Retire early (living off savings)

[Robertj21a]

garyhun said:

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.

I've heard of 4 deaths recently - ages 74, 62, 51 and 43. None were in accidents or had done anything unusual. It certainly makes you think.

[PositronicRay]

Ari said:

Robbo 27 said:

A financial adviser has told me that I should be looking for over £250K in cash or easily transferrable assetts (not property) to have a stress free retirement and also have around £2000+ a month in pension income on top of that.

Love Pistonheads.

What's wrong with that? Equates to around £40k p.a. before tax.

[Ari]

PositronicRay said:

Ari said:

Robbo 27 said:

A financial adviser has told me that I should be looking for over £250K in cash or easily transferrable assetts (not property) to have a stress free retirement and also have around £2000+ a month in pension income on top of that.

Love Pistonheads.

What's wrong with that? Equates to around £40k p.a. before tax.

Okay well firstly, here in the real world, people don't often have a quarter of a million pounds kicking around in cash when they reach retirement, as well as a pension chucking out over two grand a month plus a paid for house or two.

Secondly, to suggest you need that as a minimum for 'stress free retirement' is absurd. It would be lovely, of course. Lots of things would be. But if you own a modest house outright then a pension of half that and cash reserves a fifth of that amount would be more than enough to live 'stress free' on. Run the yacht, a new Jag and pay for winter in the Caribbean? Nope. But to live 'stress free'? Absolutely.

[Yipper]

Know a retired couple who live quite happily on ~£6k a year. Do a bit of gardening, walking and reading the Express and they're happy as Larry.

[PositronicRay]

Ari said:

PositronicRay said:

Ari said:

Robbo 27 said:

A financial adviser has told me that I should be looking for over £250K in cash or easily transferrable assetts (not property) to have a stress free retirement and also have around £2000+ a month in pension income on top of that.

Love Pistonheads.

What's wrong with that? Equates to around £40k p.a. before tax.

Okay well firstly, here in the real world, people don't often have a quarter of a million pounds kicking around in cash when they reach retirement, as well as a pension chucking out over two grand a month plus a paid for house or two.

Secondly, to suggest you need that as a minimum for 'stress free retirement' is absurd. It would be lovely, of course. Lots of things would be. But if you own a modest house outright then a pension of half that and cash reserves a fifth of that amount would be more than enough to live 'stress free' on. Run the yacht, a new Jag and pay for winter in the Caribbean? Nope. But to live 'stress free'? Absolutely.

Depends on your current situation. £24k p.a. + £250k isn't unusual and for a couple certainly doesn't run yacht/new jag/winter in the Caribbean lifestyle.

[Robbo 27]

https://www.which.co.uk/money/pensions-and-retirem...

Most housholders in retirement spend £2200 a month. Which magazine say that you would need £39000 gross income a year to cover your outgoings.


You will have done well if you can reach that annual income just on pensions, the balance is cash drawdown from your savings pot assuming that you are going to live for 20 years after retirement.

The £2000 a month and £250,000 savings works.

[Stu-nph26]

Do it OP life is too short and if required you can also look at part time work if needed like others have suggested.

Great thread by the way I'm 32 but been investing and planning to retire in my early 30s thanks to resources like MMM I firmly believe its very achievable for most.

[grantone]

Ari said:

Okay well firstly, here in the real world, people don't often have a quarter of a million pounds kicking around in cash when they reach retirement, as well as a pension chucking out over two grand a month plus a paid for house or two.

Secondly, to suggest you need that as a minimum for 'stress free retirement' is absurd. It would be lovely, of course. Lots of things would be. But if you own a modest house outright then a pension of half that and cash reserves a fifth of that amount would be more than enough to live 'stress free' on. Run the yacht, a new Jag and pay for winter in the Caribbean? Nope. But to live 'stress free'? Absolutely.

I know in the real world a lot of people don't achieve it, but...

If the £2k is a target household income then as a couple with fully paid up NI the new state pension gets you ~£1350 per month leaving £650 from other pensions / investments to top it up to £2k per month.

