# Retiring early – How did you do it ?



## DeepThinker

I’m early 50s, married with teenagers and we have been working (both private sector) full time for the last 28-30 years.

We’ve reached a stage in our lives where our perspective on life is changing. The deaths of parents, cousins, friends etc. reminds you of the short lives which we lead. The kids are growing up and in 5–10 years time they will have (hopefully) moved out to start their adult lives. Mortgage will be cleared in 2-3 years. We are paying into our (DC) pensions and making AVCs now and are in a decent space fund-value wise.

Thoughts are turning to retiring earlier than 65- 68 from full time work and enjoying free time. We are leading active and healthy lifestyles. I am starting to input the value of our retirement funds into pension/compound interest calculators online and estimating where we might be in 10 years time. Not sure that is realistic as it is not reflecting the reduced risk (i.e. lifestyling) which is a feature of our schemes. I have also looked at FIRE blogs etc. online but that is not for us. We don’t want to “extreme save” to get there, we want to have a life on the way too. I imagine this is a very common perspective at my life stage. I am targeting age 60 to cease full time work. So my question is, if you have already retired early:

How did you do it?
Looking back, what advice would you give a couple in their early 50s who want to retire age 60?
What would you do and equally what would you NOT do?
What are the pitfalls to avoid?
Many thanks for taking the time to read this. I hope this creates an interesting and informative discussion on the issue.

DT


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## Conan

Most people (I believe) tend to focus on Finances when planning for retirement (at whatever age). “Will we have enough to do the things we want to do?”
And whilst Finances are important, there is more to retirement than just the money. So
- what do you see yourself doing in retirement?
- have you got a bucket list?
- where will your challenges/motivation come from in retirement?
- what will be your purpose/ priorities in retirement?
- what interests and hobbies will you have?

There is far more to retirement than no longer working full time. For some people, the loss of routine, status, challenge etc can be the biggest hurdle in moving from full time work to full time retirement. So don’t under estimate the change in lifestyle- what are you going to do all day? 
So my tuppence-worth is:
- yes put some thought into building up the pension fund (and whatever other assets you might access when you retire)
- begin to consider what the change in lifestyle will entail
- what are the cost implications (budgeting - income and expenditure)
- how might you continue to use your skills and talents in retirement (still giving something back, still making a contribution)
Worth bearing in mind that that a male retiring at age 60 has an average life expectancy of some 25 years and women about 4 years longer. So the odds are that for the first 15 years plus your health won’t be a major inhibitor from doing most of the things that you reasonably want to do. 
 Go for it, but plan.


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## noproblem

"Looking back, what advice would you give a couple in their early 50s who want to retire age 60? "

You have teenage children, don't know how many, you guys are in your 50's and want to retire in around 10 years. First of all and going on experience, if you think the so called kids will be gone and you're free of them then I STRONGLY advise you to think again and I've no intention of going into the why's of it, you're going to learn that one yourself. The other important thing to remember is God loves to hear about someone with a plan around 10 years away, it's a sure way of getting a laugh out of him. (Think about that one)
No harm at all in planning for the future, but remember to enjoy life as it is now. It also happens to be the time in peoples lives when the old mechanical and engine trouble starts to kick in so make your health your wealth. Going  along as you are now is fine, if it's to be, it will happen but between now and 60'ish an awful lot can go in directions no one can know and without actual figures it's not really possible to say where you are financially. Just my opinion by the way.


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## Slim

How did you do it?
Looking back, what advice would you give a couple in their early 50s who want to retire age 60?
What would you do and equally what would you NOT do?
What are the pitfalls to avoid?
It's exciting to look forward to handing in the notice and telling everybody that you are retiring, always adding 'early' to the phrase. I did it in 2018. In order of your questions;
1. Kids through college and mortgage paid off, though not particularly early.
2. Set your pensions to max if you can. Don't deprive yourselves too much but don't waste money either. It is surprisingly cheap to live if you don't eat out much and travel outside peak times. Get any major works needed at the house raken care of in the meantime unless you really enjoy DIY(known as Damage it Yourself in our house).
3. I would not have invested in shares and property. Hindsight and all that. My other half did not retire at the time so only one of us was free to travel etc. Judge Judy gets old very fast. Have something to do to if you're not travelling the world.  That also gets less appealing after a while.
4. Don't rely on the pals at work remaining great pals. You will be on different paths.  You may feel a pang of loneliness as you pass the building of your former employer but remember, you no longer have to deal with AHs in there. You may feel a bit disconnected now that you're no longer the 'man/woman who works in or runs whatsitsname'. Some internal questioning may ensue.

Remember,  your whole working life has been pointing towards leaving it so it is a natural part of a working life but it does not mean you are dying any sooner or earlier. If there are any retirement planning courses at work, do them now, not at 59 years old.
Best of luck.
Slim.

Overall,  it's great. I took on a part time gig and OH has now retired but we're still not free to travel for another year yet, though we will squeeze in 3 or 4 holidays this year.


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## Gordon Gekko

I think that there’s a lot to be said for trying to create a sensible glide path towards retirement. For example, looking to move to a four day week and then to a three day week in the final years.


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## Paul O Mahoney

Great thread, in similar situation. Hopefully the replys are plenty as it's the lifestyle changes for her is going to be the issue for us I think.
 I got sick and haven't worked full time in years, I occupy my day, gardening, cooking walking the dog, having a pint on occasion. She travels internationally now and is loving it at 55 she has not no intention to stop, eventhough we are planning financially pension funds are growing quickly  
I was hoping she'd pack in at 60 and then consult and lecture,  she's well known in her field globally, but her employers pension contributions are very generous and she wants to maximize that. Her mother is 90 and longevity is a family trait .
It will be interesting so read the replies and hear different views


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## Leper

I would have difficulty in bettering Slim's post above. He points you in the direction why you should retire and I feel I can't add to his post. I'll do the opposite. Here are reasons as to why you should not retire early. I should know I did it twice. At age 48 (i)I retired from one public service body leaving on a Friday lunchtime and (ii) started in another public service body two days later (Monday) and (iii) 19 years later retired again. (age 65).

Reasons Not to Retire at Anytime:-
(a) You've been so loyal to your company that nobody can replace you. If you don't show up each morning the place will close down by lunch-time.
(b) You love your work colleagues. There's nobody like them and they stood shoulder-to-shoulder with you every day during your working life.
(c) Your bank account has accelerated and you never thought you'd have so much capital. You wish your kids to have all this and progressively more the more you work. Of course, they'll appreciate this during your lifetime and this will make you feel good. Good on Ya, Dad!
(d) You'll have to spend more time with your wife/husband. Perish the thought! - Where can I get some viagra?
(e) You'll be spending more time with your grandchildren. Can I get Prozac in the same place?
(f) Forget about the Beamer - Perish the thought! I'm always a boy with a toy!
(g) The chance of spending 6 weeks or more of winter/spring in the south of Spain. What would I be doing there?
(h) You love the rat-race. You have not yet realised that you can't have a rat-race without rats.
(i) You can't stay in bed beyond 6.30am.
(j) You've too much time to yourself and you'll never get over this. 
(k) You'll be asked by many to get involved in processes of "Giving Something Back." You never took, so why should you give something back?
(l) You're never going to die.

If anybody looking in qualifies for (a) to (l) you are dead man walking. Get out fast!


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## DeeKie

Roughly how much per year do people budget for college years for children? Assuming that they will be living at home?


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## Paul O Mahoney

DeeKie said:


> Roughly how much per year do people budget for college years for children? Assuming that they will be living at home?


Well we have 2 its 6k a year total for registration.  They work part time for " pocket money " but we cover the rest so I'd budget €5k each if they aren't working part time €4k if they manage to get a few bob .

Now our daughter is hoping to do a Erasmus this year, she wants to go to the University of Sydney,  why ? God knows but if that happens it'll be significant,  even if she decides to do one in Europe its 10k min.

Not all do that of course but as another poster said it can be bottomless or at least feel that way.


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## Paul O Mahoney

Paul O Mahoney said:


> Well we have 2 its 6k a year total for registration.  They work part time for " pocket money " but we cover the rest so I'd budget €5k each if they aren't working part time €4k if they manage to get a few bob .
> 
> Now our daughter is hoping to do a Erasmus this year, she wants to go to the University of Sydney,  why ? God knows but if that happens it'll be significant,  even if she decides to do one in Europe its 10k min.
> 
> Not all do that of course but as another poster said it can be bottomless or at least feel that way.


Sorry should have said ....that's extra onto who much they already cost, clothes,  teeth,  etc.


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## Andrew365

Paul O Mahoney said:


> Great thread, in similar situation. Hopefully the replys are plenty as it's the lifestyle changes for her is going to be the issue for us I think.
> I got sick and haven't worked full time in years, I occupy my day, gardening, cooking walking the dog, having a pint on occasion. She travels internationally now and is loving it at 55 she has not no intention to stop, eventhough we are planning financially pension funds are growing quickly
> I was hoping she'd pack in at 60 and then consult and lecture,  she's well known in her field globally, but her employers pension contributions are very generous and she wants to maximize that. Her mother is 90 and longevity is a family trait .
> It will be interesting so read the replies and hear different views



If she loves it, why quit? If you are in a lucky position to love your job, then you shouldn't be forced to retire at the retirement age. It is just the case that not many people are lucky enough to truely love their job. 

I would say Lecturing could be even more of a time commitment than her regular job.


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## Paul O Mahoney

Andrew365 said:


> If she loves it, why quit? If you are in a lucky position to love your job, then you shouldn't be forced to retire at the retirement age. It is just the case that not many people are lucky enough to truely love their job.
> 
> I would say Lecturing could be even more of a time commitment than her regular job.


