Interesting post, I have 2 friends who stopped working at a similar age to you and both came to the same conclusion. Both are now back at work in less stressful jobs and are much happier.
It has altered my plans for early retirement a bit.
How large a pot do you suppose it would cost to buy that kind of annuity - £300k ? Not that small really.
I'm just in the throes of taking an annuity based on a £320k pot, and they've offered me a pension of ~£16.5k, which I'm quite happy with. Granted that's from a DC scheme not DB, but it's presumably similar. All the calcs ive looked at seem to suggest "Pension offer = 1/20th of fund value" or so, and I'm currently aged 62.
For those that look the leap in the last few years with pots ranging up to 500k or so, how is it working out ? For you, for your partner if there is one ?
Not sure if I posted in this thread a few years ago when it started, but here goes ......
Got pissed off with the idea of working on average 50 hour weeks to afford the rent for a flat i didn't want to live in, in a city I didn't want to live in, each year running faster just to standstill (German taxes are a bitch).
We sold everything we didn't need. Built out a van and left our old life behind.
We've been in the van for three years now. This year I'll be 43.
I (work) worked for three months when back in Germany at the start of this year. Got stuck in with a few projects with the lads I used to work with and picked up a fair bit of private (read cash in hand) work. Banked enough that I don't need to worry about my bank account for the next couple of years.
The GF (of 23 years, really should start referring to her as something a little more official) started her own brand management business just as we hit the road. That's going really well and she's got enough clients currently that she doesn't want anymore, otherwise she would be to busy to enjoy life. What she earns in six months more than covers our outgoings of 22k€ a year (we run a tally.... To cover everything from fuel to repairs/servicing, weekly shop to posh meals out, activities such as bike park and keeping the bikes running to insurances to cover any **** ups).
I've got savings just shy of 400k. I started saving when in my early 20's. I've not had to touch them since we've been in the road, which is just as well, as they've taken a battering the last few years. I'm also in the lucky position of not having to pay capital gains tax when I cash out as I've been outside the UK for more than ten years
Think we'll be in a position this year to put 20-30k into my Hargreaves account.
I figured a long time ago that my generation will be expected to work way into their 70's (look at Denmark and Germany is already considering doing something similar).
My old man retired at 64. He's spent the best part of the last 18 years sitting on his arse looking out of the window at a garden he's in no shape to keep well kempt. The rest of the time he's sat watching shite TV or reading the Daily Mail.
The GF's folks are also mentally fit, but physically frail.
I figure I would rather spread my retirement out now whilst I'm physically fit enough to enjoy it.
It's surprising how little money you need when you're not trapped in the hamster wheel.
Ive been trying to work out scenarios around that. Using a drawdown and with the first 25% being tax free, so hypothetically say that chunk was 150k, I’m assuming that could be taken at a rate of say £3000 a month for 5 years without paying any tax at all ?
Yes that's one way of doing it but taking a little less lump sum and paying a bit of tax as you go along is another option to consider.
Under PAYE and a salary of £67k you would take home £49,170, but a drawdown of £67k gives you £59,464 assuming you take 25% tax free lump sum out of the £67k and haven't taken it all in one go.
4. Its fairly cheap to get out and about in your local area doing stuff, but overnight stays these days are not cheap.
Very much so. Unfortunately Mrs S won't entertain the idea of a camper van
For those that look the leap in the last few years with pots ranging up to 500k or so, how is it working out ? For you, for your partner if there is one ?
Not sure if I posted in this thread a few years ago when it started, but here goes ......
Got pissed off with the idea of working on average 50 hour weeks to afford the rent for a flat i didn't want to live in, in a city I didn't want to live in, each year running faster just to standstill (German taxes are a bitch).
We sold everything we didn't need. Built out a van and left our old life behind.
We've been in the van for three years now. This year I'll be 43.
I (work) worked for three months when back in Germany at the start of this year. Got stuck in with a few projects with the lads I used to work with and picked up a fair bit of private (read cash in hand) work. Banked enough that I don't need to worry about my bank account for the next couple of years.
The GF (of 23 years, really should start referring to her as something a little more official) started her own brand management business just as we hit the road. That's going really well and she's got enough clients currently that she doesn't want anymore, otherwise she would be to busy to enjoy life. What she earns in six months more than covers our outgoings of 22k€ a year (we run a tally.... To cover everything from fuel to repairs/servicing, weekly shop to posh meals out, activities such as bike park and keeping the bikes running to insurances to cover any **** ups).
I've got savings just shy of 400k. I started saving when in my early 20's. I've not had to touch them since we've been in the road, which is just as well, as they've taken a battering the last few years. I'm also in the lucky position of not having to pay capital gains tax when I cash out as I've been outside the UK for more than ten years
Think we'll be in a position this year to put 20-30k into my Hargreaves account.
