Regret retiring too early with not enough money?

Dorian1958

Jerry as you posted at 07:57 I assume you did so lying in bed;)
9 months to go for me after working 42 years, I suppose going at 60 counts as early retirement these days. Like the idea of taking stock for a while. Can't wait.

jerrysimon

Dorian1958 wrote: »

Jerry as you posted at 07:57 I assume you did so lying in bed;)

Yes strangely this morning I awoke at 6:30am (usually the time my wife gets up) and found myself wide awake so got up at 7:30am with my tea and cereal logged in here on my mac as you do

Jerry

MallyGirl

jamesd wrote: »

At 50 the ISA looks like a mistake unless you're already putting 100% of pay into pensions or want to use it for an innovative finance - peer to peer - ISA. Better to get pension tax relief then tax free lump sum to use for the ISA. Or maybe increase mortgage borrowing to do both then tax free lump sum for mortgage clearing.

Thanks - we have an offset mortgage so are effectively doing this at the moment but we only have £38k left to go on it so it will be cleared before retirement either way and no need for a lump sum to sort it.

jamesd wrote: »

If not doing salary sacrifice down to minimum wage for the whole yer it's most efficient to concentrate it in months down to minimum wage then normal sacrifice just ti get employer matching. This maximises the amount of 12% NI saving because NI is calculated for individual pay periods.

I had never thought of this - so if I sal sac a whopping great AVC every few months, instead of the consistent amount I currently do, I get the 12% bonus on those months?
Certain benefits such as life insurance and bonus are based on salary after sal sac so we don't want to go too crazy with the extra pension payments but I could certainly chop and change the AVCs to get NI savings. Thanks

Ganga

kidmugsy wrote: »

The posties around here seem fit and cheerful. Is it a reasonably stress-free job?

Yes and better than walking the streets:rotfl::rotfl::rotfl:

Anonymous101

I'm soon to be 36 and have aspirations to retire early. 55 or 56 ideally.

I'm interested how many of the people on here went about planning for early retirement. Was there actually a plan or did the situation just present itself?

I'm currently saving 18% of my salary into a pension and a further 9% into a S&S ISA. I'll be increasing the pension provision to 25% in the new year. I'm hoping this will be a decent foundation to build upon over the next 10 years before a final 10 year push to retirement.

I'm interested what people that have been through this processes thoughts are on planning for this.

jamesperrett

Anonymous101 wrote: »

I'm interested how many of the people on here went about planning for early retirement. Was there actually a plan or did the situation just present itself?

I'm in a final salary scheme. A couple of years ago I ended up doing quite a bit of overtime which counted towards the pension. When I did the calculations I realised that this additional overtime cancelled out the reduction for taking the pension early and the associated lump sum would more than pay off my remaining mortgage. If I stayed more than 2 years after I earned it, the overtime would no longer count towards the pension so it made little sense to stay.

I have just under a month until my last day.

k6chris

Anonymous101 wrote: »

I'm interested how many of the people on here went about planning for early retirement. Was there actually a plan or did the situation just present itself?

Like you, I focused on paying a large proportion of my salary into my pension savings, as well as over paying the mortgage. This was not to retire at any specific age, but just to expose me to the risk of being able to do so, if I wished. The twin benefit of this approach is you tend to lead a more frugal life style, which means that you need less money saved to support it in retirement! My gut feeling is the vast majority of early retirees have done this, focusing on saving more and spending less.

Good luck with your plan, you are doing the right thing :T

Anonymous101

k6chris wrote: »

Like you, I focused on paying a large proportion of my salary into my pension savings, as well as over paying the mortgage. This was not to retire at any specific age, but just to expose me to the risk of being able to do so, if I wished. The twin benefit of this approach is you tend to lead a more frugal life style, which means that you need less money saved to support it in retirement! My gut feeling is the vast majority of early retirees have done this, focusing on saving more and spending less.

Good luck with your plan, you are doing the right thing :T

Thanks.

That's good to hear and in line with what my thinking is really, I suppose the modern term for it is FIRE (Financially independent, retire early). I don't necessarily want to stop working totally, just have more scope to work less hours or doing lower paid work with less pressure. As many people on this thread have done.

You are correct about the twin benefit. Living a frugal lifestyle not only gives financial benefits but with more time on your hands once you work less there the scope to either cut costs further or take up a hobby that may yield some income. I think frugality is a mindset that has many benefits.

michaels

Anonymous101 wrote: »

I'm soon to be 36 and have aspirations to retire early. 55 or 56 ideally.

I'm interested how many of the people on here went about planning for early retirement. Was there actually a plan or did the situation just present itself?

I'm currently saving 18% of my salary into a pension and a further 9% into a S&S ISA. I'll be increasing the pension provision to 25% in the new year. I'm hoping this will be a decent foundation to build upon over the next 10 years before a final 10 year push to retirement.

I'm interested what people that have been through this processes thoughts are on planning for this.

It is almost certainly running your expected contributions through a spreadsheet including your planned retirement date and seeing what income you might expect including however much state pension you think you will have earned. Probably no need to do anything too complicated, just work in today's prices with 2% real investment growth, whatever date you anticipate any TFLS being available based on your age and needing a fixed amount per year to go from retirement to state pension and then 4% of remaining pot PA thereafter.

jamesd

MallyGirl wrote: »

so if I sal sac a whopping great AVC every few months, instead of the consistent amount I currently do, I get the 12% bonus on those months?
Certain benefits such as life insurance and bonus are based on salary after sal sac so we don't want to go too crazy with the extra pension payments but I could certainly chop and change the AVCs to get NI savings.

Yes, most of it will end up in the 12% range if you go down to minimum wage. A pay calculator can work out how much for you, just feed in pre-sacrifice, level sacrifice and a deep sacrifice income level into it to see the NI difference for your actual pay amount.

Your employer will be saving more NI if you sacrifice more, 13.8% for them if they don't share some or all with you. Worth saying you're considering much more sacrifice but don't want to lose bonus or life insurance, is there any chance of splitting the employee NI saving or basing bonus on pre-sacrifice pay or pay after the bit which gets normal employee matching. Since it helps them save NI they may come up with something.

Since the bonus isn't predictable, I assume, the sacrifice NI saving may be worth taking anyway.