Retirerment at 43 - Man logic....
Discussion
red_slr said:
Most people on MMM forums have a FIRE figure of around 1M - 1.5M so your figure sounds about right. On this they say you can sustain a decent income forever or until being so old as it makes no difference. At the moment people are basing this around returns of c.4% PA so your 1M gives you £40k per year before tax. Its a massive subject and how to achieve the "FI" part is a big topic in itself as some people go the property route, others things like VLS or pensions - there are loads of ways to do it.
As for getting bored, with 2 or 3 hobbies, some travel, property to look after it would not be difficult IMHO.
As for getting bored, with 2 or 3 hobbies, some travel, property to look after it would not be difficult IMHO.
And it's not hard for funds to do a lot better than 4%. Plus not to forget that even after drawing out the income from it every month, you've still got a million quid in the bank and no mortgage. Should you feel a little more carefree and/or not bothered about leaving an inheritance for your kids you could even slowly chip away at the million with the anticipation of being down to 0 when you're at some particular age of your choosing. Assuming you had stuff you wanted to spend that much money on that wasn't still some form of asset...
del mar said:
This would leave say £550,000 left, drawing it down by £18,000 a year for 30 years which would take me up to 73.
Whilst I would technically run out of my draw down pot by 73, ....
Its worth noting that you could probably get around £18k (probably more) out of investments on your £550k and not touch it. So your calculations are off by quite a bit. In other words you have not factored in interest and also compound interest of any surplus either, which might make a big difference to your calcs as any shortfall on income from the investment one year can be carried into the next by using the surplus or capital and make it up the following as you are taking such a small % of the capital anyway it would probably recover.Whilst I would technically run out of my draw down pot by 73, ....
HTH.
Long term draw down must involve equity, you can't have a draw down using interest from a bank account or even Bonds at their current yields.
You would not cover inflation.
A sensible starting percentage is probably 3.5% with target growth around 7 or 8%.
It is not so difficult to average 7%, but if you start off during a couple of bad years it could put you behind the eight ball, hence the 3.5 and not 4% initially.
Once growth is established you can "up it" to 4%.
Boredom, some people live just for work and almost convince themselves that the world would stop if they stopped working
Squash, tennis, golf, breakfast on the beach, OK maybe not in Newcastle, do whatever floats your boat.
An easy way to manage draw down is to not depend on the current years performance but to keep a couple of years in cash that way the investment portion can remain unchanged.
Financial planning should not involve a suicide date when the money runs out
You would not cover inflation.
A sensible starting percentage is probably 3.5% with target growth around 7 or 8%.
It is not so difficult to average 7%, but if you start off during a couple of bad years it could put you behind the eight ball, hence the 3.5 and not 4% initially.
Once growth is established you can "up it" to 4%.
Boredom, some people live just for work and almost convince themselves that the world would stop if they stopped working
Squash, tennis, golf, breakfast on the beach, OK maybe not in Newcastle, do whatever floats your boat.
An easy way to manage draw down is to not depend on the current years performance but to keep a couple of years in cash that way the investment portion can remain unchanged.
Financial planning should not involve a suicide date when the money runs out
Good luck to you OP.
I've just retired for a second time at 54. I originally did it at 37 and went into BTL but a messy divorce took me back into work 10 years ago and I've just ended that again.
It's a wonderful feeling to not have to think about going into 'work' and to manage your time the way you want to.
Just make sure you do things to stimulate the mind and body, otherwise you'll stagnate.
Good luck
I've just retired for a second time at 54. I originally did it at 37 and went into BTL but a messy divorce took me back into work 10 years ago and I've just ended that again.
It's a wonderful feeling to not have to think about going into 'work' and to manage your time the way you want to.
Just make sure you do things to stimulate the mind and body, otherwise you'll stagnate.
Good luck
del mar said:
Wild thoughts at lunch time....
If we were to sell what we own, house, flat cars and savings (no debt) - that would raise a pot of say £1.1 -1.2m on a sunny day with a favourable wind.
Move back to Newcastle, buying a house in the same area we grew up in - £200,000
Buy 6 buy to lets for £400,000 - this would produce approx. £2,400 a month in rent. This would increase by an amount over time so some degree of inflation proofing / pay rise.
This would leave say £550,000 left, drawing it down by £18,000 a year for 30 years which would take me up to 73.
Total income £44,000
Split between two of us we would pay limited tax on the rental income and no NI.