I figured a long time ago that my generation will be expected to work way into their 70's (look at Denmark and Germany is already considering doing something similar).
My old man retired at 64. He's spent the best part of the last 18 years sitting on his arse looking out of the window at a garden he's in no shape to keep well kempt. The rest of the time he's sat watching shite TV or reading the Daily Mail.
The GF's folks are also mentally fit, but physically frail.
I figure I would rather spread my retirement out now whilst I'm physically fit enough to enjoy it.
It's surprising how little money you need when you're not trapped in the hamster wheel.
Awesome post mate, love it.
been trying to work out scenarios around that. Using a drawdown and with the first 25% being tax free, so hypothetically say that chunk was 150k, I’m assuming that could be taken at a rate of say £3000 a month for 5 years without paying any tax at all ?
If you weren't 67, and not getting any other pension then yes.
But you'd be stupid to do that because you'd then get hammered for tax when you started using the other £450k. Much better to level it out and drip from both sides together.
Eg assuming no other income ( which clearly isn't right over a 20 year period, but to keep it simple)
Option 1
Take £3k pcm for 5 years and pay no tax at all because it is the free chunk.
Then take the taxable chunk at the same rate and pay about £4.8k PA tax for the next 15 years. ( 20% of £24k PA)
OR
Option 2
Take £1000 pcm from your taxable pot, but pay no tax as that is your tax free allowance
Take £750 pcm from your tax free pot and pay no tax on it
Take £1.25k pcm from your taxable pot and pay £3k PA on it ( 20% of £15k PA)
( all for 20 years)
Option 1 pays £12k more tax than option 2
....stupid piece of shit forum
Very much so. Unfortunately Mrs S won't entertain the idea of a camper van
I'm really not convinced a camper van is a cheaper option than hotels for most people. I know VW tax etc but a 5 year old California looks like it's about £50k. tax £400/service costs £500+/insurance £500+ and depreciation have got to add up to about £5 per year.
Unless it replaces a car you've got cost of capital (5%?) another 2.5k per year and we're up to £7500. Most of the time in the UK you're not going to be wild camping so you've still got to pay maybe £30+ a night for pitch with hookup. how much are you really going to use it, and how much is it really going to cost you per night.
You can probably give yourself a £10k a year budget for hotels/holiday cottages etc etc. and be away from home 90 days.
That's the equation I keep coming back to when I think about campers. What you lose is the option to go away at the last minute (but you can't do that with campsites most of the time) but you get a proper bed/toilet/shower.
Very much so. Unfortunately Mrs S won't entertain the idea of a camper van
I'm really not convinced a camper van is a cheaper option than hotels for most people. I know VW tax etc but a 5 year old California looks like it's about £50k. tax £400/service costs £500+/insurance £500+ and depreciation have got to add up to about £5 per year.
Unless it replaces a car you've got cost of capital (5%?) another 2.5k per year and we're up to £7500. Most of the time in the UK you're not going to be wild camping so you've still got to pay maybe £30+ a night for pitch with hookup. how much are you really going to use it, and how much is it really going to cost you per night.
You can probably give yourself a £10k a year budget for hotels/holiday cottages etc etc. and be away from home 90 days.
That's the equation I keep coming back to when I think about campers. What you lose is the option to go away at the last minute (but you can't do that with campsites most of the time) but you get a proper bed/toilet/shower.
Absolutely agree, but DAMN they'd be useful.. Although my depreciation would be a LOT more with 25,000 a year going on it.
Bit off topic, but.....
Re campervans..... We built out a brand new XLWB H3 Ducato to a high standard (I'm a carpenter and had a workshop at the time so that helped somewhat), with space for four bikes inside, enough insulation and heaters to survive an artic winter, enough water onboard that we can be truly off grid for two weeks at a time.
Total cost came in under 50,000€.
California size vans are a piss take. Essentially glorified glamping. Too small for two people. No storage space. Tiny load capacity. I say that as someone who owned a LWB T5 with a self built interior.
In three years we've covered just over 30,000km. 4tk of those were commuting around Munich the last five months.
You can build a decent overnight van with a few mod-cons for under 10k.
Bought our van 10 years ago when Abigale was racing and before the market went mad. Same vans and same year are still selling for what we paid for it.
I love been away in it.
Averaged 8000m a year in it. Mainly in Europe.
Got soaked today up the mountain and now relaxing with a cold beer whist everything drys
Since we've diverted into discussing vans....
There's no way a 5 year old California depreciates £5k per year. My LWB pro conversion ( didn't get a Cali as they're absolutely tiny) has dropped about £18k in the nineteen years I have owned it.