I make it a ~£200k pension pot between 2 needed for an annuity of that size at 65 on a 3% escalation + 50% Joint Life according to web link below. 35 years each paying into a pension £3k pre-tax (with employers contributions if available) in today's money if it only kept pace with inflation. I guess this is the bit a lot of people will skip.

£250k cash is more difficult, but somewhere close to it should be doable for a reasonable proportion of households if you've been sensible with a repayment mortgage and are willing to downsize from the family home. It should be simple for anyone retiring from London / South East to cheaper parts of the country.

Tough if you're single though, or not been able to work for significant periods of your adult life.

http://www.sharingpensions.co.uk/annuity_rates.htm

[98elise]

Ari said:

PositronicRay said:

Ari said:

Robbo 27 said:

A financial adviser has told me that I should be looking for over £250K in cash or easily transferrable assetts (not property) to have a stress free retirement and also have around £2000+ a month in pension income on top of that.

Love Pistonheads.

What's wrong with that? Equates to around £40k p.a. before tax.

Okay well firstly, here in the real world, people don't often have a quarter of a million pounds kicking around in cash when they reach retirement, as well as a pension chucking out over two grand a month plus a paid for house or two.

Secondly, to suggest you need that as a minimum for 'stress free retirement' is absurd. It would be lovely, of course. Lots of things would be. But if you own a modest house outright then a pension of half that and cash reserves a fifth of that amount would be more than enough to live 'stress free' on. Run the yacht, a new Jag and pay for winter in the Caribbean? Nope. But to live 'stress free'? Absolutely.

I agree. My mother fits that profile almost exactly. She potters in the garden, meets with her friends for lunch etc and has perfectly nice stress free retirement.

[condor]

I'm single and 'sort of' retired 8 years ago with only £16K in savings, aged 50. Fortunately owned my own house - which was a big plus.
I started a casual morning dog walking business after 6 months, which has since expanded into a house/pet sitting/dog walking business. This pays my usual monthly outgoings ( in place of a pension) and satisfies my desire for constant animal contact.

[maxdb]

What about selling your current house and downsizing to a house worth circa £250k. The left over cash could be used to buy another house that can be used to rent out that will bring in a monthly income.

[BryanC]

At the time, because I did not really understand annuities / SIPPS etc etc and being widowed at 61, I carried on working until almost 65 which financially paid off as it made the transition from salaried to retired ( semi-retired - I still do a bit of work ) easier. For me it was not a good idea to stop working shortly after a bereavement, not least because the value of annuities was starting to drop significantly. Looking back, the projections when I was in my mid 50s were a long way apart from what valuation I got 10 years later.

Being single, one outstanding piece of advice I got was to retire during the summer, even if you have to live for a few months on savings as I imagine there is nothing worse than starting the next stage of your life coming home to a dark house and short days. In other words, give yourself time to start retirement waking to a nice sunny day, T-shirt and shorts on, perhaps a day in the garden, perhaps get on the push-bike ( or Caterham ) to float down the pub or whatever appeals, the choice is yours.

If you have a good go at retirement, you will expand your past-times into the available time, hence the adage, "..don't know how I had time to go to work". It really is true, so an early retirement needs some careful thinking about. Do however get a good financial adviser right from the start.

[SCEtoAUX]

maxdb said:

What about selling your current house and downsizing to a house worth circa £250k. The left over cash could be used to buy another house that can be used to rent out that will bring in a monthly income.

This is no time to be buying to let, and quite right too.

[PositronicRay]

maxdb said:

What about selling your current house and downsizing to a house worth circa £250k. The left over cash could be used to buy another house that can be used to rent out that will bring in a monthly income.

People think this, but the reality if active you need more space not less, something to consider when you're slowing down late in the 70s.

[baliongo]

Thanks for the comments so far guys...

Selling up and downsizing is a possiblity and so is taking a low paid stress free job to tide me over for a while..

