Early-retirement wannabe

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  • atush
    atush Posts: 18,726 Forumite
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    well hattie, if you have over 600K and you are still saving off your pension you need to do 3 things.

    As you have no dependents/spouse you need to

    A Spend more having fun with those cruisers lol

    B decide who of your relatives deserves your largess or

    C find your favorite charities to leave dosh to
  • jamesd
    jamesd Posts: 26,103 Forumite
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    I still have my AVC fund with Scottish Widows which I have left to grow. Stands at about £110k. ... I used to have to convert it to an annuity before age 75 years but now I have complete freedom (subject to income tax if I draw any out). Is that the position in a nutshell?
    Right, back in 205 it had to be annuity after 75 then in 2006 Alternatively Secured Pensions were introduced which allowed drawdown instead and in April 2015 there were even more freedoms added to take out any amount at any time instead of a restricted range of amounts.
    If I die with funds still in the AVC, do the funds go to my beneficiaries ( which are charities)?
    They go to those you have named in an "expression of wishes" form with Scottish Widows. The will doesn't govern what happens to pension pots and they aren't part of your estate. Though the pension trustees may use the will to help them sort out what to do if they have no idea other than more remote family like sibling, parents or cousins and so on.
    Thoroughly enjoying the freedom of retirement and have no money worries. Live at the same modest level as when I was working. Enjoying giving back to society in varies ways and feel fulfilled. I know that I am fortunate, very fortunate, but realise that good health is everything and that things could go wrong tomorrow in that direction. In the meantime. I am content and enjoying life.
    If you can bring yourself to it, you could try spending more money on anything from holidays to smaller luxuries. You probably have around £35,000 a year extra that you could spend for life, or more for many years while you're still young. If you fancy an around the world cruise with a top of the line cabin, go for it and have fun! :)
  • Hi again, thanks for advice.

    As has been said, everyone is different and with their own priorities. Looking back, there are a number of factors which assisted in my retirement planning. Probably many/most of these would not be appealing at all to others, with different needs and priorities. Other factors may not be doable for younger people in today's highly competitive work/ employment environment. I would just say that, as I was going through my working life, I never felt that I was depriving myself of anything or over-planning for retirement, although I appreciate that others might think that to be the case. In retrospect, things have worked out, as they will for most people who take steps to plan things even just a little.
    I identify the following factors in own life.
    (1) After a lengthy period of education, getting into good and secure employment in my mid 20s, with rising income. This is the no 1 factor, and I fully get how difficult this is today.
    (2) Buying my own place at age 31; this was quite old back then but probably young in today's terms.
    (3) Once purchased, only one upgrade. Happy with my limited accommodation, no desire to have a place bigger or smarter than my needs, so long as I was happy with the area and neighbourhood, which I have always been. Not moving enabled me, as a single person, to establish strong community links which I am still benefiting from. Again, I was lucky in not having to move for occupational reasons (although at one point in my career I had a commute of 60 miles or so).
    (4) Saving every penny to pay off my mortgage. I bought in 1988, interest rates reached a maximum of 15.4% in, I think, 1990 so there was a real incentive to pay off my mortgage which I did by 1993( paid off in chunks). I also lost out on mortgage tax relief which was being phased out just as I started on the house purchase route. After I paid off the mortgage, I kept my two endowments going, rather than cashing in or making paid up, on the basis that I had been paying the premiums for several years and wouldn't miss the money. Whether this was a good decision or not, I don't know, but it did produce a nice lump sum in 2014 (although less than the mortgage capital amount planned for).
    (5) Getting to know the ins and outs of the occupational pension scheme early, when most of my colleagues of similar age weren't particularly interested. As soon as I was able, I entered into a contract to buy the maximum number of added years which I could (7.8 years, from memory) at a fixed percentage cost of gross salary. The earlier you started, the lower percentage cost for the same number of years. This attracted tax relief at the higher rate(by then I was a higher rate tax payer). When I came to take early retirement, I got a pro rata boost in my actual years. My contract was over 21 years (from 1996 to 2017), so by retiring in 2011 I got 15/21 of the 7.8 years. At the same time as taking out the added years contract in 1997, I also started an AVC fund, originally with Equitable Life (big mistake) but moved to Scottish Widows in 2000 (In 2013, I got £543 compensation from the Equitable compensation fund for the loss of growth between 1996 and 2000; obviously my fund was quite small during those years and I have no idea how far the compensation awarded met my lossses). When the ceiling of 15% of gross income for tax relief on pension contributions was removed (was it 2006?), I upped my AVC contributions, finally reaching a total of 30% of gross income going into pension (across basic contributions, added years and AVC). When the opportunity arose for early retirement in 2011 (I wasn't expecting this), I found that I had enough to fund a reasonable standard of living and on the basis that time is finite (financial resources are infinite) I chose to have the extra time to pursue other interests. PS the added years scheme was closed to new entrants in, I think, 2007, so I am assuming that it was a good scheme for members who took advantage of it, otherwise why remove it?
    (7) Not being married and not having children. I know that most people would consider this too great a sacrifice for early retirement, and they are right for themselves. However some people don't go down this route in.life, or don't get the opportunity, and for them it may be the right thing. I consider that it was right for me and have no regrets. It does, of course, mean that I have not had to finance children through education.
    (8) Related to the last point, having had total control over my finances and not having had to compromise control in regard to the spending priorities of a partner. Also, not having my finances shared with another has meant (by definition) not having suffered the financial fallout of a relationship breakdown.
  • atush
    atush Posts: 18,726 Forumite
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    i may have missed a point 6 due to spacing and punctuation, but 4, 5 and 7 certainly tell the tale of your good retirement fund

    And dont call it oversaving? It is your money and you want to save it -fine. and I have 3 kids and a spouse but you didnt? fine. This just made it easier for you to amass money.

