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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 915Posts
    • 1,699Thanks
    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 218
    • blisteringblue
    • By blisteringblue 6th Jul 18, 9:37 AM
    • 1,080 Posts
    • 1,963 Thanks
    blisteringblue
    While that is true OMG the markets already fear the worst, so in my opinion they have already factored in hard brexit. Anything better than that and I don't think it will be a bad as we fear. OK there won't be 30% gains for a few years but I'm happy with a few % personally.
    • k6chris
    • By k6chris 6th Jul 18, 9:47 AM
    • 307 Posts
    • 519 Thanks
    k6chris

    I'm using a bucket strategy in retirement rather than any form of safe withdrawal rate but that suits my very risk-averse nature. One of the most important things I have learned is to find both investment and decumulation strategies that suit your psychological makeup.
    Originally posted by OldMusicGuy

    What is a bucket strategy??
    "For every complicated problem, there is always a simple, wrong answer"
    • Triumph13
    • By Triumph13 6th Jul 18, 9:59 AM
    • 1,376 Posts
    • 1,819 Thanks
    Triumph13
    I personally wouldn't trust the 4% rule over a 30 year retirement based on what has happened in the past, because there are some pretty big societal and economic shifts looming. However, I think it's a really useful guide number to help get an idea of what size of DC pot you need to retire and I wish I'd known about it earlier.
    Originally posted by OldMusicGuy
    I would recommend this tool to help get the odds of the 4% rule not working:
    https://engaging-data.com/will-money-last-retire-early/
    It really puts things into perspective much better than most tools as it includes life expectancy data so lets you visualise the overall probability of outliving your funds rather than just the probability of them lasting to age x.
    I'm using a bucket strategy in retirement rather than any form of safe withdrawal rate but that suits my very risk-averse nature. One of the most important things I have learned is to find both investment and decumulation strategies that suit your psychological makeup.
    Couldn't agree more on the psychological side. I'm 16 weeks away from retiring with an 11 year gap before any DB pensions come on stream. The rational side of my mind says I have so much safety margin built in I will be fine. The little homunculus lurking down in my hindbrain is an awful lot harder to convince!
    • Sea Shell
    • By Sea Shell 6th Jul 18, 10:16 AM
    • 1,017 Posts
    • 1,618 Thanks
    Sea Shell
    What is a bucket strategy??
    Originally posted by k6chris
    My question too! ???
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Triumph13
    • By Triumph13 6th Jul 18, 10:44 AM
    • 1,376 Posts
    • 1,819 Thanks
    Triumph13
    What is a bucket strategy??
    Originally posted by k6chris
    I would guess OMG is basically allocating chunks of his funds to different time periods and either expects to have enough in DB / SP to cover his needs long term, or else one of the buckets is earmarked to buy an annuity.
    I have a few buckets myself to bridge the gaps until various DB / SPs come into play and am modelling them quite differently to the remaining drawdown pot.
    • Marine_life
    • By Marine_life 6th Jul 18, 10:57 AM
    • 915 Posts
    • 1,699 Thanks
    Marine_life
    I'm 16 weeks away from retiring with an 11 year gap before any DB pensions come on stream
    Originally posted by Triumph13
    Assuming the DB pots remain unmolested ;-)
    Money won't buy you happiness....but I have rarely if ever been in a situation where more money made things worse!
    • happyandcontented
    • By happyandcontented 6th Jul 18, 11:47 AM
    • 1,617 Posts
    • 3,150 Thanks
    happyandcontented
    Has anyone on here decide to take their DB pot out? Or are you all convinced that leaving it in situ is the way to go?
    • AlanP
    • By AlanP 6th Jul 18, 12:22 PM
    • 1,326 Posts
    • 982 Thanks
    AlanP
    Has anyone on here decide to take their DB pot out? Or are you all convinced that leaving it in situ is the way to go?
    Originally posted by happyandcontented
    Loads of threads on this forum about transferring out from a DB scheme if you have a Search / Browse.

    No consistent answer and very personal situation dependent.

    If you are considering it I would suggest you start a new thread and see what opinions are based on your ( & spouse / partner) situation.
    • happyandcontented
    • By happyandcontented 6th Jul 18, 12:27 PM
    • 1,617 Posts
    • 3,150 Thanks
    happyandcontented
    Loads of threads on this forum about transferring out from a DB scheme if you have a Search / Browse.

    No consistent answer and very personal situation dependent.

    If you are considering it I would suggest you start a new thread and see what opinions are based on your ( & spouse / partner) situation.
    Originally posted by AlanP
    Thanks, I have done that, as I read this thread regularly I just wondered if any of the regular contributors have taken that path.
    • cobson
    • By cobson 6th Jul 18, 12:35 PM
    • 32 Posts
    • 20 Thanks
    cobson
    What is a bucket strategy??
    Originally posted by k6chris
    https://www.investopedia.com/articles/financial-advisors/060815/comparison-bucket-strategy-vs-systematic-withdrawals.asp
    • OldMusicGuy
    • By OldMusicGuy 6th Jul 18, 1:17 PM
    • 618 Posts
    • 1,301 Thanks
    OldMusicGuy
    What is a bucket strategy??
    Originally posted by k6chris
    In simple terms, it's segmenting your retirement assets into buckets with differing levels of risk rather than keeping it all invested and taking specific %age withdrawals. For example, I have 18 months of cash in immediate access accounts and another three years of cash in a fixed interest bond ladder, all outside my DC pot and tax free.

