How early can you retire?

Thrugelmir

missile wrote: »

Not necessarily so.


When it comes to buying some items e.g. new car & home improvements. The seller is often incentivised to sell you finance. If you are careful, you may find it can work out cheaper to take the finance offer.

Try buying a car for cash from a main dealer. :eek:

Doshwaster

HappyMJ wrote: »

I've pretty much retired now at 40. I just do odd jobs every now and again. I don't need much money to get by. I've got investment income of around £1,000 per month and that's more than enough for me and my partner. That capital should run out by the time I reach 70 at which point the state pension which currently pays £1,000 per month for a couple will be payable.

Of course that planning is based upon assumptions of what the state pension will be worth in 30-40 years time and what your health will be like.

I'm 43 and I don't think I could retire now even if I could afford it as I'd just be bored stupid. Having a lot of time on my hands would just means that I would find new ways of spending money.

Ideally I'd like to get to the stage when I could choose to work less but full retirement isn't even on the horizon. I'd love to travel more but that's really hard on 25 days holiday a year.

kidmugsy

Scroll through this blog:

http://www.retirementinvestingtoday.com

Goldiegirl

Just a few things to think about




Don't forget the effect of inflation. If you think you could live frugally now on, say, £1000 per month..... in 10 years time it would be VERY difficult..... in 20 years time impossible. You could live for another 60 years or more, so that's a lot of inflation to think about.


How do you want to live? Do you want a very basic existence and just get by..... or do you want to live a bit and travel and eat out etc. Unless you love frugality and are happy to stay within your own 4 walls forever, you'll need money for fun, both now and after you retire. The key is to live a balanced life.


How would you spend you time after retirement. Two weeks off work when you have money to spend is a lot different to never working again for the rest of your life. Have you got interests and hobbies to fill the time, and will you have the money to pursue your interests.


Don't forget you'll need 35 years of National Insurance contributions to get the full state pension. If you give up work early, don't forget to make additional voluntary NI payments to make sure you have the required 35 years contributions.


As others have said... look for another job that you'd like.


When I was your age I used to think sometimes that it would be nice not to have to work.... but when I really thought about it, I realised I wouldn't have much of a life as I wouldn't have enough money for the sort of freedom I wanted.


Fortunately, I liked my job, so I got my head down, saved money, paid into the pension, enjoyed life with holidays etc along the way, and finally retired last year at age 54. We now have enough money to live comfortably and to do the travelling we want, which is much better, in my opinion at least, to stop working at a very early age and just existing for the next 50 odd years,

HappyMJ

Doshwaster wrote: »

Of course that planning is based upon assumptions of what the state pension will be worth in 30-40 years time and what your health will be like.

I'm 43 and I don't think I could retire now even if I could afford it as I'd just be bored stupid. Having a lot of time on my hands would just means that I would find new ways of spending money.

Ideally I'd like to get to the stage when I could choose to work less but full retirement isn't even on the horizon. I'd love to travel more but that's really hard on 25 days holiday a year.

I'm assuming state pension will be worth close to what it's worth in today's money. I haven't considered my health. I'm also assuming the NHS will still be around to care for me and I won't require private medical insurance and at around £2,500 a year for a single premium for a 70 year old I just can't see the value in it.

That's why I still do some work every now and again to avoid being bored stupid as you put it.

Goldiegirl wrote: »

Just a few things to think about




Don't forget the effect of inflation. If you think you could live frugally now on, say, £1000 per month..... in 10 years time it would be VERY difficult..... in 20 years time impossible. You could live for another 60 years or more, so that's a lot of inflation to think about.


How do you want to live? Do you want a very basic existence and just get by..... or do you want to live a bit and travel and eat out etc. Unless you love frugality and are happy to stay within your own 4 walls forever, you'll need money for fun, both now and after you retire. The key is to live a balanced life.

I don't think spending £1,000 a month is living frugally. I could spend much less.

Goldiegirl

HappyMJ wrote: »

I don't think spending £1,000 a month is living frugally. I could spend much less.

It depends what you want from life.


Our current household income is £1540, and we feel we live comfortably on that, and go out for meals and have days out. But our holiday expenditure is completely separate and comes out of savings which we've accumulated over our working life.


My husbands state pension starts next year, and mine will start in 2026 (ages away) and apart from savings, we have money in my husbands pension pots, which we will draw down when needed (but not yet)


We could live on £1000, but it would not be the life I want to live - we wouldn't be able to so all the fun things we currently do with the other £540 per month.


I wouldn't have been happy to stop work with the prospect of having a monthly income of £1000, and the prospect of this never increasing, apart from index linking with inflation. It wouldn't be the life I'd chose for myself. We live mindfully, but not completely frugally.

GenghisKhan

kidmugsy wrote: »

Scroll through this blog:

http://www.retirementinvestingtoday.com

Thanks for the hat-tip there kidmugsy.

To answer the question How early can you retire? I'm trying to achieve it in less than 10 years. I started my journey at age 35 and want to be well and truly done by 45.

I'm currently 43 and have accrued 82% of the wealth I think I will need. That wealth will buy a modest family home plus give me enough to live on 'hopefully' forever. So I'm on track for that 10 years.

Key learnings for me so far (don't think I'm allowed to link to my journey but plenty of posts on all these topics):
- The amount you save is critical. I'm currently saving 55% of gross earnings and have been between 55-60% for many years now. Concentrate on learning how to earn more and spend less.
- Don't forget the spend less as it accelerates your pace to the goal posts but also brings the goal posts closer.
- My experience is very early FIRE does not give compound interest a chance to really work it's magic. To demonstrate I'm 8 years in and savings have contributed 68% to my wealth building while investment returns have only contributed 32%.
- Be wary of the 'magic 4% rule' that seems to be so bandied around these days. I could be FIRE'd for 40 years and I've settled on a WR of 2.5%.
- To do it requires Determination. Don't underestimate this point.

Of course DYOR and all that.

Chickereeeee

Thrugelmir wrote: »

Try buying a car for cash from a main dealer. :eek:

They encourage you to take finance so you can get an additional discount,,,,,! Then pay off the finance in one go after a month, as the charge is less than the additional discount.

C

Chickereeeee

How depressing to see several healthy people planning for VERY early retirement in their thirties!

Plan for supporting yourself when you need to retire, yes of course! Be entrepreneurial, take risks and try to become financially independent early, so you take breaks, get more education in new fields, or take bigger risks and build something, yes, even more so!

But retirement, as in no longer working? Oh dear me.



C

GenghisKhan

Chickereeeee wrote: »

How depressing to see several healthy people planning for VERY early retirement in their thirties!

Plan for supporting yourself when you need to retire, yes of course! Be entrepreneurial, take risks and try to become financially independent early, so you take breaks, get more education in new fields, or take bigger risks and build something, yes, even more so!

But retirement, as in no longer working? Oh dear me.



C

For me FIRE is work becomes optional and not sunning myself on a beach until I die.

At the FIRE point my plan is to:
1. Resign
2. Ascertain where we want to live. At this time that's looking like 6 months in Malta, Spain and a non-UK city location not in the South East of England to understand that.
3. In parallel decompress ensuring no critical decisions are made during this time. I want to really understand who I am outside of the high pressure high stress work environment I currently find myself.
4. If it's the UK then ideally build a modest home. Want a low energy use, fairly small home but on a bit of land which seem rare.
5. Then once I know myself and have the family settled figure out what I want to be when I grow up. That might be a keen cyclist, a keen sea kayaker, a valuable charity volunteer or a self employed worker. Money won't be a concern so I can become who I want to be. What I won't be is a corporate drone.