Early-retirement wannabe
Comments
-
Good luck, it looks like you are well set up. I still have 16 weeks to go.......enthusiasticsaver wrote: »So my works retirement do is booked for the 20th December and I am getting my ducks in a row for the start of 2018 when I will be retired woohoo!!0 -
DancingBadger wrote: »Rent for six months or so?
Already found a house we like a lot!Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
enthusiasticsaver wrote: »I think you will just have to look on it as transferring from equities to property. I would buy outright for the security. Are you not selling a property abroad?
Indeed.
Yes we are selling but its unlikely to coincide with the purchase.
We are resigned to paying cash which is not such a bad thing as the majority of money is in EURO so given the current exchange rate its actually not a bad time to be buying sterling
and as another poster said, there is value in the security of no debt. Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
Hi All. Sorry I’ve spent too long lurking and watching this thread but always feel I have more to learn off others than anyone can learn from me. This thread has been an inspiration to my own plans to retire at the end of 2018.
Qu: When did you begin planning and what drove the decision?
- I am 46 now and have been thinking about quitting at 50 for many years but in recent years after many, many, hours spent on a forecasting spreadsheet and many more on the internet researching the kind of lifestyle we want going forward, I have become convinced that I can quit earlier. Work can be great but the 5% to 10% of the time that I spend on negative and troublesome issues can outweigh all the good times and load more and more stress into just too many sleepless nights. I’ve survived this for many years but can only take so much more. Frankly, I served my time and earned (in more ways than one) a change of lifestyle.
Qu: What is the strategy for getting there? Well, I will tell you clever folks our position and leave you to judge the sanity or not of my plans.
- We are married, no kids. I am late 46 (so aiming for retirement at 48); My wife is 45
- House owners (small for just the two of us). No mortgage or other debt.
- Expected cash in savings at Dec 2018: £200,000
- Expected DC pensions at Dec 2018 assuming moderate growth: £340,000
- State pension entitlement: We will need to make further contributions in order to both get full state pension entitlement (as the rules currently stand at least). I reckon £20,000 of the above cash savings will be needed and seems worthwhile (My wife in particular has many years missing)
Qu: How much of a relative decline in income are you prepared to take?
- £20,000 a year is very doable for us. We live fairly modestly and have been focusing on living on this level of income (outside of work expenses) for the last year. Owning our own small house and not having kids really helps keep the expenses down.
Qu: Main concerns?
- I feel we need the cash savings (low risk but I know low returns) in order to fund the period between early retirement and the DC pensions becoming available. Don’t feel we can take risks with this. Arguably should have £50k left at age 55 to play with.
- From age 55 to state pensions age that would leave us dependent on the DC pensions – in a downturn we would have a couple of years cash reserves in the background but not too much
- State pensions in the future. Who can tell! I do feel that our budget has a good chunk of leisure & luxuries built in so that if state pensions reduce or our DC pensions are taking a dive we can afford to be frugal for a good few years to cope.
- And finally the figures seem so sensitive to the smallest change in the percentages I use in my forecast. I’m interested in what others are using for their growth figures:
- Inflation
- Pensions growth
- State pension growth
But my forecast assume very modest pensions growth and it seems we should be able to make it 90 before heading off to Switzerland.
Any comments gratefully received (though please do not depress me too much ) 0 -
- And finally the figures seem so sensitive to the smallest change in the percentages I use in my forecast. I’m interested in what others are using for their growth figures:
- Inflation
- Pensions growth
- State pension growth
In my calculations I use 3% for inflation, with investments making 2% over that (after fees), and 1% for SP.
I can't see the Triple Lock lasting (i'm 58) so gone pessimistic there in some ways.
Fortunately our core income will be from index-linked DB pensions so whether inflation is 1% or 5% has a reduced impact for us, but even so, given "time" investments shoudld return Inflation+.
With ~9 years to live on your cash that is where inflation could hurt you. Do you really need to keep 9 years worth in cash?0 -
- We are married, no kids. I am late 46 (so aiming for retirement at 48); My wife is 45
- House owners (small for just the two of us). No mortgage or other debt.