I'm not holding a gun to her head, and as we said she loves it, But there is always the opposite argument that life is for living, which she pines for on occasion too.


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## noproblem

Paul O Mahoney
 "Her mother is 90 and longevity is a family trait."

Just remember that it may  be true for only one half of the Mum/Dad scenario. Always remember my mother saying her mother told her there was no shafóid (daftness) in the family so she need never worry about that. Lo and behold, her (Mum's) father died from it


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## DeeKie

Paul O Mahoney said:


> Well we have 2 its 6k a year total for registration.  They work part time for " pocket money " but we cover the rest so I'd budget €5k each if they aren't working part time €4k if they manage to get a few bob .
> 
> Now our daughter is hoping to do a Erasmus this year, she wants to go to the University of Sydney,  why ? God knows but if that happens it'll be significant,  even if she decides to do one in Europe its 10k min.
> 
> Not all do that of course but as another poster said it can be bottomless or at least feel that way.


Thanks. So 2 children 30 to 40k! Ouch


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## Paul O Mahoney

DeeKie said:


> Thanks. So 2 children 30 to 40k! Ouch


Over 3/4 years then theres the Masters and PhD.... and the real "ouch" no tax relief.


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## DeeKie

Paul O Mahoney said:


> Over 3/4 years then theres the Masters and PhD.... and the real "ouch" no tax relief.


Ok. We’ve a way to go so.


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## Daddy Ireland

20% relief on 3rd level fees when 2 kids are going together in the same year.  Not a whole lot and should be on each child.


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## Daddy Ireland

Sorry, 20% relief applies to one of the two that are in 3rd level at the same time.


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## Paul O Mahoney

Daddy Ireland said:


> 20% relief on 3rd level fees when 2 kids are going together in the same year.  Not a whole lot and should be on each child.


Registration fee isn't tax deductible anything over is.....


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## DeeKie

Daddy Ireland said:


> Sorry, 20% relief applies to one of the two that are in 3rd level at the same time.


Noted. Think I’m better off assuming no tax allowance in my pension planning projections.


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## Paul O Mahoney

This brings in another point in 1996 Labour??? Decided to give " free" 3rd level education,  resulting in our universities dropping off a global scale that we had gained over a 100 yrs . I'm a RTC man , or IT now. We again just made a mess, and my wife has a PhD "in old" money. And she worked part time.
It's the parents who stump up now and really makes pension contributions increases very difficult until we are in our 50s....and then it's a balancing act .........sorry I'm ranting


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## mtk

Our estimated "extra" 3rd level  cost (although some related to turning 18)  for 1 at home  *36 week term* - assumed more or less self sufficient rest of period ( summer job I hope etc.)costregistation3000​lunches1440​bus720​health insurance830​leisure1080​lost child benefit1680​home carer tax credit lost1600​10350​


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## Paul O Mahoney

noproblem said:


> Paul O Mahoney
> "Her mother is 90 and longevity is a family trait."
> 
> Just remember that it may  be true for only one half of the Mum/Dad scenario. Always remember my mother saying her mother told her there was no shafóid (daftness) in the family so she need never worry about that. Lo and behold, her (Mum's) father died from it


Her longevity is both sides,  her Dad died young 68 but he smoked and gave them up at 60 "Senior Service " giving up killed him. She did smoke until 48 and gave up successfully , her mother has one cigarette a day at 90 .....moderation is key.


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## Paul O Mahoney

mtk said:


> Our estimated "extra" 3rd level  cost (although some related to turning 18)  for 1 at home  *36 week term* - assumed more or less self sufficient rest of period ( summer job I hope etc.)costregistation3000​lunches1440​bus720​health insurance830​leisure1080​lost child benefit1680​home carer tax credit lost1600​10350​


But if they pay for leisure,  and we pay for health insurance,  home carers allowance,  not applicable,  and I/we make lunches and breakfasts and dinners.  Don't know why you added in " loss of child benefit " its moot.

5k without part time seems in the ball park, and 4k if they do.

Bus €720 nah.....€10 a week on leapcard as a student


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## messyleo

Pretty sure the student leap card cap is €20 per week and the average trip into town is 2.50 each way (so also €20, excl nights out etc) - don't think you get much public transport these days for a tenner a week!


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## Leper

DeepThinker started a good thread on preparation for (early) retirement. He's getting some excellent relevant financial advice here. There's far more to retirement than the money. Generally, we have control over the money as we've had years to prepare. Some invested better than others, but so what? You can do only what you can do and you have to retire sometime. You can't do Genie and blink your eyes and have a pot of gold produced in front of you. 

Looking at RTE television last night I note that two celebrities (an architect and a horticulturist) both not short of the few bob. But, each built a "den" down their gardens. The dens were to be used as a work area and a retreat. Both had corrugated roofs and were basic (both with a bath, electricity, some furnishings and a bit of a view). Anybody who would hop into retirement expecting everything to be the same as during the working life could find himself (usually a he) consigned to the shed down the garden.

You must prepare and allow the other people in your life to do what they have always being doing. Don't worry, You'll get your slots too. Avoiding confrontation is a major part of retiring. You'll be spending much more time with those nearest and dearest to you. Ensure you use that time fruitfully and joyously. 

You're not a babysitter-on-demand. You are nobody's instant solution to anything. Get into some kind of routine. Walk, talk and make friends. You have lots of time available to you for the first time since you were a toddler. Use it wisely.


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## Buddyboy

And if you're into it, find some type of hobby or interest now that you are interested in, that you can either qualify in, or get a lot of experience with.  The Adult education departments of secondary schools are always looking for teachers of 10 week courses.


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## michaelm

I (have a) plan to be in a position to retire at 60 if I so wish.  I won't have a problem with the non-financial side of things.  My projected retirement budget sees more spending than my work pension will provide so I have to ensure that other funds are such that they can bridge the gap between early retirement and hitting state pension age.  I know rules around state pension can change but one has to make some reasonable assumptions in order to plan.


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## garbanzo

It seems like an unrealistic goal for most to be able to quit work and retire at 60. I expect to have to supplement our income, if I can afford to go early. This will be through part time work or some form of consultancy. Interested in hearing from people in the financial planning business as to how people’s ARFs or Annuities are performing and what level of fund they have needed to have saved to achieve an exit from work at 60.


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## Ravima

Well, you can take 25% of pension pot (DC) tax free up to max of €200K. You must put  €63500 aside (for some reason) and then take min of 4% of the balance as pension pa. You can of course take more. By my reckoning, you should therefore have min of €863500 in fund. Hopefully the fund will increase or at least hold value per annum giving you  the 4%. However, if you are in your late 80's and in a nursing home, then your pension doesn't matter to you as you are just waiting for God to call you to a better place. Life is to be lived. No point in leaving all your assets to the next generation for them to enjoy, when you can also enjoy the fruits of your labours.


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## garbanzo

I presume a strategy would be to max out your tax free lump sum to €200k and use that as a buffer to get you from 60 to 68 when you will (hopefully) qualify for the State pension. That’s €25k per annum. Not a huge amount over that time period but not to be sniffed at as an annual income which is by its nature entirely tax free.


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## Freelance

garbanzo said:


> I presume a strategy would be to max out your tax free lump sum to €200k and use that as a buffer to get you from 60 to 68 when you will (hopefully) qualify for the State pension. That’s €25k per annum. Not a huge amount over that time period but not to be sniffed at as an annual income which is by its nature entirely tax free.



Thats the basis of my approach, however I also have a number of personal pension funds. When I retired (at 60) I took a cash lump sum of 500k (the tax free 200k and an additional 300k at 20%). I also had cash on hand. I drew down one of my personal pensions, such that it pays me approx 33k pa (the 20% limit). So I use the pension I am drawing down, plus whatever cash is needed from my cash pile to provide my income from now until 67. At that point I will have the state pension, and whatever cash remains available plus the pensions that I haven't yet drawn down. It is likely that I will have assets including pension assets when I die, however this is fine as it will have a good home.


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## Freelance

DeepThinker said:


> How did you do it?
> Looking back, what advice would you give a couple in their early 50s who want to retire age 60?
> What would you do and equally what would you NOT do?
> What are the pitfalls to avoid?



Hey DT

I retired at 60. I had an outline plan for a long time and started some detailed planning at about your current age, so your question is timely. Here is my shot at answering your questions in no particular order :

Knowing yourself/selves is critical. People have very very different priorities. A few examples of this as it applies to me. I had a very comfortable standard of living when I was working. I knew I wouldn't be poor in my old age, but I also knew that some of the working life luxuries wouldn't continue (top marque car, fine dining, etc). And I was fine with that. I came from nothing (my parents would dispute this) and regarded all that fancy stuff as transitory, to be enjoyed when I had it and not to be missed when it was gone. So I did an analysis of my annual expenditure (at age 52) and identified the stuff I was prepared to do without, leaving me with a clear idea of the income I needed for the decent standard of living I now have. That gave me the target income/cash pile I required and I built my plans around that. I had 8 years to figure all this out, and kept my finger on the pulse throughout (without it becoming an obsession). It also meant that I didn't suddenly wake up shortly after "R-day" with a chip on my shoulder because I was short of funds. 

Another suggestion is to decide on your "house/accommodation" plan from now till death. That may sound drastic, but what are your expectations ? My parents left it too late to move out, and spent their later years rattling around a huge poorly insulated and somewhat isolated house. I looked at the downsizing/moving options and decided to stay in my existing house until the time goes to move to a nursing home. In making that decision I scored all the practicalities for each decade (60s, 70s, 80s). Comfort/warmth ? Garden maintenance ? Transport/Isolation? Shops/Social ?  Having made the decision to stay put, I did an amount of work to "future-proof" the house - insulation, accessibility/mobility, south facing sun/reading room  etc.

