Retire early (living off savings)
Discussion
It sounds idyllic being able to do your hobbies all day but you may well get bored. Sure, some of the things may include social interaction but they're not intellectually stimulating in the same way that your job is.
Could you try working part-time in the same or similar role?
How about starting your own business and working closer to home? Or just get a job closer to home if it's the commute that you dislike?
Could you try working part-time in the same or similar role?
How about starting your own business and working closer to home? Or just get a job closer to home if it's the commute that you dislike?
red_slr said:
Here is a 30 year fire calc simulation based on 120k/7k. (USD). Its inflation adjusted.
FIRECalc looked at the 117 possible 30 year periods in the available data, starting with a portfolio of $120,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 117 cycles. The lowest and highest portfolio balance at the end of your retirement was $-368,787 to $482,310, with an average at the end of $42,149. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 52 cycles failed, for a success rate of 55.6%.
FWIW I ran for a few more years:
10 years 100%
15 years 94%
20 years 79%
Thanks for your interesting info so far..FIRECalc looked at the 117 possible 30 year periods in the available data, starting with a portfolio of $120,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 117 cycles. The lowest and highest portfolio balance at the end of your retirement was $-368,787 to $482,310, with an average at the end of $42,149. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 52 cycles failed, for a success rate of 55.6%.
FWIW I ran for a few more years:
10 years 100%
15 years 94%
20 years 79%
£120k is my target amount knowing i can spare this but i could use a bit more if needed and have kept back approx £50k emergency money and i do have a endowment maturing in 3 years time approx £36k but if i decide to retire i may look at cashing this in early...i have my eye on a small holding at approx £300k as we have always wanted some land for animals so i could release £200k+ from the sale of our home but this would mean my wife working somewhere new which she is prepared to do if need be...lots of ifs and buts atm
50 this year and in the same frame of mind.
Been in refurbishment for 30 years, mostly working in London and the south east, now living in the Midlands..the travelling is getting worse by the month, long hours and red tape etc have made working much less appealing...
I’ve been purchasing property for about 6 years and now have a nice portfolio I can easily live off, plus an office building I’m going to rent.
Have managed to also save a decent amount and I’m mortgage free, so am in a position whereby I can now stop working.
If you’ve not done it already, get your outgoings into a spreadsheet and project forwards say 30 years. Make sure you add in 4% ish a year for inflation, or you’ll be way out.
Also, take a look at mrmoneymoustache.com there’s loads of good stuff on there.
Good luck!
Been in refurbishment for 30 years, mostly working in London and the south east, now living in the Midlands..the travelling is getting worse by the month, long hours and red tape etc have made working much less appealing...
I’ve been purchasing property for about 6 years and now have a nice portfolio I can easily live off, plus an office building I’m going to rent.
Have managed to also save a decent amount and I’m mortgage free, so am in a position whereby I can now stop working.
If you’ve not done it already, get your outgoings into a spreadsheet and project forwards say 30 years. Make sure you add in 4% ish a year for inflation, or you’ll be way out.
Also, take a look at mrmoneymoustache.com there’s loads of good stuff on there.
Good luck!
Edited by MrVert on Sunday 7th January 10:33
MrVert said:
To live off £7k a year would be freakishly difficult I’d say....our spend / year is approx ten times that including home costs, food, holidays, restaurants, track days, cars etc. I couldn’t think of retiring and dropping my standard of living, so made sure I had everything costed into a monthly spreadsheet, then yearly allowing for inflation and future costs and other income inputs.
If you’ve not done it already, get your outgoings into a spreadsheet and project forwards say 30 years. Make sure you add in 4% ish a year for inflation, or you’ll be way out.
Also, take a look at mrmoneymoustache.com there’s loads of good stuff on there.
Good luck!
Thanks but the £7k is a top up on my wifes £14k but i could cut the £7k down if need be.......If you’ve not done it already, get your outgoings into a spreadsheet and project forwards say 30 years. Make sure you add in 4% ish a year for inflation, or you’ll be way out.
Also, take a look at mrmoneymoustache.com there’s loads of good stuff on there.
Good luck!
I recently retired age 61, we worked out that with our savings and a couple of small private pensions of mine and my wife's we'd be ok,
the majority of my spending is on my hobby, restoring my latest project,
Our house is paid for, I don't commute any more, in fact we may go down to one car in future, and we still manage to save a small amount each month!
So if you think you can do it then go ahead.
BTW it's brilliant
the majority of my spending is on my hobby, restoring my latest project,
Our house is paid for, I don't commute any more, in fact we may go down to one car in future, and we still manage to save a small amount each month!
So if you think you can do it then go ahead.
