Enough money to retire at 26?

System

GreyQueen wrote: »

Your £300,000 at 1.85% is gross interest of £5, 550 not £7,500 btw. And that £5,550 is subject to tax at 20% which will reduce it to £4,440. Which is why people use ISAs and other wheezes to keep some of their capital untaxed.

The £300,000 divided by 40 years is the £7.5k allowance. Should have explained that. Not the interest on the £300k. The interest covers inflation, and may add a little income. The £7.5k comes from taking money out of savings each year.

By the end of the 40 years, I will have none left, but have state pension £8.5k a year + pensioner benefits like no TV licence (I think).


You only pay tax on earnings over £10k . I assumed this was basic knowledge

nearlyrich

You only get a free TV licence at 75 and I doubt that will continue for much longer...I am early 50s with more than you have in pensions and ISA's etc and I have moments of doubt that I have enough money to live on for the rest of my life because I actually enjoy living and want to do more travelling when I stop working.

Cyberman60

7.5K a year can be done as I'm doing it, although on an index-linked pension, minimum 3% per annum. Admittedly, starting at 26 is a bit extreme, as I started at 52, coincidentally exactly twice that age.

System

Cyberman60 wrote: »

7.5K a year can be done as I'm doing it, although on an index-linked pension, minimum 3% per annum. Admittedly, starting at 26 is a bit extreme, as I started at 52, coincidentally exactly twice that age.

are you happier now or when you were working and earning more?

Lizling

Hmm. How would you feel about moving to,say, rural Algeria? I think that budget should easily cover all eventualities over there.





(Mostly joking, but not entirely. Moving abroad to a much cheaper country might be worth researching if you're serious.)

pigpen

berbastrike wrote: »

Average appliance life say 10 years.

Washing machine = £200
Dishwasher = necessary? £150
Fridge = £200

Say £600

Divided by 10, only £60 a year, not huge costs.

no.. average life span 5 years.. they come out of extended warranty and die!

£200 washing machine.. you jest surely! double it! at least

Fridge freezer again.. double it!

House insurance doesn't cover wear and tear so you'd have repairs and replacements to pay for..

Have you actually lived in the real world ever???

.. Back reading...

when you have lived independently and paid bills like a real grown up come back with proper figures.. you are making a bit of a ninny of yourself its embarrassing to watch.

lostinrates

berbastrike wrote: »

and also, would my plan/savings, increase or decrease chances of getting a girlfriend?

Decrease, because you minimise both the pool of people who would be interested by such a niche lifestyle, and with a tight budget for lifestyle, opportunity to meet people.


The half way option is a good one. As someone whose access to work and entertainment etc is limited I'm a little bemused that a 'contracted' lifestyle is desirable to some. My husband and I have both said if we came in to huge amounts of money he would still work, but in a very reduced hours situation and different role, and my access to work would be better! Crucially our access to things you have set a tight budget for would be increased.

A good balance between time, which it agree is a HuGELY underestimated commodity most take for granted, money...both savings and income and also stimulation, from work, social activities, intellectual pursuit, and interaction with society is really optimal, and most of us make a bit of a balance fail. Your option is no more satisfactory because its pushing out the things you find hardest ATM.

If you are finding work/ interaction difficult maybe its worth investigating this with some of your savings and some one geared to guide you through this so you can get more from life NOW.

GreyQueen

berbastrike wrote: »

The £300,000 divided by 40 years is the £7.5k allowance. Should have explained that. Not the interest on the £300k. The interest covers inflation, and may add a little income. The £7.5k comes from taking money out of savings each year.

By the end of the 40 years, I will have none left, but have state pension £8.5k a year + pensioner benefits like no TV licence (I think).


You only pay tax on earnings over £10k . I assumed this was basic knowledge

You're so funny.

Debating whether to amuse myself further by reading your other threads.

Whether you are 24 or 26 you won't be getting a state pension at all until you're 68, based on present rules. More likely to be 70 or so by the mid-century. May even be retirement only when medically certified as unfit or work or actually d-e-a-d.

That's 2056 or 2058, depending on whether you're pretending to 24 or 26 today. Are you unworldy enough to imagine that the cost of living will remain unchanged for the next 40 years? Your £7.5 k could easily be one month's modest expenditures by then. Or less.

You have an interest figure for one year only and you are using that as a basis for your decisions? Perhaps you could try looking up these terms; ZIRP and NIRP?

Oh, and you do need to decide on a story and stick to it (the truth is always good and definately easier to remember) about whether you do run a business and are s/e or whether you do intend to live off your capital at a rate of £7,500 and are a financially independant non tax-payer. That is key to everything.

And I'd love to know what you did between leaving school and now that enabled you to accrue £700,000 (what you say you paid for your house and what you say you have in the bank). Eager minds want to know.

I do know some tax inspectors IRL and they will expect you to be very clear about what you live on and/ or earn, and they're nowhere near as friendly as the posters on here. One of them had to pull a six figure sum out of the air to bill some recalcitrant s0d who woudn't do his tax return and decided to use what was my landline telehone number back then - came to just under £80k and the onus was on him to prove otherwise or pay up.

System

pigpen wrote: »

no.. average life span 5 years.. they come out of extended warranty and die!

£200 washing machine.. you jest surely! double it! at least

Fridge freezer again.. double it!

Fridge = £220
http://www.currys.co.uk/gbuk/household-appliances/refrigeration/fridge-freezers/logik-lfc55s13-fridge-freezer-silver-20163486-pdt.html


Washing machine = £170
http://www.currys.co.uk/gbuk/household-appliances/laundry-dishwashers/washing-machines/logik-l612wm13-washing-machine-white-20227297-pdt.html

So much for "double it" !

ttoli

Early retirement isn't always what you think it is , I retired at 42 and moved here (Northern Cyprus) , very affordable place to live , banks pay (at the moment) 14% p.a. , Yes I own my own house but £300 a month for all bills, food etc achievable . Got bored of not working , so back in an office part time .