And yes alpin, I agree they are shit in comparison to bigger builds if you don't need to transport kids and use it for commuting
But FFS can people who are time served professional carpenters stop posting waffle about how little a van would cost if you used your years of hard earned experience and many weeks of hard labour to convert it.
I'm just in the throes of taking an annuity based on a £320k pot, and they've offered me a pension of ~£16.5k, which I'm quite happy with. Granted that's from a DC scheme not DB, but it's presumably similar. All the calcs ive looked at seem to suggest "Pension offer = 1/20th of fund value" or so, and I'm currently aged 62.
FFS can people who are time served professional carpenters stop posting waffle about how little a van would cost if you used your years of hard earned experience and many weeks of hard labour to convert it.
I'm flattered you think it only took a few weeks...😉
Friends have converted vans for way less and get splinters when they merely look at a piece of wood.
And if you're retired/retiring you've likely got the time to spend on a project like that.
End.
Is that inflation linked or not? 16.5k/yr in 20 years time at 2% pa (Gov target) is a little over 11k in real terms - pls check that out.
Yes, it is index-linked, and it's also a Joint Annuity, so Mrs Lawman would see 50% of it if I carked it first (although she's 11 years older than me, so that's relatively unlikely all things considered)
My grandparents all made it into their late 80s, my dad died a couple of weeks after his 91st, my mum's just turned 90 this spring. So on the whole we're quite a long-lived clan, and I'm hoping to maintain that particular family tradition
There's no way a 5 year old California depreciates £5k per year. My LWB pro conversion ( didn't get a Cali as they're absolutely tiny) has dropped about £18k in the nineteen years I have owned it.
the 5k included tax/service/insurance and looked about right comparing new prices to 5 year old vans. I know camper van prices are weird (and all van prices have been weird the last few years - our 2018 Caddy Maxi Life we bought a year old doesn't seem to have depreciated at all in that time) but surely service costs are going to increase even if depreciation slows down. But realistically how much is a 15 year old diesel van with 150k+ miles on it going to be worth in 2035 when most cars on the road are likely to be electric?
I'm genuinely interested in what the true cost per night is on a camper as I keep going back to thinking about one. how much do they cost to own and how many nights a year do people actually spend in them?
There's no way a 5 year old California depreciates £5k per year. My LWB pro conversion ( didn't get a Cali as they're absolutely tiny) has dropped about £18k in the nineteen years I have owned it.
the 5k included tax/service/insurance and looked about right comparing new prices to 5 year old vans. I know camper van prices are weird (and all van prices have been weird the last few years - our 2018 Caddy Maxi Life we bought a year old doesn't seem to have depreciated at all in that time) but surely service costs are going to increase even if depreciation slows down. But realistically how much is a 15 year old diesel van with 150k+ miles on it going to be worth in 2035 when most cars on the road are likely to be electric?
I'm genuinely interested in what the true cost per night is on a camper as I keep going back to thinking about one. how much do they cost to own and how many nights a year do people actually spend in them?
Considering a TravelLodge is about £30-50 a night, if you're just looking for somehwere to kip then a camper makes very little sense. But a camper is sometimes more convenient depending on location of where you are of course.
so back to the 'how much/size of pot' part of the topic. I get the feeling that we are often indoctrinated through our career paths that we need a very large pot to maintain a decent (subjective of course) existence post retirement, however real life experiences often seem to suggest that the £1M figure bandied about by pension advisors and the like is a pie in the sky for the majority and many are having a great time on half this amount, or in many cases less ?
Of course most people don't accumulate anywhere close to 1m during their working life - that's going to be a large proportion of their total pre-tax earnings. It's only become a thing due to people riding the house price bubble.
That's not to say it's impossible for people who have decent careers and not too extravagant lifestyles. When we lived in Japan we were saving rather more than half of our joint salaries and had a comfortable lifestyle. But it was an unusual situation (free housing was part of the deal).
Considering a TravelLodge is about £30-50 a night
FWIW I was just looking for somewhere cheap and decent (near Syston) and it seems more like £50-80. But perhaps I'm unlucky with the day/location.
Right back to the OP – my brother is in a very similar position – he owns his own home, no wife or dependents, and a significant pot (I don't know the actual amount, but I know it will be around the same). He's 53 and stopped working a year or so ago, although not officially retired. He says he may consider doing some IT consultancy work if he's interested in it, or perhaps work as a van driver or something similar (i.e., a job that requires minimal thinking). He is quite happy, he has enough to live on, and knows he'll have his state pension to fall back on too. He just spends his days walking/hiking or riding his motorbike.
Edit: I should also mention that he doesn't have expensive tastes – he doesn't holiday abroad (just has the odd week here or there somewhere within the UK), doesn't spend much on clothes, runs a 10-yr-old car and, other than his motorbike and walking, his only other 'luxury' expense is going to gigs – and those are usually at the cheaper end rather than the £100+ tickets for stadium gigs.
