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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 1,013Posts
    • 2,004Thanks
    Marine_life
    Early-retirement wannabe
    • #1
    • 5th Nov 10, 10:46 AM
    Early-retirement wannabe 5th Nov 10 at 10:46 AM
    I would like to create a topic (don't see it at the moment - other than the NUMBER thread).

    Who is aiming for early retirement (or who has retired early already)?
    When did you begin planning and what drove the decision?
    What is the strategy for getting there?
    How much of a relative decline in income are you prepared to take / did you take?
    What are your main concerns?
    For those already in early retirement - how is it progressing? What have been the good and bad surprises (financial and otherwise)?

    I will post my strategy but wanted to get some thoughts
Page 281
    • hugheskevi
    • By hugheskevi 6th Oct 19, 12:16 PM
    • 2,359 Posts
    • 3,161 Thanks
    hugheskevi
    Three years out of the housing market obviously means you are subject to house price risk?
    Yes, something I have pondered at length. There would be two ways to mitigate the risk. First, I could retain my current house and rent it out whilst traveling. That is a very imperfect risk mitigation though, as I live in London now and plan to retire to Wales. I also do not at all like the idea of being a very long distance from my property and relying on agents to manage it. Whether sensible or not, I know I would fret about it when traveling and be worried whenever I was out of internet connection areas (which will be quite frequent in remote areas), and do not want to have that stress.

    I could buy my Welsh property before travel, but I think it would be very hard to rent out as we plan to live in a very remote area. I also would not like being miles away from the property, as above. So on balance, running house price inflation risk for the 3 year period away seems the best of bad options. However, 3 years is probably an upper-estimate of the time we will spend traveling - I think it will be at least a year, but 3 years is optimistic, so the risk probably isn't as severe as it could be.

    Why does your income requirement go up after 58 (but your "ideal" number remains unchanged)?
    The income requirement doesn't increase, just the income available. Ideally I would like £50,000 p/a, and my accrued pension to date would provide £45,000 p/a, but being pension I assume it is only accessible from age 58 (my current State Pension age is just below 68, so I assume that increases to age 68 and minimum pension age is 10 years below state pension age).

    My minimum acceptable income is £30,000 p/a, so that is the first priority I allocate funds against for the period before pensions are fully available (our DB pensions will pay £31,500 after tax from age 50, so funding will be from ISAs for the period to age 50). After achieving an income of £30,000+, additional funds go firstly toward house purchase (wife's preference). As time passes and we save more, the house purchase fund will increase to £500,000 after which point additional funds will be put toward increasing the £30,000 p/a of income provision, hopefully up to £50,000 p/a.

    However, that would be getting into the 'one more year' sort of territory - living in a £500K house with £50K p/a income and having traveled for 3 years with a budget of £70K p/a would be top-end of all my needs estimates, so I think it very likely I would be tempted to go a bit before all of that is achieved. That would probably be due to either a 'pull' factor of a great travel trip coming up, or more likely a 'push' factor of not enjoying work and just wanting to walk away.

    I expect to have to leave my DB pension in February 2022 (as due to the way final pay is defined and my historic salary record I would get more leaving than if I stayed). That may well be the prompt to go part-time to avoid higher rate income tax, and be the beginning of the end in terms of leaving.
    Last edited by hugheskevi; 06-10-2019 at 12:23 PM.
    • michaels
    • By michaels 6th Oct 19, 5:37 PM
    • 22,901 Posts
    • 104,734 Thanks
    michaels
    Thanks - just thought of a question. You appear to be part of a couple, are the income figures quoted household or for you alone, just to give us an idea of 'scale'? Thanks
    Cool heads and compromise
    • stoozie1
    • By stoozie1 6th Oct 19, 7:26 PM
    • 643 Posts
    • 587 Thanks
    stoozie1
    @hugheskevi no financial gems from me, but a small tip from someone who relocated from England to Wales 25 years ago. I have found it great for community and relationship-building to try to learn some Welsh, it communicates a lot of respect and is a great ice-breaker and people appreciate it here. You come across very bright, and so an app like duolingo could help you pick up some basics very quickly.
    Save 12 k in 2018 challenge member #79
    Target 2018: 24k Jan 2018- £560 April £2670
    • hugheskevi
    • By hugheskevi 6th Oct 19, 7:38 PM
    • 2,359 Posts
    • 3,161 Thanks
    hugheskevi
    Thanks - just thought of a question. You appear to be part of a couple, are the income figures quoted household or for you alone, just to give us an idea of 'scale'? Thanks
    All figures are based on household income, after tax. Our Defined Benefit and State pension incomes are pretty evenly divided, so no danger of higher rate tax. However, DC wealth is predominantly with me, so drawing it down whilst staying basic rate tax will take a while, but that shouldn't matter.

    Our financial commitments should be minimal due to no mortgage, debts or children. We still have 3 parents alive, so that gives potential for some unexpected responsibilities. We don't have any expenses tastes aside from possibly travel (playing music, running, computing, gym, bridge) , and once the big travel trip is over we plan to have several pets which will prevent overseas holidays (and indeed even UK holidays, at least together).

    @hugheskevi no financial gems from me, but a small tip from someone who relocated from England to Wales 25 years ago. I have found it great for community and relationship-building to try to learn some Welsh, it communicates a lot of respect and is a great ice-breaker and people appreciate it here. You come across very bright, and so an app like duolingo could help you pick up some basics very quickly.
    Aye, my wife is keen to learn Welsh. I went to school in Wales, so spent 5 years learning it...but aside from counting to 10 and very basic phrases I've forgotten it all.

    We will probably be living in areas where Welsh speaking is more common, so agree it is something we should do.

    I also plan to spend some time in Central America learning some Spanish, probably in Guatemala, which I hope will be useful to travel around South America in particular. That can go with my GCSE French, which a couple of years proved good enough to arrange over the telephone a group trip to a snake handling/exhibition/demonstration in Kinshasa, Democratic Republic of Congo
    Last edited by hugheskevi; 06-10-2019 at 7:47 PM.
    • michaels
    • By michaels 6th Oct 19, 8:11 PM
    • 22,901 Posts
    • 104,734 Thanks
    michaels
    I would like to build (well have built for me) an eco home when I retire. I understand that this is much easier in Wales where certain planning rules are waived for carbon neutral houses, whereas in the UK whilst the build costs are manageable (say 300k) getting a site with planning permission pushes the overall bill up towards £1m
    Cool heads and compromise
    • westv
    • By westv 7th Oct 19, 9:28 PM
    • 4,907 Posts
    • 2,480 Thanks
    westv
    Originally I was going to jack it in when I was 58 (March 21). Then I decided 57, when my current FTC is due to end (June 20). However, as time goes on I am more and more thinking Dec 19. I have to give 1 months notice.
    Based on starting drawdown at the same time my total pot wouĺd be around £430,000 leaving next year and £420k if leaving Dec so only around £10k difference.
    My wife claims she will be happy whatever I do. We'll see LOL!
    • Triumph13
    • By Triumph13 24th Oct 19, 8:00 AM
    • 1,578 Posts
    • 2,232 Thanks
    Triumph13
    I canít believe that it's a year to the day since we Ďretiredí at the age of 52 (me) and 54 (DW). Iím using the inverted commas as a sop to the internet retirement police because, whilst my wife stopped work entirely, I agreed to stay on for a year, 1 day a week, term time only working from home. The main driver for this was to make my last few months of full time less stressful as in so many areas I was the man who knew where they kept the coal. As we have two teenage boys in high school the work isnít much of a bind.
    Financially all has gone embarrassingly well. Markets tanked immediately after I retired, just to try and freak me out, but soon recovered. We had deliberately over-saved before pulling the plug so were able to go in with a budget of £48k pa vs average spending in the preceding few years of about £38k (CPI inflation adjusted).
    It's been a fairly expensive year as we spent 20% of it on holiday including 5 weeks in nice gites in France and Spain in the summer plus various UK holiday cottages to hit the hills. There were also a few indulgences like a woodfired pizza oven, a robot vacuum cleaner and a flight to Aus for OH's trip next year. The final total comes out at....drum roll...£39k. I've ended up doing a small amount of paid overtime making my 1 day job more like 1.5 day and by the time I add all that up my net earnings for the year were £36k so net expenditure for the year is £3k. And there's one year less of class 3 NIC to buy too! I really haven't got the hang of this 'spending' lark yet.
