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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 893Posts
    • 1,611Thanks
    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 200
    • mgdavid
    • By mgdavid 10th Apr 18, 9:00 PM
    • 5,648 Posts
    • 4,974 Thanks
    mgdavid
    I totally agree you should lie for today (while also saving).

    ........
    Originally posted by atush
    hope that wasn't a Freudian slip !
    The questions that get the best answers are the questions that give most detail....
    • Wednesday2000
    • By Wednesday2000 14th Apr 18, 10:26 AM
    • 1,851 Posts
    • 12,748 Thanks
    Wednesday2000
    We decided not to get life insurance yet but we did pay off our mortgage completely! The money is going out of our bank next week.

    I know it is more of a psychological benefit as we were on a low interest rate but saying that I am over the moon we paid it off. Our house isn't worth that much, about £300,000 but now we could always buy a smaller/cheaper place if we needed to as we own it outright.

    My husband can get his pension at age 50 but it reduces by 33% if he did do that.

    This is the ages and by how much they reduce if you take it before age 60.

    58 8%

    55 18%

    50 33%

    He has about £480,000 in there. I think he must have about 29 years for a state pension and I know I have 20 years now I made some Class 3 overpayments.

    I would rather retire at 45 (he would be 50) and have less money but he thinks he should work until about 55 so we have more money.

    We are frugal and we both have had health problems and no kids obviously so I think we would be better off retiring early?
    2018: Simplify your life
    • hugheskevi
    • By hugheskevi 14th Apr 18, 11:39 AM
    • 2,017 Posts
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    hugheskevi
    My husband can get his pension at age 50 but it reduces by 33% if he did do that. This is the ages and by how much they reduce if you take it before age 60.

    58 8%
    55 18%
    50 33%

    He has about £480,000 in there.
    It isn't clear from this whether he has a Defined Benefit pension, and there is an actuarial reduction for taking it early, or whether it is Defined Contribution with £480,000 and the 'reductions' stated above are just the difference between projected pot amounts at different ages based on a projected rate of return. Having said that, it probably isn't a key point.

    You don't mention your position - retirement is best planned jointly to maximise the tax advantages. That can sometimes result in one partner putting most of their income into a pension, for example, or if a partner is not earning then putting the £3,600 into their pension to get the 20% tax relief available to anyone regardless of tax status.

    I think he must have about 29 years for a state pension and I know I have 20 years now I made some Class 3 overpayments.
    Presumably you have checked your State Pensions, to establish exactly how much you have and how many more qualifying years you need for full pensions. Voluntary Class 3 contributions are usually very good value, so whether you stay in work or retire early you may wish to factor in the cost of getting full state pensions.

    I would rather retire at 45 (he would be 50) and have less money but he thinks he should work until about 55 so we have more money.
    At very early retirement ages, the effect of 1 more year of work is very significant. For example, assume you could both remain in work and earn £40,000 or retire and live off £20,000 of saved assets. By working one more year you are (crudely, ignoring tax and work-related expenses, etc) £60,000 better off than if you had retired. The advantage of this is that changing a marginal position into a comfortable position may well only require a year or two of extra work.

    Retiring before minimum pension age is harder, especially the more years you are prior to minimum pension age, as you can't benefit from significantly tax-advantaged pension saving, so are relying on other assets. Plus you have fewer years to build up a pot. Once at minimum retirement age 25% tax free lump sums can provide significant resources to live off for several years, covering the period before all pensions become payable.

    We are frugal and we both have had health problems and no kids obviously so I think we would be better off retiring early?
    There is also the shift-down option, ie part-time work, which may be worth considering. There might be key income break-points worth shifting down to, eg, Primary Threshold of £702 per month, below which no National Insurance is payable, Personal Allowance of £987 per month, below which no income tax is payable, higher rate income tax of £3,862 per month, etc. That can increase net £per hour worked, as well as qualifying for another year of State Pension.