£36k is the magic number if your house is paid for and no debt/dependants. Part time work is key, winters can be long with short day light. Free days out still require transport of some description, you will drink a lot of coffee when out and about and lunch, beer etc. Three coffees a week is £500 a year, three beers is £700 a year and so on.
Bear in mind too that these nominal pots to retire on don't account for when you retire - 500k would give a very decent standard if you retire at 67 and have your (possibly 2x) state pensions - try retiring at 55 with the same amount, by the time your state pension kicks in your pot could be almost gone depending on whether you earn anything in the meantime and how much you spend.
£36k is the magic number if your house is paid for and no debt/dependants.
per person or for a couple? including state pensions? and you're saying working part time on top or to make it up to that?
Bear in mind too that these nominal pots to retire on don't account for when you retire - 500k would give a very decent standard if you retire at 67 and have your (possibly 2x) state pensions - try retiring at 55 with the same amount, by the time your state pension kicks in your pot could be almost gone depending on whether you earn anything in the meantime and how much you spend.
I think that's the thing.. If you want to quit work 'early' you'll need 'bridge' money such as ISAs or stocks and shares to see you through until the state (and hopefully private pensions and SIPPs) kick in.
And ideally mortgage free as well.
I'm 45 and have basically quit out of the rat race due to being mortgage free and getting a double whammy of inheritance from my dad and nan who both died within 4 years of each other...
I'm investing carefully and smartly at the moment but my private pensions are pretty meager, my NI contributions are pretty much full though.
I'm going to have to get a part time job in the next year or so.. I'm considering van driving or something that doesn't require thinking too much, as I quit my cooperate IT job through total burn out... And I'm not going back to that shit show.
I guess I'm lucky in a way, the timing of how all this happened, but I'd sooner have my family back.
We just have to play the cards we are dealt as best we can I guess.
ISAs or stocks and shares to see you through until the state (and hopefully private pensions and SIPPs)
Just to clarify (and I'm sure MattyFez meant this)...
"ISAs or stocks and shares" -> this isn't either/or: you can hold stocks and shares within an ISA (avoiding Capital Gains Tax and/or div tax depending on the holdings).
"until the state (and hopefully private pensions and SIPPs)" -> you can draw from SIPP at 55 (changing to 57 in a few years). Private pensions, for at least defined benefit (final salary) depends on the schema rules. e.g. often 60.
Bear in mind too that these nominal pots to retire on don't account for when you retire - 500k would give a very decent standard if you retire at 67 and have your (possibly 2x) state pensions
yes, in my musings, I’d likely be halfway between, probs 60, and wife would still be working part time.
Personally, I am in a tricky situation as my wife is nine years younger than me, so when I hit 67 (and I really don't want to carry on working), we really wouldn't be able to live off my pensions unless we downsize considerably and/or get an inheritance (I know it is horrible to think in these terms, but it is our reality). Of course, any inheritance could be wiped out by care home costs if things were to go that way.
I'm investing carefully and smartly at the moment but my private pensions are pretty meager,
Even when not working I think you can still pay a small amount into a SIPP and get credited 20% tax relief.
I'm mulling this all over at the moment.
Currently 53 but had enough of the corporate life so planning on binning it all in at 55.
Should have c£300k in pension pot so plan to take tax free element and live off that for 6 months and will then get part time job (c£20k pa as delivery driver or something like that) and supplement that with drawdowns from pension pot until I reach 60. At that point I will be able to collect £20k pa for life from my other pension.
Hope to fully stop working at 60 and that I'll still have enough in pot/savings to supplement the £20k until I get my state pension at 67. If not, can supplement by downsizing of my house which is mortgage free.
Does that all sound broadly doable?!?!
ISAs or stocks and shares to see you through until the state (and hopefully private pensions and SIPPs)
Just to clarify (and I'm sure MattyFez meant this)...
"ISAs or stocks and shares" -> this isn't either/or: you can hold stocks and shares within an ISA (avoiding Capital Gains Tax and/or div tax depending on the holdings).
"until the state (and hopefully private pensions and SIPPs)" -> you can draw from SIPP at 55 (changing to 57 in a few years). Private pensions, for at least defined benefit (final salary) depends on the schema rules. e.g. often 60.
Yes sorry that's what I meant... always max out your tax free stuff within ISA or SIPP before anything else...theres no resaon not to.
How much money you put into either is very situational.
I'm mulling this all over at the moment.
Currently 53 but had enough of the corporate life so planning on binning it all in at 55.
Should have c£300k in pension pot so plan to take tax free element and live off that for 6 months and will then get part time job (c£20k pa as delivery driver or something like that) and supplement that with drawdowns from pension pot until I reach 60. At that point I will be able to collect £20k pa for life from my other pension.