    We keep busy, the garden is looking better than it has for years and various DIY projects have been done. Not as many as we had hoped, but there's always next year. The pile of books waiting to be read has grown rather than shrunk despite some very pleasant days curled up in the conservatory, in a hammock in the garden or by the woodstove. I'm looking forward to the leaves falling so I can get back to cutting more wood for the fire. All in all life is good.
    • cfw1994
    • By cfw1994 24th Oct 19, 8:28 AM
    • 475 Posts
    • 422 Thanks
    cfw1994
    Sounds very good!
    Two questions.....
    Which robovac?! I feel one needs to be in my life
    & on the part time working....did you continue to be paid by them, or did you set yourself up as a sole trader or suchlike?
    Winter is coming: enjoy the books!!
    • JoeEngland
    • By JoeEngland 24th Oct 19, 8:37 AM
    • 364 Posts
    • 786 Thanks
    JoeEngland
    I canít believe that it's a year to the day since we Ďretiredí at the age of 52 (me) and 54 (DW). Iím using the inverted commas as a sop to the internet retirement police because, whilst my wife stopped work entirely, I agreed to stay on for a year, 1 day a week, term time only working from home. The main driver for this was to make my last few months of full time less stressful as in so many areas I was the man who knew where they kept the coal. As we have two teenage boys in high school the work isnít much of a bind.
    Financially all has gone embarrassingly well. Markets tanked immediately after I retired, just to try and freak me out, but soon recovered. We had deliberately over-saved before pulling the plug so were able to go in with a budget of £48k pa vs average spending in the preceding few years of about £38k (CPI inflation adjusted).
    It's been a fairly expensive year as we spent 20% of it on holiday including 5 weeks in nice gites in France and Spain in the summer plus various UK holiday cottages to hit the hills. There were also a few indulgences like a woodfired pizza oven, a robot vacuum cleaner and a flight to Aus for OH's trip next year. The final total comes out at....drum roll...£39k. I've ended up doing a small amount of paid overtime making my 1 day job more like 1.5 day and by the time I add all that up my net earnings for the year were £36k so net expenditure for the year is £3k. And there's one year less of class 3 NIC to buy too! I really haven't got the hang of this 'spending' lark yet.
    We keep busy, the garden is looking better than it has for years and various DIY projects have been done. Not as many as we had hoped, but there's always next year. The pile of books waiting to be read has grown rather than shrunk despite some very pleasant days curled up in the conservatory, in a hammock in the garden or by the woodstove. I'm looking forward to the leaves falling so I can get back to cutting more wood for the fire. All in all life is good.
    Originally posted by Triumph13
    Blimey, you must be in a good profession if you can earn the equivalent of a decent salary by only working 1.5 days a week!
    • Triumph13
    • By Triumph13 24th Oct 19, 9:20 AM
    • 1,578 Posts
    • 2,232 Thanks
    Triumph13
    Sounds very good!
    Two questions.....
    Which robovac?! I feel one needs to be in my life
    & on the part time working....did you continue to be paid by them, or did you set yourself up as a sole trader or suchlike?
    Originally posted by cfw1994
    The robovac is a Eufy 11S. DW did all the research and choosing so I can't tell you much about it apart from that it seems to work very well indeed.
    On the PT I continued to be directly employed. Not only was this less hassle, but my small DB with them (closed years ago) revalues at RPI while employed vs CPI when I leave so that should be worth another £100+ a year when it comes into payment as a result.
    Winter is coming: enjoy the books!!
    I read the Game of Thrones books - largely in the hammock so the stories are now indelibly linked to lying in the hammock in my mind!
    • Triumph13
    • By Triumph13 24th Oct 19, 9:22 AM
    • 1,578 Posts
    • 2,232 Thanks
    Triumph13
    Blimey, you must be in a good profession if you can earn the equivalent of a decent salary by only working 1.5 days a week!
    Originally posted by JoeEngland
    I am indeed very fortunate. Accountancy may be dull, but it can pay quite well.
    • Anonymous101
    • By Anonymous101 24th Oct 19, 10:47 AM
    • 1,431 Posts
    • 1,171 Thanks
    Anonymous101
    I am indeed very fortunate. Accountancy may be dull, but it can pay quite well.
    Originally posted by Triumph13