That would equate to a Gross salary of about £55 - 60,000. A decent income in Newcastle, especially with no mortgage.
I would draw my pension at age 65 - which on contributions to date could grow to be millions.... In reality £250,000 ish ?
Whilst I would technically run out of my draw down pot by 73, I still have the 6 houses which should hopefully have increased to say £75,000 each another £450,000 which at £30k a year should get me to 88. This assumes that we just waste the monthly income for the next 30 years which is unlikely.
Issues.
Selling on a rainy day with no wind....
Living near aged parents.....there are good and bad aspects to this
Inflation eroding savings this bit needs a lot of thought - this could be off set by spending more of it on properties, and having less sat there doing nothing ?
Slack periods / repairs to the properties. 10% of income - rental property to date hasn't caused any issues, but i appreciate they can go wrong.
Boredom there is nothing to stop either of us taking a job if it becomes a huge issue.
No silly cars - although I reckon i might be able to keep one, and the family banger.
Spending more time with the wife.
I have 5 friends only one lives in the same area of the country as us so that is not a huge issue.
Wife would move back.
9 year old son, doesn't have a choice but he wants to stay with his friends.
What else am I missing ?
Thanks
Del
Similar situation to me except I'll be 55. We will have 4BTL + our home + decent pensions and no debts. I wish I could do it sooner but the numbers only come together at 55.If we were to sell what we own, house, flat cars and savings (no debt) - that would raise a pot of say £1.1 -1.2m on a sunny day with a favourable wind.
Move back to Newcastle, buying a house in the same area we grew up in - £200,000
Buy 6 buy to lets for £400,000 - this would produce approx. £2,400 a month in rent. This would increase by an amount over time so some degree of inflation proofing / pay rise.
This would leave say £550,000 left, drawing it down by £18,000 a year for 30 years which would take me up to 73.
Total income £44,000
Split between two of us we would pay limited tax on the rental income and no NI.
That would equate to a Gross salary of about £55 - 60,000. A decent income in Newcastle, especially with no mortgage.
I would draw my pension at age 65 - which on contributions to date could grow to be millions.... In reality £250,000 ish ?
Whilst I would technically run out of my draw down pot by 73, I still have the 6 houses which should hopefully have increased to say £75,000 each another £450,000 which at £30k a year should get me to 88. This assumes that we just waste the monthly income for the next 30 years which is unlikely.
Issues.
Selling on a rainy day with no wind....
Living near aged parents.....there are good and bad aspects to this
Inflation eroding savings this bit needs a lot of thought - this could be off set by spending more of it on properties, and having less sat there doing nothing ?
Slack periods / repairs to the properties. 10% of income - rental property to date hasn't caused any issues, but i appreciate they can go wrong.
Boredom there is nothing to stop either of us taking a job if it becomes a huge issue.
No silly cars - although I reckon i might be able to keep one, and the family banger.
Spending more time with the wife.
I have 5 friends only one lives in the same area of the country as us so that is not a huge issue.
Wife would move back.
9 year old son, doesn't have a choice but he wants to stay with his friends.
What else am I missing ?
Thanks
Del
Edited by del mar on Wednesday 17th May 17:36
garyhun said:
Good luck to you OP.
I've just retired for a second time at 54. I originally did it at 37 and went into BTL but a messy divorce took me back into work 10 years ago and I've just ended that again.
It's a wonderful feeling to not have to think about going into 'work' and to manage your time the way you want to.
Just make sure you do things to stimulate the mind and body, otherwise you'll stagnate.
Good luck
Good effort, doing it at 37! That would give me 18 months, not sure I'll be in that position by then. I've just retired for a second time at 54. I originally did it at 37 and went into BTL but a messy divorce took me back into work 10 years ago and I've just ended that again.
It's a wonderful feeling to not have to think about going into 'work' and to manage your time the way you want to.
Just make sure you do things to stimulate the mind and body, otherwise you'll stagnate.
Good luck
garyhun said:
I've just retired for a second time at 54. I originally did it at 37 and went into BTL but a messy divorce took me back into work 10 years ago and I've just ended that again.
Apologies if this is too intrusive, but I feel compelled to ask if the divorce might have been related to retiring early?Sheepshanks said:
garyhun said:
I've just retired for a second time at 54. I originally did it at 37 and went into BTL but a messy divorce took me back into work 10 years ago and I've just ended that again.
Apologies if this is too intrusive, but I feel compelled to ask if the divorce might have been related to retiring early?
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