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  • FIRST POST
    • Steve123456789
    • By Steve123456789 15th Oct 19, 3:55 PM
    • 52Posts
    • 16Thanks
    Steve123456789
    What do do when you're mortgage free?
    • #1
    • 15th Oct 19, 3:55 PM
    What do do when you're mortgage free? 15th Oct 19 at 3:55 PM
    I'm sure this has been asked a million times, but I thought I'd ask from my personal perspective. If all goes to plan, I should be mortgage free on a 4 bed house at the age of 32 or 33.


    I'm getting a bit ahead of myself, but what would you do?


    My plan is to either retire early, around 50ish, at the latest hopefully, or go part time as soon as mortgage is done, and work until whenever I need to.
Page 3
    • pjcox2005
    • By pjcox2005 21st Oct 19, 8:56 AM
    • 657 Posts
    • 746 Thanks
    pjcox2005
    Just to add a different view, I'm mid-thirties (still with mortgage) and went down to 4 days a week (although contract is actually slightly longer work in the 4 days so it's not a full 20% reduction).


    Love it, gives an extra day to spend with the kids whilst young, loses the top end of salary (i.e. 40% taxed element, plus no childcare) made it quite economical. Intend to keep the day off when they're at school to enjoy my hobbies and therefore mean I free up time at weekends to be with family.


    I really think more people should explore it.


    On early retirement, if you're earning well and planning for it, then I see no reason why it's not possible as long as you avoid too much lifestyle inflation as wages go up.
    • Goldiegirl
    • By Goldiegirl 21st Oct 19, 3:32 PM
    • 8,511 Posts
    • 50,194 Thanks
    Goldiegirl
    In answer to your question, when I repaid my mortgage I just carried on as normal, but saved more money.

    I was 46 when my mortgage ended, and when I was 50, I was made redundant.

    At this point, I took the opportunity to go part - time. I was very lucky to find a job in a similar field, at the same hourly rate, for two days a week.

    My husband, who is 8 years older than me, decided to go down to 4 days a week, then we finally stopped work altogether nearly 5 years ago.

    A few observations -

    Just wondering what your wife thinks about all this. We've heard about what you think, but this will have a big effect on your wife too. Is she happy to be the main breadwinner? How does she feel that, as a couple, for the rest of your lives your joint income will be much less than it would have been. This will affect your joint retirement income too, as, if you are part time (or not working at all) you won't be able to put so much into a pension.

    Also, if you hate work so much, you'll still hate working part time. Instead of having the 'Sunday evening feeling', I ended up having the Wednesday evening feeling instead. When I was full time, I worked and got on with it, but I got very resentful of my part time job, as I began to look on it as an inconvenience.

    I don't know what line of work you are currently in, but if you really hate it, you will want to do something different - but don't forget, part time jobs are often very low paid roles.

    Finally, have you worked out what you will do all day, if you don't work?

    Once you have finished all the housework, there'll be time to fill. You'll be home alone too, so time might drag. If you are thinking you'll 'join clubs', don't forget there won't be anybody your age during the day, everyone will be much older. I'm 59 now, and I still feel like the youngest retiree in the area!

    Overall, I can't help thinking that 30's is too young to withdraw from the workplace. Later on, you might regret it.

    As you don't like working for other people, I can't help thinking that you'd be better off working out what it is you like, and work for yourself doing something you like, otherwise you might end up leading a lonely and restricted life.
    Last edited by Goldiegirl; 21-10-2019 at 3:48 PM.
    Early retired - 18th December 2014
    If your dreams don't scare you, they're not big enough
    • Steve123456789
    • By Steve123456789 21st Oct 19, 4:22 PM
    • 52 Posts
    • 16 Thanks
    Steve123456789
    In answer to your question, when I repaid my mortgage I just carried on as normal, but saved more money.

    I was 46 when my mortgage ended, and when I was 50, I was made redundant.

    At this point, I took the opportunity to go part - time. I was very lucky to find a job in a similar field, at the same hourly rate, for two days a week.

    My husband, who is 8 years older than me, decided to go down to 4 days a week, then we finally stopped work altogether nearly 5 years ago.

    A few observations -

    Just wondering what your wife thinks about all this. We've heard about what you think, but this will have a big effect on your wife too. Is she happy to be the main breadwinner? How does she feel that, as a couple, for the rest of your lives your joint income will be much less than it would have been. This will affect your joint retirement income too, as, if you are part time (or not working at all) you won't be able to put so much into a pension.

    Also, if you hate work so much, you'll still hate working part time. Instead of having the 'Sunday evening feeling', I ended up having the Wednesday evening feeling instead. When I was full time, I worked and got on with it, but I got very resentful of my part time job, as I began to look on it as an inconvenience.

    I don't know what line of work you are currently in, but if you really hate it, you will want to do something different - but don't forget, part time jobs are often very low paid roles.

    Finally, have you worked out what you will do all day, if you don't work?

    Once you have finished all the housework, there'll be time to fill. You'll be home alone too, so time might drag. If you are thinking you'll 'join clubs', don't forget there won't be anybody your age during the day, everyone will be much older. I'm 59 now, and I still feel like the youngest retiree in the area!

