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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 908Posts
    • 1,669Thanks
    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 223
    • MallyGirl
    • By MallyGirl 12th Aug 18, 7:54 PM
    • 3,005 Posts
    • 8,011 Thanks
    MallyGirl
    When you say you have maxed out the work pension can you actually contribute no more or are you just getting the most you can as a match from your employer?
    I use a S&S ISA as it will allow me to retire when I like (funds permitting) but I was already too old when they introduced the LISA so that was never an option
    • gadgetmind
    • By gadgetmind 12th Aug 18, 9:05 PM
    • 10,865 Posts
    • 8,767 Thanks
    gadgetmind
    if I have maxed out the the work pension.
    Originally posted by FIRSTTIMER
    What do you mean by "maxed out"? There is Lifetime Allowance, Annual Allowance and then maybe some employer/scheme rules, so which are you banging your head against?

    And do you have any 40%/60%+/45% band left?
    Last edited by gadgetmind; 13-08-2018 at 9:26 AM.
    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.
    • FIRSTTIMER
    • By FIRSTTIMER 12th Aug 18, 9:17 PM
    • 398 Posts
    • 61 Thanks
    FIRSTTIMER
    I can only purchase a maximum of 6800 across all education pension flexibilities. I have done this. I pay in 18.1% per annum of my salary and I cannot do ANY more as I get a letter saying so yearly. Hence S&S/LISA
    Last edited by FIRSTTIMER; 12-08-2018 at 9:19 PM.
    • FIRSTTIMER
    • By FIRSTTIMER 12th Aug 18, 9:18 PM
    • 398 Posts
    • 61 Thanks
    FIRSTTIMER
    Employer contribution is 16.3% I believe - albeit, its a government funded defined scheme - so this is irrelevant I suppose. Plan to retire at 60.
    • NoMore
    • By NoMore 12th Aug 18, 9:24 PM
    • 244 Posts
    • 225 Thanks
    NoMore
    How old are you now ? A sipp would also be an option to use any aa left.
    • FIRSTTIMER
    • By FIRSTTIMER 12th Aug 18, 9:30 PM
    • 398 Posts
    • 61 Thanks
    FIRSTTIMER
    35 - I don't really fancy a sipp tbh - rather have the capital value via S&S ISA/LISA and then maybe take less lump sum with retirement income
    • Triumph13
    • By Triumph13 13th Aug 18, 8:24 AM
    • 1,358 Posts
    • 1,775 Thanks
    Triumph13
    There are, but they all involve hassle and loss of value in one form or another.

    If I didn't plan to go traveling for a long period, it would be easy, as I would simply use a mortgage to achieve this. The travel element doesn't entirely preclude this, but it does make it harder and introduce risk. I would need to re-mortgage before going traveling, rent out property and then port mortgage to new property.

    There would be no guarantee I could port the mortgage, especially as I would have no income. I could mitigate that risk by leaving work on unpaid leave rather than resignation, meaning I could if necessary return to work for a while which would mean there would no reason a porting request would be rejected.

    The above would of course be a reasonable amount of hassle. There would also be additional mortgage fees payable, and I would probably have to pay additional stamp duty on my next house purchase, as my wife has first-time buyer status still but if I have a mortgage to port I would need to be involved in the purchase. Although the rental income would probably more than offset this, as I would have a fully furnished house ready to let out which would yield a lot more than the money from a house sale held in savings (needs to be low/zero risk as would be using it within about 2-3 years).

