Retire early (living off savings)

[baliongo]

I have just turned 50 yrs old and i have had enough with the rat race for good,i am sick of travelling to work and would like to sit back and enjoy what the future holds.
I have a few hobbies incl cycling,walking,jogging and motorcycles which keep me busy and being self employed/semi-retired i have tested the water working approx 6 mths of the year for the last 5 years and enjoying the other 6 months off work.

I have set aside £120k to live on and i usually spend approx £7k per year topping up my wife`s part time earnings,so i have 17 years of savings to live on taking me up to 67yrs (if i make it) when my pension starts giving me around £20k per year to live on until death.
I have no mortgage and our home is valued at £550k so it could be sold and we could move somewhere cheaper if need be and both my sons have had some money from me to start on the property ladder themselves.

Has anyone here done/doing this??

How mad am i,yes maybe a little.....(just to add we own a new car that should last a few years and i have a few bob set aside for emergencies..)

[baliongo]

Cheers Guys,


My wife earns £14k a year working part time and we can live on that amount with ease but factored the £7k as a worse case scenario.
She loves her job (nursing) and the fact that she walks to work helps so no expenses there and we have a holiday fund for a few years set aside too..

at the moment the £120k is sitting in two cash isa`s

Edited by baliongo on Sunday 7th January 09:45

[baliongo]

glenrobbo said:

Thought so...

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Thanks......i will have a look

[baliongo]

PurpleMoonlight said:

If it's what you want to do and you can manage financially, then do it. It really doesn't matter what anyone else thinks.

You can always return to some form or work if you get totally bored.

PS, I've been working 40 years this year, and feel bloody tired.

True,i was hoping someone has done/doing it to give me some pointers....i have been in construction since 17 yrs old and everything aches.

At least for now i can look out on a monday morning from my window and watch the rat racers rush off to work while i pour a cup of coffee and read the paper..no plans to go back to work until spring for now then i will see how i feel about full retirement.

[baliongo]

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..

£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

[baliongo]

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.......

[baliongo]

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

[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..

[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.

[baliongo]

£1390 council tax
£3400 food
£500 dog insurance
£700 car insurance for 2 cars
£300 motorcycle insurance x 2
£1200 gas and elec
£400 car tax x2

Which are many of the basics equalling £7890 per year..not incl fuel,meals out,day trips,my hobbies etc

My wife earns £14k per yr without the £7k i am prepared to add to the pot if need be which by my reckoning works...

With £50k emergency money and a endowment payout in 3 yrs of £36k ....

Edited by baliongo on Monday 8th January 08:09

[baliongo]

bhstewie said:

Every now and then I watch Escape to the Country or something similar and I'm always amazed at the number of couples who appear in their 60's so it's just the two of them but they "need" a minimum of 4 bedrooms and seem to be looking at sodding huge piles just so they have a few rooms spare when the kids visit.

I'm not suggesting everyone live in a bedsit but it does make you wonder, that is assuming any of them actually do it v just wanting to be on TV it does seem a little odd, unless their assumption is their home is "cash" and they'll downsize should they need to.

After walking the dog and having breakfast i plan to look into this some more,there are many rural properties for sale (we want some land for animals) that could give us a comfortable £200k spare cash after selling our property..Bedsit no but there is money to be made changing property.

[baliongo]

RC1807 said:

OP: I don't think you've enough £ behind you, honestly, to retire now, unless you move somewhere far, far cheaper to live - like Thailand or the Philippines.

For the last 5 years i have worked 6 mths of the year and banked some of those earnings,we comfortably lived on my wifes part time earnings (£14k) during each of those years...i am prepared to top her earnings up with my savings if need be for days out and enjoying any time we have together..

£120k divide by £7000 equals 17 years but i dont expect to be topping her earnings up too much.As said its down to whether i think i can do this and i believe i can with ease and still have £50k + £36k as emergency fund.

Time will tell i guess and the next full year off will tell me how possible this is.....

[baliongo]

Hang On said:

Good luck. Please let us know how it pans out.

Thanks i will,its great to see others have done this be it with more money to play with and i have tested the water over the last 5 years working just 6 mths a year.
I can always take on agency work when and if (plumber/pipefitter) so that is my fallback.

Time for my second cup of coffee while i sit here with my dog alongside me while others are stuck in traffic or are on overcrowded trains..

[baliongo]

Decided to sell one of my motorcycles as both are delicate things that get used rarely which will release between 15-25k depending which bike goes...