    Overall, I can't help thinking that 30's is too young to withdraw from the workplace. Later on, you might regret it.

    As you don't like working for other people, I can't help thinking that you'd be better off working out what it is you like, and work for yourself doing something you like, otherwise you might end up leading a lonely and restricted life.
    Originally posted by Goldiegirl

    Hi, thanks for the reply.


    In response to the bits I've bolded above...


    -My wife wants to work less too. We're both of the same crazy opinion that you should work to live, and not live to work. If we half our expenditure (pay off mortgage) we can half our income and still lead the same quality of life.


    -I'd probably still hate working part time, but there would be less work, and therefore less hate, assuming hatred/time remained a constant.


    -So much stuff. We're very outdoorsy, and outdoors is free!


    -Nothing stopping you starting work again, is there?


    I know that far too many people are very unfortunate and can't get by without working 9 jobs at the same time, but for a hell of a lot of people I know, if you ask them why they work, they'll just say "well that's what you do, isn't it?"
    They're the same people who spend reams and reams of money on meaningless junk that isn't making them happy.
    What would make me happy would be having more time.
    • MaxiRobriguez
    • By MaxiRobriguez 21st Oct 19, 5:20 PM
    • 592 Posts
    • 441 Thanks
    MaxiRobriguez
    Op: If you can afford it, not just now, but for the rest of your life, and you plan carefully, then by all means you should do what makes you happy. If that means ditching work, then why listen to anyone who says otherwise?

    I'd like to be able to do the same as you, but with a wife (and soon to be children) that need supporting I'm attempting to bolster pension to 1m so that two of us can live off it with a bit of money to give kids. If I wasn't in that situation, I'd be retiring in 30's/40's and doing something immeasurably more worthwhile than work.
    • enthusiasticsaver
    • By enthusiasticsaver 21st Oct 19, 7:49 PM
    • 9,397 Posts
    • 21,781 Thanks
    enthusiasticsaver
    Presumably if you are intending to give up work then you need a source of income unless you are going to work part time which may be an option. Investing is something which normally is best for the long term and the markets are a little volatile at the moment which would explain why your Vanguard fund is down. My investments too but that is normal volatility although of course you could be investing beyond your risk appetite.

    We retired at 58 but it would have been a lot earlier if we had not had kids. Although we did enjoy our jobs and that is the bit I find a bit sad that presumably you are in your twenties or early thirties and are planning to retire at 50 so still have more than 20 years to go. I would urge you to do something else which makes you happy even if you earn less. Life is too short to spend doing things you hate even work although many don't have the choice. From your situation it appears you do have the choice but have chosen to stick with jobs you hate to pay off your mortgage early. Laudable action but once it is gone maybe look into doing something else to earn a living.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • pjcox2005
    • By pjcox2005 21st Oct 19, 8:57 PM
    • 657 Posts
    • 746 Thanks
    pjcox2005
    Just to add OP, I presume you've already seen the popular FIRE (Financial Independence Retire Early) websites and forums (if not say and we'll name some) where others have same aspirations or are retired early so can give a different view.


    Likewise the pensions board has a couple of interesting threads on retiring early. Typically 50s rather than your situation but gives an idea about what people had to adjust to on retirement.
    • jennifernil
    • By jennifernil 21st Oct 19, 10:47 PM
    • 5,165 Posts
    • 2,174 Thanks
    jennifernil
    At the moment, as you are working, you are making pension contributions, though I doubt a total 10% of salary contribution will be enough to provide a comfortable retirement, especially if you want to take your pension at the earliest opportunity.

    But if you stop working, you may not be able to afford to make contributions any more, plus you will not be adding years to your state pension. Even working part time would mean your personal pension contributions would be reduced. That would worry me!

    Do you have a car? How will you be able to afford to replace it every so often unless you have a decent amount of savings set aside? What about home repairs and renovations? Replacing appliances every so often?

    Free time has to be filled somehow. Even if the great outdoors is free, you still have to get there. Hobbies can be expensive. Do you want to travel?

    Retiring completely in your 50s may be feasible if you have no plans to have children, but not in your 30s. Find a job that you enjoy more, or start your own business, could be linked to your love of the outdoors.

    Reduce your hours a little and use some of your income to do things you enjoy while you are still young, but make sure you are still building up your pension and your savings, you will need them one day.
    • hugheskevi
    • By hugheskevi 21st Oct 19, 11:05 PM
    • 2,359 Posts
    • 3,161 Thanks
    hugheskevi
    My plans are to retire fully around the age of 45.

    This is later than it could have been due to spending several years travelling the world in my 20s - that was the best use of all of my investments, albeit not in a financial sense. I view this time as essentially borrowing from retirement - ie, taking time out that you need to repay at a later date by working longer.

    The travel involved a year living and doing casual work in Australia, a year travelling across Africa and 18 months travelling across Asia. In more recent times I took 3 months off to drive from the east coast of Africa to the west coast.

