Trying to figure out if retirement at 60 is possible

Linton

justme111 wrote: »

in the calculation that he kindly provided Linton did not seem to account for any investment growth above inflation in the 8 years before 60 and after.

Correct. It is sensible to be reasonably pessimistic with a relatively large insustainable drawdown early on. You could get it very wrong.

He did calculate the withdrawal from the age of 67 as if you wanted to leave capital untouched - you would not live forever so you may as well use your capital.

Very difficult in the early years since there is a very wide variation in your possible life span. What is highly risky is to cut back on your core assets too soon since you need them to cope with an extended life span and future inflation. So at least in the early years after SP age you should base drawdown on long term sustainability.

I would say you seem to be on track - of course as years pass you will get progressively fewer unknowns so it will be easier to plan.

Sure but you must be pretty confident to hand in your notice and actually retire. You can make a plan now on whatever assumptions you like, but you do need to update it regularly with real numbers to see if you are on track.

I am not sure what CPI was every year from 1995, I have plugged in 2.5%/year for 18 years into a compound interest calculator and got £4500 now. On another hand I am not sure whether Linton has accounted for tax in his calculations as you wanted your sums net.

CPI since June 1995 is up 59%, approx 2%/year. See http://swanlowpark.co.uk/ for long term CPI and RPI data. My initial objective was a very quick calculation to see whether the OPs wishes made sense. Tthe £30K, retire at 60 proposal doesnt seem to, even with no tax assumed whereas the £24K/year may.

Will_Do

Thanks everyone for taking the time to respond. Lots for me to think about. I'll get an email off to the BT pension for an up to date forecast for starters.

My takeaway is that a target age of 60 is not a ridiculously unachievable pipedream but by no means a given and would be at the low end of my income objective. I'll definitely up my pension contributions by the 5% i was considering adding this year. I'm also paying off a debt at £400 pcm which will be cleared in 22 months so that money will be going straight to the pension at that point. Will see how it goes and what else I can divert to the pension. It's finding the balance between a decent retirement and not cutting back on life before then too much.

Someone suggested i also build up my non-pension savings. I keep roughly 5k in an instant access savings account so that I can deal with any unexpected needs. I think of that more as an emergency fund than savings. As a higher rate taxpayer, and Scottish to boot, I'm just not sure that it makes sense to put any meaningful spare cash into anything other than pension due to the tax benefits. Am I missing something?

I'll keep plugging away at it. If i can't retire at 60 it's not the end of the world but a motivating target that gives me 7 years contingency.