Hope to fully stop working at 60 and that I'll still have enough in pot/savings to supplement the £20k until I get my state pension at 67. If not, can supplement by downsizing of my house which is mortgage free.
Does that all sound broadly doable?!?!
Yes IMO / IME
£36k is the magic number if your house is paid for and no debt/dependants
Funnily enough we had an appointment with a financial advisor last week, agreed that £36k will do us very nicely, and since state pensions should cover 2/3rds of that, are probably on track; hopefully even to retire before 67.
Considering that when mrsDoris turned 41 we were still living in a one bed rental on a main road in a slightly stabby area, and retirement was looking doubtful at best, we came out of that meeting on cloud nine.
I resurrected this thread last week to get some updates and advice on how people were getting on with early retirement and sensible life costs vs fund pots not at the panacea £1M or the like.
some great posts, all very helpful as I now have a few months to make some decisions, coming out of a well payed exec job, and considering next steps at the end of the summer. I could pursue a range of options, from staying in same field, either more of the same, or something quite different, a few days a week, or alternatively a firm tightening of the belts and not work.
it is very useful reading about other people’s experiences, much appreciated.
I quit my career New Year 2024 and left at the end of April. I have a half time job that I enjoy and have continued with. In a recent change my hours have now increased by another day and I got a pay rise. All this means that I am not withdrawing from the savings/pension pot at the moment which can only be a good thing. I like the job, its new and interesting with low stress levels the majority of the time. Ideally I think I'd to do another 2 years of it when I will be 57.
I have not regretted quitting for a second and every week being effectively a long weekend has given me insight into what to do with more time off, rather than going from a stressful full time job to nothing. Its worked for me
get part time job (c£20k pa as delivery driver or something like that)
Thats pretty much full time if you want to take home £20k or gross £20k. The problem is low level work at or near NMW is available , but its also over subscribed as its accessable to alot of people. Our european cousins have Evri / Amazon delivery jobs as they are low skilled , low paid , long hours but for them its a gold mine.
What you need is something north of £14/hr , for say 3 days a week. This will gross around £15k p.a. , will still feel like being retired and free up most of your week . Alot harder to find unless you can do advanced diy. / handyman suff. Think £30 ph to build flat pack furniture is the going rate down south. Similar for fitting a new tap , painting a wall , hanging a gate , changing a light fitting , swapping a bottle trap.
@sprootlet - possibly cheeky but what line of work have you got into? Quitting early and finding something to earn "just enough" to top up a reduced pension is very attractive at the moment (more so because I'm halfway through a fortnight's leave!)
Though I'm not sure the marriage could survive that decision, for added complication.
The ideal is to struggle on at work for 3 years and 10 months till I'm 60.
I'm 53 and working 4 days a week, loving life and aiming for around 60 but this might depend on what our boy is doing as he will be 20 at that point.
My question is, do people sometimes end up restricting their life in retirement a bit, due to trying to pay as little tax as possible?
I also noted with sadness rereading the thread, that Tj's post shows in realtime that we really can't wait and need to get on with doing the things we want to do ASAP. Love that you've got up and got with achieving those plans Tj.
Yes, I don't understand this 'just be a delivery driver' semi-retirement option.
Many delivery drivers are under extreme time pressure, driving generally isn't something I find that pleasant these days, as I get older my low light vision is getting poor so winter I wouldn't enjoy. There doesn't seem to be any old giffers doing it near me.
I think I would rather ring up orders in Screwfix.
Being a delivery driver isn't the only option obviously, but I've got a couple of "retired" mates doing 2-3 days a week and enjoying it. Gets them out, they are happy driving and physically fit, 2-3 days still leaves them 4-5 days for "fun". One is in his late 60s now, but looks 10 years younger.
For those that look the leap in the last few years with pots ranging up to 500k or so, how is it working out ? For you, for your partner if there is one ?
Well as you will know my plans did not exactly work out 🙂 I guess what I have ended up with is a wee bit more than the £500 000 mark as a now 64 yr old single man. I have a small work pension plus a couple of even smaller widowers pensions and a rental flat. The nominal value of the lot together is a bit more than that mark. I have an total income of around £1300 pcm which I can live on quite happily ( no mortgage). Some of the money is in cash which of course gives me a huge safety net and can be spent ie thats what funded my recent trip to Australia and NZ. I understand its a very privileged position to be in.
I have always lived a relatively frugal lifestyle indeed to the point I have issues spending money sometimes. A pound is a prisoner and all that 🙂
One of the key things for me is that I am time rich so that I can do things more cheaply as it doesn't matter if I spend a few days setting stuff up rather than paying someone to do it ie the trips I have done I have spent some time on those trips organising things like my bike in NZ and my car in Aus. When you have plenty of time it does not matter if you spend a few days sorting stuff out in a way that you couldn't if you only had two weeks. For example the car in Aus took a few days at each end of the trip to organise. I wouldn't have wanted to spend that time if I was time limited.