    Financially, I prioritised pension saving, then ISA saving, and lastly mortgage. I should be mortgage free next year (at age 42), have enough pension to retire on and so for last few years money will going into ISAs until I have sufficient to retire fully.

    I may well go part-time in a couple of years, when I expect my Defined Benefit pension to be changed by my employer. At that point I will probably just work enough to avoid higher rate tax.

    Plan for retirement is 3 years traveling around the world, mostly the Americas. That should get me toward age 50 when I will come back to UK and conventionally retire.

    I think the above has been a nice balance of spending, saving and consuming. In particular, there are some types of travel you will only enjoy when young, eg, spending nights out in bars drinking excessively is now my idea of horror So as well as things like working part-time, maybe plan to take time out to travel and do other stuff.
    • Steve123456789
    • By Steve123456789 24th Oct 19, 3:29 PM
    • 52 Posts
    • 16 Thanks
    Steve123456789
    We don't have any concrete plans to do anything at all yet, other than pay off our mortgage at 32.


    At this point, we'll have basically no savings at all, but our income will have more than halved.


    This is the point we could both go part time, and still live the same...
    ...or continue to work for another 15 or 20 years, saving loads, but still living comfortably before retiring traditionally.


    My pension is pretty rubbish. I pay 6% and so does my employer. This is the max they'll pay, so it's the max I'll pay. I have hardly anything in it. Maybe 2.5k? Same for my wife.
    • Steve123456789
    • By Steve123456789 24th Oct 19, 4:53 PM
    • 52 Posts
    • 16 Thanks
    Steve123456789
    Just to add OP, I presume you've already seen the popular FIRE (Financial Independence Retire Early) websites and forums (if not say and we'll name some) where others have same aspirations or are retired early so can give a different view.


    Likewise the pensions board has a couple of interesting threads on retiring early. Typically 50s rather than your situation but gives an idea about what people had to adjust to on retirement.
    Originally posted by pjcox2005

    I've seen a couple, but which ones do you mean?
    • Steve123456789
    • By Steve123456789 24th Oct 19, 4:55 PM
    • 52 Posts
    • 16 Thanks
    Steve123456789
    Presumably if you are intending to give up work then you need a source of income unless you are going to work part time which may be an option. Investing is something which normally is best for the long term and the markets are a little volatile at the moment which would explain why your Vanguard fund is down. My investments too but that is normal volatility although of course you could be investing beyond your risk appetite.

    We retired at 58 but it would have been a lot earlier if we had not had kids. Although we did enjoy our jobs and that is the bit I find a bit sad that presumably you are in your twenties or early thirties and are planning to retire at 50 so still have more than 20 years to go. I would urge you to do something else which makes you happy even if you earn less. Life is too short to spend doing things you hate even work although many don't have the choice. From your situation it appears you do have the choice but have chosen to stick with jobs you hate to pay off your mortgage early. Laudable action but once it is gone maybe look into doing something else to earn a living.
    Originally posted by enthusiasticsaver

    What would you recommend investing in?


    Currently have a S&S ISA with 500 in it (I know this is northing compared with what I'll need to retire) and I'm planning on putting about 200 a month in. It's currently down a tenner but I know it'll move around all over the place.


    Parents in law invest lots of money. They use Hargreaves Lansdown and are currently on over 30% for the year apparently. I'd like to get in on this, but it sounds too good to be true.
    • Charjohndew
    • By Charjohndew 24th Oct 19, 8:29 PM
    • 9 Posts
    • 7 Thanks
    Charjohndew
    Start investing (in pension and S&S ISAs). Arguably you should have done that before paying off the mortgage.
    Originally posted by El Torro
    Can you explain why you suggest doing this before/or rather paying off a mortgage? Genuine question-this is a minefield and I am intrigued that's all! Thanks
    • El Torro
    • By El Torro 24th Oct 19, 9:01 PM
    • 462 Posts
    • 448 Thanks
    El Torro
    Can you explain why you suggest doing this before/or rather paying off a mortgage? Genuine question-this is a minefield and I am intrigued that's all! Thanks
    Originally posted by Charjohndew
    There are many threads on this forum discussing this very point. Basically if you invest rather than overpaying your mortgage the likelihood is that your investments will grow faster than the extra interest you end up paying on your mortgage.

    People who focus on becoming mortgage free generally know this, but they want the security that comes with not having a mortgage.

    Both are valid arguments. Personally I fall in the camp of having more money later in life, even if that means taking longer to pay off my mortgage debt.
    • Steve123456789
    • By Steve123456789 25th Oct 19, 10:11 AM
    • 52 Posts
    • 16 Thanks
    Steve123456789
    There are many threads on this forum discussing this very point. Basically if you invest rather than overpaying your mortgage the likelihood is that your investments will grow faster than the extra interest you end up paying on your mortgage.

    People who focus on becoming mortgage free generally know this, but they want the security that comes with not having a mortgage.

    Both are valid arguments. Personally I fall in the camp of having more money later in life, even if that means taking longer to pay off my mortgage debt.
    Originally posted by El Torro

    Someone up there didn't understand this.
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