Early-retirement wannabe
Comments
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I think you are in a position many would dream of no matter what you do. If you want to get the best value for money then many details are missing from your post to be able to advise.Looking for some opinions from others who want to retire early.
An outline of our position.
52 years young and Married with no kids.
Mortgage free and debt free. No loans etc.
Final salary pension which I can take early (50 onwards with reduced benefits).
If I take my pension next year (53 years old) I'd have accrued 29 years.
We intend to sell our house (£385k), I've got around £20k saved. Also I've got investments coming out at 54, 55 and 56. These should be good for around £20k each after CGT.
We will buy a house for around £300k in a different part of the U.K. which will be the equivalent or better than our current house.
I'd appreciate opinions on if we take full pension lump sum (£130k) with reduced pension (£19k pa) or low lump sum (£25k) and higher annual pension of around £27k.
Thanks.
-What is your Number?
- what income status your other half has?
-are the numbers you listed after reduction or unreduced ?
Re higher tflc or pension - I would go for higher tflc and got it into isas in a few years so that I do not have to pay that much tax on my pension (after you get state pension it would be even more). I am not that versed in tax matters though , others may correct me if I am wrong.
But really I think you are at a stage where you can dedicate your attention to other sides of life , financial is sorted and should not distract you ..The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
Often people seem to use this word mistakenly where "quandary" would fit better.0 -
I started a spreadsheet aged about 30 with the key numbers and realised early retirement was a definite possibility. Am 37 now and living abroad for 13 years has meant I've managed to save a good deal thankfully. Ideally I would like to retire around 50 with 60k per year although my thinking has changed since I met someone a year ago and the idea of kids has suddenly popped into the equation and may need to work a bit longer to put them through uni etc.
First job I had will give me a company pension of 4k/yr at 60 plus have 18 years of NI contributions so thats about 4k kicking in at 68. I currently have no company pension with my job but have built up 3 BTLs with no mortgage that provide 40-45k. Have a private pension pot of about 170k and other investments of about 250k which I hope to invest in something next year which should bring in 15k.
I realise I'm in a v lucky position and could almost theoretically retire now but we plan to move back to the UK in the next few years and will have to fork out for a family home, we'd like a wedding, expense of kids.. and we may well struggle to find work when we return as our place of choice doesn't really have anything in our sector of work so may need to retrain or look for other ways to support ourselves which could take a few years. I'm also very pessimistic on returns that other people talk about from their pension pots and investments. Better to plan for the worst and be pleasantly surprised I reckon. So for now the plan is to stay abroad for a couple more years and save as much as we can.
I think once we do retire then we would really love to do plenty of travelling. Certainly not afraid to rough it (we love hiking holidays to cheap places like Nepal, India and China) but also would like some luxury (couple of weeks a year in Maldives or similar and a couple of weeks skiing).0 -
Ive read pages and pages of this thread but not had the stamina to do the bit in the middle..
What stuns me is the amounts discussed in the pension pots., concerns about luxury items, holidays etc.
Life is short. Your kids are going to blow anything you leave them on things you never had. You dont need enormous homes, you dont need new clothes, you dont need takeaways or meals out. You just need enough. I think I must live in a different world
My husband has a pension of £9,000 a year, which thanks to Tata is about to take a hit. I have several small pots which we began to draw down on my 55th birthday to pay into the bill account which should last until he gets his state pension. We own a small house in a northern part of the UK. We did blow on a VW to camp and tour but our needs are simple. Our savings, I mean his, are 4 x his pension. We consider ourselves more than fortunate.
Your delay is down to fear. Just do it. If you are unhappy, depressed counting the days JUST DO IT.
Apologies if i offend.
No doubt well meaning, but far too simplistic and judgemental. It might be fear, but it might be down to caution, prudence, or planning and waiting a while to have choice in retirement.
Many, me included would like to have some choices. On your budget you have very few choices. Holiday in the Maldives or Minehead? Hawaii or Hastings? On the budgets you talk about you dont get to ask the question even.
Like another poster I'd be happy doing that but I'd like to have the choice to holiday not just in the UK in a camper, but scuba diving in warm waters, on a beach in Hawaii and so on.
Living with very constrained choices may suit you, but it doesn't suit everyone. As for me, I decided really recently to retire a year earlier than planned because the trade off between what has become a dull but is a well paid job, and the ability to have choices in retirement finally crossed over to give me a date. So the salary in my last year is being spent doing up the house and garden so I have fewer expenses in retirement. No fear. Just calculation. I'm sure many others are similar.0 -
I think you are in a position many would dream of no matter what you do. If you want to get the best value for money then many details are missing from your post to be able to advise.
-What is your Number?
- what income status your other half has?
-are the numbers you listed after reduction or unreduced ?
Re higher tflc or pension - I would go for higher tflc and got it into isas in a few years so that I do not have to pay that much tax on my pension (after you get state pension it would be even more). I am not that versed in tax matters though , others may correct me if I am wrong.
But really I think you are at a stage where you can dedicate your attention to other sides of life , financial is sorted and should not distract you ..
Thanks. Pension is reduced to 84% at age 53 or 87% at age 54. The numbers quoted are based on the 84%.
My wife has no pension.0 -
So if the choice is you retire at either 53 or 54 then since it will take 33 years to break even by retiring earlier, you might as well do it earlier since by the time you are 85 or so you are unlikely to be needing that money so much.
I'd take the lower TFLS since you don't seem to need a lump sum for anything and £27k is a nice sum to retire on especially at such an early age when your spending needs are likely to be higher, and even when you get SP you'll still be on basic rate tax, and it won't take that long to break even. Around 18 years, so just when you are getting SP and still have statistically 20+ years to live you'll be on £8k a year less from there on, that's some nice holidays you could have then for the sake of what, a bigger but declining bank balance you don't need in the meantime ?0 -
AnotherJoe wrote: »No doubt well meaning, but far too simplistic and judgemental. It might be fear, but it might be down to caution, prudence, or planning and waiting a while to have choice in retirement.
Many, me included would like to have some choices. On your budget you have very few choices. Holiday in the Maldives or Minehead? Hawaii or Hastings? On the budgets you talk about you dont get to ask the question even.
Like another poster I'd be happy doing that but I'd like to have the choice to holiday not just in the UK in a camper, but scuba diving in warm waters, on a beach in Hawaii and so on.
Living with very constrained choices may suit you, but it doesn't suit everyone. As for me, I decided really recently to retire a year earlier than planned because the trade off between what has become a dull but is a well paid job, and the ability to have choices in retirement finally crossed over to give me a date. So the salary in my last year is being spent doing up the house and garden so I have fewer expenses in retirement. No fear. Just calculation. I'm sure many others are similar.
I'd like the choice beteen a 4 quid bottle of plonk, or a 7 quid bottle fo something decent.
I'd like a choice between a sarnie at a road side shop, and a pub lunch. Or dare I say a 3 course prix fixe lunch.0 -
Thanks. Pension is reduced to 84% at age 53 or 87% at age 54. The numbers quoted are based on the 84%.
My wife has no pension.
Does she have any earned income?
If yes, put it in a pension. If no (or it is less than 3600) put in 2880 into a pension for her each year The govt will gross it up to 3600.
Se wil have a Personal allowance in retirement, of which only 1K can be given to you now. So it would help if she used some of hers to save tax in retirement.0 -
Regardless ....
Better the cottage where one is happy - than the palace where one weeps!0 -
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