BTW it's brilliant
My concern would be unforseen circumstances, we needed some underpinning done last year, seven grand.
What if the boiler goes and needs replacing at 2 or three grand.
We can all live fairly happily on a lower amount of money then we think, making savings, being frugal but think we all need a rainy day fund.
What if the boiler goes and needs replacing at 2 or three grand.
We can all live fairly happily on a lower amount of money then we think, making savings, being frugal but think we all need a rainy day fund.
J4CKO said:
My concern would be unforseen circumstances, we needed some underpinning done last year, seven grand.
What if the boiler goes and needs replacing at 2 or three grand.
We can all live fairly happily on a lower amount of money then we think, making savings, being frugal but think we all need a rainy day fund.
Brand new boiler fitted (thats my industry) new appliances when we moved here 4 years ago and another £50k emergency money...but i get what you mean What if the boiler goes and needs replacing at 2 or three grand.
We can all live fairly happily on a lower amount of money then we think, making savings, being frugal but think we all need a rainy day fund.
OP, I hit 55 last year and did just the same - quit the job last August and haven't regretted the decision for a minute. Must admit we made sure we had considerably more than £120k behind us mind you, mainly because we have some fairly ambitious travel plans for the next year (while we're both fit enough to enjoy it) or so but also to enable us to carry on with roughly the same monthly outgoings as when I was working. I suspect I'll get back into some form of employment in a year or so when all the DIY projects are completed, but that will be a decision for then and I very much doubt it'll be doing the same thing as I did before.
At 53, have recently found myself thinking of doing same.
Leaving aside those who love their jobs and want to work as long as possible (and often have difficulty adjusting to retirement) the vast majority of people who would happily retire don't do so because they don't realise they can. Forecasting expenditure (including allowances for unforseen events, changing cars etc) is something many people are not good at. So they have fears about "running out of money" and so the carry on working. Add into this the "must leave something for the kids" brigade and the fact that people with good pension pots don't understand their options and how to factor those in.
If only people were prepared to pay for financial lifestyle planning in and of itself. It could change their lives (literally).
Leaving aside those who love their jobs and want to work as long as possible (and often have difficulty adjusting to retirement) the vast majority of people who would happily retire don't do so because they don't realise they can. Forecasting expenditure (including allowances for unforseen events, changing cars etc) is something many people are not good at. So they have fears about "running out of money" and so the carry on working. Add into this the "must leave something for the kids" brigade and the fact that people with good pension pots don't understand their options and how to factor those in.
If only people were prepared to pay for financial lifestyle planning in and of itself. It could change their lives (literally).
baliongo said:
MrVert said:
To live off £7k a year would be freakishly difficult I’d say....our spend / year is approx ten times that including home costs, food, holidays, restaurants, track days, cars etc. I couldn’t think of retiring and dropping my standard of living, so made sure I had everything costed into a monthly spreadsheet, then yearly allowing for inflation and future costs and other income inputs.
If you’ve not done it already, get your outgoings into a spreadsheet and project forwards say 30 years. Make sure you add in 4% ish a year for inflation, or you’ll be way out.
Also, take a look at mrmoneymoustache.com there’s loads of good stuff on there.
Good luck!
Thanks but the £7k is a top up on my wifes £14k but i could cut the £7k down if need be.......If you’ve not done it already, get your outgoings into a spreadsheet and project forwards say 30 years. Make sure you add in 4% ish a year for inflation, or you’ll be way out.
Also, take a look at mrmoneymoustache.com there’s loads of good stuff on there.
Good luck!
When we did this 5yrs ago (aged 53) I was always prepared that if too tight I'd go back to work, I haven't had to thank goodness.
Since I love work will never fully retire but understand this is not for everyone. However, given that there is one factor that I believe many overlook.
Health
Life expectancy is getting longer but the majority of people over 75 have some sort of medical issue and by 80 it’s almost guaranteed despite everyone’s sprightly grandmother.
I am 69 and very healthy but when I look at much older people the needs are striking including special accommodation and care.
I do not think that it is wise to assume that the state can afford to provide this so you need a big cushion for later years. The old days of bunking in with the kids had sadly proven to be a pipe dream for many in my experience.
Health
Life expectancy is getting longer but the majority of people over 75 have some sort of medical issue and by 80 it’s almost guaranteed despite everyone’s sprightly grandmother.
I am 69 and very healthy but when I look at much older people the needs are striking including special accommodation and care.
I do not think that it is wise to assume that the state can afford to provide this so you need a big cushion for later years. The old days of bunking in with the kids had sadly proven to be a pipe dream for many in my experience.
RDMcG said:
Since I love work will never fully retire but understand this is not for everyone.