So my experience is that is perfectly possible to have a decent retirement on that sort of money so long as you do not have expensive tastes and as long as some of the money is easily accessible as cash. Without that accessible cash money the antipodean trip would not have been possible but everything else I have done would all just about fit in my monthly income.
If things had gone as planned then the main difference would have been that we would have needed to let the flat as a holiday let to replenish funds when on long trips as we would have had a slightly bigger income but much less cash on hand.
I have zero regrets about retiring on what to many would seem to think inadequate money. I just simply cut my cloth accordingly. I am aware tho that having cash on hand has created a huge safety net for me. I still need to be careful with money
So thats my experience of retiring.
I firmly believe that no one ever said on their deathbed "I wish I had worked more"
I also noted with sadness rereading the thread, that Tj's post shows in realtime that we really can't wait and need to get on with doing the things we want to do ASAP. Love that you've got up and got with achieving those plans Tj.
thats very kind and that is very much the lesson. Two of Julies family have retired early because of what happened to her and the realignment of their priorities that resulted
Final thought. I think the pattern of a "cliff edge" retirement is going to be less common ie working full time then stopping completely. I think it will become much more common to have a slide into retirement as Scotroutes and others have done or are intending to do ie going from full time high pressure work to part time lower pressure work for a transitional few years. I know several folk who are doing this
^^ tj, I think that is exactly what I may end up doing. I’ll be 60 in February.
I’d like to find the right part time lower pressure work for a start after the summer. Due to my circumstances in this tax year I’ll be donating the majority of anything earned from that work to the inland revenue, but I don’t think hanging off to save tax would be wise, or good for my head. Then come next April I can hopefully use what I earn in that role, with low taxation, to minimise any pension drawdown for a bit.
so I have a few months to identify and hopefully secure that job !
Care homes are always looking for staff.
I have a 92yr old mum with mild dementia, living on her own and with a home care package, who I spend a fair amount of time around (she lives 35 min drive away and I’m over a couple of times a week).
She will likely be in a care home later this year, no way am I going to be working in one !
Two of Julies family have retired early because of what happened to her and the realignment of their priorities that resulted
Our attitude to time vs money changed a bit after Mrs S had the Big C. An "unaffordable" trip to Australia for her suddenly didn't seem so expensive 😁
Whether it was just age or whether it was some lingering, post-cancer thing she also found she couldn't physically continue in her care role, reduced to half hours and then retired completely once I'd reached State Pension age. We're now a bit over that £36k pa figure mentioned above (jointly) and managing just fine.
Interesting to read scotroutes, appreciated, and also pleasantly surprised that the household lives well for a relatively ok amount, I think I was thinking that 40 odd k between us would be very tight, I need to do the maths, especially in relation to tax efficiency.
mrs ic is a bit younger and works 3 short days, earning a tax efficient just under 20k gross, with no plans to retire for a good few years.
As I was "contracted out" for many years, I don't get the full state pension. Early retirement meant my work pension pot was smaller than it would have been and has to last longer. With Mrs S now getting her early pension too, we manage ok and should hopefully be a wee bit better off in a few years when her State Pension kicks in too.
£40 000 for a couple is plenty if you do not have expensive tastes. Sure if you want month long all inclusive 5star holidays it is not but for a modest lifestyle its loads.
I’m not sure if the meaning here of 36k or 40k is gross or net ?
quite a big difference depending whether one person or 2 bringing it in and tax setup
I’m not sure if the meaning here of 36k or 40k is gross or net ?
quite a big difference depending whether one person or 2 bringing it in and tax setup
Both my wife and I have retired, me last year at 62. I have a few pensions from various jobs, I cashed one in, taking £25k lump sum, and the rest (about £120k) drawing down monthly to last until the state pension kicks in. My wife is doing roughly the same, so monthly income is about £3k. We also have savings for capital items if needed. (We're mortgage free.)
£36k is plenty for us, we don't do holidays and rarely go out to eat, neither of us drink. Always a good idea to track spending over a few years to be sure what you need.
My question is, do people sometimes end up restricting their life in retirement a bit, due to trying to pay as little tax as possible
Can you elaborate a bit? Not sure what you're referring to.
@thegeneralist its just that every video I watch regarding retirement focuses heavily on paying as little tax as possible, which I accept is sensible. I just wondered if some people are missing out on things by not having enough money each year just to avoid paying more tax.
Obviously I put this in the 'nice problems to have' category 🙂
I figure that if I have enough money coming in to have to pay tax, I probably should.