    There is always a tension between having enough to retire and working a bit longer for a bit more. I find detailed calculations help a lot here - spend plenty of time calculating to be sure what your desired target is, add a bit (but not too much) caution, and when the target is reached, take the exit decision.
    • Wednesday2000
    • By Wednesday2000 14th Apr 18, 12:21 PM
    • 1,851 Posts
    • 12,748 Thanks
    Wednesday2000
    Hugheskevi - thanks for responding.

    I think he has a final salary pension.

    I don't have a pension as I was self employed and didn't ever bother to get a private one. I don't work now as I have fibromyalgia and had to stop working. We need to build up our savings again and I am going to start putting the £2,880 away now the mortgage is gone.

    We honestly didn't even think about retirement until a couple of years ago.

    I know I could possibly claim the Personal Independent Payment but I haven't got around to it yet. The stories about how hard it is to claim have put me off a lot.

    I have checked the state pension and we both need 35 years.

    I did think about us both getting part time jobs but this was before I became ill. My husband doesn't really mind his job so he would be quite happy to carry on until 55. His job is fairly well paid and very easy to do.
    2018: Simplify your life
    • happyandcontented
    • By happyandcontented 14th Apr 18, 12:33 PM
    • 1,272 Posts
    • 2,435 Thanks
    happyandcontented
    Hugheskevi - thanks for responding.

    I think he has a final salary pension.

    I don't have a pension as I was self employed and didn't ever bother to get a private one. I don't work now as I have fibromyalgia and had to stop working. We need to build up our savings again and I am going to start putting the £2,880 away now the mortgage is gone.

    We honestly didn't even think about retirement until a couple of years ago.

    I know I could possibly claim the Personal Independent Payment but I haven't got around to it yet. The stories about how hard it is to claim have put me off a lot.

    I have checked the state pension and we both need 35 years.

    I did think about us both getting part time jobs but this was before I became ill. My husband doesn't really mind his job so he would be quite happy to carry on until 55. His job is fairly well paid and very easy to do.
    Originally posted by Wednesday2000
    Something that might be worth checking out (and may have a bearing on whether you take out insurance) is whether the FS scheme pays a spousal pension across the board, or whether, like ours, that is only payable if the pension is actually in payment.

    If it is not in payment at the time of death only the personal premiums paid in are returned and the rest is lost. For this reason, we have taken out a term assurance to cover us until NRA even though we will both be retiring much earlier.
    • Wednesday2000
    • By Wednesday2000 14th Apr 18, 12:39 PM
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    • 12,748 Thanks
    Wednesday2000
    Something that might be worth checking out (and may have a bearing on whether you take out insurance) is whether the FS scheme pays a spousal pension across the board, or whether, like ours, that is only payable if the pension is actually in payment.

    If it is not in payment at the time of death only the personal premiums paid in are returned and the rest is lost. For this reason, we have taken out a term assurance to cover us until NRA even though we will both be retiring much earlier.
    Originally posted by happyandcontented
    Oh, really. I didn't know that. I will have to look into that.
    2018: Simplify your life
    • happyandcontented
    • By happyandcontented 14th Apr 18, 12:42 PM
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    happyandcontented
    Oh, really. I didn't know that. I will have to look into that.
    Originally posted by Wednesday2000
    No, we didn't know that either, and it came as a bit of a shock when our IFA looked closely at the pension documents. Not every scheme is like that, but it is not uncommon apparently.
    • Wednesday2000
    • By Wednesday2000 14th Apr 18, 12:43 PM
    • 1,851 Posts
    • 12,748 Thanks
    Wednesday2000
    My husband said if he dies while he is employed there I would get 4 times his salary.

    So, does that mean we should wait to get life insurance after he leaves work or would it be easier to get extra life insurance while we were younger?
    2018: Simplify your life
    • happyandcontented
    • By happyandcontented 14th Apr 18, 12:57 PM
    • 1,272 Posts
    • 2,435 Thanks
    happyandcontented
    My husband said if he dies while he is employed there I would get 4 times his salary.

    So, does that mean we should wait to get life insurance after he leaves work or would it be easier to get extra life insurance while we were younger?
    Originally posted by Wednesday2000
    It is up to you, my husband changed jobs and became a contractor and so his benefits package (Death In Service etc,) went with that job. Now he has to provide his own benefits package!

    If 4 times his salary would provide for you into old age then perhaps you need not bother, but if you would also have no pension provision in addition to that lump sum, then it might be worth thinking about it.

    It was only when we began to look into what pension provision he had (like you, he had paid into the works scheme and just not bothered thinking any more about it!) that we discovered that loophole existed.
    • Wednesday2000
    • By Wednesday2000 14th Apr 18, 1:10 PM
    • 1,851 Posts
    • 12,748 Thanks
    Wednesday2000
    It is up to you, my husband changed jobs and became a contractor and so his benefits package (Death In Service etc,) went with that job. Now he has to provide his own benefits package!

    If 4 times his salary would provide for you into old age then perhaps you need not bother, but if you would also have no pension provision in addition to that lump sum, then it might be worth thinking about it.

    It was only when we began to look into what pension provision he had (like you, he had paid into the works scheme and just not bothered thinking any more about it!) that we discovered that loophole existed.
    Originally posted by happyandcontented
    I think a lot of people just pay into a pension without really looking at the details. That is lucky that you got an IFA to check and found out.

    I think he should get life insurance on me, thinking about it. Damn, I wish I had thought of this before I was diagnosed last summer, I was healthy until then!
    2018: Simplify your life
    • happyandcontented
    • By happyandcontented 14th Apr 18, 2:07 PM
    • 1,272 Posts
    • 2,435 Thanks
    happyandcontented
    I think a lot of people just pay into a pension without really looking at the details. That is lucky that you got an IFA to check and found out.

    I think he should get life insurance on me, thinking about it. Damn, I wish I had thought of this before I was diagnosed last summer, I was healthy until then!
    Originally posted by Wednesday2000
    We have only taken out insurance on my husband as if I died first he would still have a substantial pot and would be ok for income. My pension is nowhere near as big as his as I gave up work for quite a few years to facilitate his career (which involved a lot of stress and international travel) and also to look after our children and then ageing parents.

    It depends on your circumstances.
    • gfplux
    • By gfplux 15th Apr 18, 7:37 AM
    • 4,314 Posts
    • 3,780 Thanks
    gfplux
    My husband said if he dies while he is employed there I would get 4 times his salary.

