High risk, high reward: A pauper's dream of early retirement.

Hoenir

kempiejon said:

My UK focused share portfolio is testing all time highs. FTSE100 up around 6% year to date, S&P500 down a similar amount, but yes currencies play for global investors.

Currency could potentially be a double edged sword. If there's a significant flight of capital out of US $ assets. Often gets overlooked how UK investors returns were boosted by the fluctuations in the exchange rate post 2007. 

barnstar2077

It is the end of March, and the end of my financial year. The time where I update the spreadsheet with this years numbers, and see if my dream of early retirement is still on track. I am 49 years old, and would like to retire as soon as possible (the older I get, the more I feel the constraints that work puts upon my time, and the more grating I find the company BS.)

Diving straight into those numbers, my combined ISA and pensions have increased from £225.2k this time last year to £271.5k. An increase of £46.3k, or 20.58% (16.56% if you exclude the £9k I paid in myself.)

It is hard not to be happy with these returns, and yet because of a certain orange menace they were not what they could have been this year. I made the mistake of doing some calculations a couple of months ago, based on the numbers at the time, and assuming I would be paying even more in before the end of March, but that is my own fault for jumping the gun and getting my hopes up! : )

I had a chimney removed at the end of last year, which cost me £1300, but other than that, a fairly uneventful year financially.

My ISA currently sits at £71.4k. I have made the decision not to add any more to my private pension this year, and instead to increase my ISA contribution to £500 a month. I will be keeping my work pension contributions the same.

I have made this decision based on some uncertainty at work, as there is much talk of automation (that is due to be finished in two to three years time.) I do not think that there is much of a possibility of redundancy, but would just like to improve my options if I find the new work environment even less appealing than it is now.

I am still invested in Vanguards FTSE Global All Cap index fund (and the closest equivalent for my works pension.)

As I said, I am 49 now, and with my current contributions and 5% growth, I could have £400k in five years time at the age of 54.

I would like enough in my ISA to get me to 57, with enough left over to create a self sustaining fund to take care of house repairs and new white goods etc after that. £100k in my ISA and £300k in pensions is what I am aiming for before I pull the trigger.

I have put off writing this end of year review, because, to be honest, I do not feel great at the moment. I am going back to work tomorrow after a couple of weeks off, and that combined with the constant doom and gloom in the media these days has left me feeling somewhat depleted.

I know that I am doing better than most, and I am grateful that I even have a light at the end of the tunnel, but cannot quite seem to find my enthusiasm for the year ahead just yet.

I do hope that my fellow retiree hopefuls have faired well? (and I also hope that spring will soon improve my mood!)

Albermarle

I don’t think the constant gloom and doom in the media is confined to ‘these days’

It is pretty much always like that, just maybe it varies in intensity a bit.

Hopefully the cloud will lift when the weather improves!

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81942139#Comment_81942139

I’ve just read through this thread for the first time, interesting read.

My situation feels quite similar to yours but I’m a little older, 54 now and will turn 55 later this year. Our numbers our similar too, I’ve got about 500k in my pension although this might have dropped since I last checked, and 90k in ISA and savings. I’m thinking I’ll work for another year or two, firstly to add just a bit more to pension and savings, also to ride out this current situation. Another year or two of working does look to make a big difference to the long term numbers but reading this thread and your thoughts on our time being the priority has made me think.

Can I ask what you mean when you say you hope to have enough in your ISA for a self sustaining fund? From reading your posts it appears you’re comfortable to live a more simple life if it means retiring at a younger age, I think the same but I overthink how much I believe I will need and for how long, although I’m sure many do that.

I also feel down about current events and the world generally, I try to stay positive but it can be challenging, I don’t enjoy my job which also has a negative impact.

barnstar2077

https://forums.moneysavingexpert.com/discussion/comment/81942202#Comment_81942202

It does sound like you are where I would like to be a bit farther down the road! : )

When I say a self sustaining maintenance pot, I mean I would like to be in a position where I have a £30k to £50k ISA left at the time when I switch to living off of my pensions.

If I can make 5% on £50k a year (for example), that is £2.5K. So as long as I do not spend more than that in a year, it should continue to grow, and when I need a new fridge etc, I can just take the money out of there.

So, even if things do not go as planned and I end up living just on state pension alone, I will not have to worry. I can happily spend whatever stipend I have every month in retirement, knowing that I have a separate fund (my ISA) to take care of any problems.

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81942253#Comment_81942253

Ah okay makes sense, that’s the ideal position to be in where your money can work hard enough to replenish most or hopefully all of what’s been taken each year.

And your ISA is a stocks and shares invested in the Vanguard fund?

barnstar2077

https://forums.moneysavingexpert.com/discussion/comment/81942677#Comment_81942677

Yes, in the Vanguard FTSE Global index fund.

barnstar2077

Hit a milestone today. Having just checked, today is the first time my ISA and pensions combined have reached £300k.

Just feel grateful to be in a good position tbh, and still relatively healthy. Upon reflection I think the death, or imminent demise, of some colleagues recently has had a greater affect on me than I realised.

Three people from work in their early sixties have either died, or are dying, from lung or throat cancer in the last couple of months. All heavy smokers and/or drinkers. Another obese colleague in his fifties died late last year. All of whom I used to chat to on a regular basis and were good people.

It has really brought home just how important it is to look after your health and not just your finances if you want a long and happy retirement.

SarahB16

Hit a milestone today. Having just checked, today is the first time my ISA and pensions combined have reached £300k.

@barnstar2077 I'm really pleased to hear that for you. To help put that into context for the rest of us would you mind kindly sharing approximately how old you are when you hope to retire.

barnstar2077

https://forums.moneysavingexpert.com/discussion/comment/81992367#Comment_81992367

Of course, I'm 49, and would like to retire by 55 at the latest. I am very flexible on when I retire, and how much I drawdown once retired. I can live on £12k no problem, but am aiming for 16k+. I am willing to change spending habits on the fly if need be.