Likewise, if I die having failed to spend enough on bikes and there is IHT due on my estate, then it probably should be paid.
On the whole, I'm in favour of having the NHS, roads, railways, ambulances, fire engines, police, people to empty my bins, and all the other public goods. So I'm prepared to pay for them.
Mugboo,
Yeah I wonder. Most of the stuff I've seen/done to avoid paying more tax is around the pre retirement phase, and hence has the side effect of giving one more money in retirement than you would otherwise have had. Eg putting everything above the high rate tax band in the pension.
I suppose you could take less money from your pot in retirement if you really wanted to pay less tax, but since you'd then likely die with it unspent them it would seem a perverse thing to do. ( Unless you're planning to die in the next two years before the tax on pension inheritance comes in )
My question is, do people sometimes end up restricting their life in retirement a bit, due to trying to pay as little tax as possible
Can you elaborate a bit? Not sure what you're referring to.
My take on this is that if you have various sorts of income/savings/investment, and you can choose which element to use and when, it can make sense to reduce income in one tax year or defer an expense until the following tax year.
Eg, if you need funds to replace a car, if you pull out the money this tax year, you may pay more tax but if you can hang on a few weeks/months and pull out the funds in the next tax year, it may be beneficial. So, in that sense, you are imposing a restriction...
Whereas Elon Musk can just buy whatever he wants, whenever he wants and doesn't care about a minor tax inconvenience...
Well this week is a milestone for me. I was intending retiring in May at 55 but work were desperate to keep me so with effect 1st July my new contract requires me to work 200 hours a quarter, essentially equivalent to three days a week, but in blocks and days as I see fit. Salary is three/fifths, so a lot more than I was going to draw down. It was a no brainer to accept (for now), but I’m not counting my chickens too soon, as the risk is they want to see five part days, five days a week. Even if I stick this out only for a couple of years, the pot will grow.
So I need to plan something for Tuesday on my first “retirement” day off that will feel like I’m swinging the lead a bit! 🤣
I’m not sure if the meaning here of 36k or 40k is gross or net ?
I just did the sums for you. My pensions add up to £37k, net. That's from last November. Prior to that it was about £27k net. We're not £10k pa better off though as Mrs S has now stopped working.
If I was hazarding a guess, I'd say that our expenditure is less than yours (currently at least).
I'm no where near your level of savings.
However, I've an ill OH who has just retired due to ill health and on full disability , with a limited life span ahead. I'm also now independent of supporting my kids, in fact they are paying us rent now. 😎. I'm 51. I've seen a few friends die early, well before retirement.
I've just taken on a promotion, and if I'm honest I can't see myself going any higher than I now am. And can't see i will do this job forever. But it is well paid.
So my plan is to do this well paid job for 5 years, and use that time to create opportunities where I can work part time in future.
I've sat down with OH and discussed this the last few days. I/we can't afford to just stop now, but we're making plans so I don't work until 67. I'm aiming for 56/57 to slow down to part time and enjoy life.
In your position I would sit down, write a plan, bounce it off mates, and then crack on and go for more rides/walk the Munro's etc.
When you've got your nose to the grindstone, IME money becomes more of a focus, to distract you from all the cr@p and stress of life in a corporate world. You can justify dealing with the shit when you can at least buy yourself nice stuff and do fun things. 7 years later, having taken redundancy at 53 hopefully I have a different perspective - Mrs DB and I can get by on less than half the income we had previously - fortunately, no kids or mortgage either. I'm still working part-time and we have other savings and investments should we get an unexpected expense. My private pensions at 65 will provide a modest income and the state pension will be a bonus, but pretty good in comparison to some of the people I know who struggle week to week and have no savings. Having a cancer diagnosis earlier this year has made me think about things a bit more - fortunately it's relatively benign and a recent blood tests were encouraging and if it came to it, we have enough savings to pay for private treatment should I need it. My advise to anyone thinking about it, do a few sums and if it looks half-possible, go for it. The precious commodities here are time and health, not money.
Without wanting to get too controversial, I think it's important to remember that some folk posting (and reading) this thread won't have a high level of support from their partner. When I was surprisingly given the chance of early retirement I had a weekend to make up my mind. My wife told me to "go for it and we'll work it out later". The posting history of some forum members shows that they are struggling to maintain the lifestyle their partners would like to have 😂
That sounds really excellent and supportive.
Mine said the opposite.
Scotroutes - as a barber I hear this everyday, so many people still having to work too hard to pay for yet another new sofa or kitchen. Weekends devoted to shopping centres, etc. One big and very expensive holiday a year which has to be somewhere really hot with a beach to lay around on. 2 nice cars, both on leases and as soon as the kid passes their test a a blingy VW is a must. We are all different, I guess but I do wonder if they ever sit down and ask themselves if any of this stuff is worth all that stress.