One other suggestion is to use any spare cash that crops up along the way to get rid of your mortgage/dump into your pension. Consider this any time you get a pay increase, bonus, tax cut/refund, windfall, legacy etc. Be brutal and do it immediately, if possible before the money is in your current account. It never ceases to amaze me that the whole country went nuts over the SSIA scheme, when pensions  are an even better bonanza, just longer term. Also, this approach also helps you to start the process of cutting your cloth..........

There is lots more on the financial planning side, but you get my drift. Put a bit of time and effort into it now and a lot will fall into place over the next 8 years.

As has been pointed out by a number of posters, the non-financial side is also important (but not something to be afraid of). I had no fear on this front. I was never ever bored for as much as 1 minute at any stage in my life. I have never had a difficulty keeping my mind occupied. I had a very fulfilling and successful career, great colleagues, etc etc. But I had had quite enough of all that and I relished the day I left, said good bye to all of it and haven't looked back (Cut pretty much all the ties tbh). And the answer to all the offers of Consultancy, Project Work, Part Time work, Non-Exec Opportunities, etc etc was two words, second one OFF.  I had a long list of things I wanted to do but never had the time to try, and this together with various ongoing interests means I am still short of time most days. I guess I am also fortunate that I am fearless about trying new things, and can throw myself into anything. I also fairly quickly got used to enjoying some "down time": simple things, like going to a pub on a say a Tuesday at 12:30, IT under my arm, sipping a pint and having my lunch, and heading home at 3pm. I never ever considered such a thing when I was working. But it is very very pleasant to do it now and again. I mention all this not as a template - we are all so totally different that many would find my approach an anathema. But its back to my opening statement - Know yourself - and plan accordingly. As an example of this I took a week off work when I was 54 or 55, and planned nothing in advance for the week. Each night before going to bed I planned a few things for the next day, including staying in bed for an extra 30 mins each morning, and I loved it. Walks, drives, visits, explorations etc. The freedom to do whatever I wanted.

Your 60s should, in my estimation, be the best years of your life. Free from constraints and demands, hopefully healthy, mellowed by experience and age, nobody pointing targets and expectations at you. You absolutely deserve a great decade, but you will only realise this if you prepare for it.

Sorry this is a bit rambling, but at my age I no longer feel the need to diligently arrange things in a logical and orderly fashion !!

Good luck.


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## mickeyg

Freelance, a big bualadh bos to you! Super post.


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## Leper

Freelance - If ever you and I are in the south of Spain at the same time . . . . you're welcome on our terrace at around 1.15pm any day and I'll supply the wine. I bet the conversation would be entertaining.

Incidentally, I watched a television programme about a cardiac surgeon in Belfast who was approaching retirement. When asked if he would miss using his god-given skills he merely replied "No" and he hoped the biggest decision he would have to make was whether to use Marine Blue or lighter colour in his painting of landscapes.


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## ATC110

Paul O Mahoney said:


> Well we have 2 its 6k a year total for registration.  They work part time for " pocket money " but we cover the rest so I'd budget €5k each if they aren't working part time €4k if they manage to get a few bob .
> 
> Now our daughter is hoping to do a Erasmus this year, she wants to go to the University of Sydney,  why ? God knows but if that happens it'll be significant,  even if she decides to do one in Europe its 10k min.
> 
> Not all do that of course but as another poster said it can be bottomless or at least feel that way.





DeeKie said:


> Thanks. So 2 children 30 to 40k! Ouch





Paul O Mahoney said:


> Over 3/4 years then theres the Masters and PhD.... and the real "ouch" no tax relief.





Daddy Ireland said:


> 20% relief on 3rd level fees when 2 kids are going together in the same year.  Not a whole lot and should be on each child.



I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.


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## mtk

Freelance said:


> Hey DT
> 
> I retired at 60. I had an outline plan for a long time and started some detailed planning at about your current age, so your question is timely. Here is my shot at answering your questions in no particular order :
> 
> Knowing yourself/selves is critical. People have very very different priorities. A few examples of this as it applies to me. I had a very comfortable standard of living when I was working. I knew I wouldn't be poor in my old age, but I also knew that some of the working life luxuries wouldn't continue (top marque car, fine dining, etc). And I was fine with that. I came from nothing (my parents would dispute this) and regarded all that fancy stuff as transitory, to be enjoyed when I had it and not to be missed when it was gone. So I did an analysis of my annual expenditure (at age 52) and identified the stuff I was prepared to do without, leaving me with a clear idea of the income I needed for the decent standard of living I now have. That gave me the target income/cash pile I required and I built my plans around that. I had 8 years to figure all this out, and kept my finger on the pulse throughout (without it becoming an obsession). It also meant that I didn't suddenly wake up shortly after "R-day" with a chip on my shoulder because I was short of funds.
> 
> Another suggestion is to decide on your "house/accommodation" plan from now till death. That may sound drastic, but what are your expectations ? My parents left it too late to move out, and spent their later years rattling around a huge poorly insulated and somewhat isolated house. I looked at the downsizing/moving options and decided to stay in my existing house until the time goes to move to a nursing home. In making that decision I scored all the practicalities for each decade (60s, 70s, 80s). Comfort/warmth ? Garden maintenance ? Transport/Isolation? Shops/Social ?  Having made the decision to stay put, I did an amount of work to "future-proof" the house - insulation, accessibility/mobility, south facing sun/reading room  etc.
> 
> One other suggestion is to use any spare cash that crops up along the way to get rid of your mortgage/dump into your pension. Consider this any time you get a pay increase, bonus, tax cut/refund, windfall, legacy etc. Be brutal and do it immediately, if possible before the money is in your current account. It never ceases to amaze me that the whole country went nuts over the SSIA scheme, when pensions  are an even better bonanza, just longer term. Also, this approach also helps you to start the process of cutting your cloth..........
> 
> There is lots more on the financial planning side, but you get my drift. Put a bit of time and effort into it now and a lot will fall into place over the next 8 years.
> 
> As has been pointed out by a number of posters, the non-financial side is also important (but not something to be afraid of). I had no fear on this front. I was never ever bored for as much as 1 minute at any stage in my life. I have never had a difficulty keeping my mind occupied. I had a very fulfilling and successful career, great colleagues, etc etc. But I had had quite enough of all that and I relished the day I left, said good bye to all of it and haven't looked back (Cut pretty much all the ties tbh). And the answer to all the offers of Consultancy, Project Work, Part Time work, Non-Exec Opportunities, etc etc was two words, second one OFF.  I had a long list of things I wanted to do but never had the time to try, and this together with various ongoing interests means I am still short of time most days. I guess I am also fortunate that I am fearless about trying new things, and can throw myself into anything. I also fairly quickly got used to enjoying some "down time": simple things, like going to a pub on a say a Tuesday at 12:30, IT under my arm, sipping a pint and having my lunch, and heading home at 3pm. I never ever considered such a thing when I was working. But it is very very pleasant to do it now and again. I mention all this not as a template - we are all so totally different that many would find my approach an anathema. But its back to my opening statement - Know yourself - and plan accordingly. As an example of this I took a week off work when I was 54 or 55, and planned nothing in advance for the week. Each night before going to bed I planned a few things for the next day, including staying in bed for an extra 30 mins each morning, and I loved it. Walks, drives, visits, explorations etc. The freedom to do whatever I wanted.
> 
> Your 60s should, in my estimation, be the best years of your life. Free from constraints and demands, hopefully healthy, mellowed by experience and age, nobody pointing targets and expectations at you. You absolutely deserve a great decade, but you will only realise this if you prepare for it.
> 
> Sorry this is a bit rambling, but at my age I no longer feel the need to diligently arrange things in a logical and orderly fashion !!
> 
> Good luck.



Congrats @Freelance on your enviable financial  position
And well done for  planning so well!

1)In relation to the the taking of the drawdown  ( from fund growing Gross of tax ) up to 33k wondering what you used to decide better to do this rather  than using the cash pile ( growing minus tax)
Asking as will be in similar position on this point
2)  re taking  the 300k @ 20% was there any (internal ) argument with yourself whether to take or not ( I probably won't be impacted as not much over 800k but here is hoping !)
3) did you disregard state pension or assume you will get full ?
Thanks


----------



## DeeKie

ATC110 said:


> I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.


Each to their own. My own parents put me through college and I am forever grateful to them for it. I’ve given money to them for home improvements. It’s not bizarre.


----------



## PGF2016

ATC110 said:


> I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.


Agreed. I'm of the opinion that school leavers should work for a year or two prior to going to university. Allow them to mature and also time to save.


----------



## Sarenco

Freelance said:


> When I retired (at 60) I took a cash lump sum of 500k (the tax free 200k and an additional 300k at 20%). I also had cash on hand. I drew down one of my personal pensions, such that it pays me approx 33k pa (the 20% limit).


Taking a lump sum of €500k would suggest that you retired a pension pot of at least €2m.  If that's correct, would imputed distributions not effectively force you to draw down more than €33k pa?


----------



## Daddy Ireland

And why was a further 300k taxed at 20% and not higher rate.


----------



## moneymakeover

The Pensions authority

*Tax*
*Tax on lump sums at retirement*
The first €200,000 of pension lump sums payable is currently (2016) tax free. This is a total lifetime limit even if lump sums are taken at different times and from different pension arrangements. Lump sums between €200,001 and €500,000 are taxed at 20%, with any balance over this amount taxed at your marginal rate and subject to the Universal Social Charge.
The amount of cash you can take out of a pension arrangement is limited, with different rules applying depending on the type of arrangement you have.

For RACs, PRSAs and people transferring to AMRF/ARFs at retirement, the cash limit is 25% of the retirement fund.

The amount of cash you can get from an occupational pension scheme at normal retirement age is broadly 1.5 times your Final Remuneration, if you have completed 20 years’ service and have no benefits from a previous scheme


----------



## Paul O Mahoney

ATC110 said:


> I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.


We have the money,  their mother did that but has decided that she didn't want her children to have to ...........


----------



## Freelance

Leper said:


> Freelance - If ever you and I are in the south of Spain at the same time . . . . you're welcome on our terrace at around 1.15pm any day and I'll supply the wine. I bet the conversation would be entertaining.



Be carful with invites like that, I’m always looking for new experiences and I’ve accepted far less attractive that that !! 

I love the Belfast surgeon’s attitude by the way.


----------



## DeepThinker

A quick word of thanks to everyone for taking the time to both view and contribute to this thread so far.
In particular to Freelance just earlier; that’s a really, really great read with lots of good advice and insights.
Plenty of food for thought from multiple contributors and great to hear the experiences of those that have actually done it.

DT


----------



## Freelance

mtk said:


> Congrats @Freelance on your enviable financial  position
> And well done for  planning so well!
> 
> 1)In relation to the the taking of the drawdown  ( from fund growing Gross of tax ) up to 33k wondering what you used to decide better to do this rather  than using the cash pile ( growing minus tax)
> Asking as will be in similar position on this point
> 2)  re taking  the 300k @ 20% was there any (internal ) argument with yourself whether to take or not ( I probably won't be impacted as not much over 800k but here is hoping !)
> 3) did you disregard state pension or assume you will get full ?
> Thanks



Thanks @mtk. These are good questions and I’ll do my best to answer

When I started the planning process 10 years ago I developed a model (using excel, 1 sheet, 6 columns, 30 rows - but it grew like Topsy over the next 8 years - you‘ll all know how that goes). I worked on this from time to time and then put it away. Every now and the I’d take it out and seek the views of others (informed friends, relations, pensions/financial guys, accountants and solicitors, and a tax guy, as well as others) on aspects of it, and re-model to take account of any sensible feedback. Most of these were informal chats, and there were many conflicting views. But I had the time to digest the lot and distill until I had something that worked for me. One of the most beneficial inputs was the tax guy, and he did some great work (chargable). So as well as planning the asset distribution, the income drawdown model, the cash flow plan, etc we looked at holistic tax model (i.e. it took account of working life income tax, CGT issues (and there were a few of them), lump sum taxes and also the income and other tax issues post retirement. The key tax drivers were to avail of all possible tax free options, and to maximize my use of any 20% opportunities all along the line. In simple terms, a good chunk of that 300k you refer to was pre-retirement income that would have been taxed at 40% (or more) and that I was in a position to do without for a few years. This went into my pension pot gross, was invested, and then came out at 20%. The benefit to me was 60k plus the investment growth. And also having it put away meant that I wasn’t frittering it away on dickens knows what which is what would have happened had it landed in my current account. So it was fundamentally a tax based decision, but it also ticked a number of boxes re cash flow, investment opportunities, and lump sum accumulation. I’ll be very frank here and say that my circumstances were “non-standard”and I had opportunities available to me that others might not have. But there is a general lesson - by working on the model early and having it available to discuss and review with others allowed it to mature and allowed me to challenge myself and revisit various assumptions and get familiar and most importantly comfortable with the outcomes. 

So to answer your specific questions against that background:
1 - Tax - I wanted to fully utilize my 20% annual allowance. It’s is likely that any income I don’t take now will be at 40% in the future. 
2 - Not really, though one of the pension guys could not get his head around it and kept trying to talk me out of it. In my mind I didn’t ever regard it as a fundamental part of my pension plan. Rather it was a tax efficient savings scheme, and I had an investment opportunity lined up for it the day it landed. 
3 - It was factored in from the start and I expect to receive it (in full) when I reach 67. That was another reason for taking the annual 33k now as the state pension is taxable and that plus any pensions I am drawing down will definitely go over the 20% threshold. 

I hope that this all makes sense and answers your questions.


----------



## Freelance

Sarenco said:


> Taking a lump sum of €500k would suggest that you retired a pension pot of at least €2m.  If that's correct, would imputed distributions not effectively force you to draw down more than €33k pa?



Hi Sarenco. Not sure if I mentioned it previously but I had/have multiple pension arrangements, and some pretty unusual pre retirement circumstances. My pension pot was somewhat less than €2m however as you will probably know there are different ways to calculate pension lump sum/s. I got a lot of advice on this as it got complicated and actually required two Revenue rulings before it was finalised. The imputed distribution issue was flagged but it didn’t actually arise.


----------



## Sarenco

Thanks for the follow up @Freelance.

That all makes sense, although I’m still puzzled why the imputed distributions haven’t kicked in.


----------



## mtk

Freelance said:


> 1 - Tax - I wanted to fully utilize my 20% annual allowance. It’s is likely that any income I don’t take now will be at 40% in the future.
> 2 - Not really, though one of the pension guys could not get his head around it and kept trying to talk me out of it. In my mind I didn’t ever regard it as a fundamental part of my pension plan. Rather it was a tax efficient savings scheme, and I had an investment opportunity lined up for it the day it landed.
> 3 - It was factored in from the start and I expect to receive it (in full) when I reach 67. That was another reason for taking the annual 33k now as the state pension is taxable and that plus any pensions I am drawing down will definitely go over the 20% threshold.
> 
> I hope that this all makes sense and answers your questions.



thanks @Freelance
All this makes sense to me particularly 1 and 3 where I have thought about it a good bit ….. and  point towards a large tax incentive to stop working (earning) before state retirement age if you have resources to do so rather than wait and be hit with higher rate income tax charges on later drawdown ......


----------



## Odea

I retired at 50. I am now 67.  

I married early at 23. Owned my first house at 23 with mortgage. Sold that and bought larger house in better location at age 29 with mortgage. I had 3 children by age 30.

Moved house again at age 42. Bought larger detached house with mortgage in sought after area that increased rapidly in value. Teenagers and older at this stage all had own bedrooms.

Over the years I have always cleared my mortgages early by paying in additional funds from salary and bonuses etc. Always shopped around for "deals" in everything I did. Hated paying interest, fees, parking charges, etc

Both myself and my wife live simple enough lives. No big cars, bling, clothes labels, no cigarettes, light drinkers. no golf clubs, expensive hairdressers, nail bars etc. Make do and mend.  Look after my own garden, clean my own windows, cars. But still enjoyed ourselves. Children all happy.

Our weakness was travel where we had lots of holidays. All D.I.Y.

We were lucky that there was free education when our children were growing up so University was effectively free with no fees, grants etc. All our children got jobs and were able to look after themselves.

Hated work. Jumped when given the chance on redundancy with deferred pension.  My wife continued to work part time. So lots of time together.

Mortgage cleared within 3 years of finally leaving work. House very valuable. Always knew that I could downsize if needed and release large funds.

Inherited funds when parents died over 6 years ago. Still have this money, never really needed it but gives us great sense of security.

Now receiving deferred pension of €20k plus two by State pensions. Total income about €42k, plenty to live on. Plenty.

Looking back, moving house was a good decision. Paying down debt and not wasting money needlessly was a good decision. We were definitely lucky along the way.

Since retiring we have continued in this vain but we have increased the number of holidays, meals out (not fancy). 

I suppose we live a simple life and always have done. Grateful for all we have. Some regrets, made lots of mistakes and wrong decisions along the way but recovered well.

Our future is more of the same and being able to help our grown up children financially, when they need it now gives great satisfaction.


----------



## mtk

Odea said:


> Hated paying interest, fees, parking charges, etc


Ditto!



Odea said:


> Some regrets, made lots of mistakes and wrong decisions along the way but recovered well.



 May I ask you in relation to any  financial mistakes what they might be in order to avoid them
in relation to period 50 to 60 or 65? did you just use savings to support yoursefl?


----------



## Allpartied

Odea said:


> I retired at 50. I am now 67.
> 
> I married early at 23. Owned my first house at 23 with mortgage. Sold that and bought larger house in better location at age 29 with mortgage. I had 3 children by age 30.
> 
> Moved house again at age 42. Bought larger detached house with mortgage in sought after area that increased rapidly in value. Teenagers and older at this stage all had own bedrooms.
> 
> Over the years I have always cleared my mortgages early by paying in additional funds from salary and bonuses etc. Always shopped around for "deals" in everything I did. Hated paying interest, fees, parking charges, etc
> 
> Both myself and my wife live simple enough lives. No big cars, bling, clothes labels, no cigarettes, light drinkers. no golf clubs, expensive hairdressers, nail bars etc. Make do and mend.  Look after my own garden, clean my own windows, cars. But still enjoyed ourselves. Children all happy.
> 
> Our weakness was travel where we had lots of holidays. All D.I.Y.
> 
> We were lucky that there was free education when our children were growing up so University was effectively free with no fees, grants etc. All our children got jobs and were able to look after themselves.
> 
> Hated work. Jumped when given the chance on redundancy with deferred pension.  My wife continued to work part time. So lots of time together.
> 
> Mortgage cleared within 3 years of finally leaving work. House very valuable. Always knew that I could downsize if needed and release large funds.
> 
> Inherited funds when parents died over 6 years ago. Still have this money, never really needed it but gives us great sense of security.
> 
> Now receiving deferred pension of €20k plus two by State pensions. Total income about €42k, plenty to live on. Plenty.
> 
> Looking back, moving house was a good decision. Paying down debt and not wasting money needlessly was a good decision. We were definitely lucky along the way.
> 
> Since retiring we have continued in this vain but we have increased the number of holidays, meals out (not fancy).
> 
> I suppose we live a simple life and always have done. Grateful for all we have. Some regrets, made lots of mistakes and wrong decisions along the way but recovered well.
> 
> Our future is more of the same and being able to help our grown up children financially, when they need it now gives great satisfaction.



Sounds wonderful and you certainly deserve credit for the financial security you have.  

However, there are several pieces of that idyllic jigsaw that are unlikely to be available to many people. 

I'll start with my bugbear, inherited funds.  Most people don't get anything, or very little.  No worries, my parents and my wife's parents gave us plenty, security, stability and the loving memories that we cherish every day.  Inherited wealth should be taxed at a much higher level than it is at 
the moment.  It is a grossly unfair method of sharing resources in the productive economy. 
Nobody likes to talk about it, but it determines a huge number of outcomes: from participation in public life, to access to education, to the ability to save or purchase property.  I'm not getting at you, personally, but the principle of inherited wealth is hugely destructive to a meritocracy and leads to people becoming even wealthier regardless of how little they work.  This, in turn, leads to a rentier class who exploit the productive class through higher rents and charges for basic services.  The result of this is clear in the Dublin property market, where productive people now hand over 50% of their wage to unproductive, often absentee,  landlords. 

Secondly, the property market accumulated a significant amount of capital for you.   No doubt your property increased in price over the years due to the development of your little bit of Ireland.  All of this was paid for by general taxation.  Transport, railways, buses, roads, pavements, street lighting, schools, places of work, universities, health centres, hospitals,  all the structures of a modern society.  Property should be taxed, much more vigorously. Captial Gains tax should be levied on the prinicipal residence.  No-one deserve or earns the increase in their property price, barring the small appreciation from general home improvements.  The majority of capital appreciation came because of social development, paid for by general taxation.  As such,  the beneficiaries should give a bit back. 

Pensions, well the kind of secure, earnings related annuity which you seem to have is a thing of the past, even in the pubic sector.  Certainly the idea of availing of such a luxury at age 50 is never going to be a realistic option for anyone in the current workforce. 

Likewise the college education. You do admit you dodged a bullet there, but, as these pages show, that bullet is hitting todays 50 year olds, straight between the eyes.

I hope you don't mind me venting my spleen a little and I mean no offence of any kind.  I'm just pointing our that things have changed, quite dramatically, and not for the better. Whilst previous generations saw their wealth, public services, access to opportunity increasing as they grew older, the generations coming behind seem to be heading in the opposite direction.  I think, eventually, your generation is going to have to pay a bit more, to equal things out.


----------



## Leper

odea retired at 50 and 17 years later he is just sharing how he was lucky, made much of his own luck. He and his wife have been thrifty. They did nothing dishonest and fair play succeeded in what they set out to do.


----------



## Allpartied

Leper said:


> odea retired at 50 and 17 years later he is just sharing how he was lucky, made much of his own luck. He and his wife have been thrifty. They did nothing dishonest and fair play succeeded in what they set out to do.



So give me a plan, for a 20 year old to retire, on a pension equivalent to the average national wage, at 50.  Bear in mind that Dublin property prices are, currently, at a ratio of 10 times the average salary, mortgages are now stretching to 40 years, defined pensions are gone, gone, gone, gone and the state pension is not available until age 68, possibly later.


----------



## Leper

Allpartied, Most of us can't think 30 days ahead, never mind 30 years. You're only 20. Enjoy life and don't think about retiring for another 30 years.


----------



## Nicetoknow

Leper said:


> Allpartied, Most of us can't think 30 days ahead, never mind 30 years. You're only 20. Enjoy life and don't think about retiring for another 30 years.



I don't think he's 20...I think he's asking a really good question.


----------



## Laughahalla

Average stock market returns is 7%.
Rough sums ..
400 euro per month invested/compounded over 40 years gives you ~ 1 million / 40k per annum.

Start paying into your pension.
People say they can't afford to pay in . The  reality is that they can't afford not to pay in.

Old age is coming, it shouldn't be a surprise to anyone.


----------



## jim

@Laughahalla  can i ask how did you calculate that, whats the formula? Forgive my ignorance.


----------



## moneymakeover

jim said:


> @Laughahalla  can i ask how did you calculate that, whats the formula? Forgive my ignorance.








						Compound Interest Calculator
					

This free calculator also has links explaining the compound interest formula.



					www.moneychimp.com


----------



## jim

@moneymakeover @ luaghahalla i am gettibg aroubd 700k not 1m.


----------



## moneymakeover

jim said:


> @moneymakeover @ luaghahalla i am gettibg aroubd 700k not 1m.


----------



## MOB

Allpartied said:


> Secondly, the property market accumulated a significant amount of capital for you.   No doubt your property increased in price over the years due to the development of your little bit of Ireland.  All of this was paid for by general taxation.



I am not sure that I agree with this.   If instead of "property market" you substitute the words "public sector pension" the statement would be equally true.   A public sector pension is, in essence, a significant capital asset.

Many people in the private sector have traditionally gone the 'buy to let' route in order to provide an income in their old age.  I am not sure that it is fair to single out this form of accumulated capital for special punitive tax treatment.


----------



## Threadser

ATC110 said:


> The state pension is a subsistence payment rather than a 1.5 times final salary tax-free lump sum plus 50% of annual salary for life; to compare both is puerile


A "subsistence" payment that is paid to everyone including those on very high incomes at retirement?


----------



## Leper

The name of the thread is Retiring Early - Can we return to this please?

You can have your Public/Civil Service bashing elsewhere, if you wish.


----------



## DeepThinker

Hey, thanks Leper. You beat me to it. Let’s keep the thread on track people. 

DT


----------



## Brendan Burgess

Folks stay on topic.

Go down to Letting Off Steam if you want to discuss the merits of the public service 

Brendan


----------



## Odea

mtk said:


> May I ask you in relation to any  financial mistakes what they might be in order to avoid them
> in relation to period 50 to 60 or 65? did you just use savings to support yoursefl?



I started investing directly in the stock market. I had no fear. Buying and selling. There were about a dozen companies that I studied. Making about €300 per week. Used Campbell O'Connor, so fees were low. I noticed that I could regularly do 30 trades on the trot, all showing a profit. I started to become reckless and began trading on gut instinct rather than fundamentals. I noticed that one trade done badly would easily wipe out all the 30 profitable trades. I did a bit of short selling, not recommended. It's all very well as some companies have a trading pattern but when the market price shifts.....you get caught.
Just before 9/11, I invested heavily in Insurance companies. Lost a huge chunk. Began to lose my nerve but kept on trading. It took me 5 years to get my losses back.
Then the recession circa 2007. Lost again. I had become more cautious since 9/11 so I began to invest in more "safe" shares. Lost another chunk of money. I more or less exited the market but kept about a half dozen shares that were showing a loss but the companies had good prospects. These came good and in the last few years I made money and got all my losses back. I sold half of my holdings when Campbell O'Connor closed last year....big mistake, the market has kept going upwards. I haven't lost any money but if I had held those shares, between profits and dividends I would say I missed out on about €40k.  I have a decent amount of money sitting in an account in Davy, just sitting there, I don't want to go back in and buy at the top of the market. I also cannot purchase shares that I sold last year for say £25, that are now £30.

Just to end....I remember sitting on the balcony of a hotel in Spain, having a drink.  I had been trading BP on a regular basis. I remember ringing COC and asking them to sell my holding while sitting on the balcony. I turned to my wife and said "that's the holiday paid for"..... a real Dell Boy moment.


----------



## sidzer

For me early retirement is before 60 - I had hoped to retire age 56ish. I am a secondary school teacher and I thought that it would get easier with time and experience but I am finding it increasingly difficult and wonder how many more laps I can do!  

As I am post 1995 public servant I am more or less resigned to the fact that I will have to hang in until I am 60 which is my retirement age.

Just turned 50 and I have just signed up to buying back 11 years notional service. By 60 I will have paid in the max contributions. I worry a bit about supplementary pension as I have a rental property and a small farm which makes shag all but it is a small business concern with money going in and out. I also have a Guinness pension coming at 65 (currently @12k p/a. I have started AVC contributions and will continue doing some contributions if I have any capacity to make tax free contributions.

I am currently doing some work on the home house and garden and will have this well done by 60 - I plan on having the house retirement years proof as much as possible! I have always been good with money but have recently become much more conscious about my spending. I have a 16 car and was going to change it but decided to keep it as long as possible maybe even up to retirement as it would take 20k for a new one on trade in and then you are tied to the exorbitant service charges that main dealers charge. I am also going to save as much as possible so that I will mange if I don't get the supplementary pension at 60! 

I also love to travel and agree with above poster that life is for living so I will have a good holiday every year  and a few weekends away etc- that's not up for negotiation. 

Very interesting questions raised by the OP and excellent answers. I am amazed how many friends I have who are not thinking about their retirement and think that I am suffering from some kind of anxiety by my planning and concerns etc.


----------



## 52andout

general comments. How I got here :
maxed pension contribution
I recall employer used to able to give bonus into pension without impacting max contributions. not sure if still can do this
paid off mortgage ASAP
Never took out any loans other than mortgage
Payoff credit card in full every month
earned sufficent income to do above!

didnt waste cash on cigarettes and we don't drink much

happy to walk  when can to saty fit and be green lower stress and save costs
ate very healthily avoiding ready made crap and over priced fancy burger joints. Your Health is your biggest asset IMHO.

shopped around (where convenient)

Donts':
avoided any property syndicates that came knocking
avoided accumulating stuff
didn't take transfer value from DB scheme when it was "fashionable" ( control it etc.)  to do so

Dos:
We use (need) 55k -60k pa . Do a detailed budget yourself. don't kid yourself


----------



## Laramie

52andout said:


> We use (need) 55k -60k pa . Do a detailed budget yourself. don't kid yourself


I get by on about €25k per annum. This includes holidays.

How do you need €55k?


----------



## Ceist Beag

Laramie said:


> I get by on about €25k per annum. This includes holidays.
> 
> How do you need €55k?


I as in just you Laramie? Or I as in a family? We need around €40K-€45K per annum.


----------



## Leper

Laramie said:


> I get by on about €25k per annum. This includes holidays.
> 
> How do you need €55k?



Everybody's situation is different. We were always used to relatively low wages with no bonuses anytime. Mrs Lep had to give up work on marriage and spent over 20 years rearing our kids and then returned to work. We had the occasional overtime but like many we were screwed with 3rd Level fees + accommodation and no grants, we paid every cent of income tax due like most and couldn't afford a tax advisor, the car was nearly held together with sellotape. I could go on and on (Before somebody says it I'll say it myself "You usually do!"). 

If you are used to plenty you may have some difficulty settling to retirement as you'll most likely have less income. I don't begrudge anybody of high income while working or in retirement provided it was earned above board. When you weigh everything retirement is the better optiion. No more gridlock, no more hassle, no crying, take as long as you wish with everything, read what you like, watch television whatever you wish and when you wish etc. We spend so much time in Spain that  I'm fearing a letter from Spanish Revenue - come to think of it, if we acquire a residencia we could end up paying less taxes - perhaps our time to pay less has come?

Summary of Above:- Cut your cloth to suit your measure.


----------



## Daddy Ireland

Laramie is probably a single person with no dependants, no mortgage.  If wrong please enlighten us on where I'm going.


----------



## Daddy Ireland

..... going wrong.


----------



## Laramie

No. Married. Three grown up children left the home. No mortgage.

2 x cars. Insurance/Petrol/NCT/Tax comes in at about €2400..   We have no need for the two cars as we live close to all amenities, bus and DART. We also have free travel. Not sure why we keep second car.

House Insurance about €500.

Utilities. Gas/electricity   about €1800.

Internet/TV/Phone about €850.

Property Tax   €1500.

Food about €2500.  Cook from scratch.

Health Insurance plus doctors about €2200 (with snowyb's help)

Holidays. €5000

Gifts/birthdays/christmas etc  about €2500.

Entertainment to include drinks/coffees/meals out.  €2500

So far about €22k in total.


----------



## Ceist Beag

Ok so just 2 of you. You're able to feed/water yourselves for €7 per day, that's impressive!


----------



## Monbretia

That is good going Laramie, I am on my own and excellent at budgeting (in my opinion) and I wouldn't come in under that and I don't even have that holiday!


----------



## Laramie

Ceist Beag said:


> Ok so just 2 of you. You're able to feed/water yourselves for €7 per day, that's impressive!


Why is it impressive?

We are lucky in so far as we live beside Aldi, Lidl, Dunnes, Tesco, SuperValu, M & S.  All of these have incredible value in vegetables, fruits and meat.

If you choose carefully you can buy vegetables for 49c, meat/chicken for €3 etc.   3 x meat/fish items in Lidl for €9.  3 x meat/fish items in Dunnes €10. (You also get €10 back in Dunnes for a €50 spend).  Tins of fish for 80c, Buy on Chinese New Year specials and stock up with noodles and sauces. Pizzas on special offer etc
Last weekend Lidl had toilet rolls at half price.  They also have their vegetable seeds in stock. A packet for less than a Euro. Three time the price in Woodies. I will be growing salads, french beans, spinach, broad beans, potatoes etc. I do this more so for the fun as I can usually buy the veggies in the supermarkets for a lot less than I can produce for the work involved.


----------



## Daddy Ireland

I will post later for my annual outgoings.   Im truly amazed Laramie and I consider myself good with money .


----------



## Ceist Beag

Laramie said:


> Why is it impressive?


You might not think it is that impressive, but believe me there are not many who could get by so cheaply. I think we are quite good on budgeting for groceries and we spend at least 3 times what you spend. We are a family of 5 but still even with just 2 of us I doubt we could get close to that. Fair play.


----------



## Laramie

Holidays are our weakness. Lots of places yet to see, hoping to have another 10 years left in us.

I have already picked up cheap Ryanair flights for just over €30 each way for April and May.  Join up to chain hotel rewards for special offers. Accor, Melia etc. With points and specials, you can get a hotel room for less than €100.  We are paying €85 per night for half board in a Melia hotel in April, south of Barcelona.  We use Tripadvisor to find ways to get from airport to hotel. 90% of the time we use local bus. We very seldom use a taxi unless it's an early morning flight.

I enjoy doing this and shopping around. Lots of people don't and I can understand that.


----------



## Laramie

Ceist Beag said:


> You might not think it is that impressive, but believe me there are not many who could get by so cheaply. I think we are quite good on budgeting for groceries and we spend at least 3 times what you spend. We are a family of 5 but still even with just 2 of us I doubt we could get close to that. Fair play.


In fairness, I am not buying for children. Happy with meat and three veg. Curry. Lots of salads. We really don't buy many things in a packet. Loose vegetables, maybe meat in a packet from the Lidl freezer but no real processed foods. No fizzy drinks. Buy our Cadbury's when it's on special at €2 for 200 grams. (Normally €3.35). We have been known to buy 20 bars of these at a time, then use the Dunnes Stores voucher to get a further €10 off.  Buy our annual stock of booze in November when the supermarkets are practically giving it away.

Lots of people would prefer to be on the golf course or a day out at a Spa. We are low maintenance but enjoying what we do.


----------



## misemoi

I am thinking back to my student and backpacking days. I had plenty of time to shop & cook, and I lived off almost nothing u comparison to now. But still got to enjoy the activities that interested me at the time. It all depends on your hobbies of choice, and your required level of luxury or ability to DIY. Also don't forget the ability to do things at off peak times reduces their cost significantly.


----------



## Daddy Ireland

Two people one retired and one semi retired. One in university no grants and excluding this for purpose of comparison.  Three other children who visit plenty so food will include for a family of six.  Both non drinkers/smokers.

Mortgage       3,396
Car repay       4,423 on one car.  Have second 05 car.
Life cover      1,320  two lives
Eir phone       1,316  b/b plus 4 Tesco PAYG (paying for 2 kids)
ESB                1,008
Prop Tax          312
Health Ins      2,826 for 2 adults +1 young adult
Car Tax             990  (800 on 05 car)
Car/House    1,268  insurance
Dining out      1,078
Car fuels        3,506
Oil heating      1,100
Food               6,442 Lidl/Aldi 90%
Clothes           1,108
Car repairs         896
Refuse               318
Holidays           3,060 all DIY
Doctors/Meds 2,569 family of 6
Cash various    2,528
Sundry              5,233  too numerous to mention / house repairs

Total               45,000

Reckon at best the most I could shave off this when mortgage is done in 5 years time and perhaps once car loan is paid off and hold onto that and not replace or get rid of one car is between 5k and 10k.   If that situation existed now excluding mortgage, second car costs I would be coming in at approx 35k.   So I have to admire your figures Laramie.


----------



## Shelby219

Leper said:


> Everybody's situation is different. We were always used to relatively low wages with no bonuses anytime. Mrs Lep had to give up work on marriage and spent over 20 years rearing our kids and then returned to work. We had the occasional overtime but like many we were screwed with 3rd Level fees + accommodation and no grants, we paid every cent of income tax due like most and couldn't afford a tax advisor, the car was nearly held together with sellotape. I could go on and on (Before somebody says it I'll say it myself "You usually do!").
> 
> If you are used to plenty you may have some difficulty settling to retirement as you'll most likely have less income. I don't begrudge anybody of high income while working or in retirement provided it was earned above board. When you weigh everything retirement is the better optiion. No more gridlock, no more hassle, no crying, take as long as you wish with everything, read what you like, watch television whatever you wish and when you wish etc. We spend so much time in Spain that  I'm fearing a letter from Spanish Revenue - come to think of it, if we acquire a residencia we could end up paying less taxes - perhaps our time to pay less has come?
> 
> Summary of Above:- Cut your cloth to suit your measure.


Hi Leper, maybe you have posted this before, but I'm interested in hearing about your spending more time in Spain,,?(time of year, places you go, accommodation, budgets,) I'm approaching retirement myself soon and would like to get away to Spain or Portugal for longer periods etc,


----------



## josh8267

The best way for most is to max out there pension Tax breaks early in our working life ,

Retiring early may be your choice or underline health Issues may be the deciding factor,

I invested in pension from early in my working life on an average enough wage (AVC )+ compamy/employees scheme,
I could stop them if I wanted to ,Which I did for a while
To be honest I don't buy into paying off your mortgage and leaving tax breaks unclaimed,
once I hit 55 it is a great feeling to know I had enough to pack work in whenever I wanted to,


----------



## Laramie

Shelby219 said:


> Hi Leper, maybe you have posted this before, but I'm interested in hearing about your spending more time in Spain,,?(time of year, places you go, accommodation, budgets,) I'm approaching retirement myself soon and would like to get away to Spain or Portugal for longer periods etc,


My own brother purchased a property in Spain about 20 years ago.  He spends about 6 months there. Never in July or August as it is too warm. He does it kind of different. A month in Spain followed by a month in Ireland. This means that he pays for a lot of extra flights but he constantly watches Ryanair for bargain flights and snaps them up when he can.
He purchased a second hand car there. He leaves this parked in an out of the way car park from Malaga airport. He pays a reasonable sum for this. His property has a small garage where he can park his car.


----------



## Leper

I'm with Laramie. Most homes have waste as far as food is concerned. Less food waste = More money wisely spent and even less on refuse collection. I bet  Mr and Mrs Laramie had their backs to the wall for nearly all of their married life. I bet they got no 3rd Level Grants and were not any kind of burden on the state. 

There is less income now, but true soldiers like the Laramies fight on to the end.


----------



## Steiny

Reading this and all quite interesting. Would love idea of freedom to retire between 50 and 60. In private sector, 36 yrs old, irish life pension with 5pc employer contribution. Have just upped my pc contribution in last year or so. Understand the benefit of marginal tax relief but irish life managing my money long term doesn't inspire confidence. Pot is worth 17pc more than contributions at the mo. Have no idea if its performing as it ought. Will have mortgage cleared on forever house in next few years. Idea of buying a 2bed rental with cash is attractive perhaps when property comes back down again in next few years. Any advice on how to manage irish life??


----------



## NewEdition

Steiny said:


> Any advice on how to manage irish life??



Avoid them.. fees are awful


----------



## Steiny

NewEdition said:


> Avoid them.. fees are awful


I don't believe I can given that this is what the company has offered... Should i set up another pension elsewhere?


----------



## Buddyboy

Another option for going abroad, which I hope to use (and has been agreed by my wife amazingly) is to do house swaps.

Our house is one of those that doesn't like being vacant for long periods of time, something is bound to fail/go wrong or just seize up (a bit like myself).  I suggested to my wife that we could do house swaps, where we can live in other parts of the world for a few weeks/a month at a time, and our house is lived in as well. The prevalence of good websites for this makes it a viable option.

Also, it keeps down the costs as accommodation is paid for (Without having to either own or rent a property abroad), and normally transport is supplied, e.g the use of a car. All we have to pay for is flights.

So, in our retirement, I can see us using this method for a few years, to travel at reasonable cost.


----------



## garbanzo

Giving this thread a wee bump to see if there are any other posters out there prepared to share their experiences on the subject of how they managed to retire early?

I’m still reasonably confident that things will turn around within the 7-10 year timeline I am working to. A little, maybe a fair bit concerned at the trajectory my pensions have taken but I’m staying the course.


----------



## zephyro

garbanzo said:


> Giving this thread a wee bump to see if there are any other posters out there prepared to share their experiences on the subject of how they managed to retire early?



Hit net worth target at 39 and probably the main contributors to getting there faster were:
1. switching from employee to self-employed contracting
2. investing heavily in USD and US stocks up to around 2010 when € was strong
3. then buying a city-centre apartment after the crash here


----------



## Laughahalla

garbanzo said:


> Giving this thread a wee bump to see if there are any other posters out there prepared to share their experiences on the subject of how they managed to retire early?
> 
> I’m still reasonably confident that things will turn around within the 7-10 year timeline I am working to. A little, maybe a fair bit concerned at the trajectory my pensions have taken but I’m staying the course.



A correction should be expected every few years. It shakes out the weaker companies from your index and gives an opportunity to buy units in your pension at a lower price. With 7-10 years to go I wouldn't be overly concerned. People get into difficulty when they try to time the market and make switches to their pension when they should have left it alone.


----------



## allaround

garbanzo said:


> Giving this thread a wee bump to see if there are any other posters out there prepared to share their experiences on the subject of how they managed to retire early?
> 
> I’m still reasonably confident that things will turn around within the 7-10 year timeline I am working to. A little, maybe a fair bit concerned at the trajectory my pensions have taken but I’m staying the course.



Garbanzo, Conan's post on page 1 of this thread is worth reading imo if you haven't already


----------



## Buddyboy

And now is a very good time to see how much money you may actually need, as (if you are lucky), you are working from home, going to the supermarket for 1 trip and eating meals at home, and not buying any unnecessary stuff like more clothes, shoes, or anything on-line.
My life at the moment is pretty close to how my parents spend their retirement, so it is a good indication of to lowest level of money you need. Not saying I would keep this up indefinitely, but it sets the lower level, or minimum needed.


----------



## fayf

Yes, its a good exercise for the lower level.

strange thing is, a lot of people will have amassed all that disposable income over the course of the crisis period, so a good opportunity to see what its going on.

Have not retired yet, but its coming soon. We do a lot of walking, and i have a few hobbies, and have been looking at some voluntary work. As someone mentioned above, you can travel very cheaply when you are flexible. We are good savers, and the only area we’d spend a lot on, is eating out, we don’t spend much on cars, which a lot friends seem to do consistently. As has been said, ya can’t do it all.

Finances are good. Mortgage cleared last year, have both been maxing pension for about 10 years. Thats been interesting, as you just adjust to the new available disposable income, which we have.
None of that it stopped us doing some big holidays in the US, and Europe, and a big home revamp about 7 years ago. Apart from the mortgage, we have not had a loan for anything,  since about 2010, and we will never borrow for anything, ever again. Good bit  in savings and kids college/other kids expenditure is all taken care of.

The most recent crash had an impact of about a 14 % pension fund value drop, but not as much as most, as was conservative’ish anyway. Not that concerned as it will come back in time.


----------



## MsCutha

Interesting reading everyone’s thoughts and opinions. I don’t know much about pensions but do my best to learn as much as I can.
I’m 33 years old with two small children and working in private sector (pharma) on a wage of just under 57k. OH no just under 30k he’s 34.
I am currently paying 10% pensions into a defined benefit company scheme and 10% avc and employer contributes 3%.
Can’t afford to pay more at the moment due to the following:

Bought a house 15 months ago and still trying to get our finances back on level ground. We went through a phase of having no money for months.
Childcare-we have a 4 and 7 year old in primary school so loads to pay for after school and the numerous breaks that are attached to bh in the school year and summer.
Loan- we have a 3 year car loan which we are half way through paying and a bank loan.

Any one have any words of wisdom to someone like me? Plan is to clear the loans in the next 15-18 months as we did hope to have another child but seeing the figures regarding the cost is making me have a rethink

ETA I so have the options to buy company shares and just opted in (started working there a year ago)


----------



## NoRegretsCoyote

MsCutha said:


> Any one have any words of wisdom to someone like me? Plan is to clear the loans in the next 15-18 months as we did hope to have another child but seeing the figures regarding the cost is making me have a rethink



Have #3, you'll never regret it.




MsCutha said:


> ETA I so have the options to buy company shares and just opted in (started working there a year ago)



Don't buy company shares. Unless you are very lucky, like working for Apple in the 1990s, you will do better with a diversified portfolio. So put it into your pension.


----------



## MsCutha

NoRegretsCoyote said:


> Have #3, you'll never regret it.
> I’m not sure if you’re joking
> 
> 
> 
> Don't buy company shares. Unless you are very lucky, like working for Apple in the 1990s, you will do better with a diversified portfolio. So put it into your pension.



Really??
I work for one of the big American pharma companies and thought maybe it is a good idea partly because of the tax incentive, I also plan to be there long term and hopefully get good returns in a couple of years. I know zero about stock markets and tbf don’t have the cash to invest hence my thinking this is an easier option.
I have done irish life previously (saving for house) and I’ve just read on here not to use them.


----------



## Gordon Gekko

I think the poster didn’t catch the nuance of your question and was poo-pooing the concept of buying individual companies/stock picking generally.

Availing of share incentive plans through your employer is generally a good idea. The main caveat being that you liquidate them as soon as possible. And, in my view, take the cash if it’s a pure cash vs shares deal, which it rarely is.


----------



## NoRegretsCoyote

Gordon Gekko said:


> I think the poster didn’t catch the nuance of your question and was poo-pooing the concept of buying individual companies/stock picking generally.
> 
> Availing of share incentive plans through your employer is generally a good idea. The main caveat being that you liquidate them as soon as possible. And, in my view, take the cash if it’s a pure cash vs shares deal, which it rarely is.



Exactly. Most people I know just leave these shares in the drawer. You can be lucky - a family friend worked for Apple in Cork in the 1990s - but there are always going to be dogs and having a chunk of your wealth in one stock makes no sense. Diversify.



MsCutha said:


> I also plan to be there long term and hopefully get good returns in a couple of years.



Maybe you will, but you are taking a gamble by staying with the one firm. It is like going to the races and putting all your money on a 10/1 outsider at the first race.


----------



## MsCutha

Gordon Gekko said:


> I think the poster didn’t catch the nuance of your question and was poo-pooing the concept of buying individual companies/stock picking generally.
> 
> Availing of share incentive plans through your employer is generally a good idea. The main caveat being that you liquidate them as soon as possible. And, in my view, take the cash if it’s a pure cash vs shares deal, which it rarely is.


How soon is soon though? We are expected to keep them for a minimum of 3 years to avail of the tax free benefit. There is also the option of a wage deduction over the next couple of months (couldn’t afford to do) which after reading this I am glad I did not opt for. Thanks for the info, really appreciate it.


----------



## MsCutha

NoRegretsCoyote said:


> Exactly. Most people I know just leave these shares in the drawer. You can be lucky - a family friend worked for Apple in Cork in the 1990s - but there are always going to be dogs and having a chunk of your wealth in one stock makes no sense. Diversify.
> 
> 
> 
> Maybe you will, but you are taking a gamble by staying with the one firm. It is like going to the races and putting all your money on a 10/1 outsider at the first race.


At the moment I don’t have spare cash (very insignificant compared to figures on this site) for investment hence sticking to the one. But points taken, I will be keeping a good watch on them. Thanks


----------



## MsCutha

Noregretscoyote I wasn’t sure if you’re joking or being sarcastic about my comment regarding having a third child haha.