    On balance, I'm inclined to think all the above is too much phaff. The simplest approach is to sell my current house, go travel and buy next house in wife's name, later changing ownership structure to whatever is most appropriate. It might be that I can raise money against the property, but as I don't intend to have any income I can't rely on that. And it would be likely to be at interest rates higher than conventional mortgages.
    Originally posted by hugheskevi
    Why not sell current house / buy retirement house immediately on retirement (gets that settled and out of the way / derisked) then rent that property out for a few years whilst you travel?
    • gadgetmind
    • By gadgetmind 13th Aug 18, 9:28 AM
    • 10,865 Posts
    • 8,767 Thanks
    gadgetmind
    35 - I don't really fancy a sipp tbh - rather have the capital value via S&S ISA/LISA and then maybe take less lump sum with retirement income
    Originally posted by FIRSTTIMER
    A SIPP is as much capital as an ISA and can contain pretty much the same assets. It's just that an ISA is capital that's already been taxed whereas a SIPP is taxed on the way out (other than the 25% lump sum).
    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.
    • FIRSTTIMER
    • By FIRSTTIMER 13th Aug 18, 9:37 AM
    • 398 Posts
    • 61 Thanks
    FIRSTTIMER
    Thanks for this. The SIPP idea puts me off as I do not want 25% cash and then the rest in a pension. I want the full SIPP as tax free cash - can this happen?

    I also feel having access to S&S ISA cash if needed is better than no access to a SIPP for 20 odd years in addition to all my money going into work pension too.

    Maybe I!!!8217;m thinking wrong?
    • NoMore
    • By NoMore 13th Aug 18, 11:03 AM
    • 244 Posts
    • 225 Thanks
    NoMore
    Looking at this the wrong way round. What is the objective for this extra money? That would help decide the appropriate vehicle for it. Instead of just randomally choosing something because you don!!!8217;t famcy it.
    • Anonymous101
    • By Anonymous101 13th Aug 18, 11:10 AM
    • 1,153 Posts
    • 558 Thanks
    Anonymous101
    Thanks for this. The SIPP idea puts me off as I do not want 25% cash and then the rest in a pension. I want the full SIPP as tax free cash - can this happen?

    I also feel having access to S&S ISA cash if needed is better than no access to a SIPP for 20 odd years in addition to all my money going into work pension too.

    Maybe I!!!8217;m thinking wrong?
    Originally posted by FIRSTTIMER
    Pensions are contributed to before you pay tax. Any money you take out of a pension will be subject to income tax aside from the 25% allowance. The only way you can avoid paying tax on a pension is therefore to keep your withdrawals below the basic rate income tax threshold.

    The accessibility of an ISA is both a positive and a negative. Good for short term cash should you need it but generally bad for long term retirement type saving.
    • atush
    • By atush 13th Aug 18, 12:36 PM
    • 17,253 Posts
    • 10,821 Thanks
    atush
    Thanks for this. The SIPP idea puts me off as I do not want 25% cash and then the rest in a pension. I want the full SIPP as tax free cash - can this happen?

    I also feel having access to S&S ISA cash if needed is better than no access to a SIPP for 20 odd years in addition to all my money going into work pension too.

    Maybe I!!!8217;m thinking wrong?
    Originally posted by FIRSTTIMER
    Maybe it isnt one or the other but both?

    and if you pay BRtax, 100 into a pension costs you 80. and just 80 goes into the ISA as no TR.

    If you pay HRtax, 100 into a pension costs you 60.
    • hugheskevi
    • By hugheskevi 13th Aug 18, 12:43 PM
    • 2,062 Posts
    • 2,618 Thanks
    hugheskevi
    Why not sell current house / buy retirement house immediately on retirement (gets that settled and out of the way / derisked) then rent that property out for a few years whilst you travel?
    That is a good option and in other circumstances would be ideal, but the retirement property will be in a very remote, rural location (eg unlikely to be any other property visible in any direction). That would make it hard to rent out, and also to manage remotely given how isolated it will be.
    • westv
    • By westv 13th Aug 18, 1:15 PM
    • 4,625 Posts
    • 2,225 Thanks
    westv
    That is a good option and in other circumstances would be ideal, but the retirement property will be in a very remote, rural location (eg unlikely to be any other property visible in any direction). That would make it hard to rent out, and also to manage remotely given how isolated it will be.
    Originally posted by hugheskevi

