Planning for retirement at age 25 - anyone else?

HarryGray

Hi all,

I thought I'd start a thread for those who are already planning retirement (early or normal) at a young age.

What steps are you taking? What is your target and how are you going to achieve it?

Any inspiration welcome!

Prism

I started contributing at 24 after my first big pay rise. However I didn't (and still don't) have a fixed plan as the future was unknown to me at that point. Save whatever I could afford into my pension was as good as it got. Over the years I have increased my contribution (and dropped it) as my jobs and pay have changed. Its hard to know what else can be done with so many unknowns at that age

dunstonh

I thought I'd start a thread for those who are already planning retirement (early or normal) at a young age.

i started contributing at 18. When that was considered the normal age to start. It's rather sad that 25 is now considered a young age to start but reflects how once this country used to be one of the best in the world for retirement provision but has gone downhill fast.

Marcon

I read (or rather mis-read) the title and thought you were planning to retire at 25 - in which case 'winning the lottery' or 'marrying a millionaire' were on my list of suggestions!

Have you considered an alternative: ensuring you have a job you absolutely love, so that going on doing that may not be the chore that 'going to work' can be?

HarryGray

Marcon wrote: »

I read (or rather mis-read) the title and thought you were planning to retire at 25 - in which case 'winning the lottery' or 'marrying a millionaire' were on my list of suggestions!

Have you considered an alternative: ensuring you have a job you absolutely love, so that going on doing that may not be the chore that 'going to work' can be?

I should rephrase - I was meaning more 'financial independence' rather than complete retirement.

hugheskevi

My key points would be:

• Keep plans flexible - things will change many times
• Invest in yourself - the returns are immense, constantly aim to improve salary/income position until at least age 30, probably more like 35-40.
• Take risk - not just in investment, but also in life. Make sure you can deal with consequences, but in general seize opportunities.
• Take value - if govt. gives money away, take it, take all employer pension contributions, if higher rate taxpayer take the benefit, etc. This applies to all things, not just pension.
• Buy own dwelling as soon as stable in life, will be much cheaper than renting
• Avoid interest-bearing debt aside from mortgage, and buy everything outright unless incentivised to do otherwise
• Keep firm grip on expenditure, and don't let it drift upwards as income increases
• Ensure you understand all regular expenses, and that every one is optimised whenever contract (or similar) is due for renewal.
• Remember that early retirement is not the only goal in life - enjoy things as opportunities arise, eg, travel, but ensure you are getting value. Be flexible and able to benefit from the best opportunities, but never wasteful.
• Don't waste money on going out - spending £25+ on a meal and £30+ on drink is just a waste, especially as more often than not the end outcome is a reduction in health, particularly with alcohol. Do something more productive with time and money, eg go running with a club to socialise.
• Don't let money 'leak' away on a string of small but pointless purchases. Things like take-out coffee, purchasing lunch, etc.
• Stay fit and healthy so as to maximise time to enjoy early retirement
• Take advantage of anything free/subsidised. Running is (largely) free and may save on the expense of a gym, for example. Similarly swimming can be very cheap due to Local Authority subsidies.
• Learn in detail about tax. Understanding it is the first step to avoiding it.

ColdIron

HarryGray wrote: »

I should rephrase - I was meaning more 'financial independence' rather than complete retirement.

It's still unclear. Are you 25 and planning financial independence in a few decades or are you planning on financial independence by the time you are 25? If the latter then gambling, crime or similar would suggest themselves though they are not without their perils

Terron

dunstonh wrote: »

i started contributing at 18. When that was considered the normal age to start. It's rather sad that 25 is now considered a young age to start but reflects how once this country used to be one of the best in the world for retirement provision but has gone downhill fast.

I am trying to think when that was. When I was young a lot of people started work at 15 or 16 but probably didn't start pensions until later if ever. I was in the minority who went to university, so didn't start work until I was 22, but that was in the private sector and the company pension scheme was only for managers. si I didn't start a pension until I was 26.

bostonerimus

Looking to future retirement income I paid some voluntary NI from the age of 18 when I was at university. I also saved as much of my grant money as I could, but didn't invest it, I just put it in a NatWest saving account. I started investing and saving to a pension when I got my first job at age 25 and active planning for retirement started when I got married a couple of years after that.

gardner1

dunstonh wrote: »

i started contributing at 18. When that was considered the normal age to start. It's rather sad that 25 is now considered a young age to start but reflects how once this country used to be one of the best in the world for retirement provision but has gone downhill fast.

At 18 i had more important things to spend my meagre salary on :beer:

jerrysimon

At 16 I started an apprenticeship in the Ministry of Defence and they started a pension (non contributory with just a 1.5% Widows contributions I think they called it) straight away.

I remained in the Public Sector for 40 years before retiring at 56, 18 months ago. By then my contribition was around 6.5% I think.

Of course my lower salary (relative to the private sector) reflected this generous pension provision