Glad to see there are some of you who have done this and seem happy with the choice to do so.I have no plans to do anything work wise just yet as i have completed all my contracted work and have been turning down work for the last couple of months.

thanks again..

[jonah35]

Yipper said:

Know a retired couple who live quite happily on ~£6k a year. Do a bit of gardening, walking and reading the Express and they're happy as Larry.

Exactly.

Chap I know had a brother who is a fireman who retired to Crete at age 48 and lives a lovely life. This chap I know decided to pack in his job on £18k per year in the U.K. and now lives in Crete with his brother and him and his wife live on £500pm.

If you saw him he looks 20 years younger, is thin and in shape and goes swimming jogging and cycling every day and at night the 4 of them sit down to a barbecue and eat outdoors on the terrace.

Wonderful life and have a bit back for emergencies and one day his state pension of £700pm will kick in and his wife’s of £700pm will kick in. They’ll have too MUCH money!!

Meanwhile some overweight bloke (heart attack waiting to happen) is cursing tonight bell because he has to be up early in the morning for a sales meeting in Staines and has his suit hung up in the back of his car for the week away from his family. He needs to earn £3k pm to pay the mortgage, for his wife’s Pilates and evoque and for the babysitter for the kids he is away from

It is a materialistic society and I’ll admit I once almost got trapped in it

[Stu-nph26]

jonah35 said:

Exactly.

Chap I know had a brother who is a fireman who retired to Crete at age 48 and lives a lovely life. This chap I know decided to pack in his job on £18k per year in the U.K. and now lives in Crete with his brother and him and his wife live on £500pm.

If you saw him he looks 20 years younger, is thin and in shape and goes swimming jogging and cycling every day and at night the 4 of them sit down to a barbecue and eat outdoors on the terrace.

Wonderful life and have a bit back for emergencies and one day his state pension of £700pm will kick in and his wife’s of £700pm will kick in. They’ll have too MUCH money!!

Meanwhile some overweight bloke (heart attack waiting to happen) is cursing tonight bell because he has to be up early in the morning for a sales meeting in Staines and has his suit hung up in the back of his car for the week away from his family. He needs to earn £3k pm to pay the mortgage, for his wife’s Pilates and evoque and for the babysitter for the kids he is away from

It is a materialistic society and I’ll admit I once almost got trapped in it

Totally agree Jonah. I was/am the same I still work full time, but now rather than looking to get the latest car, new watch or bigger home to keep up with the Jones I invest at least 60% of my income with a view to retire in 10 years or less in my early 40's. I have to keep a check on things as I often drift and was very tempted to blow 25k just this week on an e92 M3 but I refrained and continued along my path of FI.

I also love the idea suggest above of moving somewhere like Crete, sound like wonderful way to make the most of retirement.

[baliongo]

Stu-nph26 said:

. I have to keep a check on things as I often drift and was very tempted to blow 25k just this week on an e92 M3 but I refrained and continued along my path of FI.

This has been my downfall over the last couple of years and i bought a couple of classic motorcycles both of which i still own but the current value is far beyond what i paid for them which is good but now i have to make sure i keep away from the classifieds...thankfully my love of cars has diminished over the years so that is one less thing i could be spending money on.

[TwigtheWonderkid]

I like to think we're a pretty frugal, low maintenance couple, but living on £500/month
Council tax is £220, (ok, we have a big house in a London borough, so many would pay half that), then electric, gas, phone and broadband, house insurance, car insurance, running the car, food, water rates, etc.

Not sure that's doable in the long term.

[RemaL]

I have 10 years until I hit 50 and was hoping to retire around then. Currently in a better position than the OP with 10 years to go.

I've not looked into this much but had found the thread handy to give me a idea of what I would need possibly.
Yes depends on what happens in the next 10 years

But at 50 personally I would be scared to death to have 120k with the wife earning a small amount to retire. Yes my kids are young and still at home at the moment but this may not be the same in 10 years. Even if it was it would not be a huge impact on my lifestyle.