Planning for the next chapter..............

time2change_2

I’m a long time lurker on here, and have used the tips picked up from other people to pay off about £20K of debt. I have just under £600 left to HMRC which will be paid off soon. I’m sneaking on now while I still have a debt but I’m planning the next stage of life which will involve saving a large sum! I’m no longer a DFW but I am a REW (retire early wannabe). I need a way to see progress and hold myself accountable.

I’m in my late 50’s, happily single (unwilling to put myself through the hell that is online dating). 2 adult(ish) children, DD is financially independent with a good job, DS is about to finish uni and has a job lined up. DS is still, at least occasionally, financially dependent.

I have decided that I don’t want to work until I’m 67 and would like to retire early – if I can by about 63, but at least 64.

 I will get full state pension and (part of) a decent final salary scheme. I plan on leaving that until 67 but could possibly take it earlier.

 I’m mortgage free and largely operate the “give every £ a job” form of budgeting. I have lots of “pots” mainly metaphorical on a spreadsheet but several accounts as well. I save for as many things as I could think of but have added a new one this year of “entertainment” to cover theatre/concert tickets etc. when I found myself taking money from other pots to pay for them.

So, if you’re still with me, I think I need £25,000 a year to fund retirement. That would allow me to still maintain my lifestyle in terms of holidays, running my car, etc etc. (subject to inflation obviously). To retire at 63 I would need to save £100k in 5 and a bit years, basically £1500-£1600 a month which seems almost impossible.

I am expecting £30-£35k in a couple of months but have “allocated” some of that to buy a new(to me)  car, replace my windows, refill a few pots which have been raided while I was on reduced hours. That should leave me about £17K to start the Retirement fund off with and reduce the monthly amount to £1300-£1400, still a huge sum. I have/will have some things to start with:

Current payment to HMRC                   £152 pm

Daughter’s phone                                £53 pm (she’s sorting it out herself now)

Monthly sub to son                              £110

Pension from job from hell                   £70   (originally to prop up income on reduced hours)

Extra hrs (4 days a week + extra)        £200

Total                                                     £585

I have a couple of amounts which could soon be diverted from their current pots (which will have reached their target) so another £180 a mth.  I will add bank interest to this sum as well as surveys and any ebay sales.

I don’t want to work 5 days and nor do I want to make the next 5 years miserable so I’m aware the target may be impossible but I’m going to try. To make it seem more doable I’ve worked out that every £96 I save buys me one (working) day of early retirement and that is my focus.   

I’ve just done two current account switches which will bring in £375 (3.9 days) and will give access to 2 regular saver accounts with 7% & 6.17% interest rates. I’m also going to open a Nwide start 2 save at 5.25%.

 Right now , the retirement fund stands at £367.58 or 3.83 days

time2change_2

And I also need to declutter about 3 stone from me!

[Deleted User]

Wishing you well with your plans. What exactly do you plan to do with the £100000? Am I correct in thinking that ten £25000 per annum includes the state pension. 

You may also find this thread useful which has been running a while. It has lots of contributors discussing and implementing financial plans for retirement.
https://forums.moneysavingexpert.com/discussion/6228191/how-much-to-live-on/p1

time2change_2

Hi Baron_Dale

The idea is that it would fund the gap between stopping work and getting pensions at 67. Realistically the length of the gap will depend on how much I can actually save!

Where to put it once I've saved it but before I spend is a good question that I haven't quite answered yet. Loosely I will max out ISAs, (mainly cash but at least some in a stocks and shares I think). Keep some in the best instant access savings account(s) I can as I am happier when I know I have an amount to cover any eventuality.

I seems such a huge goal I haven't really got a fully formed plan yet!

And yes the £25K includes full state pension at its current level. I know people live on less and I probably could but I enjoy travel and a certain amount of socialising/theatre etc.

I'll have a read of that thread thanks for the pointer.   

[Deleted User]

Just wondering if you have moved any further forward with your plans.

time2change_2

Thanks for popping by Baron_Dale.

I have been away on two holidays with a shorter time between them than intended due to cancelled flights! Both cancellations led to extra costs so trying to recover them from the airlines - one is a spanish one, one is Irish - any guesses as to which is the hardest to deal with!

Anyway two lovely holidays over and just about got my head back on this ready to make progress over the summer, hopefully anyway.

By various means RF stands at £689 or just over 7 days.

One switch amount still to come as the bank I was switching from had a technical glitch but they did give me £25 in apology so that went straight in the RF. The actual switch bonus of £175 will be added when it arrives.

Ebay/vinted sales plod along steadily which is useful. 

My service charge is due by end of the month and is £170 less than I have saved so I will put £100 into RF and keep the £70 in the "annual excess" pot just in case anything is more than I've saved for it. 

I get paid weekly , so save for monthly bills weekly as well and some of those are looking high so I may sweep some of that excess off as we're halfway through the year now  . That will all stay in the annual excess until the end of the year when it will transfer across to the RF I think.

Money is currently spread across three regular savers (paying 5.25%, 6.17% and 7%) and another lower interest instant access account (3.95%)

When the lump sum comes in the intention is to have 2/3rds in a cash ISA and 1/3rd in a stocks and shares ISA - need some research on best one and what to put it into - some sort of fund probably to start with. I may allocate a proportion to actual stocks and shares but it's not something I've done before so want to be sure I have enough "liquid funds" elsewhere first.

As the fund builds (ever the optimist) I will put some in fixed rate accounts if the rates are good enough.

time2change_2

Another week on

Cashed out You Gov and some ebay sales as well as some other savings so REF stands at £1459.

I have been disciplined this week and made sure I took lunches to work but rolled food budget savings and my daily spends savings into the current week as I had a busy weekend of activities.

enthusiasticsaver

How much would you lose by taking your occupational pension early? I cashflowed ours and we both retired at 58 so we are bridging the gap between early retirement date and state pension using DB pensions taken at 60 (we are 63 and 64 now), stocks and shares ISAs and SIPPs. 

time2change_2

Hi enthusiastic saver,

The occupational pension came as part of the divorce settlement and I haven't explored whether I could take it early yet. It's a LGPS one (civilian Police pension) and its index linked so I was planning on not touching it if I don't have to, but it is an option.

Because of the divorce and debt (now mainly repaid) I haven't got much in savings to use yet. I'm not quite ready to give up work yet but I can see it not that far in the future.