Want to retire early - where to begin??

Linton

You should be able to retire after 35 years work with a reasonable pension. Just put in 25% of your gross pay including employer's contribution into your pension and invest wisely but not wildly. That and State Pension at 67 or whenever could give you a retirement income something like 75% of your gross pay.

AlanP_2

gadgetmind wrote: »

My brother worked on the railways, and then moved to the civil service (where he claimed people moved even slower!), and took early retirement at 50.

This simply wouldn't be possible in the private sector.

Not sure if this as in response to my comment or not but -


I know more Private Sector workers who have retired under 50 than Public Sector ones.

By the time 55 comes around that swings the other way as the Public Sector worker can access his pension and, in the last few years for local government at least, there has been so much restructuring that avoiding the actuarial reduction + redundancy lump sum has been attractive to many.

AlanP_2

mlv-1967 wrote: »

Well, I would retire tomorrow if I won the lottery jackpot. It's all about being realistic and planning logically instead of dreaming.

Well yes it is, in as much as threads like this should help people to set realistic targets and discuss ways they could achieve their dream.

It should not be about destroying their dreams just because I / you / ANO thinks it's a fanciful dream

gadgetmind

AlanP wrote: »

I know more Private Sector workers who have retired under 50 than Public Sector ones.

From office work roles with no reports?

My take (and I stand to be corrected) is that in the private sector, quite likely relying on DC pensions rather than DB, you really need to be a high flier to retire early, whereas in the public sector, you just need to rise to the top of the early redundancy pile a couple of times.

Reue

mlv-1967 wrote: »

Public sector employer? The government is now cracking down on huge handouts like these. And even in the private sector this sort of thing is happening less and less.

Nope, private company.

AlanP_2

gadgetmind wrote: »

From office work roles with no reports?

My take (and I stand to be corrected) is that in the private sector, quite likely relying on DC pensions rather than DB, you really need to be a high flier to retire early, whereas in the public sector, you just need to rise to the top of the early redundancy pile a couple of times.

My examples were very well paid, high pressure roles in City and well paid IT sales jobs - but private sector which was my point.

Very, very few public sector workers get made redundant more than once although that will increase going forward as more roles are taken out of the organisations which affects staff of all ages and at all levels.

The "Merry Go Round" at the top end between Local Gov, NHS, Civil Service, Quango and back round again is a different issue.

At the end of the day there is no "one size fits all" answer or statement that covers this though is there.

For example about 50% of both the private sector and public sector retirees I referenced were bored within 2 years and did something else for the mental stimulation and enjoyment as opposed to needing the money. They missed working basically.


BTW - Just to give this some context in case some may think I am only looking at this from a public sector perspective - whilst I am working in Local Gov now that is only since 2008. Before that (going back to early 80s) it was private sector IT (4 redundancies) and 9 years self-employed.

Reue

mlv-1967 wrote: »

I don't see how it is realistically possible to retire before 55, and even that target is extremely ambitious, given the multiple hoops that the government has created for us to jump through.

Easily possible for someone who starts planning it early enough.

Uni graduate at 21, Saves for house deposit and buys first house at 25. Overpays the mortgage and has it paid off by 35. 15 years of saving say £15k a year gives £225k at age 50 on which to live off the investment returns or draw down the capital until pension opens up at 55/60etc and state pension later on.

ermine

mlv-1967 wrote: »

For this you need to make sure that your mortgage has been paid off by then and/or your partner earns sufficiently for you to take this income drop.

You would be unwise to do that if you aim to retire before the age you can access pension savings (currently 55). You should usually retain the low-cost borrowing and aim to save enough to pay off the mortgage with your pension tax-free 25% pension commencement lump sum.

The money you don't use to pay off the mortgage earlier can be used to give you more flexibility pre-55. You don't have to do this, I got that wrong, for example, but it makes it easier.

The Escape Artist is an example of somebody working in the private sector who retired at 43. As he said -

I paid off my mortgage when I was 32, built up my investment portfolio and then quit my corporate job in March 2014 at the age of 43. I did this with an office job, bringing up 3 kids and without winning the lottery, inheriting money or being CEO of a large multi-national company. Those are my stripes.

Money_Saving_PhD

Thank you all for your comments, it's been some time since I last posted and I have been researching and reading Tim Hale's book, almost to the end now. Thanks to ermine especially, I have been reading your blog and appreciate your insight into living simply. I have a few questions if anyone knows the answers and could help me out, I've had trouble getting answers at work.

I can enroll in the USS immediately and I can transfer my LGPS pension in using the club transfer within the first year (I have about 5 years service, about £2.5k/year pension projection). The proposals for the changes to the USS in 2016 suggest the club transfer option will close in about a year too.

So I'm still not sure of the benefits of transferring my LGPS to USS, when the transfer value should be equivalent. Is it better to have all my eggs in one basket? Does combining my service give a better total return? I'm also not sure with the USS deficit if I should leave it where it is in LGPS.

I also wondered if anyone can explain; my current earnings at the university are about 8 hours per week, on a zero-hours contract, and sometimes at two different pay grades, but the hourly rate is relatively good. How will my service and salary be calculated when making pension projections (the university have not been able to explain this yet)?

I know someone (atush I think?) said to get into the DB scheme asap and start paying in, is this still the case with changes coming to USS, and with me earning so little? Should I then aim to be making AVCs to this?

I've just been sent the consultation docs for the proposed changes to USS next year (as someone who may join USS in the future) and am reading through them now. Even if a portion of the USS becomes DC, is it still better to be in a partially DB scheme? Many thanks in advance for any advice.

115K

Reue wrote: »

Living cheaply is the key message. There's a few UK people around your age attempting similar timescales. Take a look at some of their blogs for an idea of the savings %s required and long term planning:

http://thefirestarter.co.uk
http://financiallyfreebyforty.blogspot.co.uk
http://www.earlyretirementguy.com

And of course the UK early retirement guru who also frequents these boards:

http://simple-living-in-suffolk.co.uk/

Thanks for those links.:T