Only freedom will do

in_need_of_direction

How sad is this! I can't envisage early retirement at all for me. If I didn't have my job, I'm not totally sure who I'd be. Maybe that will change over the next ten years.

ljaneyr

edinburgher wrote: »

Hehe - 20 years or so for me I suspect - I know what you mean

Snap! I turn 30 this year :eek::o:eek::o

edinburgher

I'm 31, also in the trendy club 30s.

gallygirl

edinburgher wrote: »

I want to learn how to be more involved at parties, must learn from these sociable E's!

Start by throwing a party - Judi and I will come - if we don't get distracted by something shiny on the way :rotfl:.

judi24

Party??? Who said party?? When? Where? count me in!!!!:D


Seriously it is really interesting how different personality types approach long term planning - I would like to retire early - I'm 45 now and would love to be able to stop working full time at 55 - I would like to do something else (maybe in academia, consultancy or becoming an expert witness) preferably from a little farm house in France. But no idea where to start in planning it! I do pay into an NHS pension but cant take that until I'm 60 and I have house with a mortgage (value £250k mortgage £145k) that I could pay off by then should that be the best approach - just not sure if it is!


I am rubbish at long term thinking - for example - my debt payment plan needs to be completed this year - not a minute longer - can't cope with slowing it down! but then I will have 9 years to accomplish my goal of freedom (to some extent) and choice - following your thread for tips and inspiration!

Alchemilla

I don't like parties any more. Is that wierd?

gallygirl

Break it down into simple steps Judi. You'll have to decide on various assumptions - just make a note of what the questions are, you can make guestimates later. Or just pluck what seems like a reasonable figure and make a note of it - at this stage you just need to be asking the questions, you have a while to refine plans. For example, if you are serious about somewhere in France:

1. How much would what you want cost? If you don't know research it.
2. How much equity would you have left when you freed up your own house
3. How much can you save while you are working (maybe two figures - an easy one and an eat lentils forever one)
4. Have you thought of buy to let etc? Do you want to explore it?
5. How much would you need to live on? Again, if you don't know, research it on French forums etc. Include health costs etc.
6. How much to factor in for trips to see family & friends in the UK?
7. How much of a pension will you get and when? Factor in personal pension and state pension.
8. Assuming you want to retire at 55, you'll maybe have 5 years to fully fund, 8 years partially funded by works pension and then when state pension plus your works pension are added together you'll hopefully have enough. If not, what is the shortfall?

I've numbered them all as they can all be tackled separately, in any order except for no. 8 being last. Once you have answered all you can start to play. For the moment assume the price differentials, including exchange rates, will stay the same and you will get 0% interest on your savings. Once you've really got to grips with what you need to fund (the timetable and mechanics, not the actual amounts) then you can start to experiment with different interest rates etc but I needed to get the above fully established first (and as you're an ENFP so will you ). That is the very basic scenario.

Set yourself up a spreadsheet to work out the various options, e.g. if you have paid off your mortgage you will need less money each so can adjust for that, but if you don't pay it off you may be able to get better growth from leaving the savings invested and drawing extra each month. Financially the latter is probably better but the former is better for peace of mind if you're a worrier. Try playing with putting all your savings into bonds and assume 1% or 2% growth, all your savings into equities and assume 5% growth, 7% growth etc. Try an 80:20 split of bonds & equities and vice versa. It's generally accepted that if you withdraw 4% of a reasonably balanced portfolio every year you'll 'never' run out of money.

I found this useful:
http://www.cfiresim.com/input.php but only once I really understood what I was doing. You can start to play with interest rates, inflation etc, but get the basics nailed first. The cfire calc will stress test your figures against all recorded stock market cycles and tell you what % success rate (i.e. not running out of money!) you have. You can also do that in conjunction with something called the Monte Carlo effect which chucks in random events. I found it hopelessly confusing and complicated when I first came across it but very useful when I went back to it after I'd become comfortable with my own assumption and calculations. The biggest risk is if there is a stock market crash in the first few years of your retirement (if you're planning on investing) as your financial needs will be the same but you're withdrawing from a depleted fund and will need to sell more units to get the same income.

I'll be fine up to 100, may be out in the gutter after that :eek:.

Karmacat

Gally, what a great post! Thanks

Parties ... I'm fine as long as I can hang out in the kitchen by the booze, or in the dining room by the food

Or dance :dance:

ljaneyr

Thanks for all that GG! I won't pretend to understand everything you said yet but it all helps

Secret_Saving_Squirrel

Hello,

I am confused by most of this, however I still like parties but not as much as I used to. Happy to make small talk with anyone. Love social occasions.

Regarding pensions, oh and I have planned to have a fair bit of dosh up to 75 and after that we are not worried as although we have a few relatives who have lived beyond this age, they have not wanted to do any travelling, holidaying or partying, so our basic pensions would have served them finely. Genes will out, so it is really not wise for us to assume that we will need the same at 76 as at 66.

Squirrel:beer: