Early retirement… who did it?

[AnilS]

So true
And how often do you see obese couples on TV with iPhones on the table and cigarettes in the hand saying....I can't afford to cloth the kids

It'll be because it's someone else's fault or problem.

 

[Johnjo]

The problem with these retirement tables is that they don't resonate with most people. People need tangible retirement income and tangible expenses for it to make sense.

Joe

That’s the best laugh I’ve had in ages, thanks!

 

[clivem2]

Another way to view the "comfortable" £50k net pension figure is that as an employee to earn this amount you'd need to be on a salary of around £75k. Not so many people manage this when working, let alone in retirement.

 

[TheDecameron]

What happens for those who reach retirement age in prison? Do you still get the state pension or are there deductions for board and lodging?

 

[paulfromcamden]

So true
And how often do you see obese couples on TV with iPhones on the table and cigarettes in the hand saying....I can't afford to cloth the kids

I'm sure that's true in some cases. On the other hand it's increasingly hard to function without being online and if you're really skint a £50 smartphone on a cheap monthly tariff lets you do that more cheaply than a laptop and broadband. It's the same reason you see rough sleepers with smartphones.

 

[Ponty]

Yes and no. I agree that it's super important to start early but I know folk who even in middle age are, through no real fault of their own, struggling to get by on minimum wage zero hours contracts. Pensions just aren't even on the radar when financial planning means working out how you're going to pay the rent this month.

I have reasonable, if modest, pension provision - but it's more through luck than because of the choices I made.

The point I’m making is that with a bit of foresight and sacrifice, those making relatively small investments now for their children / grandchildren could secure those kids retirements due to 60+ years of growth and compounding. I believe an awful lot of people could do this if they really wanted to. It’s now so much easier to do than even 10 years ago. Maybe once their time comes state pensions will be means tested anyway and if more had decent private provision, there could be more for those who, for whatever reason, have no pension pot.

 

[Barrymagrec]

What happens for those who reach retirement age in prison? Do you still get the state pension or are there deductions for board and lodging?

You can claim for a 24 hour attendance allowance.

 

[Bob McC]

What happens for those who reach retirement age in prison? Do you still get the state pension or are there deductions for board and lodging?

State pension is not payable to those in prison.

 

[droodzilla]

It seems I can look forward to a moderate standard of living in my retirement. My needs are moderate too, so that's fine.

Glad I kicked the hi-fi habit a long time ago.

It helps that I'll no longer have a mortgage to pay by the time I retire. Many in future will not be so fortunate, and will have to meet significant housing costs from their retirement income. That's a potentially huge issue.

 

[Ponty]

It helps that I'll no longer have a mortgage to pay by the time I retire. Many in future will not be so fortunate, and will have to meet significant housing costs from their retirement income. That's a potentially huge issue.

It’s potentially a massive issue. I know many don’t like the idea of it, but I can’t see how the state pension won’t be means tested in future. It will mean more going to those who have to pay rent in retirement and nothing for those over a certain level of net worth.

 

[bor]

The problem with these retirement tables is that they don't resonate with most people. People need tangible retirement income and tangible expenses for it to make sense.
Joe

Thanks Joe, that's informative.

But what stands can we afford ?

Minimum: Everything balanced on large cardboard box.
Moderate: Something nice from IKEA
Comfortable: 100 Levels of MANA (glass not chipboard)

 

[raysablade]

Another way to view the "comfortable" £50k net pension figure is that as an employee to earn this amount you'd need to be on a salary of around £75k. Not so many people manage this when working, let alone in retirement.

Pension income behaves very differently to Salary. It is not subject to NICs (13% rising to 15% soon) or pension Contributions (6% for me).

I’ve also noticed that since I partially retired my union subs have reduced in line with my salary and because my payroll giving is a percentage of salary, that went down too.

Interesting in terms of the survey quoted above that my wife and I have long targeted a post tax retirement income of £50000 as the point that we can fully stop work. For basic rate taxpayers with an full allowance each, you don’t need much more than a combined £50000 to have that left.

 

[clivem2]

Pension income behaves very differently to Salary. It is not subject to NICs (13% rising to 15% soon) or pension Contributions (6% for me).

I’ve also noticed that since I partially retired my union subs have reduced in line with my salary and because my payroll giving is a percentage of salary, that went down too.

Interesting in terms of the survey quoted above that my wife and I have long targeted a post tax retirement income of £50000 as the point that we can fully stop work. For basic rate taxpayers with an full allowance each, you don’t need much more than a combined £50000 to have that left.

Yes, with careful use of drawdown / TFC you'd likely pay no tax for several years.

The point about £75k salary equivalency was that it's interesting to show what people would earn when employed for a similar standard of living to £50k net of tax pension.

 

[mandryka]

Interesting in terms of the survey quoted above that my wife and I have long targeted a post tax retirement income of £50000 as the point that we can fully stop work. For basic rate taxpayers with an full allowance each, you don’t need much more than a combined £50000 to have that left.

But how are you going to achieve £50K p.a. index linked?

 

[hifinutt]

It seems I can look forward to a moderate standard of living in my retirement. My needs are moderate too, so that's fine.

Glad I kicked the hi-fi habit a long time ago.

It helps that I'll no longer have a mortgage to pay by the time I retire. Many in future will not be so fortunate, and will have to meet significant housing costs from their retirement income. That's a potentially huge issue.

I should learn from you , retired 6 years ago and still taking out mortgages although it gets harder and harder to do !!

 

[Joe P]

for,

Comfortable: 100 Levels of MANA (glass not chipboard)

Ah crap, I can't believe I forgot to include funds for Mana.

Just a rough calculation, but 100 phases would necessitate major renovations in the listening / farting* room. I mean, you'd have to excavate into the Earth's crust to have the turntable at arm level when cueing, or build a sixth-floor addition on the house, depending on which way you want to go.

I'll need to rejig my figures but if my understanding is correct, at phase 100 the hi-fi itself becomes irrelevant. It's a bit like when you buy a really, really nice interconnect. If the wire is that good are components even needed?

Joe

* Let's be honest here.

 

[raysablade]

But how are you going to achieve £50K p.a. index linked?

It’s a joy of the Principle Civil Service Pension Scheme of which we are both members.
And the New Sate Pension to which we will be entitled at 67.

 

[mandryka]

It’s a joy of the Principle Civil Service Pension Scheme of which we are both members.
And the New Sate Pension to which we will be entitled at 67.

Jammy

 

[Yank]

State pension is not payable to those in prison.

What if they're released, at or above the normal age of eligibility?

 

[Amber Audio]

Some interesting stuff online about FIRE (financial independence retire early) planning, at its most basic the idea is save 25xAnnual Expenses into a Pot and then draw down on it at 4%. It’s worth doing a free calc or two just to get an idea of annual expenses/budget if you haven't one already.

https://firecalc.com/

https://www.thetimes.co.uk/money-mentor/article/how-to-retire-early-the-fire-method/