Do i have enough for early retirement?

itwasntme001

Thanks all very much for your input. I think it is pretty clear that i do not have enough. I am not bothered as i said i am looking for work anyway.


Yes i have and i took some meds and had therapy. It started before i left work (maybe part of why i left was due to the depression), and it got worse last year whilst out of work. However i feel better now and have so since the start of the year (apart from 1 or 2 episodes which got resolved quickly).


thanks all again!

dividendhero

itwasntme001 wrote: »

Thanks all very much for your input. I think it is pretty clear that i do not have enough. I am not bothered as i said i am looking for work anyway.


Yes i have and i took some meds and had therapy. It started before i left work (maybe part of why i left was due to the depression), and it got worse last year whilst out of work. However i feel better now and have so since the start of the year (apart from 1 or 2 episodes which got resolved quickly).


thanks all again!

Good luck with your therapy - I know you've already said you won't be taking early retirement, but I do know some people who've had depression and it's got much worse after they stopped working.

As others have said, try finding work you enjoy and don't get overly worried about the £££'s - you've a fair chunk of money behind you

Terry_Towelling

dividendhero wrote: »

Good luck with your therapy - I know you've already said you won't be taking early retirement, but I do know some people who've had depression and it's got much worse after they stopped working.

As others have said, try finding work you enjoy and don't get overly worried about the £££'s - you've a fair chunk of money behind you

Agreed. You have a stash of cash, so that side is all sorted. I'd love to work again (but I could be lying). I'm 55 and have been out of it for 6 years now as my wife has dementia and I am her sole carer. To be honest it's the most worthwhile thing I've ever done and I spend much of the day up to my armpits in... well you can guess what... but the pay is rubbish!:)

pepper77_2

itwasntme001 wrote: »

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

If you can face living in the sticks, your fall back scenario could be

Clear your mortgage and buy oop north.
Rent out your London property and live off the income(I'm guessing easily £25k)
Workwise, work when you want doing what you want.

DairyQueen

Very simple.

You are looking to fund a 60 year retirement. Unless you factor in that 'inheritance' (which may well be depleted by nursing home fees), you are not even close to funding this. The chances are that your expenses will change dramatically over the next decades (I recently spent £20k on dental work despite having 'perfect' teeth until age 50).

OH and I have three decades on you, and have a much bigger net worth, but we are still concerned that we may outlive our funds. At age 65 a safe withdrawal rate in the UK is currently estimated at 2.75/3.0%. That is intended to fund a 30 year retirement. I'm not an actuary but suggest that a safe withdrawal rate for a 60+ year retirement would be a lot less (1.5%? 2%?).

If you downsized to a mortgage-free property (£315k) you would have £565k to generate income. 2% = around £13k p.a. Even with capital depletion the withdrawal rate wouldn't increase sufficiently to match your £24k expenses.

Plus you will need to make voluntary NI contributions to qualify for a reasonable state pension.

You are too young to waste what could be a very productive life.

atush

itwasntme001 wrote: »

Thanks all very much for your input. I think it is pretty clear that i do not have enough. I am not bothered as i said i am looking for work anyway.


Yes i have and i took some meds and had therapy. It started before i left work (maybe part of why i left was due to the depression), and it got worse last year whilst out of work. However i feel better now and have so since the start of the year (apart from 1 or 2 episodes which got resolved quickly).


thanks all again!

First off, glad you have seen the doc and are feeling better.

but as you may have left due to your depression you may have done well to have gone off on a medical leave as you had depression- could have stopped them from making you redundant. or had to pay you mlre/boost your retirement.

Having suffered depression myself, i always tended to feel better this time of year- more sunlight helped me. So I worry about a relaspe come next autumn if you dont sort the underlying cause by then.

jamesd

itwasntme001 wrote: »

i am going for early "retirement" in the sense that i want enough to not have to work...

- 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

I normally hang out in the pensions section and the broad answer to your question is that yes, you can easily afford to retire if you want to.

Say you sell the London place and spend 150k on one in a cheaper part of the country. That adds 165k to your capital, taking you to 730k. Even just taking around 3% of that as income from dividends and interest that's 21.9k a year to live on. Trivial for a fairly frugal person to do that in most of the country.

Plenty of compromises available in how much to spend on a home and where but a one bed flat appears to meet your needs.

If you were 55 I'd be using 5% of capital and the Guyton-Klinger rules to suggest more like 36,500 a year. You could probably do 4% so 29.2k if you wanted to. Or if you're willing to take the 40 year planning horizon it is for and assume an inheritance within that time could go with the 36.5k. The retirement safe withdrawal rates are based on extreme bad cases and the money is likely to handle 30-36.5k for life once your state pension is factored in.

Congratulations! Your past prudence in accumulating lots of money has made work optional for you at an income level that is higher than the median average UK household income.

I'm simply amazed at the number of responses you've had saying that someone with enough money to buy a home and still have three quarters of a million Pounds left over can't afford to retire, but I assume that those expected you to stay in London.

jamesd

DairyQueen wrote: »

At age 65 a safe withdrawal rate in the UK is currently estimated at 2.75/3.0%. That is intended to fund a 30 year retirement. I'm not an actuary but suggest that a safe withdrawal rate for a 60+ year retirement would be a lot less (1.5%? 2%?).

A 55 year old could use the Guyton-Klinger rules and take 5% after 30% of costs for a 40 year retirement with 60% equities.

The fixed inflation-adjusted income that produces 2.75-3% just isn't a very good approach to take unless someone values great simplicity over spending an hour or so applying some rules once a year.

It doesn't really need an actuary to do more than suggest a lifespan. As the retirement time grows the potential income gradually drops towards the income of the investments, depending on the mixture used. In the UK that income floor is likely to be around 3% of capital, perhaps 2.5% with high bond mixtures. The capital growth portion is needed to keep up with inflation.

ams25

I would agree with jamesd that if OP is willing to downsize to a property of around £150k thereby eliminating all debt and probably reducing property maintenance related costs too AND adding another £150k or so to his net worth then he could afford to retire.

I would pay voluntary contributions of c.£750 pa for the next 25 years so a full state pension is available.

With the likely boost of an inheritance at some point plus sp, even a relatively conservative guideline safe withdrawal rate of 3% or slightly less gives you easily more than the £14k requested, another £1k for ni contributions and some additional fun money.

I would be prepared for a flexible withdrawal approach...being prepared to cut back if markets are really bad or increase if really good over a period of more than 3 years in either direction. The reality is all safe withdrawal approaches should be used as guidelines but you need to stay flexible as no one knows how markets will do or how your own investments will do over time. Use your time now to read about retirement planning and safe withdrawal rates. Www.earlyretirementnow.com is a good starting place. Wade pfau has a good book called how much can I spend in retirement. Kindle version is good value. https://www.amazon.co.uk/How-Much-Spend-Retirement-Investment-Based/dp/1945640022

So for OP major life change is move to a lower cost of living area and downsize and start a financially independent life...maybe with part time job you love or volunteering etc for good mental health and wellbeing.
Or get a new job in London you would enjoy.

Good luck. You do have options most don't have — that is an impressive achievement at 35.

enthusiasticsaver

You could afford to retire by selling up and moving out of London. You would have the cash, P2P and isas to survive on for 20 years with no mortgage.