Semi/Early Retirement at a young age

YoungBusinessman

Congratulations on expecting your first child. Also well done on the impressive income, your obviously good at what you do/sell as it works!! Im looking at increasing income(still less than yours...) to fund me paying off £40k debt, my mortgage and then onto next house and saving for early retirement all by age 40....17 years to go......

atush

Yes, once the child (congrats BTW) is in school, you wont be taking off 6 months of the year. But you can take 3 over the summer? and shorter trips at Xmas and Easter?

We had planned a somewhat early retirement at 59-60, but the OH might work another year or 2 because we had twins late and that put our retirement plans back (esp when they both made it to University- we would have been able to retire before that if they hadn't but we are happy)

C-dog

Confirmed this morning. Still kinda in shock and it will honestly make us think things through in a whole new light.

The goal remains the same, earn, save, earn, save, earn, save. This opens up all options to us.

We'll probably sit down in a few months, readdress the travelling idea. There was once a conversation about taking a mini retirement. An extended break so to speak. That might be on the cards...Everything is up in the air right now. Today has been a total blur

Tonight I will be celebrating with a fine red. Maybe 2.

atush

You get the whole bottle, she cant have any lol

mgdavid

atush wrote: »

You get the whole bottle, she cant have any lol

brilliant, always good to have a reminder about the upsides

BeatTheSystem

beancurd wrote: »

Don't take 100k salary if possible.

Salary 10k if you are the first employee as it is most NI efficient, but 8k gross otherwise.
Dividend to bring you up to the basic rate tax limit of approx 40k. From the limit, subtract salary and other income such as bank interest. Then pay a little under 90% of the remainder as dividend. So somewhere up to 27k net.
Pension 40k
Leaving retained profit approx 20k after expenses and corp tax. Take this out with 10% tax later, remember to include 10k tax free gain.

If you must take 100k for company reasons, take remainder as div at 40% tax.

Claim expenses wisely. Use spouse employment if appropriate. You should be able to extract about 80% of the 100k. Consume that 120k you just received wisely. Fill Isa if you can. Don't extract more just to use isa. Beware of 1.2M LAs but I reckon that'll grow.

I second Beancurds suggestion as this is exactly what I did for many years. I put the maximum I could into SSAS/SIPP, as long as I live long enough to 55 I will be in a good position.


Make hay while the sun shines, circumstances can and do change.

The only modification I would make is to put more into VCT's to mitigate all tax (30% relief) especially if you are confident that your business will continue to do well for the next few years.


I would be very careful about 'retaining cash for investment in people' This did not fly with our accountant. The revenue is tightening up on this. Also keeping it in the business exposes your wealth to creditor attack, it only takes one bad contract.


Best of luck.

C-dog

So confirmed once again with another pregnancy test this morning. Thats probably £40 worth now (investment idea)...

Actually biggest shock was seeing my LS 100 ACC account in negative for the first time since I started investing. Sept was our year end, so I loaded up my SIPP with all available cash, so now I am in no position to capitalise on this dip. Bah!

No issue, for the short to mid term range the plan is to accumulate as much as possible, so focus on selling more, not on investments.

I do need to look at my allocation though with my next purchase. Everything to date is in Lifestrategy 100 (or 80 in my wives account). Might need to consider a less risky portfolio for the shorter term. But if I have a plan an additional year or two, so be it.

I've absolutely zero knowledge of VCTs, so that could be worth a gander and a read.

Regarding creditor attack. We work with many smaller businesses rather than a small number of larger contracts, so no 1 client is greater than 2-3% of our total revenue.

atush

C-dog wrote: »

So confirmed once again with another pregnancy test this morning. Thats probably £40 worth now (investment idea)...

Actually biggest shock was seeing my LS 100 ACC account in negative for the first time since I started investing. Sept was our year end, so I loaded up my SIPP with all available cash, so now I am in no position to capitalise on this dip. Bah!

No issue, for the short to mid term range the plan is to accumulate as much as possible, so focus on selling more, not on investments.

I do need to look at my allocation though with my next purchase. Everything to date is in Lifestrategy 100 (or 80 in my wives account). Might need to consider a less risky portfolio for the shorter term. But if I have a plan an additional year or two, so be it.

I've absolutely zero knowledge of VCTs, so that could be worth a gander and a read.

Regarding creditor attack. We work with many smaller businesses rather than a small number of larger contracts, so no 1 client is greater than 2-3% of our total revenue.

2 things, dont spend 40 on x number of pregnancy tests. After the first one, get one free at your doctor lol.

Second, when you whack cash in your sipp, doesn't mean you have to invest all of it at once in shares. You can drip feed it in, and leave a sum for investing in 'dips' as you say.

Thrugelmir

C-dog wrote: »

I've absolutely zero knowledge of VCTs, so that could be worth a gander and a read.

Don't get sucked in by the tax relief. Investments need to stand on their own merits.

C-dog

What a roller coaster of a couple of weeks. Wife is indeed pregnant and we've just about come to terms with that. Lets be honest here, I'm freaking out. Massively! I had dreamed of 3 months in the snow, 3 months in the sun and the other 6 back here in the UK.

I'd even consider moving country in retirement if I thought I could achieve half that.

I'm earning and saving as much as I can. We've 2 monster tax bills to pay in January, so we're taking zero drawings from the business right now so that we don't have to touch our savings/investments. Also we have a couple of amounts from our parents (early inheritances) to put into the SIPPs this month, so we should hit the 200k invested by month end. Thats a major saving rate for the past twelve months. I remember hitting 100k not so long ago. #compounding

Hope to hit £250k by April. Baby due June.

In my head I know I need to stick to my plan of save, save, save. But I keep day dreaming of taking the plunge in a ski property in France or Austria. I won't as the goal is to reach my FI figure. But its a nice idea.