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MoneyGeoff

OP, did you try the cFIREism suggestion?

Starting with 2,000,000 and spending 60,000 pa for 50 years (increasing with inflation) and assuming no other income, no pension, no state pension, no further inheritance etc still has 100% success rate with an average ending pot over 13,000,000.



It's US data but even if you reduce the growth it still looks easily doable.

bostonerimus

MoneyGeoff wrote: »

OP, did you try the cFIREism suggestion?

Starting with 2,000,000 and spending 60,000 pa for 50 years (increasing with inflation) and assuming no other income, no pension, no state pension, no further inheritance etc still has 100% success rate with an average ending pot over 13,000,000.



It's US data but even if you reduce the growth it still looks easily doable.

Remember fees are not taken into account in these estimates and they can be a very large proportion of a sensible withdrawal rate if you are planning for 50 or 60 years. Of course the vast majority of scenarios for that withdrawal rate will result in a large ending balance, but this sort of income planning dictates that you plan for at least a 95% success rate.

Malthusian

bostonerimus wrote: »

The OP's most important initial consideration is going to be taxation and an investments strategy should be built around managing those sensibly.

What you just said is akin to saying "The most important part of a good diet is buying a really good pair of running shoes".

Taxation and investment strategy are two completely different animals. A small percentage of the population have a black-belt level of knowledge of either one and, critically, keep their knowledge up to date year after year. An even smaller subset are black belts in both.

fred990

No doubt you've been told not to retire young because you need to be a productive member of society and won't feel 'fulfilled' or other such tosh.
Why not just buy a modest pad, bung loads into various vanguard type funds and just go enjoy yourselves on a budget (of sorts). Whilst having a great time read/study about investing, find a good advisor then move the money if need be?

Alice_Holt

Interesting (and relevant to the OP) article on Safe Withdrawal Rates:

https://monevator.com/why-the-4-rule-doesnt-work/


And:
https://monevator.com/try-saving-enough-to-replace-your-salary/

https://earlyretirementnow.com/2018/07/25/why-is-retirement-harder-than-saving-for-retirement-swr-series-part-27/
(American based, but worth a read - particularly "A stock market crash is a lot more worrisome in retirement")

Marine_life

If you know nothing about investing, then you definitely need advice.

As well as investing advice you need tax advice - especially if you will continue working as the investment income will likely push you into the higher tax bracket. You can manage the tax exposure of your investments but that will take time to set up.

Before you meet a financial advisor you should ask yourself how much risk you are prepared to take i.e. it may be perfectly possible to generate 5-7% on average BUT what would you do if after setting up your portfolio is suddenly lost 25% (£500k)? Achieving 3-4% may be more sustainable and enable you to sleep at night if capital preservation is more important than return.

bostonerimus

Malthusian wrote: »

Taxation and investment strategy are two completely different animals.

They start to merge when you get into big numbers. Personally I don't own bonds or equity funds that distribute interest and dividends in my non-retirement accounts because I would be paying a big tax bill on them. With a few million the OP might be in a situation where natural yield will start to gets expensive from a tax perspective and so should consider that.

Anonymous101

fred990 wrote: »

No doubt you've been told not to retire young because you need to be a productive member of society and won't feel 'fulfilled' or other such tosh.
Why not just buy a modest pad, bung loads into various vanguard type funds and just go enjoy yourselves on a budget (of sorts). Whilst having a great time read/study about investing, find a good advisor then move the money if need be?

That's what I'd recommend.

I've read lots and lots of investment related information on Early retirement over the last 2-3 years whilst working towards my personal goals on that. However I've not had any formal training or coaching on investing. I'd like to think that I'd be able to manage a healthy £2-3m pot now. Perhaps not the most efficient way possible but certainly better than the vast majority even with financial advice.

I feel that much of wealth preservation is about mind set.... you can have all the advice there is but if you're still of a mind to spend it all on big houses and fast cars whilst paying high fee's your money will evaporate pretty quickly.

Kudos to the OP for asking for advice on here. Mine would be to not rush into spending any of it. Instead do all your own research into how you might be able to make that money mean that you never have to work for money again. Time is the most valuable asset we have so use your money to make the most of it.

steampowered

amazon1234 wrote: »

I suppose we were thinking: would £2 million be enough to secure an annual income of around £60k-£70k without damaging the lump sum.

There are two fundamental problems with your investment strategy:

- Inflation. Remember that £1 million today is worth less than £1 million next year. If your investment generates an income of 4% a year after management fees and tax, but inflation is at 2%, your "real" income is 2% - not 4%.

- Investment risk. If you try to protect your capital you will minimise your returns. As you are investing for a 40+ year period, you are probably going to be much better off taking a long term view, which means accepting that in sensible long term investments capital values are going to fluctuate up and down from time to time.

rnj

I've found myself in a similar position where I can retire comfortably, in my 30's and no kids, after death of my partner but I still feel I need to go to work just to be productive. I was bored watching daytime tv.