    I often find that working with money pays decent money... and usually the bigger the numbers you deal with the more you get paid.
    • AlanP
    • By AlanP 24th Oct 19, 11:04 AM
    • 1,701 Posts
    • 1,362 Thanks
    AlanP
    I often find that working with money pays decent money... and usually the bigger the numbers you deal with the more you get paid.
    Originally posted by Anonymous101
    Very true in my experience. I knew a couple of guys who epitomised that.

    One was a senior Merchant Banker (no snide comments about the Minder use of that phrase please ). He was good at his job and earnt a small fortune, spending his days putting together multi hundred-million deals to finance fleets of 747s and the like.

    The second was an accountant and ended up as the FD for a national Building Society and the likely next CEO until they merged a few years ago, again extremely well paid as you would expect.

    Unfortunately they both struggled with numbers that only had 3/4/ 5 or 6 digits, so the stuff in their personal lives, as expenditure / deals at those levels never got near their desks.

    The banker used to "con" himself and add 3 or 4 zeroes to anything he was thinking about buying so he could do a cost / benefit analysis against numbers that his "trained" brain could cope with.


    They are both well off still but small purchases just don't register on their comprehension, so easy to fritter away £10/20K.
    • GunJack
    • By GunJack 24th Oct 19, 11:05 AM
    • 10,833 Posts
    • 8,116 Thanks
    GunJack
    @hugheskevi no financial gems from me, but a small tip from someone who relocated from England to Wales 25 years ago. I have found it great for community and relationship-building to try to learn some Welsh, it communicates a lot of respect and is a great ice-breaker and people appreciate it here. You come across very bright, and so an app like duolingo could help you pick up some basics very quickly.
    Originally posted by stoozie1
    It depends where n Wales you're going to live...around us there's no need for it, very few can speak Welsh. However, if you're around the coast (any bit of it), Anglesey, Snowdonia, or down South you'll find a little Welsh quite useful.

    Be aware, there's also quite a mish-mash of Wenglish in some odd places, now that can take some getting used to
    ......Gettin' There, Wherever There is......

    I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple
    • Anonymous101
    • By Anonymous101 24th Oct 19, 11:12 AM
    • 1,431 Posts
    • 1,171 Thanks
    Anonymous101
    Very true in my experience. I knew a couple of guys who epitomised that.

    One was a senior Merchant Banker (no snide comments about the Minder use of that phrase please ). He was good at his job and earnt a small fortune, spending his days putting together multi hundred-million deals to finance fleets of 747s and the like.

    The second was an accountant and ended up as the FD for a national Building Society and the likely next CEO until they merged a few years ago, again extremely well paid as you would expect.

    Unfortunately they both struggled with numbers that only had 3/4/ 5 or 6 digits, so the stuff in their personal lives, as expenditure / deals at those levels never got near their desks.

    The banker used to "con" himself and add 3 or 4 zeroes to anything he was thinking about buying so he could do a cost / benefit analysis against numbers that his "trained" brain could cope with.


    They are both well off still but small purchases just don't register on their comprehension, so easy to fritter away £10/20K.
    Originally posted by AlanP


    Not on that scale but I am familiar with those types of people.
    I should have added that just because someone works with money and is able to manage other peoples to the scale of millions it doesn't at all mean that they have any of the skills required to manage their own.
    • Gary1984
    • By Gary1984 24th Oct 19, 12:23 PM
    • 26 Posts
    • 11 Thanks
    Gary1984
    There's also the time as money aspect. If you make 6 figures but are perhaps working 50+ hours a week then your time becomes very valuable. You're going to be less inclined to spend an hour shopping around for the best car insurance or drive to Aldi when Waitrose can deliver and so on.


    So it might appear from the outside that the person is bad with money. But it may just be that they value convenience and perhaps some more expensive luxuries in their limited non-working time over the additional money.


    All of this is compatible with retiring early if you're making good money, as long as you can scale back again once retired.
    • westv
    • By westv 24th Oct 19, 12:48 PM
    • 4,907 Posts
    • 2,480 Thanks
    westv
    I'm going to look into robo vacs too.
    • barnstar2077
    • By barnstar2077 24th Oct 19, 12:54 PM
    • 228 Posts
    • 384 Thanks
    barnstar2077
    I'm going to look into robo vacs too.
    Originally posted by westv
    Don't get sucked in by the hype!
    If you don't have your own plan, then you're following someone else's!
    • Anonymous101
    • By Anonymous101 24th Oct 19, 1:13 PM
    • 1,431 Posts
    • 1,171 Thanks
    Anonymous101
    There's also the time as money aspect. If you make 6 figures but are perhaps working 50+ hours a week then your time becomes very valuable. You're going to be less inclined to spend an hour shopping around for the best car insurance or drive to Aldi when Waitrose can deliver and so on.


    So it might appear from the outside that the person is bad with money. But it may just be that they value convenience and perhaps some more expensive luxuries in their limited non-working time over the additional money.


    All of this is compatible with retiring early if you're making good money, as long as you can scale back again once retired.
    Originally posted by Gary1984


    Absolutely. Its about being mindful. I always remember my father refusing to do any decorating at home because he could work overtime. He would earn sufficient within a few hours to pay a professional to do the painting which would have taken him 2 or 3 days had he done it himself.
    That is totally different from someone deciding to spend all of their salary on ridiculously over the top cars, watches and handbags etc when they aren't investing into a pension.
    • MallyGirl
    • By MallyGirl 24th Oct 19, 2:35 PM
    • 4,026 Posts
    • 9,464 Thanks
    MallyGirl
    I'm going to look into robo vacs too.
    Originally posted by westv
    never going to happen in this house - there are already far too many videos on the internet of people who mix dogs and robo vacs and poop. Dogs are housetrained but there is always that chance ...
    I'll stick to the old fashioned way.
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