I want to retire early

caronoel

Do you have a lump sum that you could put down as a deposit on a buy to let investment property?

If you could find something that could give you a rental yield of (say) 5%, you can now borrow on a five year fix of well under 3%, so there would be a healthy residual in it for you. Given you are likely to be a 20% income tax payer, the new drachonian measures on 40% tax payers wont impact you

The other beauty is that rents typically track inflation, so you will have a nice little buffer there in addition to a capital sum when you eventually decide to sell up

atush

molly57. wrote: »

Good Morning


I am not going to say what my current employment is. All I can say is it is for a "not very good employer who is only interested in the business need and not the welfare of the staff" and I don't really want to continue the countdown to my retirement in such bad conditions. I have been there for a long time (laziness on my part in not finding something else). I want to have a bit more me time with enough income to live reasonably well. And YES "atush" it is a PIPE DREAM but if I can achieve it I will. I am good at my job and care about fair conditions which is not liked by management. I do my job to the best of my ability, comply with all the rules and conditions even though my heart and mind says differently.


I could reduce my hours with my current employer if they will let me. I would like part time work with an employer who cares about their staff. My work pension is not automatically payable at 60 unless I request to retire at that age. My official retirement age is 66 at present. I do not know if I can retire at 60 and continue working for the same employer part-time but I can look into that. And yes I can increase my pension contributions to my current employer.


The whole reason for this post was to find out what is available to me and what my options are.

My saying pipe reaming was to give you a gentle kick up the behind and get into saving action.

You hate your job, so make looking for a new one a priority. Consult HR or your pension scheme provider to find out more about your current pension (if you said who it was, others might be able to help better).

Figure out how much you need to live in retirement. Look up The Number thread and read it. Then figure how you can get there, and how much you need to save.

Post an SOA on the budgeting or debt free board and ask for advice on cutting costs so you can save more. consider a lodger if you have a spare bedroom and bathroom.

Save any money you can free up into a DC pension and use that money to retire early.

Molly4

Unfortunately I do not have a lump sum to invest in property which sounds a very good idea. Perhaps I could work from home as well as keeping my job or taking on a new part-time job. Any ideas that are legal, clean and don't pay peanuts per hour?

michaels

OP are you aware of the financial advantage of contributing 2880 to a pension each year to gain tax relief bringing this sum up to 3600 regardless of income and then withdrawing the money 25% tax free, the rest taxed at your marginal rate and repeating each year?

atush

molly57. wrote: »

Unfortunately I do not have a lump sum to invest in property which sounds a very good idea. Perhaps I could work from home as well as keeping my job or taking on a new part-time job. Any ideas that are legal, clean and don't pay peanuts per hour?

Actually, unless you have skills in t he sector, property investment can be a bad idea for many.

And yes, you can earn over 4K pa tax free under rent a room relief. Legal.

xylophone

Why not look round for a new job now?

Living_proof

What would this thread consider to be a reasonable disposable income in retirement for a single person? Assume all my bills are paid (water, gas, elec, council tax, insurance and house insurance etc) what disposable income would provide a comfortable lifestyle. I am not looking for Caribbean cruises etc. and I am already a thrifty type! I am considering retiring slightly earlier than SPA as I am weary of the same old, same old.

Triumph13

As a way to make your 'pipe dream' more exciting and if you don't have family ties keeping you where you are, have you considered heading off into the sunset and being a beach bum in a low cost of living country(ies) for a couple of years to help your money stretch? If you are a home owner and can rent your house out for a year or two, then that would probably cover your living expenses in some places. Planning your trip might also make your job a bit more bearable in the short term!

Molly4

Thank you "atush", "michaels" "Living proof" and "Triumph13" for your comments. All things for me to consider.


"michaels" can you explain how the contributing £2880 to a pension to gain tax relief works? Or is there a forum on MSE that explains it for me?


This is where I look stupid. With my current work pension contribution do I pay tax on my gross salary or on the net salary after my pension and national insurance contributions are deducted?

coyrls

molly57. wrote: »

Thank you "atush", "michaels" "Living proof" and "Triumph13" for your comments. All things for me to consider.


"michaels" can you explain how the contributing £2880 to a pension to gain tax relief works? Or is there a forum on MSE that explains it for me?


This is where I look stupid. With my current work pension contribution do I pay tax on my gross salary or on the net salary after my pension and national insurance contributions are deducted?

[FONT=&quot]You pay tax on your net salary after your pension contributions are deducted. If you have a salary sacrifice arrangement, you won't pay NI on your pension contributions either, otherwise you will be paying NI on your gross salary prior to the deduction of pension contributions.

The £2880 "trick" only applies if you are not earning anything. If you are earning, you can [FONT=&quot]contribute[/FONT] the whole of your gross salary (up to £40,000) and gain tax relief on your contributions. If you can make extra [FONT=&quot]cont[FONT=&quot]ribution[/FONT][/FONT]s into your existing pension scheme, that would probably be simpler than setting up a new SIPP.[/FONT]