Seen an FA finally! This is the plan to retire early....anyone any opinions?

AnotherJoe

FIRSTTIMER wrote: »

I had a realisation that I want to retire at the earliest age possible and wanted to know how to do it. This is what was decided after finding a FA who would tackle it.....I just wanted to see others opinions on it. Currently 35. This is all based on today obviously.
<SNIP>
Hit me with it people...all advice appreciated.

Then start reading Mr Money Mustache, The Escape Artist, and other "FIRE" blogs because I dont think that 58 qualifies as "the earliest age possible" and you could do much better.

But you'll need more radical reengineering than just investing more.

FIRSTTIMER

I've made my point about 58, I like working, I don't want to stop at 40, 45, 50, 55. 58 is just fine. Why do I have to justify 'earliest age possible' or do I need to put earliest age possible based on me for me in my life, before everyone jumps in with their keyboards and says you could actually retire at 45, 50 or even 36. I am not bothered about when I can retire in other peoples opinion.


I WANT TO RETIRE WHEN I WANT WHICH IS WHEN PENSIONS INVESTED IN BECOME AVAILABLE TO ME.

FIRSTTIMER

Mathematically


I do not understand how people do not see that these two things give much different outcomes.
Option 1 - LISA
Pay £250 a month for 13 years then stop. Investment growth continues on amount left in for next 10 years.
Pay £250 monthly into another account for 10 years then finish.


Option 2
Pay £250 a month into an account for 23 years non stop with growth along the way.


Option 2 will always produce a better outcome.

greenglide

How do you reconcile your OP of

I had a realisation that I want to retire at the earliest age possible and wanted to know how to do it.

And

I've made my point about 58, I like working, I don't want to stop at 40, 45, 50, 55. 58 is just fine.

Alexland

FIRSTTIMER wrote: »

Mathematically I do not understand how people do not see that these two things give much different outcomes.

Regardless of the number of accounts you hold you will get investment growth (ignoring market volatility and platform fees) on your contribution from the day the money goes into the account until the day it is withdrawn. It won't grow at a faster rate just because the overall account balance is larger. Compounding doesn't produce that result. The VLS fund units will grow in value at the same percentage rate each year if you hold 10 or 100.

For example if your contributions bought 5000 accumulation fund units over the first 13 years then 2500 fund units in the next 10 years (as the unit cost had increased and there are less months in the second period) then you would still have 7500 fund units at the end regardless of if these were bought in one or two accounts.

Alex

FIRSTTIMER

Oh great so now I am having to interpret and explain the actual wording of my point on age from the original post when I put I want to retire at 58 a sentence later. Jesus Christ. Where’s judge rinder.

noh

FIRSTTIMER wrote: »

Mathematically


I do not understand how people do not see that these two things give much different outcomes.
Option 1 - LISA
Pay £250 a month for 13 years then stop. Investment growth continues on amount left in for next 10 years.
Pay £250 monthly into another account for 10 years then finish.


Option 2
Pay £250 a month into an account for 23 years non stop with growth along the way.


Option 2 will always produce a better outcome.

Mathematically I do not understand why you think they give different results.

FIRSTTIMER

Feel free to google some fund calculators and see the difference in total sums at the end of 23 years

Alexland

FIRSTTIMER wrote: »

Feel free to google some fund calculators and see the difference in total sums at the end of 23 years

https://www.hl.co.uk/tools/calculators/regular-savings-calculator

£250 per month for 13 years at 5% growth = £54,567 which as a lump sum would then grow at 5% for a further 10 years = £88,883 in the LISA plus the £250 per month at 5% for 10 years (£38,748 in the pension) = £127,631 total

£250 per month for 23 years in the pension at 5% growth = £127,632

Ok so £1 different due to rounding error as the calculator drops the pennies.

Alex

bostonerimus

No mention of actual income requirements, inflation and investment gain estimates. There is no plan, just some guess work.