- Expected cash in savings at Dec 2018: £200,000
- Expected DC pensions at Dec 2018 assuming moderate growth: £340,000
- State pension entitlement: We will need to make further contributions in order to both get full state pension entitlement (as the rules currently stand at least). I reckon £20,000 of the above cash savings will be needed and seems worthwhile (My wife in particular has many years missing)
If it were me I'd want a bit more in savings/investments then what you've mentioned above. There may just be enough if all goes well, but it could get tight if things go a bit astray.
My main concern is if there is a prolonged period of time when there is only one of you and there is only one state pension coming in (and being blunt here that is likely to be your wife's). Will there be enough other money available so she can live comfortably for possibly another 10 to 20 years.
You've not mentioned whether your wife currently works, but if she doesn't then have you thought about both of you taking on some part-time work, or even just you finding some more relaxed part-time or even full-time work. It doesn't have to be the same company, or the same line of work, just something that you might enjoy or at least something that doesn't have the negatives of your present role.0 -
In my calculations I use 3% for inflation, with investments making 2% over that (after fees), and 1% for SP.
Interesting, in my calculations I have also used 3% for inflation, with investments making 2% (but before IFA and Platform fees, though I'd like to see more than that), and 1% annual increases for SP, due @66 and 2 very small DB pensions due @65.
In my spreadsheets I have used (1) 3.5% drawdown until RIP, and (2) a higher initial drawdown rate for 3 years until my DB and SP kick in to help supplement income, and then cut back on drawdown rate.2 Separate arrays, 7 x JASolar 380w panels (2.66kWp) south facing, 4 x JASolar 380w panels (1.52kWp) east facing, 11 x Tigo optimizers & cloud, Growatt SPH5000, Growatt 6.5kWh Hybrid battery (Go-live 01/12/21) - Additional reporting via Solar Assistant.0 -
Interesting, in my calculations I have also used 3% for inflation, with investments making 2% (but before IFA and Platform fees, though I'd like to see more than that), and 1% annual increases for SP, due @66 and 2 very small DB pensions due @65.
In my spreadsheets I have used (1) 3.5% drawdown until RIP, and (2) a higher initial drawdown rate for 3 years until my DB and SP kick in to help supplement income, and then cut back on drawdown rate.
It's all a bit of a guessing game unfortunately, luckily we have a high level of "inflation" protection with the DB schemes.
Our various DC pots will be used to fund the period after leaving work, and defering DBs until nearer Scheme Age & SP, so sometime in next 7 years. Limited time for inflation too hurt us too much there.
After that they will be the "icing on the cake" for more extravagent uses and/or a buffer if care required, and/or passing onto children.
We are very fortunate to be in this position and appraciate the "comfort blanket" we will have.0 -
Interesting, in my calculations I have also used 3% for inflation, with investments making 2% (but before IFA and Platform fees, though I'd like to see more than that), and 1% annual increases for SP, due @66 and 2 very small DB pensions due @65.
In my spreadsheets I have used (1) 3.5% drawdown until RIP, and (2) a higher initial drawdown rate for 3 years until my DB and SP kick in to help supplement income, and then cut back on drawdown rate.
I don't have an inflation assumption per se and instead just work in 'today's money'.
I assume state pension will stand still in real terms, invested funds will grow by 2% in real terms (after fees), and cash will depreciate by 2% in real terms and that any real assets (basically only the house which might be downsized eventually) will stand still in real terms.
Of course what this does not address is that when (if!) real incomes rise then a fixed real terms income becomes worth less relative to average earnings.I think....0 -
I'm hoping my retirement plans survive tomorrow's budget. We're 99.5% DC pensions (sliver of DB for my wife) and these have been under regular attack for many years. :-(I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
Categories
- All Categories
- 343.1K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.2K Work, Benefits & Business
- 607.9K Mortgages, Homes & Bills
- 173K Life & Family
- 247.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards