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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 900Posts
    • 1,634Thanks
    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 204
    • Chickereeeee
    • By Chickereeeee 10th May 18, 12:00 PM
    • 451 Posts
    • 275 Thanks
    Chickereeeee
    I do not know if it has been covered in the depths of this thread, but I recommend moving house when taking early retirement, especially if you have been in the same place for a while.

    You are no longer resticted in finding a place by commuting restictions, and have a whole new area to explore, new people to meet and challenges to overcome.

    C
    • MallyGirl
    • By MallyGirl 10th May 18, 12:32 PM
    • 2,963 Posts
    • 7,968 Thanks
    MallyGirl
    I do not know if it has been covered in the depths of this thread, but I recommend moving house when taking early retirement, especially if you have been in the same place for a while.

    You are no longer resticted in finding a place by commuting restictions, and have a whole new area to explore, new people to meet and challenges to overcome.

    C
    Originally posted by Chickereeeee
    I expect we will do that eventually but in ER we think that the proximity to London will enable us to go to shows/museums/etc that we always seem to miss at the moment. Access to Heathrow also handy. My Dad retired from Surrey to the depths of Dorset and he and his culture vulture wife spends quite a lot of time in hotels as they just cannot get home from events.
    • OldMusicGuy
    • By OldMusicGuy 10th May 18, 12:50 PM
    • 554 Posts
    • 1,119 Thanks
    OldMusicGuy
    I do not know if it has been covered in the depths of this thread, but I recommend moving house when taking early retirement, especially if you have been in the same place for a while.

    You are no longer resticted in finding a place by commuting restictions, and have a whole new area to explore, new people to meet and challenges to overcome.
    Originally posted by Chickereeeee
    Not specifically in this thread, but it has been discussed in others. Some people (me included) have always included property as part of our longer term financial and retirement planning, while others exclude it. I have just retired and our plan was always to downsize within one to two years of my retirement, move to a smaller house in a cheaper part of the country and find a renovation/improvement project that we can complete together while we are still young enough.

    I think it depends on two things, where you live and your pension arrangements. We live in a very expensive part of the SE, so if we go anywhere (apart from London), it will be relatively much cheaper than where we are now. But if you already live in a "cheaper" part of the country, you will release less equity by downsizing. Also, unlike most people on here, I have no DB pension so apart from SP, I have no regular income floor. So I really do want to release equity from the house now because we will need it.
    • kidmugsy
    • By kidmugsy 10th May 18, 7:05 PM
    • 11,599 Posts
    • 8,124 Thanks
    kidmugsy
    I recommend moving house when taking early retirement, especially if you have been in the same place for a while.

    You ... have ... new challenges to overcome.
    Originally posted by Chickereeeee
    Mmmm. New challenges. One might have had a belly full of "challenges", its being an absurd euphemism for problems.
    Free the dunston one next time too.
    • atush
    • By atush 11th May 18, 3:38 PM
    • 17,185 Posts
    • 10,749 Thanks
    atush
    Not at all. Much rather be outdoors in the countryside, walking across to a valley where I watch kites soaring overhead and deer, than sitting indoors. And the exercise makes me feel good too!

    I take it you've never been up to your waist walking through peat bog either
    Originally posted by Deneb
    I avoid peat bogs if I can. In fact, i avoid bogs of all kinds.

    I have no desire to become the next person mummified in peat

    Mind you avoiding is hard to do here, it is so wet I have a bog garden.
    • Angry_kittens
    • By Angry_kittens 11th May 18, 3:41 PM
    • 17 Posts
    • 35 Thanks
    Angry_kittens
    After coming across this thread several months ago I have slowly been making my way through it and have now read all 204 pages!

    I would like to say a massive thank you to Marine_life and all other contributors, it has made me think massively about what I want to reach in life (financially). I have always been more inclined to save money than spend it - which enabled me to buy my own house at 23 with a 25% deposit (I live in the North West)

    I am now reconsidering how and where to save money efficiently - currently I am mostly over paying my mortgage and making P2P investments. As I want to move again soon I will probably maintain this in the short term to enable me to make the (hopefully final) step to a detached house.

    After that though I will be looking to pay at least 30% of my salary into my work pension via Salary Sacrifice, continue P2P investment and start looking at S&S ISA's. Stocks have generally always terrified me as my father got burnt by the 2009 crash just as he commenced his pension, but I am now more comfortable with the risks and have changed the portfolio blend on my work Pension - bigger risk while I am young.

    At only 26 I have a long way to go, but am aiming for 55 as my Early Retirement date; or whatever the minimum age is then - early 60's wouldn't surprise me with the number of governments and budget announcements I have to get through until then!

    Most of my peers and colleagues consider me a little mad to be thinking about and planning retirement at 26, but I expect I'll have the last laugh at some point in the future...

    I found all the references to office politics and Dilbert worthy management decisions particularly amusing, I work in IT for a major US investment bank and I am already unsure how I'm going to stomach the next 3 decades!
    • mgdavid
    • By mgdavid 11th May 18, 8:25 PM
    • 5,674 Posts
    • 5,003 Thanks
    mgdavid
    .....

    I found all the references to office politics and Dilbert worthy management decisions particularly amusing, I work in IT for a major US investment bank and I am already unsure how I'm going to stomach the next 3 decades!
    Originally posted by Angry_kittens
    Don't worry too much; in my experience (40 years in IT, recently retired) we IT types can usually cope with management BS very well. The realisation that they can have it easy or have it hard depending on how they treat the IT guys and gals works wonders!
    It also helps to view getting one over on management as a sport ;-)
    Last edited by mgdavid; 11-05-2018 at 8:29 PM.
    The questions that get the best answers are the questions that give most detail....
    • atush
    • By atush 11th May 18, 9:45 PM
    • 17,185 Posts
    • 10,749 Thanks
    atush
    I am now reconsidering how and where to save money efficiently - currently I am mostly over paying my mortgage and making P2P investments
    Overpaying a mtg is an inefficient way to save, at least with the rates available now. Are you at least paying in enough to your pension to get the max the employer will pay in?

    Do you realise SS means that you get 32% tax relief? Ie 100 into your pension costs you only 68?

    With P2P have you looked at which ones can be put in an ISA? Some can.
    • gallygirl
    • By gallygirl 11th May 18, 9:58 PM
    • 16,646 Posts
    • 109,861 Thanks
    gallygirl
    Overpaying a mtg is an inefficient way to save, at least with the rates available now.
    Originally posted by atush
    On the other hand if the OP is looking to get a better LTV on their mortgage when they move then it maybe is the best short-term answer.

    AK - why are you tying your retirement age to when the govt. say you can access your pensions? Investing in S&S or P2P ISA's means you can fund the gap between when you choose to retire and when the govt. let you get at your money . You're very young to be planning so far ahead - keep it up and you could easily be FI in your 40's .
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • kidmugsy
    • By kidmugsy 11th May 18, 10:41 PM
    • 11,599 Posts
    • 8,124 Thanks
    kidmugsy
    Stocks have generally always terrified me as my father got burnt by the 2009 crash just as he commenced his pension
    Originally posted by Angry_kittens
    Someone like you who would be buying S&S monthly would be much less at risk than your father who was exposed to serious risk on a capital sum at one instant. That's why there is still a case for moving some capital into low risk investments as one approaches retirement. Though what constitutes "low risk" is hard to identify at the moment: possibly not government bonds. Anyway, later in life be sure to diversify.

    It might be wise to open a LISA at some point - perhaps for only a modest amount - to keep open the option of subscribing until you are fifty. After all you may not always have access to a salary sacrifice pension scheme.
    Free the dunston one next time too.
    • crv1963
    • By crv1963 12th May 18, 12:23 AM
    • 453 Posts
    • 1,010 Thanks
    crv1963
    After coming across this thread several months ago I have slowly been making my way through it and have now read all 204 pages.


    I am now reconsidering how and where to save money efficiently - currently I am mostly over paying my mortgage and making P2P investments. As I want to move again soon I will probably maintain this in the short term to enable me to make the (hopefully final) step to a detached house.


    At only 26 I have a long way to go, but am aiming for 55 as my Early Retirement date; or whatever the minimum age is then - early 60's wouldn't surprise me with the number of governments and budget announcements I have to get through until then!

    Most of my peers and colleagues consider me a little mad to be thinking about and planning retirement at 26, but I expect I'll have the last laugh at some point in the future...

    I found all the references to office politics and Dilbert worthy management decisions particularly amusing, I work in IT for a major US investment bank and I am already unsure how I'm going to stomach the next 3 decades!
    Originally posted by Angry_kittens


    Good for you, at the very least you've a head start on your peers! Given current interest rates, over paying mortgage makes sense if you're building capital to gain a lower LTV for your next property, I'd advise as someone who had a mortgage under the Major/ Lamont years to be wary of always thinking interest rates will never go to silly levels so having the lowest rate you can get is a good way forwards.


    Once you've sorted housing, do look at pensions, even if it may take you until you're 57/ 58 to access a SIPP, maximise employer contributions and don't look at State Pension age as retirement age, but look to use other investments to fund the gaps between each age.


    For example I'm 54, can access DB at 55, SP at 67, so having been much, much later to the party than you, Mrs CRV and I are realistically looking at going at 57/ 58 for me and 54/ 55 for her so saving the "gap years" of 57- 67 when SP kicks in. Had we been able to by choice we'd have saved so we could go me 53 her 50.


    Also remember at 26 life is a moveable feast so do spend a bit ie live for now, save a bit ie holidays/ treats/ cars, gamble a bit ie investments/ pensions/ ISA/ P2P! Be wise don't sacrifice todays happiness for tomorrows future but don't sacrifice tomorrows future for todays gratification, keep a balance and don't ever borrow against a depreciating asset like a car or a sofa!


    As for office politics, they're in every workplace with 3 or more people. Keep your powder dry and don't join the gossip, accept that you never please anyone let alone everyone! If someone moans I listen but don't repeat, I only advise if I'm sure and I plough my own way forward!


    Good luck
    Last edited by crv1963; 12-05-2018 at 12:25 AM.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • gadgetmind
    • By gadgetmind 12th May 18, 9:27 AM
    • 10,857 Posts
    • 8,755 Thanks
    gadgetmind
    Stocks have generally always terrified me as my father got burnt by the 2009 crash just as he commenced his pension, but I am now more comfortable with the risks and have changed the portfolio blend on my work Pension - bigger risk while I am young.
    Originally posted by Angry_kittens
    Glad you now understand the risks. Single company risk is the one I've seen burn the most people, with single sector/company next down. Of course, panic selling at the bottom and not holding enough cash/bonds can also cause a few sleepless nights!
    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.
    • atush
    • By atush 12th May 18, 6:07 PM
    • 17,185 Posts
    • 10,749 Thanks
    atush
    On the other hand if the OP is looking to get a better LTV on their mortgage when they move then it maybe is the best short-term answer.

    T.
    Originally posted by gallygirl
    Well short termism isnt always wise either. a good LTV is important, but giving up employers contribs and not taking advantage of 32% TR is a bad idea to me.

    But extra money/income could be split and they could do both.
    • gallygirl
    • By gallygirl 12th May 18, 8:57 PM
    • 16,646 Posts
    • 109,861 Thanks
    gallygirl
    Well short termism isnt always wise either. a good LTV is important, but giving up employers contribs and not taking advantage of 32% TR is a bad idea to me.

    But extra money/income could be split and they could do both.
    Originally posted by atush
    Granted - but a better LTV would give a better rate and excess could go to pension (though I appreciate that would have more of an impact if the range of mortgage rates was a higher than 1.49 to 2.49%!).
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • Angry_kittens
    • By Angry_kittens 14th May 18, 7:44 AM
    • 17 Posts
    • 35 Thanks
    Angry_kittens
    I am aware of the tax relief on pensions; I will be taking full advantage of that ASAP! My employer contributions are not linked to my own - they contribute 8% irrespective of what I put in.

    I know mortgage over payments are not financially sensible, the sort house I am looking at is right on the limit of the equity I have now and the amount I could potentially borrow (~4.5 x salary) - as I'm single this is my major hangup atm.

    I do have a IFISA on one of the P2P sites, although I don't earn enough interest outside of that to pay tax on currently.

    Although ever a saver I do have a few frivolous outgoings - a brand new car (on 0% finance of course) and a penchant for PC gaming - top end hardware is very expensive!

    I may retire earlier than 55 / pension age - should finances allow at the time, god forbid I'm still at the same company they seem to like giving people a golden boot at that age so it may all work out!

    Thank you all for the comments!
    • Anonymous101
    • By Anonymous101 14th May 18, 10:00 AM
    • 1,151 Posts
    • 554 Thanks
    Anonymous101
    I am aware of the tax relief on pensions; I will be taking full advantage of that ASAP! My employer contributions are not linked to my own - they contribute 8% irrespective of what I put in.

    I know mortgage over payments are not financially sensible, the sort house I am looking at is right on the limit of the equity I have now and the amount I could potentially borrow (~4.5 x salary) - as I'm single this is my major hangup atm.

    I do have a IFISA on one of the P2P sites, although I don't earn enough interest outside of that to pay tax on currently.

    Although ever a saver I do have a few frivolous outgoings - a brand new car (on 0% finance of course) and a penchant for PC gaming - top end hardware is very expensive!

    I may retire earlier than 55 / pension age - should finances allow at the time, god forbid I'm still at the same company they seem to like giving people a golden boot at that age so it may all work out!

    Thank you all for the comments!
    Originally posted by Angry_kittens
    You seem like you've got your head screwed on so don't really have too much to add to what others have said other than good luck. I'm sure with your attitude things will work out fine for you.

    The only piece of advice I'd have would be to maybe think about contributing more into a S&S ISA rather than a pension.
    There's a few reason's I'd advise this but they all revolve around flexibility. In your mid 20's there's potentially a very long time to go until you're able to access your pension savings. As you've mentioned this can be altered on a political whim which even though i'm 10 years older than you concerns me. Obviously this is less efficient tax wise than the pension however you do have opportunity to move your ISA savings into your pension as you near retirement and the policies around pensions more certain for your retirement window.
    As far as investments go those within the ISA can be selected match those within your pension if you desire. I'd argue that there's a greater flexibility within ISA's than pension fund. Certainly my S&S ISA has more than my company pension!

    Lastly by investing into a S&S ISA you are able to introduce much greater flexibility on the timing of your retirement. As others have commented on this thread there could be opportunity to use your investments to fund a staged retirement, perhaps a move to part time working or even the setting up of a lifestyle business. You could do this much much sooner than whatever the minimum access to pensions age is at the time if you keep the investments accessible, which of course they are not within a pension.

    I've mentioned on other threads that I don't like to think of access to pensions age as a "retirement" age like most people do. You can retire any time you like providing your finances allow. Keeping more accessible especially whilst you're relatively young is a wise move to me especially if you have aspirations to retire early.

    Good Luck!
    • kidmugsy
    • By kidmugsy 14th May 18, 5:36 PM
    • 11,599 Posts
    • 8,124 Thanks
    kidmugsy
    Although ever a saver I do have a few frivolous outgoings - a brand new car
    Originally posted by Angry_kittens
    I wonder sometimes whether brand new cars are more ruinous than cocaine.
    Free the dunston one next time too.
    • Anonymous101
    • By Anonymous101 14th May 18, 8:13 PM
    • 1,151 Posts
    • 554 Thanks
    Anonymous101
    I wonder sometimes whether brand new cars are more ruinous than cocaine.
    Originally posted by kidmugsy
    I think for most people cars are the single biggest waste of money through their lives.

    It took me several mistakes to learn that lesson!
    • Terron
    • By Terron 14th May 18, 9:02 PM
    • 295 Posts
    • 255 Thanks
    Terron
    I think for most people cars are the single biggest waste of money through their lives.

    It took me several mistakes to learn that lesson!
    Originally posted by Anonymous101
    It is one I am planning to make next year
    • kidmugsy
    • By kidmugsy 14th May 18, 10:41 PM
    • 11,599 Posts
    • 8,124 Thanks
    kidmugsy
    It is one I am planning to make next year
    Originally posted by Terron
    Why? Why on earth?
    Free the dunston one next time too.
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