The wife has a new Toyota aygo (i know) and my ageing Alfa 156 is looking worse for wear after many reliable years so something newer and reliable would suit better.

We could get by on just the Aygo but cmon a nice large estate is what i am opting for...

[baliongo]

FocusRS3 said:

OP- i am most definitely learning towards your way of thinking.

Sick to death of the rat race and a declining/depressing city business so trying to take some steps towards preparing for it to end.

Have told the wife when it happens i'll not be returning so we will have to live accordingly.
Have kids school fees but the cash for this is stuck aside.

Selling up is what we are trying to do now as i'm 50 this year.

Watching this thread with interest

I showed my better half this video earlier.....just for kicks

https://www.youtube.com/watch?v=b0EoyTzcFOI (living in a car on $800 a mth)

[baliongo]

bhstewie said:

Again, that's just "cash" you can draw on.

You really should explore and work out what you can do that will provide some return on whatever you have vs. leaving it all in the bank.

Yes i do agree and i am looking into that also.....there is a possibility of sinking some money into a local business where my youngest son works,i wont go into too many detail but the owner is looking at getting out and i am in talks..

[baliongo]

keirik said:

There is a school of thought now that the 4% doesnt apply in the UK and 2.5% is more realistic.

I've just done something similar to the OP except I'm 56 and tbh the numbers sound tight.

I've done a fair bit of working/not working over the last few years and found my costs were more like 12k pa so 7k would be challenging for me - but may be I've got more expensive tastes.

The thing to ask though is how would you manage if you lost your wife's income? How would you manage if she was I'll or in an accident and off work for 6 months?

If i lost my wife`s income id have to go back to work i guess.....fortunately the work i do (plumbing/heating) is something i can easily drop back into even though i hate it with a passion.

[baliongo]

CharlesdeGaulle said:

What area are you in OP? Is is one of the expensive ones, or a cheaper rural one?

I live in Kent (chelsfield village) property is a 3 bed bungalow in very good order and we get free valuations and offers regularly.It is/was to be our forever home and incl a 33ft x 18 ft log cabin (gym) in the garden,new kitchen and central heating..

In the spring/summer it is a lovely place to be but i want some land for animals so a move looks likely......last valuation was £550k but i expect a bit more now..

Edited by baliongo on Monday 8th January 16:01

[baliongo]

CharlesdeGaulle said:

Does your wife's work keep you in that area or could you move somewhere cheaper? Plus, at the risk of stating the obvious, buying or renting land and acquiring animals is likely to increase the drain on your finances, not reduce it.

Could you keep working but only do the jobs you fancy?

Wife is a nurse and can work wherever (nhs or private) and looking at small holdings in cheaper parts of the country frees up £200k+ so some more to play with.

I absolutely hate the work i am trained for (plumbing/heating) and there is no way i want to do that anymore...seeing out my days on a modest amount looking after some animals in the country is my dream...wife bringing home the bacon at a local hospital is the cherry on the cake as she loves her work.

[baliongo]

King Herald said:

That is what I discovered. I mocked the people who told me I would get bored if retired, told them that I had several hobbies and a nice workshop and I would have so much to do that I could never, ever get bored. I worked offshore so already had six months a year at home that was never enough to do what I wanted, so I thought retirement would be a blast.

Four months into early retirement I found I was fed up of being busy at home, going into the workshop every day and messing about with stuff. I found myself watching more tv that ever before, getting irritated all the time.

Retirement was definitly not quite what I expected.

I am currently semi-retired and while off work (spring/summer) i spend most of my days tinkering with my 2 classic bikes both of which keep me busy..just for fun here is a typical day when i am not working..

7am wake up and shower
Breakfast lots of coffee
Walk the dog (usually 40mins)
Coffee
Chores around the house
Visit our home gym (hour max)

Walk the wife to work (taking our hound with us)
Back home and light lunch
Out in the workshop to tinker (if weather dry take one of the bikes out)
Back indoors and wait for the wife to arrive home
Have a catch up about things
Start evening meal

Now this keeps me busy and with good weather i have a 130ft garden to keep tidy with rockery/lawns and my 2 ponds to look after...to many this may seem boring but i am more than happy with this,infact i love my days off......i have been off since 7th november 2017 and with a decent tax rebate still drip feeding me i have not needed to touch any of my wifes earnings or our lump sum yet,i have been offered work but keep turning it down and see no reason to change things for now.

As said already what works for some may not work for others but this works for me....glad it works for a few of you too

Edited by baliongo on Tuesday 9th January 08:31