I have just read this on a forum - Thoughts?

meatandtwoveg

A little anecdotal, my mates father at 43 got made redundant, got ill, got a payoff, got better, never found/ bothered to work again. At 43, he sold his house, cashed in everything and stuck it all in the bank; this was in 87-88, around that time just before the crash. He worked out how the lump sum he had could/ how it could last him until he hit 65, took out a weekly payment, leaving enough to last him until his 65th birthday, the amortised model allowed for a yearly tax rebate, when enough tax was paid, included all interest, and gave him a yearly pay increment equal to the coming year net interest rate after tax. So his yearly pay increment more than matched CPI/RPI at the time; so like say this coming year from the 5th April 2011, if he was getting 3.5% gross on his capital for the coming year, he would award himself a 2.8% pay rise for the coming year, similar to current pay awards at present. So even now could stay with current pay awards He had quite a nice 22/23 years, he died last year at 65, left nothing, had nothing to leave, had a few grand left, but hey, he nearly got it spot on.

Lokolo

And what if he lived for another 20 years?

meatandtwoveg

Lokolo wrote: »

And what if he lived for another 20 years?

State, its all about timing?:beer:

Biggles

He probably topped himself just to prove a point. Some people hate to be proved wrong....

Loughton_Monkey

There appears to be nothing strange about this, other than dying just when his money ran out.

You don't say where he lived after selling his house, but I strongly suspect he lived off an extremely small amount.

There are many of us in a 'similar' position - albeit not quite as extreme. But it is the same principle. We retire early. A long time before pensions switch in. Pensions that are not going to pay for our whole lifestyle anyway. So we stuff our cash in various investments and draw on it at the 'correct' rate.

Personally, my own 'amortised model' [if that's what you call it] has me running out of money at age 90. Even then, if I were to 'see' my 91st birthday, I would still have about 60% of my 'normal' income [pensions] and my own house to live in. I am a heavy smoker, and although not an alcoholic, drink rather more than Mr Nanny State would like me to. So I am not banking on seeing that particular birthday, but if I do, then my contingency plan is to 'get by' by selling the Jag, and switching to Sainsbury's own brand of Steradent...

edinburgher

then my contingency plan is to 'get by' by selling the Jag

Better make sure you keep it nice and clean if you want to get a decent resale value

EarthBoy

meatandtwoveg wrote: »

he died last year at 65, left nothing, had nothing to leave, had a few grand left, ....

So did he leave nothing, or did he leave a few grand?

Reaper

With the average life expectancy 80 years and climbing the plan was deeply flawed unless he had a good pension about to kick in.

dunstonh

he nearly got it spot on.

1 in 5 men will die before 65. So, he played the minority odds and won. His reward was death.

Personally, I prefer the 4 in 5 odds and I hope I manage to win

edinburgher

1 in 5 men will die before 65. So, he played the minority odds and won. His reward was death.

Remind me not to enter that lottery

ed123_2

....the average life expectancy of 80 is for someone born today if you look at the chart someone born in 1960 the life expectancy is around 70 and lower the further back you go.