I'm lucky, I found a partner that enjoys slumming, getting dirty and searching for a bargain 🙂
I'm lucky, I found a partner that enjoys slumming, getting dirty
Have they got a sister? Asking for a friend
Whereas Elon Musk can just buy whatever he wants, whenever he wants and doesn't care about a minor tax inconvenience...
I think you’d be surprised at how little (income) tax the very rich pay. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
I was intending retiring in May at 55 but work were desperate to keep me...
Equivalent to three days a week
Salary is three/fifths,
If they were desperate, couldn't you have rinsed them for an improved wage?
For those with a partner that enjoys shopping, I can highly recommend moving to a Scottish island - a 2 hour journey by road and ferry each way to go ‘shopping’ dulls any desire for retail therapy. Mrs DB was so traumatised by her one visit to IKEA that she’ll never darken their doors again 😳
https://pca.st/episode/5bc9980d-8c77-4110-a0f3-bc555433d882
And for those of us with kids and grandkids.
No, because they are fair with me and I’ll be fair back. What a concept. Not rinsing an employer.
That sounds really excellent and supportive.
Mine said the opposite.
I remember on another retirement thread you were advocating for working beyond the point where you can afford early retirement in order to give your kids a leg up on the housing ladder. It was a good post and it genuinely made me think about my own, possibly selfish, motivation for planning my escape at the earliest opportunity. Did your wife hack your account that day? 😉
I think you’d be surprised at how little (income) tax the very rich pay.
Thanks for that link. Having read it, I'm frustrated, rather than surprised!
I think you’d be surprised at how little (income) tax the very rich pay.
As much as I dislike the idea that the rich pay little tax, that's a pretty poor article & has nothing to do with income tax, just because someone's wealth due to share or property ownership has increased, unless & until that wealth is cashed in it's not actual income is it?
unless & until that wealth is cashed in it's not actual income is it?
Isn't the tight definition of "income" not the point?
The ultra-wealthy have seen their net worth balloon dramatically, yet don't "contribute" to the overall running costs of a country in anyway relative to that wealth (or the average citizen).
It's a thorny subject for sure (and I don't have an answer) but being able to leverage huge loans against their theoretical worth to "live off", and then then offsetting interest (!), [amongst many other techniques] is all legal but questionable from a moral point of view. And only possible because "corrupt" politicians either won't tackle the wealth inequality or actively create massive loopholes for exploitation...
Something in the water! So I was informed of my redundancy status last Monday after 19 years working for my current employer and 32 years in the oil and gas sector. I'm currently 52 and turn 53 just before I leave my job in October.
After running all my numbers and with the full support of my wife who will continue working for 3 years I plan to take early retirement.
I've not enjoyed work for the last few years, a 2017 cancer diagnosis and subsequent successful treatment thereof has turned this into an exciting opportunity which I look forward to immensely.
For me numbers wise I expect a personal income of 2.5k per month net to be more than adequate with no mortgage and topped up by the state pension once 67. We do still have a 13 year old daughter to fund schooling and university but have planned for that already.
Exciting times!
Isn't the tight definition of "income" not the point?
And then you go on about wealthy people using their wealth to extract money by other means - that's what might need to be tackled, not got a problem with a definition of income per se & again I'd say that article is disingenuous at best.
Did your wife hack your account that day? 😉
,😆
Nah, that was indeed my view/ plan. The problem is that hers goes far further! My sums budgeted about 50 per kid to get them through Uni, then perhaps another hundred each for housing etc, plus anything that might come from their Grandparents (ie whatever their grandparents give us gets directly redirected).
She also wanted to pay off their student loans and chuck various other things their way which TBH are best left untyped... From what I could understand it basically amounted to them being able to retire before they'd actually started work....🤣
All sounds totally reasonable, especially if you say the numbers really fast and miss off lots of zeroes.
I had to explain to one of ours today why she might not be able to afford a 600k house in London on 45k/year salary. I jokingingly signed off saying 'sorry I don't have a spare 250k for you'. She fired straight back 'what about 100?' - it wasn't in jest. If you don't ask...
As others have recently noted, I and my family are not quite on the same financial page.
They are keen for me to keep them in the manner in which they would like to remain, particularly the many mini-XPS's who are not quite yet off the payroll.
I'm also stuck in the "one more year" loop, where I am being offered ridiculous amounts to work part time, do consultancy etc.
I can earn in a day what mrs XPS earns in a month as a Teaching Assistant, so it seems a little churlish of me to put my feet up just yet.
We've not discussed house deposits (yet), but even their tertiary education choices and costs are pretty hefty, and they are not headed into corporate high-paying roles any time soon (/never).
