month out of savings.
This would bring our lump sum down over the following 5 years until OH is 55 and gets his pension of 14,000 year and I will get state pension.

What am I missing? He thinks this is doable but I am not sure what the actual figures will look like.

atush

I guess it depends on what the cost of living will be there in 2015. It is hard to plan if you don't really know what your outgoings will be.