Can I retire now? (age 40)

dharm999

You’ve also not factored in costs of selling and buying the new house.  With stamp duty, legal costs, estate agent fees, removal costs, I’d guess that’s another £40k or so out of your cash and ISA funds, what does that do to your calculations?

DiamondLil

You do need to factor in house maintenance costs and the unforeseen costs that come with ageing. Paying others to do the decorating, gardening, house cleaning, etc. And despite our NHS, health care can be expensive in later life, especially dental costs. 

Marcon

If you are wondering if your assets are likely to be sufficient to let you retire at 40, why not take some proper (paid for) financial advice? Nobody here has the full picture of your situation, attitude to risk etc.

Beddie

My personal question is why? Do you hate work so much? I mostly retired before 50, as my "career" wasn't working out and was just making me stressed and ill. It was a waste of future earnings, but was my only option from a self-reservation viewpoint.
Those people who've worked out exactly how much they'll have to spend on the 27th March 2041, can't fathom your relaxed attitude. But I'm more like you, laid back about it, as enough really is enough.
Yes, you can do this and yes it will work out, as you have a backup plan - if all else fails go back to work!

MyRealNameToo

ent_moot said:

>How will you get a mortgage with no employment?

Well, I don't think they (the bank) particularly care if you have the equity.  

Rules on checking mortgages are affordable can't be gotten around by them simply deciding there's enough spare equity to cease the property and fire sale it and still cover the debt. 

coyrls

ent_moot said:

>Is that 5% real (above inflation) or nominal?

I assume 5% nominal.  I model for inflation by increasing my outgoings by 2% a year.

Neither of those will be a constant, you need to understand the effects of sequence of returns and sequence of inflation.  Modelling constant values for investment returns and inflation will give you a much more optimistic picture than the likely reality.

QrizB

coyrls said:

ent_moot said:

>Is that 5% real (above inflation) or nominal?

I assume 5% nominal.  I model for inflation by increasing my outgoings by 2% a year.

Neither of those will be a constant, you need to understand the effects of sequence of returns and sequence of inflation.  Modelling constant values for investment returns and inflation will give you a much more optimistic picture than the likely reality.

For the benefit of the OP and the interest of everyone else, I plugged his numbers into cFIREsim. It uses US numbers (which are typically more optimistic than UK ones). Links take you to the models.

If £900k (savings plus pension less house move) were accessible from day 1, we see 100% success to age 100 and no failures.

With £500k (savings, no house move) accessible, we see 80% success in getting to 2053 without running out of money.

With £300k (savings less house move) accessible, we see 18% success.

(If OP were 50, those 80% and 18% become 100% and 96% respectively.)

Aylesbury_Duck

ent_moot said:

>2) Your child is -  say 10 ?    If university beckons  still on your hands for another 12 years - uni cost £20k/year

True, I've not factored this in. I imagine she'll get a student loan to cover tuition fees, and then accommodation would be <10k? 

Highly unlikely unless she lives at home.  Even cheaper student accommodation is around £160 p.w. now, for 40 weeks.  Much of it is over £200 p.w.  in eight years' time it's going to be higher still and you haven't even considered her food and travel costs.  You can't assume your savings will appreciate at 5% p.a. and expect costs like student accommodation to get cheaper in real terms.

I think your plan is far too marginal.  You need absolutely everything to come in on its upside to get close to it being viable.  Even relatively modest and foreseeable costs like a new boiler or needing to replace a car sooner than expected puts a dent in your plans, whereas a much more resilient plan could absorb them easily.

Aylesbury_Duck

QrizB said:

ent_moot said:

Aside from the originally stated assumptions, I also assume that my pension and S&S ISA grow at 5% per year, which seems reasonably conservative.

Is that 5% real (aove inflation) or nominal?

5% annual real investment growth is *not* conservative.

Most people would work with 1% or 2% real growth. The more conservative of us (myself included) work on 0%.

Me too.  All my planning works on today's figures, assuming nil growth and no inflation.  It's probably unnecessarily prudent but if the numbers work on that basis, they're almost certainly safe.

fuzzzzy

Beddie said:

My personal question is why? Do you hate work so much? I mostly retired before 50, as my "career" wasn't working out and was just making me stressed and ill. It was a waste of future earnings, but was my only option from a self-reservation viewpoint.
Those people who've worked out exactly how much they'll have to spend on the 27th March 2041, can't fathom your relaxed attitude. But I'm more like you, laid back about it, as enough really is enough.
Yes, you can do this and yes it will work out, as you have a backup plan - if all else fails go back to work!

I 'm not so laid back but still have a tendency to agree with you. If the reason is that the OP does hate their job then I would encourage them to leave it, and have a bit more think about what they want to do. I would not personally be moving to a more expensive house though.