    So, does that mean we should wait to get life insurance after he leaves work or would it be easier to get extra life insurance while we were younger?
    Originally posted by Wednesday2000
    It can be important that the pension and death in service trustees at the company know clearly and in writing that you are the intended beneficiary.
    Early scemes left it entirely in the hands of the trustees. Some peoples family lives are very complicated (divorce, 2nd relationship and or 2nd marriage) It helps everyone to have that clear.
    Britain is racing towards March 29 next year.
    There is no Brexit dividend. "Brexit Blight of Uncertainty" sums it all up. Although "The Curse of a false Brexit" or “Brexit Disaster" come close.
    • Wednesday2000
    • By Wednesday2000 15th Apr 18, 9:32 AM
    • 1,851 Posts
    • 12,748 Thanks
    Wednesday2000
    It can be important that the pension and death in service trustees at the company know clearly and in writing that you are the intended beneficiary.
    Early scemes left it entirely in the hands of the trustees. Some peoples family lives are very complicated (divorce, 2nd relationship and or 2nd marriage) It helps everyone to have that clear.
    Originally posted by gfplux
    I will definitely go through the pension paperwork today and check that.
    2018: Simplify your life
    • westv
    • By westv 24th Apr 18, 1:36 PM
    • 4,588 Posts
    • 2,176 Thanks
    westv
    Still no clarification re location. I am the only one of 11 that this affects and it pi**es me off!
    Originally posted by westv
    Just been told today that my role will move 30 miles outside London from 1/7/18. I left it with them to see what flexibility is available as it would currently double the cost of and add several hours to my weekly travelling.
    If needs be I could just walk away but I'd rather not do that just yet.
    • Deneb
    • By Deneb 24th Apr 18, 3:21 PM
    • 325 Posts
    • 254 Thanks
    Deneb
    Just been told today that my role will move 30 miles outside London from 1/7/18. I left it with them to see what flexibility is available as it would currently double the cost of and add several hours to my weekly travelling.
    If needs be I could just walk away but I'd rather not do that just yet.
    Originally posted by westv
    I decided to go when they told me I was moving to Stevenage. That got me out of the OMY syndrome rut that I had slowly been sinking into
    • LHW99
    • By LHW99 24th Apr 18, 3:48 PM
    • 1,393 Posts
    • 1,272 Thanks
    LHW99
    Wednesday2000 do you / can you get ESA? I think that provides NI credits.
    • westv
    • By westv 24th Apr 18, 3:56 PM
    • 4,588 Posts
    • 2,176 Thanks
    westv
    Just been told today that my role will move 30 miles outside London from 1/7/18. I left it with them to see what flexibility is available as it would currently double the cost of and add several hours to my weekly travelling.
    If needs be I could just walk away but I'd rather not do that just yet.
    Originally posted by westv
    I decided to go when they told me I was moving to Stevenage. That got me out of the OMY syndrome rut that I had slowly been sinking into
    Originally posted by Deneb
    Now 55.
    Ideally I would have wanted to get to 58. Pension pot is currently around £300k with a PPF saved DB starting at 60 of around £5k.
    Also my wife wants to carry on working and will have the benefit of CS pensions starting in 12 years and 19 years.
    • Deneb
    • By Deneb 24th Apr 18, 4:22 PM
    • 325 Posts
    • 254 Thanks
    Deneb
    Now 55.
    Ideally I would have wanted to get to 58. Pension pot is currently around £300k with a PPF saved DB starting at 60 of around £5k.
    Also my wife wants to carry on working and will have the benefit of CS pensions starting in 12 years and 19 years.
    Originally posted by westv
    Ah, I went at 60. Had a DB pension in payment since I was 54 so basically lived off that and shoved my salary into a SIPP for 6 years, intending to bridge the gap until SPA.

    Now 10 months into retirement also with a second smaller DB pension and I haven't touched the SIPP. I keep telling myself that I should start spending more, but it's difficult to alter the mindset from years of saving and investing as a priority.

    Mrs D is currently 58 and still works part time, intending to retire at 60 also. One of my biggest successes has been to convince her to also save into a SIPP, although that doesn't stop her from spending just about everything else that's left faster than she earns it!

    I hope everything works out for you.
    • atush
    • By atush 24th Apr 18, 5:54 PM
    • 17,013 Posts
    • 10,634 Thanks
    atush
    hope that wasn't a Freudian slip !
    Originally posted by mgdavid

    No it was typing in the dark in a hotel room cuz everyone else is asleep lol.
    • gfplux
    • By gfplux 25th Apr 18, 7:54 AM
    • 4,314 Posts
    • 3,780 Thanks
    gfplux
    Now 55.
    Ideally I would have wanted to get to 58. Pension pot is currently around £300k with a PPF saved DB starting at 60 of around £5k.
    Also my wife wants to carry on working and will have the benefit of CS pensions starting in 12 years and 19 years.
    Originally posted by westv
    21 years ago at 52 I was forced out. Looking back it was the best thing that ever happened to me. Otherwise I would have hung on and on and on.
    Britain is racing towards March 29 next year.
    There is no Brexit dividend. "Brexit Blight of Uncertainty" sums it all up. Although "The Curse of a false Brexit" or “Brexit Disaster" come close.
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