    If these were your choices do not apologize for them

    What we are saying is, do take some time and some of that hard earned monny and spend it on yourself. Not all of it- but some

    You deserve it.
  • Karmacat
    Karmacat Posts: 39,460 Forumite
    Name Dropper First Post First Anniversary
    Hello Hattie

    It sounds like you've made some great decisions! Your first post on here says it all - you're enjoying your retirement, good for you :j Yes, you had some things in your favour, but you worked hard at making the most of things (I'm very slightly older than you, also a single woman, and was *not* so aware of future financial implications) I hope you're proud of how things are going for you.

    Lastly - you're so right about health issues. I'm struggling a bit, but many people would see me as doing really well, on health and on finances too, come to that.

    Keep on doing what you're doing :j:j
    2023: the year I get to buy a car
  • Thanks Karmacat.

    I was hoping that my experiences might provide some pointers and maybe even encouragement (hope that doesn't sound patronising or off) to those who are, as the title says, wannabee early retirees.

    I don't like the term early retirement. I prefer changing direction in later midlife. There are so many opportunities to be useful if you have reasonable health and some (if not total) freedom from salary slavery.

    I realise that every generation has different struggles. It's very easy to generalise unfairly but perhaps today's youngsters have a much more difficult time establishing themselves in good employment, while being saddled (and it is a burden) with material expectations which didn't exist 40 years ago. On the other hand, they have (in general) a much more flexible attitude towards life, and working life in particular, than I ever had when in the early years.

    Whatever happens during the course of a working life, some degree of financial planning will never be wasted effort. If one can keep life simple on a material level, and live below one's means and invest the surplus, that forms a good foundation for financial planning.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    I used to have to be on-call at night and it was awful. In the end I just said that the other staff could share the extra money and take my on-call duties, which they were happy to do.:D

    You were lucky to have a choice in the matter.
    Free the dunston one next time too.
  • missyrichards
    missyrichards Posts: 1,148 Forumite
    kidmugsy wrote: »
    You were lucky to have a choice in the matter.

    Well, I was a single woman who didn't drive and being on call would have meant going out to a building at night where there was often crime so my male manager said he would take it from me. He liked the extra money.:D
  • Nationwide8
    Nationwide8 Posts: 362 Forumite
    Hung up my suit!
    edited 4 October 2015 at 1:49PM
    Goldiegirl,Sorry random question but is there a specific Cruising thread on here ? I can't find it even in the travel section.

    Coming up for 4 mths retired now and I still savour every single second of it :j Nearly every day I look at the time and think "what I would have been doing now in work " and I am so grateful I am free to do whatever I want.Even Sundays are a pleasure now when all they used to be before was a precursor to another tedious,soul destroying week.
    Also have a few health problems and it was always a worry when to fit in various appts and then I always had to go to work before or after.It's such a relief now to be able to have appts whenever I want with no pressure as regards asking for time off to go.
    If you ask what I'm "doing now" I'd answer "having a more relaxed life" and no amount of money would tempt me back to my previous life as having a more relaxed life is priceless.

    I completely relish the freedom of having nothing "planned".When you have spent all your adult life living your life with routine and around planned things you cannot get out of eg,work,it's a complete joy to wake up most days thinking what will I do today ? and if you dont want to "do" anything you don't...again having that type of freedom is priceless !!

    Have seen a few friends from work since I retired ( ladies that lunch !! never done that during the week before :rotfl: ),when they talk about work I wonder how I ever lived that other life :cool: but I did it because financially I had no choice.Once I had a choice I got out.
  • ibizafan_2
    ibizafan_2 Posts: 920 Forumite
    I've been Money Tipped!
    We're going on our first cruise next February to Norway, hopefully to see the Northern Lights. We have been retired for just over two years, and love every minute of it, spending much time planning the next trip! My brother and SIL have been raving on about cruising for a few years, so they'd better be right. The cruise company we chose was, shock, horror, Saga. Never thought I'd say that, but they seem to tick all our priority boxes. I really agree with the previous post. Sundays are so much more relaxing now, without the thought of work hanging over you, (and I enjoyed my job). We're lucky enough to have good final salary pensions, which will increase to over £40,000 p.a when the state pensions kick in (although I'm going to defer mine for a couple of years) We're not interested in "stuff" so travel is our main interest, and we've planned some big trips in the next few years, starting with Patagonia on Thursday. We want to do this while we are still in our early sixties, and if we enjoy the cruise, another one will be on the cards. I suggested a round the world one to my OH, who blanched at the price, but didn't entirely dismiss the idea. After all, who knows what's around the corner?
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