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  • FIRST POST
    • Marine_life
    • By Marine_life 5th Nov 10, 10:46 AM
    • 906Posts
    • 1,664Thanks
    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 239
    • JoeEngland
    • By JoeEngland 30th Sep 18, 11:16 AM
    • 153 Posts
    • 202 Thanks
    JoeEngland
    This has been my biggest challenge, adjusting from getting a big salary to having nothing coming in (apart from my wife's small DB pension). I still find it challenging, especially when big unexpected bills come up (like they just did for an unexpected problem on our car). I have done all the numbers, I know we have plenty of money but the risk averse person in me still frets about it. It is a big shift.
    Originally posted by OldMusicGuy
    I think the problem is psychology, we have our gut feeling and rational head telling us different things. It's one of the things I worry about when I give up FT work for good, part of me knows the figures should work and there's always the option of trying to find PT work, but it goes against the gut feeling to be draining down funds.
    • justme111
    • By justme111 30th Sep 18, 11:27 AM
    • 3,033 Posts
    • 2,936 Thanks
    justme111
    I think this aspect will be a really hard shift for most new retirees who have managed the finances, maybe not so much for the other partner who is not aware of the day to day nitty gritty.
    Originally posted by happyandcontented
    Not even that - my partner has not managed the finances , he just collected his salary . Now that it is not coming in he freezes with worry.
    Mgdavid,, that is what I would do or hoped he would. He has not set things up though and when I said it would make sense to have one withdrawal monthly on a particular day he responded he is fine with doing it in dribs and drabs!
    • Linton
    • By Linton 30th Sep 18, 12:43 PM
    • 9,821 Posts
    • 10,078 Thanks
    Linton
    This has been my biggest challenge, adjusting from getting a big salary to having nothing coming in (apart from my wife's small DB pension). I still find it challenging, especially when big unexpected bills come up (like they just did for an unexpected problem on our car). I have done all the numbers, I know we have plenty of money but the risk averse person in me still frets about it. It is a big shift.
    Originally posted by OldMusicGuy

    Over 13 years of retirement I have found managing depletion of ones assets to be in principle no different to managing the accretion. Worry and indecision can largely be removed by planning.


    We have a spreadsheet plan for all years until extreme old age showing assets at the start of each year, external income and total expenditure during the year, and assets at the end of the year after returns at an assumed ROI and reduction by the planned expenditure not covered by income. The expenditure which covers normal living expenses including routine maintenance and short holdiays etc increases each year by the assumed inflation as does the income where appropriate.



    At the end of each year the plan is compared with reality and predicted values replaced by actuals as necessary. The viability of the plan is judged by the need for a reassuringly large amount of assets remaining at the end of the plan balanced by a desire not to leave a fortune behind when we go.


    Major expenditure (eg significant holidays, replacement cars) is treated as a one-off reduction in capital to be explicitly assessed with reference to the overall plan.


    During the year the budgetted expenditure becomes a target. If the actuals are too high then frugality or replanning may be necessary. This has only happened once for us when moving house led to a large increase in council tax and shopping at the local Waitrose increased food costs significantly. More of a "problem" is insufficent expenditure. A simple way of achieving target here is to make gifts to family or contributions to charity safe in the knowledge that it is not going to cause you problems later on.
    Last edited by Linton; 30-09-2018 at 12:46 PM.
    • coyrls
    • By coyrls 30th Sep 18, 3:18 PM
    • 1,064 Posts
    • 1,131 Thanks
    coyrls
    Not even that - my partner has not managed the finances , he just collected his salary . Now that it is not coming in he freezes with worry.
    Mgdavid,, that is what I would do or hoped he would. He has not set things up though and when I said it would make sense to have one withdrawal monthly on a particular day he responded he is fine with doing it in dribs and drabs!
    Originally posted by justme111
    That's what I do. I don't have any pension income yet, I am running down other sources first but I "pay" myself on the first Tuesday of every month but my pay consists of a top up of my current account to a set value (and therefore my "pay" is variable). So long as my current account stays in credit I am in budget and I am also making "savings" by only topping up to a set value. Unexpected expenditure comes out of savings, as it did when I was working.
    • Filo25
    • By Filo25 30th Sep 18, 3:18 PM
    • 1,686 Posts
    • 2,487 Thanks
    Filo25
    When I was attached, we never knew about each other's financial affairs beyond the basics. We didn't have a joint account, he bought what he wanted, I bought what I wanted. We sort of fell into paying different household bills

    We were different in so far as if I'd died before him, he would have had my pension, insurances, a business, a house. When he died, he had the smallest insurance (5100.00), to cover the funeral and whatever was in his bank account, which was more than I expected but certainly not much.

    But it was his money to my way of thinking and neither of us were of the mindset to direct the others money management. Not an arrangement that would suit many, but it did us.
    Originally posted by bugslet
    Pretty similar to me and my wife in all honesty, our finances are relatively independent, we divide the mortgage up between us, I pay a little more than half as I earn a little more and I pay most but not all bills, but apart from that we spend our own cash as we choose, the only difference I suppose is that I do pay for life insurance cover for both of us.

    I am the more interested in finances of the 2 of us, so can help her out if required, but it is very much my wife's money to do with as she pleases.

    It works for us anyway
    Last edited by Filo25; 30-09-2018 at 3:21 PM.
    • JoeEngland
    • By JoeEngland 30th Sep 18, 3:44 PM
    • 153 Posts
    • 202 Thanks
    JoeEngland
    Over 13 years of retirement I have found managing depletion of ones assets to be in principle no different to managing the accretion. Worry and indecision can largely be removed by planning.


    We have a spreadsheet plan for all years until extreme old age showing assets at the start of each year, external income and total expenditure during the year, and assets at the end of the year after returns at an assumed ROI and reduction by the planned expenditure not covered by income. The expenditure which covers normal living expenses including routine maintenance and short holdiays etc increases each year by the assumed inflation as does the income where appropriate.



    At the end of each year the plan is compared with reality and predicted values replaced by actuals as necessary. The viability of the plan is judged by the need for a reassuringly large amount of assets remaining at the end of the plan balanced by a desire not to leave a fortune behind when we go.


    Major expenditure (eg significant holidays, replacement cars) is treated as a one-off reduction in capital to be explicitly assessed with reference to the overall plan.


    During the year the budgetted expenditure becomes a target. If the actuals are too high then frugality or replanning may be necessary. This has only happened once for us when moving house led to a large increase in council tax and shopping at the local Waitrose increased food costs significantly. More of a "problem" is insufficent expenditure. A simple way of achieving target here is to make gifts to family or contributions to charity safe in the knowledge that it is not going to cause you problems later on.
    Originally posted by Linton
    Let me tell you about my charity
    • Marine_life
    • By Marine_life 30th Sep 18, 11:00 PM
    • 906 Posts
    • 1,664 Thanks
    Marine_life
    Finally back to blogging:

    http://earlyretirefree.com/could-you-retire-early-part-1-of-2/
    Money won't buy you happiness....but I have rarely if ever been in a situation where more money made things worse!
    • michaels
    • By michaels 1st Oct 18, 9:55 AM
    • 21,432 Posts
    • 99,297 Thanks
    michaels
    Second bullet 3 needs tidying?

    Starting investment 7,600 per annum (which we assume increases by inflation i.e. year 2 is 7,750 and so on) which is assumed to increase with inflation.
    Cool heads and compromise
    • michaels
    • By michaels 1st Oct 18, 9:57 AM
    • 21,432 Posts
    • 99,297 Thanks
    michaels
    Pretty similar to me and my wife in all honesty, our finances are relatively independent, we divide the mortgage up between us, I pay a little more than half as I earn a little more and I pay most but not all bills, but apart from that we spend our own cash as we choose, the only difference I suppose is that I do pay for life insurance cover for both of us.

    I am the more interested in finances of the 2 of us, so can help her out if required, but it is very much my wife's money to do with as she pleases.

    It works for us anyway
    Originally posted by Filo25
    We have 3 kids and my wife has a fairly low earning potential so it doesn't make sense for her to work as it won't cover the childcare costs so we end up having to pool all our money. The problem then is that whilst I prioritise early retirement (mine) for her it is not so much of an issue if we spend more now so I have to work a few more years
    Cool heads and compromise
    • Skibunny40
    • By Skibunny40 1st Oct 18, 10:37 AM
    • 128 Posts
    • 102 Thanks
    Skibunny40
    We're in quite an unusual position in that my husband earns all the money (I look after my elderly father) but I control it, as my husband has no interest. He would like to retire early, but he also likes spending money. I showed him all the spreadsheets as to how we could easily achieve early retirement, but he decided he liked spending money more than he wanted to be retired!

    Therefore, I still keep an eye on our finances but he gets all his gadgets (within reason). As I also benefit from the nice "couple" things my husband is keen on like fancy holidays and meals out, I feel I keep my side of the deal by keeping the household essential costs low as well as driving a very old car and charity shop shopping for clothes - neither of which bother me in the slightest!(Husband is constantly suggesting I buy new stuff, I say no!)
    • Filo25
    • By Filo25 1st Oct 18, 12:18 PM
    • 1,686 Posts
    • 2,487 Thanks
    Filo25
    We have 3 kids and my wife has a fairly low earning potential so it doesn't make sense for her to work as it won't cover the childcare costs so we end up having to pool all our money. The problem then is that whilst I prioritise early retirement (mine) for her it is not so much of an issue if we spend more now so I have to work a few more years
    Originally posted by michaels
    My wife does earn less than me, but still a decent wage.

    As I am older we have a bit of flexibility on retirement, realistically there will come a time when the company will pull the plug on my job on age grounds if nothing else, so if we haven't got quite enough tucked away at that point there is the chance she may need to work a few more years after I retire, ideally obviously we would both like to go at the same time though.

    Unfortunately my pension contributions are proving to be very much backended over my owrking career, so am pretty desperate not to see any changes to tax relief, or annual allowances in the near future, but I suspect my luck will run out on that at some stage
    Last edited by Filo25; 01-10-2018 at 12:22 PM.
    • marlot
    • By marlot 1st Oct 18, 2:19 PM
    • 3,643 Posts
    • 2,765 Thanks
    marlot
    When we married (29 years ago), we set up three accounts at the bank - a joint account and an individual one for each of us. The plan had been to have some pooled money and some individual.

    After a year the bank wrote to us to point out that we'd never used the two individual accounts, so had closed them. Everything has been pooled since.

    Some savings in my name, some in my spouse's. But we both know what's where. It helps that we have similar attitudes to money and savings!
    • ex-pat scot
    • By ex-pat scot 1st Oct 18, 2:36 PM
    • 281 Posts
    • 342 Thanks
    ex-pat scot
    We have 3 kids and my wife has a fairly low earning potential so it doesn't make sense for her to work as it won't cover the childcare costs so we end up having to pool all our money. The problem then is that whilst I prioritise early retirement (mine) for her it is not so much of an issue if we spend more now so I have to work a few more years
    Originally posted by michaels
    Similar - 4 for us, ranging from yr 7 up to university.
    Planning is entirely my responsibilty. It would be me working the extra years if our finances were insufficient.
    Of course, it helps that pension contributions come out of salary and therefore do not hit the bank account. They are therefore not seen as "spending".
    • Terron
    • By Terron 1st Oct 18, 5:26 PM
    • 321 Posts
    • 279 Thanks
    Terron
    In 2013 I lost my job. I worked in IT, My main skills were near obsolete so there was little chance of my finding another similar job. I had been aware that this was likely to happen sometimeso I had been saving a lot. I believed in living below my means and not borrowing, except for my mortgage but as it was an endowment one I had paid most of it off (just 4k left).



    I looked at my savings and realized I had more than enough to live on until my pensions were set up to pay out at 60. But living off my assets just did not feel right. I continued to try to live off my income - which had dropped to 300pm conttributory JSA. I failed but kept trying.


    I decide rather than live off my savings I would put them to work. I bought some properties to renovate and let (for cash as I couldn't get a mortgage). I was tranferred to the NEA as I was starting a business, which cut my benefit a bit, but as soon as my first property was let I was making 400pm - still not enough to live on without dipping into my savings.After the seconf onw was let I was making 900pm and the benefit stopped soon after. I could then cover my normal expenses but big yearly bills still required dipping into my savings. With the third property my income jumped to 1500pm which I could live off and even relax the frigality a bit. That made me feel more comfortable.


    Next year I will start taking most of my pensions. Two are old ones with GARs so I will take the annuities and live off the income. Two are DB pensions so again will provude an income I can live off. Obe is a small AVC attached to one of the DB pensions which I will rake as a TFLS. The other DB pension is actually a hybrid scheme. I will be taking the DB part, as much tas free as possible and transferring the rest into the flexible scheme I transferred my fibal pension into.


    The TFLSs I will mainly use to pay down mortgages I now have, converting them into income. Though I am intending to replace my car which will be 12 years old.


    I took a small amount tax free out of my flexible pension last year mainly to pay for my first holiday abroad since I lost my job/ It was also to try to get used to spending more ahead of my income rising. I had intended to repeat that but have been unwell this summer. I may do it early next year.


    Changing the financial habits of a lifetime is not easy.
    • crv1963
    • By crv1963 2nd Oct 18, 5:39 PM
    • 481 Posts
    • 1,051 Thanks
    crv1963
    Pretty similar to me and my wife in all honesty, our finances are relatively independent, we divide the mortgage up between us, I pay a little more than half as I earn a little more and I pay most but not all bills, but apart from that we spend our own cash as we choose, the only difference I suppose is that I do pay for life insurance cover for both of us.

    I am the more interested in finances of the 2 of us, so can help her out if required, but it is very much my wife's money to do with as she pleases.

    It works for us anyway
    Originally posted by Filo25

    Similar for us too. My wife does the household budgeting, I just transfer across on payday (usually the same amount) that she tells me I need to pay my share. Then pretty much everything we both have left is ours to do with as we please.


    With our interest in retiring in a 3-5 year timespan, she is leaving to me the pension planning as it "is too complex to follow, just tell me when, how much and what I need to pay/ sign now".


    I could retire this month but am working longer as her provision is dismal compared to my DB scheme. We married only a few years ago so have for our age a large outstanding mortgage, so working a few years more allows us to i) get the mortgage paid down a bit and ii) boost her pensions savings.


    Everyone has to work it to how it best works for them, I don't think there is a "right way" to do it.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • Bravepants
    • By Bravepants 2nd Oct 18, 5:50 PM
    • 479 Posts
    • 566 Thanks
    Bravepants
    Similar for us too. My wife does the household budgeting, I just transfer across on payday (usually the same amount) that she tells me I need to pay my share. Then pretty much everything we both have left is ours to do with as we please.


    With our interest in retiring in a 3-5 year timespan, she is leaving to me the pension planning as it "is too complex to follow, just tell me when, how much and what I need to pay/ sign now".


    I could retire this month but am working longer as her provision is dismal compared to my DB scheme. We married only a few years ago so have for our age a large outstanding mortgage, so working a few years more allows us to i) get the mortgage paid down a bit and ii) boost her pensions savings.


    Everyone has to work it to how it best works for them, I don't think there is a "right way" to do it.
    Originally posted by crv1963

    Similar to our situation, only we have no mortgage. I'm the one doing the planning. My partner has started investing, but her pensions are a longer way off than mine.
    • MarcusPiercy1970
    • By MarcusPiercy1970 7th Oct 18, 9:04 AM
    • 3 Posts
    • 2 Thanks
    MarcusPiercy1970
    I have a modest state pension from a early period of work but have managed my SIPP fund by DIY investing for years.

    You can find out the best performing funds and get investment ideas looking at Trustnet,com and Fundlight.com among others, each week. You can steer clear of the duds, keep diversified, and learn a lot. I don't bother with individual shares, but stick to collective investment funds to reduce the risks.

    IFAs are of good use, but not to manage my investments. The only person that cares for my money is ME. You can make sure using providers like Hargreaves Lansdown that you I don't pay upfront fees for each investment.
    • Imelda
    • By Imelda 8th Oct 18, 9:29 AM
    • 1,294 Posts
    • 1,560 Thanks
    Imelda
    My husband is the main earner. I don't need to work, but I do. We have two small children.
    My (part time) wage just about covers childcare and my discretionary spends but, for me, it is important for me to keep my career going:
    1. I know too many people (mainly women) shafted if their husband leaves
    2. I pay my entire salary into my pension (my husband has 5x the amount of my pension - this needs evening up).
    3. My job has far more potential for part time/ flexible working. My husband is a few years older than me - our plan is for him to retire before me and for me to continue to work part time for a few years to ease us into things (and so I get my full NI credits).

    I manage our money (and it is mostly in my name - it started out for tax reasons but now it is admin - he doesn't want to do any of it). However we each get a sum into our sole accounts each month to spend how we please but we also have a joint savings account for larger/ joint spends (such as my husband needing a new work suit/ car repairs etc). I would hate him to think I "controlled" the money. Everything is laid out in a spreadsheet and I have given him a power of attorney in case anything happens to me.

    I am doing all this so that he can retire early and I can continue working part time but my husband wants to send our children to private school so that will delay his retirement by about 5 years - his choice!
    Saving for an early retirement!
    • Kit Katt
    • By Kit Katt 13th Oct 18, 11:20 AM
    • 17 Posts
    • 19 Thanks
    Kit Katt
    Great read on this journey and the people following marine life.

    For the people that have now retired and the ones close to retirement following the journey what are they feeling about this years declining stock market?





    I'm in a money purchase scheme and it's dropped in value over 4% this calendar year.
    Has it deferred any of your plans to retire waiting on market recovery and those who's funds that are in draw down your buckets all a bit lighter will you have to make adjustments to spend levels.?.

    Here's hoping the market has bottomed and funds will go back up
    • AnotherJoe
    • By AnotherJoe 13th Oct 18, 12:07 PM
    • 10,993 Posts
    • 12,686 Thanks
    AnotherJoe
    I'm in a money purchase scheme and it's dropped in value over 4% this calendar year.
    Has it deferred any of your plans to retire waiting on market recovery and those who's funds that are in draw down your buckets all a bit lighter will you have to make adjustments to spend levels.?.
    Originally posted by Kit Katt
    Anyone who has to reduce spending when funds drop 4% shouldn't have retired just yet (if they had the choice of course)
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
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