Do i have enough for early retirement?

itwasntme001

Hi

I am 35 currently unemployed and looking for other people's opinions on my situation - i am going for early "retirement" in the sense that i want enough to not have to work, although i may still chose to (part time, volunteering etc). Based on the below details do you think i can "retire" now and if not how much more do i need to save up?

- 35 years old, unemployed so no income.
- Spending at £24k a year in today's money.
- Stocks: £400k split between pension (£100k) and ISA/trading (£300k).
- Home: Worth £575k (in London) vs debt of 260k.
- Cash: £135k
- P2P: £30k

Do not want kids as well out of choice.

Potential inheritance in the future (hopefully way into the future), guessing around £500k in today's money.

Thanks

Reaper

In a word - no.

Assuming you want to stay in your house we can discount that from your savings. So adding up your assets and subtracting your debt you have £305k

Spending £24k pa that will be all be gone in roughly 12 years.

On the one hand I have ignored any growth in the investments but on the other hand I haven't taken inflation into account. Over the long term inflation will seriously dent your spending power.

itwasntme001

The £24k includes mortgage payments (principal and interest) of £10k.

Reaper

If you do a search there are many pension calculators where you can enter your details, target income and retirement date and it will tell you how much you need to save up to achieve that. Then you can play around with the figures.

Just note there are many assumptions (eg rate of inflation, expected investment growth) which affect the outcome. Some of them let you alter the assumptions if you are more/less optimistic.

ams25

We need some more information.

How many years of mortgage payment left.

Is the £14k covering all expenses or just basic living. What about property repairs, new car, dental bills, holidays/travel, hobbies etc in all that free time. Is it enough to live a fulfilling life.

How likely is the inheritance. What if it gets eaten up by medical/social care costs, the donors spending it, iht tax etc. Would the donors be able/up for making some lifetime gifts?

How many years ni/state pension contributions do you have. Would you need to make voluntary contributions (c. £750 per year) to cover 15 years or so.

a part time job feels more realistic than full retirement from the workforce, depending on how you answer the above.

MoneyGeoff

Is the £260K a mortgage or other debt? If it's a mortgage that is being paid off out of the £24K pa that you spend then (ignoring the £100K pension) you have £465K in cash/Isas/P2P.

£465K invested at 3% and drawing down £2K per month would last 29 years so that's easily enough to get you to pension age and perhaps the inheritance?

dividendhero

Back of the envelope calculation is that you'll have around £16,000 in share income (4% yield on £400k). That's a shortfall of £8,000 pa. Assuming a couple of grand in income as a safety net, you'd need another £250k in shares

Alexland

I don't know your situation (so apologies if you are sick and unable to work) but for most people retiring single at 35 and living on pennies seems a waste of their potential. My suggestion is to find a job that you enjoy and gives you the chance to apply your skills in a way you find satisfying.

Glen_Clark

Saw a survey where people were asked how much they think theywould need for a comfortable early retirement.
All of them, even those with many £millions, gave the same answer - a bit more than they have got now.

atush

You hve enough to retire before state pension age, but not now.

So get back into employement and pay into pensions. Also with only 100K in pensions, and 300K in ISas, i'd be moving mroe of that into pensions once you have an income again. Although you could start now moving 2880 into a pension each year, which is boosted to 3600 via TR. Even though you dont pay tax.

atush

BTW, I would ask this in the pensions forum instead.