I've finally decided on a retirement date from work...31/12/2024

boogieman

bobblehat said:

I'm 52 and planning on retiring at 60.  Never thought I'd be in a position to retire early but since the kids have left the nest I've  managed to start getting to grips with some financial planning. There's a fair bit of slightly misleading info online with regards to retirement planning. Lots of online calculators will tell you need £1M Pension pot to even consider having any sort of comfortable retirement. However dig a bit deeper and you find this often assumes you will live to 90+ , need money for a care homes and want to leave money for your kids. So before you decide you can never retire early it’s well worth spending some time to dig a bit deeper and do some planning. There are some great resources online . I would recommend you start with these two gents on youtube. Pete Matthews and Chris Bourne. Learnt loads from their Vids.

Personally I’ve found that you’ll always need more money than you think in retirement, it’s amazing where the money trickles away. Typically you start off by working out what your normal outgoings are like gas, electric, water, council tax bills, then cost in food shopping, fuel etc then add some more for estimated day to day living costs and the odd luxury. But I’d guarantee you’ll actually spend far more than that in any average year because there’s things you never even consider when you’re planning. I’d add as much as 50% onto what you think you might need, if you really want a comfortable retirement lifestyle without worrying. 

RaymondLin

Wow, in order to retire at 56 and have £1000 savings a month would require, assuming

1 - No mortgage
2 - No car payments
3 - £150k in savings

That is assuming you plan to draw everything down to zero when you are 67, but then for savings / investment to increase, whilst drawing down would mean a lot bigger pot than £150k? Like way more.

Whilst the idea of retirement, or rather, not going to work sounds appealing, i don't entirely hate my work, in fact i quite enjoy it, plus....when i take holidays, i never take them to sit at home.  On weekends I don't do much in order not to spend money, I take holidays to go away to places.  I certainly don't have the financials to endlessly travel so i am not really sure what to do with my time sitting at home.

I guess the demographic here are older, got on the housing ladder earlier, some of you even on final salary pensions from work...on the financial landscape is vastly different to someone 20 years younger.

RandallFlagg

tone1 said:

I’m quite looking forward to being a recluse in my retirement…..I do get that retirement planning is important, but I can’t help of thinking about the famous Woody Allen quote…..”If you want to make God laugh, tell him about your plans”…..

Something I quote to anyone considering taking financial advice from others, be it colleagues at work or a registered Financial Advisor, is ask them what their net worth is first, ie, be cautious of taking financial advice from someone that has less money that you!

RandallFlagg

RaymondLin said:

Wow, in order to retire at 56 and have £1000 savings a month would require, assuming

1 - No mortgage
2 - No car payments
3 - £150k in savings

That is assuming you plan to draw everything down to zero when you are 67, but then for savings / investment to increase, whilst drawing down would mean a lot bigger pot than £150k? Like way more.

Whilst the idea of retirement, or rather, not going to work sounds appealing, i don't entirely hate my work, in fact i quite enjoy it, plus....when i take holidays, i never take them to sit at home.  On weekends I don't do much in order not to spend money, I take holidays to go away to places.  I certainly don't have the financials to endlessly travel so i am not really sure what to do with my time sitting at home.

I guess the demographic here are older, got on the housing ladder earlier, some of you even on final salary pensions from work...on the financial landscape is vastly different to someone 20 years younger.

I think you need a much bigger pot that £150K to be sustainable in all market scenarios, as well as no debt and full state pensions. £500-600K is more like it for an early retirement and a modest lifestyle.

RaymondLin

RandallFlagg said:

RaymondLin said:

Wow, in order to retire at 56 and have £1000 savings a month would require, assuming

1 - No mortgage
2 - No car payments
3 - £150k in savings

That is assuming you plan to draw everything down to zero when you are 67, but then for savings / investment to increase, whilst drawing down would mean a lot bigger pot than £150k? Like way more.

Whilst the idea of retirement, or rather, not going to work sounds appealing, i don't entirely hate my work, in fact i quite enjoy it, plus....when i take holidays, i never take them to sit at home.  On weekends I don't do much in order not to spend money, I take holidays to go away to places.  I certainly don't have the financials to endlessly travel so i am not really sure what to do with my time sitting at home.

I guess the demographic here are older, got on the housing ladder earlier, some of you even on final salary pensions from work...on the financial landscape is vastly different to someone 20 years younger.