    In my DC pot, I have 23% held as cash (earning no interest) and the rest invested in three multi-asset tracker funds for a 10 year plus timeframe.

    That is a very low risk approach that will avoid pound cost ravaging in my early retirement years. It suits my goals, personality and financial situation but it wouldn't be appropriate for many people I am sure. Many commentators out there don't like it (because it could miss out on potential gains) but it suits me.

    FWIW I have no DB, SP kicks in age 66 (I am just coming up to 61).

    If you want a very detailed review of statistical analysis of different investment portfolios in retirement, I recommend this book by Michael McClung: "Living Off Your Money: The Modern Mechanics of Investing During Retirement with Stocks and Bonds". This gave me ideas about how to structure the money I have invested for the long term. It is very stats heavy though.
    Last edited by OldMusicGuy; 06-07-2018 at 1:23 PM.
    • Sea Shell
    • By Sea Shell 6th Jul 18, 3:26 PM
    • 1,017 Posts
    • 1,618 Thanks
    Sea Shell
    Ah, I get it. Oooh, we have buckets!!

    This is basically our plan too.
    Last edited by Sea Shell; 06-07-2018 at 3:30 PM.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • DairyQueen
    • By DairyQueen 7th Jul 18, 8:44 PM
    • 550 Posts
    • 888 Thanks
    DairyQueen
    Thanks, I have done that, as I read this thread regularly I just wondered if any of the regular contributors have taken that path.
    Originally posted by happyandcontented
    I have taken the DB-to-SIPP path. However, as has been previously mentioned, it requires very specific personal circumstances to make this the better option i,e,:

    1) I have reduced life expectancy
    2) OH has a hefty DB pension (plus DCs and SIPP) and there is no requirement for widow/ dependent benefits
    3) No children
    4) Reasonable understanding of investments (sufficient to placate IFA that I can DIY)
    5) DBs/SPs as a couple sufficient to cover all basic expenses (and some to spare).
    6) Other investments, mortgage-free and no debts
    7) Majority of DB pension would not have increased with inflation (capped GMP inflation increase plus discretionary inflation-proofing on excess has poor recent history).
    • kidmugsy
    • By kidmugsy 7th Jul 18, 10:55 PM
    • 12,074 Posts
    • 8,524 Thanks
    kidmugsy
    My bucket's got a hole in it,
    My bucket's got a hole in it,
    My bucket's got a hole in it
    and we can't get no beer.
    Free the dunston one next time too.
    • Triumph13
    • By Triumph13 8th Jul 18, 11:15 AM
    • 1,376 Posts
    • 1,819 Thanks
    Triumph13
    My bucket's got a hole in it,
    My bucket's got a hole in it,
    My bucket's got a hole in it
    and we can't get no beer.
    Originally posted by kidmugsy
    Has someone let kidmugsy have sugar again? Quick, get the dried frog pills!
    • atush
    • By atush 9th Jul 18, 6:50 PM
    • 17,269 Posts
    • 10,835 Thanks
    atush
    We will have buckets too, not that I onew that was what it was called lol.
    • gadgetmind
    • By gadgetmind 9th Jul 18, 7:08 PM
    • 10,869 Posts
    • 8,772 Thanks
    gadgetmind
    Retirement present Tesla being collected on Wednesday. Happy days!
    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.
    • kidmugsy
    • By kidmugsy 9th Jul 18, 7:16 PM
    • 12,074 Posts
    • 8,524 Thanks
    kidmugsy
    Has someone let kidmugsy have sugar again? Quick, get the dried frog pills!
    Originally posted by Triumph13
    I hear you knockin' but you can't come in,
    I hear you knockin' but you can't come in,
    I hear you knockin' but you can't come in,
    There ain't no beer in here.
    Free the dunston one next time too.
    • Marine_life
    • By Marine_life 9th Jul 18, 8:59 PM
    • 915 Posts
    • 1,699 Thanks
    Marine_life
    Retirement present Tesla being collected on Wednesday. Happy days!
    Originally posted by gadgetmind
    Not planning any long trips then?
    Money won't buy you happiness....but I have rarely if ever been in a situation where more money made things worse!
    • gadgetmind
    • By gadgetmind 9th Jul 18, 9:40 PM
    • 10,869 Posts
    • 8,772 Thanks
    gadgetmind
    Not planning any long trips then?
    Originally posted by Marine_life
    Flying to Southampton as picking up in Bournemouth and driving back to Leeds. Then a 350 mile trip on Friday. Both will be easy as will get enough charge during bladder emptying and grabbing a sandwich to easily cover the distance.
    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.
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