Just out of interest, what is it that you do ? Am hoping you are going to say something that doesn't pay much, or is maybe even voluntary, but that does a lot of good for other people and gives you satisfaction.I too like working. Self-employed doing various media-related things, working from home.
I'll be taking my pension this year when I hit 55, but I honestly don't see me ever giving up work entirely unless its for health reasons.
Retirement will just mean I'll be even more choosy about what work I take on, but even now I don't do anything I don't want to.
I'll be taking my pension this year when I hit 55, but I honestly don't see me ever giving up work entirely unless its for health reasons.
Retirement will just mean I'll be even more choosy about what work I take on, but even now I don't do anything I don't want to.
Robbo 27 said:
b
hstewie said:
hstewie said: Retirement isn't on my immediate horizon but for the OP go here and play with some numbers.
http://www.thecalculatorsite.com/finance/calculato...
Gives an idea how your returns v withdrawals interact together with compound interest.
Thats a useful site, started with the cash I have now earning 1.4% and amount I needed to live on per month and what i would be left with at the end of 20 years.http://www.thecalculatorsite.com/finance/calculato...
Gives an idea how your returns v withdrawals interact together with compound interest.
The calculator allowed me to increase the monthly draw down so that I am close to £0 in 20 years time,
Thanks for posting
You don't have to be a financial expert to see the difference that 0.2% on savings vs. 4-5% makes a massive difference compounded over the years.
There are a few really good threads running on the Finance forum around this kind of thing which I've found really useful
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
I've also found these videos (waiting for Amazon to deliver the guys book) an eye opener given the minefield of "What should I do if I want to invest?" that's out there
http://www.kroijer.com
OddCat said:
Just out of interest, what is it that you do ? Am hoping you are going to say something that doesn't pay much, or is maybe even voluntary, but that does a lot of good for other people and gives you satisfaction.
This will be a disappointing answer. Investor and board member on two public and one private company. (Can feel the blows of the PH batons
). Not motivated by more money but the need to continue to drive change and improve companies to be more successful. Will rotate off boards on average every three years and do others hopefully. I like to join boards of companies that have performed poorly and help to install good management and set hard but achievable targets. It has generally worked well.
I do an unpaid position as Jury chair of some national technology awards aimed at identifying and recognizing promising companies that are in early stage development so they can get more profile. Like to help with those taking the huge risk of losing everything to follow their dream.
I like the Adrenalin of being deeply involved, having deadlines and figuring out strategy. I do not work the 70 hours a week I did as an executive. Now it’s more like 30 with an occasional very heavy week. Never slept much so plenty of time for gym and of course fooling around with my cars and so on.
I am 55 and have just handed in my notice from quite a stressful IT job. I have had enough of working away from home all week, so I am planning to take 6 months off work and then look for a local vocational job that pays enough for the bills.
I am even cosidering applying to be a postman, or work as a funeral bearer/driver.
I am even cosidering applying to be a postman, or work as a funeral bearer/driver.
OP, I made this move last April at 54.
A contract I had been doing for 10 years finally came to an end and after a few months of not working I really had no desire to work again.
Also found out about some people my age who had dropped down dead and that also helped focus my mind!
If you have looked through all your numbers and they work for you then do it!
If I ever get bored or feel the need to earn a little then I’ll do some part time work but my plan is to use the time to enjoy life and learn new things.
A contract I had been doing for 10 years finally came to an end and after a few months of not working I really had no desire to work again.
Also found out about some people my age who had dropped down dead and that also helped focus my mind!
If you have looked through all your numbers and they work for you then do it!
If I ever get bored or feel the need to earn a little then I’ll do some part time work but my plan is to use the time to enjoy life and learn new things.
OP, if the numbers add up and your wife is supportive then do it!
I'm a few years younger (42) but spend far too much time tinkering with my spreadsheet... when my current contract ends I am not going to rush into looking for something else and might end up taking something relatively menial/low stress instead.
I've done the flash cars, bikes etc and slaving away to get better/faster no longer appeals tbh.
Having watch friends and family have their health fail on them has made me realize that time is more precious than an extra few quid in retirement... if the numbers work go for it, I certainly intend to.
I'm a few years younger (42) but spend far too much time tinkering with my spreadsheet... when my current contract ends I am not going to rush into looking for something else and might end up taking something relatively menial/low stress instead.
I've done the flash cars, bikes etc and slaving away to get better/faster no longer appeals tbh.
Having watch friends and family have their health fail on them has made me realize that time is more precious than an extra few quid in retirement... if the numbers work go for it, I certainly intend to.
Gassing Station | The Lounge | Top of Page | What's New | My Stuff