I think you need a much bigger pot that £150K to be sustainable in all market scenarios, as well as no debt and full state pensions. £500-600K is more like it.

Hence i said, way more.

I look at my savings and work out how long left until I am 56....that's not going to happen.  Even if I save every penny from my salary BEFORE tax I still won't make it, so yeah, not going to save that much, not with a mortgage, car and food, bills...

RandallFlagg

boogieman said:

bobblehat said:

I'm 52 and planning on retiring at 60.  Never thought I'd be in a position to retire early but since the kids have left the nest I've  managed to start getting to grips with some financial planning. There's a fair bit of slightly misleading info online with regards to retirement planning. Lots of online calculators will tell you need £1M Pension pot to even consider having any sort of comfortable retirement. However dig a bit deeper and you find this often assumes you will live to 90+ , need money for a care homes and want to leave money for your kids. So before you decide you can never retire early it’s well worth spending some time to dig a bit deeper and do some planning. There are some great resources online . I would recommend you start with these two gents on youtube. Pete Matthews and Chris Bourne. Learnt loads from their Vids.

Personally I’ve found that you’ll always need more money than you think in retirement, it’s amazing where the money trickles away. Typically you start off by working out what your normal outgoings are like gas, electric, water, council tax bills, then cost in food shopping, fuel etc then add some more for estimated day to day living costs and the odd luxury. But I’d guarantee you’ll actually spend far more than that in any average year because there’s things you never even consider when you’re planning. I’d add as much as 50% onto what you think you might need, if you really want a comfortable retirement lifestyle without worrying. 

I'm not sure I agree. Accurate zero based budgeting will eliminate most surprises. A cash emergency fund will cover the unknown unknowns. Everything else is forecastable, but some future bills costs may have to be estimates based on how much it cost now or last time plus an estimated inflation. I treat the rest as discretionary leisure spend, day trips, meals out, takeaways etc. For this I budget a "pocket money" allowance for my wife and myself each month and the rest is down to discipline, when you've spent your months pocket money that's it until next month. I factor in known one off annual periodic pressure points into the budget such as birthdays, Christmas, car MOTs/servicing, annual subscriptions etc. 

hywelg

Trying to retire and hand over the busines to my son's but finding it difficult as the business operates out of my converted garage and I'm always on call. 

My new daily mantra.

Retirement isn't working. 

p90fool

Good luck @RandallFlagg and well done!

I'm sort of coming at it from the opposite direction, I'm 58, have no savings or pension plan and will probably work until I physically can't, but I only work three mornings a week anyway so I'm fine with that. 

I've enjoyed most of my incredibly varied working life and am currently in my favourite job so far and have certainly made the most of my leisure time, so I have zero regrets in not scrimping for the future. 

The state pension is still way more than I earn, so retirement doesn't hold too many fears for me if I get that far! 

RaymondLin

Honestly, providing that I am mortgage free at retirement, a state pension is enough for me to live on.  I also have a work pension that i have been putting in (work only contributes 2%, so I wack in 15% of my own money), and started a Vanguard index fund 5 years ago, only small but growing.

Can I retire before i am 60? Absolutely not, but I would expect i am okay when i am 67, if i live that long.

RandallFlagg

p90fool said:

Good luck @RandallFlagg and well done!

I'm sort of coming at it from the opposite direction, I'm 58, have no savings or pension plan and will probably work until I physically can't, but I only work three mornings a week anyway so I'm fine with that. 

I've enjoyed most of my incredibly varied working life and am currently in my favourite job so far and have certainly made the most of my leisure time, so I have zero regrets in not scrimping for the future. 

The state pension is still way more than I earn, so retirement doesn't hold too many fears for me if I get that far! 

thanks, If I enjoyed my work and enthusiastically jumped out of bed to get in the car to go to work, like I have done on occasions in the past, then I think I would be more than happy to carry on. But I don't.

Happiness and enjoying our time, every day, is perhaps the most elusive but precious state of living we should all wish for. I'm certain that can be achieved in many ways and does not necessarily need enormous wealth to attain it. 

RandallFlagg

RaymondLin said:

Honestly, providing that I am mortgage free at retirement, a state pension is enough for me to live on.  I also have a work pension that i have been putting in (work only contributes 2%, so I wack in 15% of my own money), and started a Vanguard index fund 5 years ago, only small but growing.

Can I retire before i am 60? Absolutely not, but I would expect i am okay when i am 67, if i live that long.

I am a great believer in index fund investing, never get out of the market, just keep adding and reinvesting dividends year in year out. Ignore the news, naysayers and market timers. The effect of compound interest is greater and greater as the pot builds. The growth curve is not linear and the early years can feel like it's not going anywhere but as Warren Buffet is quoted as saying: "someone is sitting in the shade today because someone planted a tree a long time ago" 

stickyfiddle

I have been maintaining a spreadsheet for almost a decade now that tracks pretty much everything in terms of history and where are are now, but not very much in terms of future projections. At the moment I'm hoping to step away from corporate life - and probably the Middle East - by 45 (currently 38). 

After that I think both MrsF and I may well keep some contracting work in our current fields but much more on-our-own-terms. But at that point I can't see myself stopping entirely, but considering moving into music production in some form or other. That would be far more about giving myself something enjoyable to do that brings a small income, rather than making any serious money from it, but who knows. 

I guess "CoastFIRE" is the closest concept among those sorts of things. What we don't want to is get trapped like so many people do with ever inflating financial commitments and earning buttloads through their 40s and 50s but never being able to stop. 

RaymondLin

RandallFlagg said:

RaymondLin said:

Honestly, providing that I am mortgage free at retirement, a state pension is enough for me to live on.  I also have a work pension that i have been putting in (work only contributes 2%, so I wack in 15% of my own money), and started a Vanguard index fund 5 years ago, only small but growing.

Can I retire before i am 60? Absolutely not, but I would expect i am okay when i am 67, if i live that long.

I am a great believer in index fund investing, never get out of the market, just keep adding and reinvesting dividends year in year out. Ignore the news, naysayers and market timers. The effect of compound interest is greater and greater as the pot builds. The growth curve is not linear and the early years can feel like it's not going anywhere but as Warren Buffet is quoted as saying: "someone is sitting in the shade today because someone planted a tree a long time ago" 

Which funds give dividends? 

I am currently investing in Life Strategy 80% Equity Fund-Acummulation, Target Retirement 2045, US Equity Index Fund.

Musicwolf

RandallFlagg said:

I think you need a much bigger pot that £150K to be sustainable in all market scenarios, as well as no debt and full state pensions. £500-600K is more like it for an early retirement and a modest lifestyle.

It depends upon your pension.  We had a couple of defined benefits pensions so we started at just under £500k, but that's the sort of magnitude required.

You need to have the sort of income that allows you to make choices, then sacrifice lifestyle in favour of early retirement.  We still have a comfortable lifestyle but I could have been driving an Aston-Martin.  Instead I chose early retirement and a Ford Focus.

stickyfiddle

Musicwolf said:

 

You need to have the sort of income that allows you to make choices, then sacrifice lifestyle in favour of early retirement.  We still have a comfortable lifestyle but I could have been driving an Aston-Martin.  Instead I chose early retirement and a Ford Focus.

That sounds like an excellent trade-off to me  

Snap

@RandallFlagg ;
nice one! 
I have a similar planned timeline, though may stretch into 2025. I've been procrastinating about retiring for the last 4 years. 
Occupying my time doesn't phase me whatsoever. Lots of things on the cards. A couple of things I am starting to look into is mentoring and lecturing. Hopefully I've got something to offer! 

We are fortunate in that the graft and risks taken in the last 20 odd years paid off. But it was graft and at times hugely stressful. Time to enjoy the results. 

A big challenge is the one you've made - deciding when to actually retire. I'm looking forward to it.

TTony

RandallFlagg said:

 Accurate zero based budgeting will eliminate most surprises.  

Hmmmm.

The trick there is "accurate" (did anyone budget for the recent energy price spikes?) and then having the discipline to stick to what you've budgeted.

Suppose you develop other interests/hobbies in retirement, but they weren't in the ZBB, so can't be afforded.  Or your tastes change, and you decide to splash out on the occasional trip to Waitrose rather than relying on what's in Aldi's end-of-day bargains bin?

I'd like my retirement to be flexible and worry-free, not constrained by a check-the-spreadsheet-first discipline ...

VimFuego

we took early retirement/career break back in 2010 when we moved down to Devon. I set up a little gardening business and mrs F sold 2nd hand books. We had savings/pensions and things were ticking along OK (we were never rich, but we always had enough and didn't have to dip into savings). This all changed in 2019 when she got ill. She couldn't work at all and I lost a ton of work as I was looking after her, so we had to dip into the savings and they took an absolute hosing. Fast forward 4 years and I'm in the process of building my savings back up. Fortunately I really enjoy my job, plus the NHS pension is a nice bonus. The plan at the moment, is to do this for another 10 years, I'm gonna take advantage of the internal pathway to becoming a paramedic, then when I'm 63 I'll either do event work for a private crew or continue with the NHS on a bank contract. I may also move back down to the south west. If I continue to save as I have, with my private pension, state pension and NHS pension I should have a comfortable enough income and enough to pay for a 1 way ticket to Dignitas when it's time (no way I'm going into a care home!!!). 

RandallFlagg

RaymondLin said:

RandallFlagg said:

RaymondLin said:

Honestly, providing that I am mortgage free at retirement, a state pension is enough for me to live on.  I also have a work pension that i have been putting in (work only contributes 2%, so I wack in 15% of my own money), and started a Vanguard index fund 5 years ago, only small but growing.

Can I retire before i am 60? Absolutely not, but I would expect i am okay when i am 67, if i live that long.

I am a great believer in index fund investing, never get out of the market, just keep adding and reinvesting dividends year in year out. Ignore the news, naysayers and market timers. The effect of compound interest is greater and greater as the pot builds. The growth curve is not linear and the early years can feel like it's not going anywhere but as Warren Buffet is quoted as saying: "someone is sitting in the shade today because someone planted a tree a long time ago" 

Which funds give dividends? 

I am currently investing in Life Strategy 80% Equity Fund-Acummulation, Target Retirement 2045, US Equity Index Fund.

Income funds and ETFs don't automatically re-invest dividends like accumulating funds do. We hold some money in Vanguard's VUSA (S&P500) ETF and have to manually reinvest the dividends each quarter as they pay out into the cash balance of the account.

The funds you have listed will automatically reinvest the dividends so they are baked in. The Life Strategy and Target Retirement funds you mention aren't strictly passive index funds as there is a degree of active fund management involved, rebalancing with the Life Strategy fund and asset re-allocation into "lower risk" assets over time with the Target Retirement fund.

I'm not a fan of either Life Strategy (too much UK weighting in the holdings) or Target Retirement (I really don't want any form of 'life styling" applied to my holdings - The "Life Styling" concept of moving funds into bonds over time on a glide path, as the set retirement date approaches, was based on the assumption that the accumulated pot would be used to buy an annuity at retirement)  

RaymondLin

RandallFlagg said:

RaymondLin said:

RandallFlagg said:

RaymondLin said:

Honestly, providing that I am mortgage free at retirement, a state pension is enough for me to live on.  I also have a work pension that i have been putting in (work only contributes 2%, so I wack in 15% of my own money), and started a Vanguard index fund 5 years ago, only small but growing.

Can I retire before i am 60? Absolutely not, but I would expect i am okay when i am 67, if i live that long.

I am a great believer in index fund investing, never get out of the market, just keep adding and reinvesting dividends year in year out. Ignore the news, naysayers and market timers. The effect of compound interest is greater and greater as the pot builds. The growth curve is not linear and the early years can feel like it's not going anywhere but as Warren Buffet is quoted as saying: "someone is sitting in the shade today because someone planted a tree a long time ago" 

Which funds give dividends? 

I am currently investing in Life Strategy 80% Equity Fund-Acummulation, Target Retirement 2045, US Equity Index Fund.

Income funds and ETFs don't automatically re-invest dividends like accumulating funds do. We hold some money in Vanguard's VUSA (S&P500) ETF and have to manually reinvest the dividends each quarter as they pay out into the cash balance of the account.

The funds you have listed will automatically reinvest the dividends so they are baked in. The Life Strategy and Target Retirement funds you mention aren't strictly passive index funds as there is a degree of active fund management involved, rebalancing with the Life Strategy fund and asset re-allocation into "lower risk" assets over time with the Target Retirement fund.

I'm not a fan of either Life Strategy (too much UK weighting in the holdings) or Target Retirement (I really don't want any form of 'life styling" applied to my holdings - The "Life Styling" concept of moving funds into bonds over time on a glide path, as the set retirement date approaches, was based on the assumption that the accumulated pot would be used to buy an annuity at retirement)  

I do have S&P 500 UCITS ETF (VUSA) but its in my ISA, started this only last year though.  I guess it's just the same as regular index fund but within ISA?  I could put more weight into that, but was going to just spread it evenly across them.