    Living in the middle of nowhere when I'm retired is the stuff of nightmares for me!
    • MallyGirl
    • By MallyGirl 13th Aug 18, 2:00 PM
    • 3,005 Posts
    • 8,011 Thanks
    MallyGirl
    me too. I want more land but not at the expense of neighbours.
    My parents, separately, have moved to remote properties in Dorset and Devon. After 8 years for Mum and 7 for Dad they have both recognised that they must move again. Mum has to drive the wheelie bin to the collection point as she can't manage it otherwise. Her village has one little shop, no pub, no amenities beyond a fish & chip van that comes once a week (and she has to drive to as she is too far to walk). His village doesn't even have a shop, just a church, no gas, his water comes from a bore hole with a complicated filtration and treatment system - what could possibly go wrong for a couple of pensioners in such an environment!!!
    • gadgetmind
    • By gadgetmind 13th Aug 18, 2:59 PM
    • 10,865 Posts
    • 8,767 Thanks
    gadgetmind
    Thanks for this. The SIPP idea puts me off as I do not want 25% cash and then the rest in a pension. I want the full SIPP as tax free cash - can this happen?
    Originally posted by FIRSTTIMER
    No, but you avoid tax at whatever level on the way in. If you then use the SIPP to avoid taking DB pension early, you can probably withdraw your SIPP tax free before SP kicks in (10-12 years are personal allowance only after 25% tax free) with ISA helping make up any shortfall. This is *way* more tax efficient then doing it all with ISAs.
    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 13th Aug 18, 5:58 PM
    • 17,253 Posts
    • 10,821 Thanks
    atush
    That is a good option and in other circumstances would be ideal, but the retirement property will be in a very remote, rural location (eg unlikely to be any other property visible in any direction). That would make it hard to rent out, and also to manage remotely given how isolated it will be.
    Originally posted by hugheskevi
    interesting. We will move from t he country nearer to town when we retire.
    • hugheskevi
    • By hugheskevi 13th Aug 18, 6:57 PM
    • 2,062 Posts
    • 2,618 Thanks
    hugheskevi
    interesting. We will move from t he country nearer to town when we retire.
    I'm doing it very much the other way around, moving from central London to mid/west Wales - probably about as extreme as you can get.

    But I will be aged 45-50 when I move there, am very fit and healthy, so expect at least 20-30 years of good health. At that future time things could change, not least as the upkeep of a large property might be more difficult.

    me too. I want more land
    Originally posted by MallyGirl
    I will need land for a number of pets, including a couple of big dogs - probably a Husky and a German shepherd, but a Malamute would be very acceptable too. Our lifestyle at the moment means we can't have a dog (both out all day) but we walk a friend's Malamute most weekends
    • JoeEngland
    • By JoeEngland 13th Aug 18, 8:02 PM
    • 155 Posts
    • 206 Thanks
    JoeEngland
    I'm doing it very much the other way around, moving from central London to mid/west Wales - probably about as extreme as you can get.

    But I will be aged 45-50 when I move there, am very fit and healthy, so expect at least 20-30 years of good health. At that future time things could change, not least as the upkeep of a large property might be more difficult.

    I will need land for a number of pets, including a couple of big dogs - probably a Husky and a German shepherd, but a Malamute would be very acceptable too. Our lifestyle at the moment means we can't have a dog (both out all day) but we walk a friend's Malamute most weekends
    Originally posted by hugheskevi
    Moving from London to Wales sounds like a very good move
    • bluenose1
    • By bluenose1 13th Aug 18, 10:11 PM
    • 2,010 Posts
    • 3,221 Thanks
    bluenose1
    I'm doing it very much the other way around, moving from central London to mid/west Wales - probably about as extreme as you can get.

    But I will be aged 45-50 when I move there, am very fit and healthy, so expect at least 20-30 years of good health. At that future time things could change, not least as the upkeep of a large property might be more difficult.

    I will need land for a number of pets, including a couple of big dogs - probably a Husky and a German shepherd, but a Malamute would be very acceptable too. Our lifestyle at the moment means we can't have a dog (both out all day) but we walk a friend's Malamute most weekends
    Originally posted by hugheskevi
    I am so easily influenced. I have spent 30 minutes tonight looking on Rightmove for houses in Wales. House prices seem very good value.
    Nice to dream as doubt my husband would willingly give up his beloved golf course and the social scene there.
    Might look at Scotland tomorrow!!!
    Money SPENDING Expert

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