Can I retire at 55?
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So are you expecting 2% above inflation and fees so around 5% market return per year? To get that return going forward you might need a high proportion of equities exposure which might leave you exposed to pound cost ravaging if continuing to withdraw during crash years. Your plan looks a bit tight to me.
No. I'm planning on the basis of net -0.5% growth.0 -
One thing to consider is that you may well have higher costs when you stop working. You may want to travel more, you could heat the house all day, not just at night, may want to go out more etc.
£20k per year sounds like a very small amount to live on.0 -
One thing to consider is that you may well have higher costs when you stop working. You may want to travel more, you could heat the house all day, not just at night, may want to go out more etc.
£20k per year sounds like a very small amount to live on.
£ 1,530 net a month isn't a pittance.0 -
£20k per year sounds like a very small amount to live on.
Probably an indication of my very sad life, but I genuinely live on £16,000 a year currently. Admittedly that's without any special one-offs that come along (new kitchen etc as mention by someone). But I think 20K is going to be fine. AND if I get growth 2% with inflation at 2.5% I could easily take some more without a problem.0 -
Cfiresim gives a figure 18,454 a year based on 40 years, full SP at 67, 100% success rate and 2% fees. More is available if using variable spending options.0
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I really appreciate people taking time to reply.
1 other piece of info that I neglected to mention is that despite the decent amount of my pension pot, I actually am currently earning a poor salary. After years of working in IT and earning well, I was made redundant when 50. I found it impossible to get a well paid job after that. My current earning do pay the bills, but I have to say I don't enjoy it and can't wait to finish.
I'm not expecting any sympathy by the way, I know that most people don't enjoy their jobs.0 -
scotty_does wrote: »Hi,
So my plan is to drawdown £20,000 a year (inflation adjusted) and then reduce that accordingly when my state pension kicks in, and probably reduce it gradually sometime after that as I get ‘proper’ old. In my spreadsheets I'm putting in an inflation figure of 2.5% and a growth rate of 2%.
There is a rule of thumb originating from the USA that says you can do that if you take 4% of the pot initially and then adjust for inflation. This was based on some research showing that historically you would be unlikely to run out of money for 30 years if you did it that way, According to that youhave enough.
However that rule has been challenged. It has been suggested that 3.5% might be better for the UK. Retiring early might mean you need the pension to last longer. Also some states of the stock market are bad. On the other hand the UK state pension makes you less vulnerable to running out.
Have you checked your state pension?
Do you have an emergency fund?
There are a fair number of sites that discuss early retirement and argue with each other. I am not a real expert.
There are a couple of long threads in here that might nelp. one about you NUMBER and onme abour early retirement. Reading them might help.0 -
£20k per year sounds like a very small amount to live on.
There are people bringing up families on this amount.
Scotty - I didn't spot whether you are on your own or have a partner as of course 2 incomes makes a difference.
There has been a lot of discussion on this board about people keeping working and then (sorry to be morbid) either dropping down dead or suffering significant ill health - having good health is just as important as having money so if you feel ready to go then go.
We intended to retire at 55 but have decided to work part time instead. It means we are keeping our state pension topped up but working less (and earning less but around what we plan to draw down), more time for hobbies but no time to get bored. Probably do this for another year and then look to stop completely or just dip in and out of work if we get fed up of all this time on our hands
;) If you think you are too small to make a difference, try getting in bed with a mosquito!0 -
There are people bringing up families on this amount.
Scotty - I didn't spot whether you are on your own or have a partner as of course 2 incomes makes a difference.
There has been a lot of discussion on this board about people keeping working and then (sorry to be morbid) either dropping down dead or suffering significant ill health - having good health is just as important as having money so if you feel ready to go then go.
We intended to retire at 55 but have decided to work part time instead. It means we are keeping our state pension topped up but working less (and earning less but around what we plan to draw down), more time for hobbies but no time to get bored. Probably do this for another year and then look to stop completely or just dip in and out of work if we get fed up of all this time on our hands;)
Thanks a lot for that Techno. I'm on my own. My wife passed away the same year I got made redundant (great year that was!).
A part-time job is something I've thought about. To be honest, with even a modest part-time income I've little doubt that I should be okay. The thought of quitting my job is scary though, but exciting at the same time!0 -
I do not see why not. Time is precious . The purpose of money is to enjoy those years you have and at the moment it is wasted as it does not fulfil that purpose. You have an excellent combination of low expense and high funds but you are deriving no benefit of it which is a shame. I would quit your present job in a heartbeat at this combination .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
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