So obsessed with retirement that I'm finding it hard to live for today

pineapple

It sounds to me like this is a case of 'the grass is greener' and that you would be better adjusting the work life balance - perhaps even finding another job. I'm actually retired yet I'm not aware of that much more spare time! I probably spend a little longer on sites like this and the time just goes . I miss my colleagues, the office banter and the job itself. It was only because of health reasons that I packed it in. Also couples who retire at the same time sometimes find each other's full time company not quite as blissful as they imagined.

Lois_and_CK

jamesd wrote: »

In general I take the same view as you. Cheap rented place then cheap purchased place. Leaves lots of free income to invest to allow me to now be able to live without benefits if I couldn't work and later with nice safety margin to probably be able to retire at 55 if I want to. Saving and investing more than 60% of net pay plus gross pension contributions for about six years to get there so far. At the moment the value of those is about 85% of my total net pay plus gross pension contributions over the years since I became able to do it.

You're right that it's more efficient to invest early on because the expected return on investments is greater than the expected return on property (about 6% long run average). But now is a good time for equity investing and a bad time for residential property because share prices are depressed while property prices remain higher than their historic average. So given a completely free decision I'd want that equity invested as soon as possible.

Interest only and investing is a sort of half way house, slower getting the money invested so nowhere near as efficient but CK still keeps the quality of life value that the place has for CK.

Given your past debt situation it is quite likely that CK hasn't yet had a chance to switch mindset to see the potential of money to get things done. One thing I did and do is keep spreadsheets that track expected time until I can support myself and until I can retire at various target income levels. Those let me make that planning more concrete and see that my goals really are achievable and on what timescale. That sort of thing might help CK to see the potential to achieve something different.

Part of the catch here is that different people have different values for future benefit vs current benefit. You seem to have a value system that's closer to mine than CK's. But that doesn't make CK's wrong, just different.

CK could usefully read the whole NUMBER topic to see that you're not actually unusual, just different from what he happens to know.

For your weekends, try thinking what you can do to free time. Washing say. Would doubling the quantity of clothes or just underwear or washers reduce the time cost? If so, that may be a good quality of life bit of spending to do. What is the cost of someone else to tidy? What do you do about dish washing, a machine? If not, that may be a good idea, to spend money to buy time. What can you do with money as a tool to buy you more time?

Hi James

Thanks for your very helpful thoughts - your post has helped me to calm down and try and come up with a compromise with CK. I showed him your post, and for the first time we've managed to discuss it without getting stroppy with each other. We're going to stay in the house for now, but have agreed to revisit the idea when we're closer to retirement. He's also going to read some of my retirement books and mull over what he wants out of retirement as well. He says he definitely wants to retire as early as possible and is more on board with making that a joint goal.

Importantly he has agreed to naming our future dog Roxi :-)

Now we just need to work out how we can enjoy the present more.

Thanks again.

jamesd

Do give him time to adjust.

Most people won't be quite as keen as I've been and am, but my commitment was shaped in part by that past experience. Debts might shape yours as well, it's nice to get to a position where you know you can live even with no jobs. Whether that's worth more or less than a nicer place is really something for each individual to decide. For me, I value the security of income more than a nicer place but that's me, others can and do differ.

Glad you've made some useful progress!

p00hsticks

Lois_and_CK wrote: »

I thought that if we sold the house now, the equity realised could be invested/saved and left to grow into a bigger pot of money over the years. I thought we'd end up with more money doing it that way, rather than selling our house at retirement because even though our current house will (probably) have grown in value, so will the smaller house we downsize to. Am I thinking this through wrong?

Yes, if the smaller and larger house both increase in value by the same percentage, then the larger house will gain more in absolute value than the smaller one. (for example, if the larger house is worth £200k now, and the smaller one £100k - a difference of £100k - , then if house prices rise by 50% in the next ten years, the larger house will be worth £300k and the smaller one £150K - a difference of £150k. You've effectively 'made' £50k in equity by remaining in the larger house.

So if you intend to downsize now, you need to be asking yourself how you would invest the equity released in order to give you a bigger return than that that would be provided by any increase in property values (i.e. in my example - if you moved from the larger to the smaller house now, how could you invest that £100k release to turn it into more than £150k in ten years time)

jamesd

That growth from £100k to £150k in ten years is the same as a 4.1% annual growth rate, ignoring inflation. It's about 1.1% if inflation is 3%.

However, that's not the right comparison because it's using the whole value of the property to calculate the growth rate. All that's really been invested is the amount of equity currently in the property. Assume that a 25% deposit interest only loan was used. The gain is then £50k on a £25k deposit, not on a £100k property value. So it's not 50% over ten years but 200% over ten years. That's 11.6% a year.

The most recent of which I've seen suggests it'll take until 2022 or so to get back to the inflation-adjusted high of 2007 so it's probably not a good time to be thinking in those terms today. Maybe in five years.

Note that the interest only or repayment question is a different one. There all the investment has to do is beat the mortgage interest rate, without inflation adjustment, because the capital value to be repaid is also not inflation adjusted.

Releasing equity form an existing property is also different and just like the interest only calculation, all you have to beat is the mortgage interest rate.

p00hsticks is right about what to do in a rising property market: buy the most valuable property you can afford to buy, if you assume that all properties will increase in value at the same rate. A low deposit level also helps, if the interest rate increase isn't excessive. But we're not in a rapidly rising property market at the moment, in most of the country, and it'll be some time before we are, probably.

There's also the intangible value to the individuals of living in the more expensive property. My preference is inexpensive property at the moment, and low costs, but if I thought that there was a sustained housing boom I might go closer to a stretch approach.

Archergirl

I think you are far too pre occuipied with retirement, you may not even reach it!!
Life is to be lived now as well as in the future, try to be more focused about your life now and enjoy what you have, so much can happen between now and then, don't waste now.

Gatser

You are NOT alone!

We have been maintaining a "Life Spreadsheet" since our early 20's .... by age 30 we planned to retire at 50.
Legal and personal changes have moved that to 55 ... but the spreadsheet says that is still achievable so the countdown is very motivating!

You HAVE to plan years ahead if you want an "on target" retirement. A friend recently used the analogy of landing a Jumbo Jet.... don't think about the landing procedure one mile before the landing strip!

Good Luck... I hope you have lots of happy spreadsheet columns ahead of you! :T

YoungBusinessman

Im 21 and been planning retirement since 16, i have £25k - soon to be £30k in shares yet £28k of debt, how stupid does that sound :eek:

Yet it is my plan and each to their own. I absolute outright refuse to sell these shares. Yet i am capping them at £30k now until i have paid off debt, have bought first place and got LTV on place to 60%.

By then im sure the shares wont be worth £30k anyway.

I have my next 5 - 10 years of finances planned out. I am not looking further along the road until another 5 years time, i will re evaluate.

I think we are in the same boat. We are obsessed with money and all things money.

I say sit tight in the property you are in, get it paid off, live a bit and then re evaluate.

Thrugelmir

p00hsticks wrote: »

You've effectively 'made' £50k in equity by remaining in the larger house.

And the higher running costs over the years?

The greater amount of mortgage interest paid?

pcrosland

this makes no sense. your eradicating any gains in stocks by having mountains of debt.