----------



## Gordon Gekko

As soon as you can sell them without any clawback basically. Most of the typical share schemes do make sense to be fair. The trick is to just sell them or most of them once it becomes possible to do so without penalty. The logic is that you don’t want too much of your wealth (i.e. shares plus income) tied to the fortunes of one company. For every fairytale about Microsoft or Apple there are multiple tales of woe.


----------



## NoRegretsCoyote

MsCutha said:


> Noregretscoyote I wasn’t sure if you’re joking or being sarcastic about my comment regarding having a third child haha.



I am not! We had #3 at your age and have............no regrets.



Gordon Gekko said:


> For every fairytale about Microsoft or Apple there are multiple tales of woe.



It's an old story, but Enron employees lost over a billion in 2002 US dollars as the company's stock went to zero.


----------



## garbanzo

Great thread this. Still trying to work it out for myself.


----------



## 50andOut

garbanzo said:


> Great thread this. Still trying to work it out for myself.


And?

So what have you worked out so far?


----------



## time to plan

NoRegretsCoyote said:


> I am not! We had #3 at your age and have............no regrets.
> 
> 
> 
> It's an old story, but Enron employees lost over a billion in 2002 US dollars as the company's stock went to zero.


And they lost their jobs as well, so their exposure to company collapse was increased by having their wealth tied up in the company as well.


----------



## NoRegretsCoyote

time to plan said:


> And they lost their jobs as well, so their exposure to company collapse was increased by having their wealth tied up in the company as well.


That was my point


----------



## garbanzo

50andOut said:


> And?
> 
> So what have you worked out so far?


What I’ve worked out so far is you need to salt away a serious sum over time and have a decent bit of luck along the way. I’ve also developed a serious amount of respect for those who have managed to do it.


----------



## fistophobia

.


----------



## thewire2020

Very interesting thread, I'm 49 so taking the advice on board. 

E24k left on my mortgage should be paid off in 2.5 years as I am overpaying each month. I am at the max ( I think for may pension contributions) Company pay 7% and I'm paying the 7% to match and with additional 16% AVC. Current pension value E128K. Single. Currently on sick leave from work however it has given me time to realise there is more to life so when I am well enough to work again I will need to figure out where to go as I cannot see myself there until 65!!!


----------



## fistophobia

Wish you well in your recovery.
What's your plan if you don't return to work?
124k is a small pension pot.


----------



## thewire2020

Thank you Fistophobia

My plan is to get a job just not the one I have. Yes I see the pension pot is small so know I will continue to ensure some sort of standard of living. Last night I was putting together a spreadsheet of my current expenditure monthly and yearly, it adds up pretty quickly... however I hope once my house is paid off that is my biggest outgoing. I Have E50k in savings but getting little or no return and am afraid to invest longterm knowing that I am not in work right now


----------



## Freelance

At 49 you have time to sort it out so no need to panic but don't waste time either. Note that when you go from 49 to 50 your maximum pension contribution for tax purposes (excluding the employer contribution) increases from 25% to 30%, and this increase is available in the year of your 50th birthday and is available for the full year (people often assume it doesn't kick in until the following year).

One other suggestion for 2023 when your mortgage is cleared. The moment that happens, divert the full amount of the repayments into some combination of your pension and a savings/investment account. Don't let a penny of it near your current account! On the basis you've survived without it up to now you should be able to live without it and it will really turbo charge your pension.

Good luck with your recovery and your future plans.


----------



## thewire2020

Thank you so much freelance , great advice, 
Yes the big 50 in May, that is good to know about the pension I wasn't aware of that I will certainly look into that for the next month.


----------



## Marco 1972

Some good advice there as heading towards big 50 too,  easy seen the sooner you start saving  the better your outcomes,  going to be a reckoning in nxt generation of those with no accommodation , basically renting, no capacity to save and working till 70,,


----------



## OMG_OMG

thewire2020 said:


> Thank you so much freelance , great advice,
> Yes the big 50 in May, that is good to know about the pension I wasn't aware of that I will certainly look into that for the next month.



You can now put 30% into your pension for the whole of 2021.  Not just from the date you turn 50.
Its the year in which you turn 50.


----------



## OMG_OMG

I retired last year in my 50s.
Got redundancy and mortgage was done just decided to go for it.
I was actually surprised that once the mortgage was gone how low my annual expenses actually are.
We actually have more disposable income now than we had at the beginning of last year and ive retired.
The wife is still working for now though will be retiring soon enough too.
Even after that we still will have more disposable income than we had before I retired.
Have to say im enjoying it, but COVID has put a little bit of a damper on it with the lockdowns.


----------



## michaelm

thewire2020 said:


> E24k left on my mortgage should be paid off in 2.5 years as I am overpaying each month.





thewire2020 said:


> I Have E50k in savings but getting little or no return


Why would you not clear the mortgage today?


----------



## iamaspinner

Freelance said:


> At 49 you have time to sort it out so no need to panic but don't waste time either. Note that when you go from 49 to 50 your maximum pension contribution for tax purposes (excluding the employer contribution) increases from 25% to 30%, and this increase is available in the year of your 50th birthday and is available for the full year (people often assume it doesn't kick in until the following year).


Excuse my ignorance, but what does that mean in practical terms? I find it difficult to get my head around anything related to pensions?


----------



## moneymakeover

I think it was in response to thewire2020 having 128k in his pension

It's not great if planning to retire early

But age 50 they can increase the pension contributions


----------



## Freelance

Hi iamapsinner. I'm not sure which part of it is confusing, so I'll try to assist on a couple of points:

The amount you can contribute to your pension and get full benefit of tax relief changes as you get older. The increased amount is available in the year of your birthday - this isn't always understood. So somebody who is currently 49 and will turn 50 later in 2021 can contribute 30% in that year.  See the following table.

AgePercentage limitUnder 3015%30-3920%40-4925%50-5430%55-5935%60 or over40%

Regarding the need to make preparations for early retirement look at it this way. Say you are single and have a modest lifestyle and want to be in a position to spend €25,000 yearly after you retire (This includes all bills and expenses but excludes mortgage as you have that paid off). If you retire at 66 (the state pension contributory age) and if you are entitled to the full state contributory pension of €13,000 you will need a personal pension of €12,000 to make up the difference. So you will need a pension fund at the time you retire at 66 sufficient to pay out €12,000 yearly.

However if you want to retire at 60, two things change. Firstly you have no income for the years from 60-66 so you will need a pension pot at 60 that can pay you the full €25,000 for each of the first six years, therefore your pension pot has to be at least €150,000 greater (to keep this simple I'll ignore the Benefit Payment for 65 Year Olds). Secondly, by retiring six years earlier, you have six years less contributions going into your pension pot. So for our 49y/o (almost 50) to retire at 60 he has 10 years rather than 16 years to build up his pension pot. And he needs a considerably larger pot to fully fund the first six years of retirement. I hope that this makes sense.

My comments here are just by way of example and I have ignored a huge number of very relevant factors such as State Pension eligibility and sliding scales, Availibility of Jobseekers Benefit, Disability Benefits, Inflation, Indexation, Compounded Growth, Investment Choices, Employers contributions, etc etc, all of which matter). There are a number of pension specialists around these parts who will do a far better job than I can at working out exactly how much you need in order to retire early and have a reasonable income. But the basic message is that early retirement needs planning and the sooner you get started the better.

Last point - don't let yourself be bamboozled by pension speak - if your adviser isn't making sense thats not your fault, tell him/her to try again, try harder or replace them !


----------



## Sadim

Gordon Gekko said:


> I think that there’s a lot to be said for trying to create a sensible glide path towards retirement. For example, looking to move to a four day week and then to a three day week in the final years.


I have always thought that once you cross 60 you should have a statutory right to work part-time and start that glide path you referred to. Like, up until 4 - 5 years ago I was doing 50 - 60 hour weeks and always under pressure with deadlines and ungrateful bosses. Then in the end was made redundant so, all that effort was worth nothing. It has put me off corporate life forever and now, I earn considerably less but have only one daughter going through college now, wife soon to retire from the public service and have a modest pension fund myself.... besides, I think I've only worn a suit 2 - 3 times in the last 4 years and one of them was a wedding! Nope, I do not miss the rat race


----------



## Marco 1972

Freelance said:


> Hi iamapsinner. I'm not sure which part of it is confusing, so I'll try to assist on a couple of points:
> 
> The amount you can contribute to your pension and get full benefit of tax relief changes as you get older. The increased amount is available in the year of your birthday - this isn't always understood. So somebody who is currently 49 and will turn 50 later in 2021 can contribute 30% in that year.  See the following table.
> 
> AgePercentage limitUnder 3015%30-3920%40-4925%50-5430%55-5935%60 or over40%
> 
> Regarding the need to make preparations for early retirement look at it this way. Say you are single and have a modest lifestyle and want to be in a position to spend €25,000 yearly after you retire (This includes all bills and expenses but excludes mortgage as you have that paid off). If you retire at 66 (the state pension contributory age) you you are entitled to the full state contributory pension of €13,000 you will need a personal pension of €12,000 to make up the difference. So you will need a pension fund at the time you retire at 66 sufficient to pay out €12,000 yearly.
> 
> However if you want to retire at 60, two things change. Firstly you have no income for the years from 60-66 so you will need a pension pot at 60 that can pay you the full €25,000 for each of the first six years, therefore your pension pot has to be at least €150,000 greater (to keep this simple I'll ignore the Benefit Payment for 65 Year Olds). Secondly, by retiring six years earlier, you have six years less contributions going into your pension pot. So for our 49y/o (almost 50) to retire at 60 he has 10 years rather than 16 years to build up his pension pot. And he needs a considerably larger pot to fully fund the first six years of retirement. I hope that this makes sense.
> 
> My comments here are just by way of example and I have ignored a huge number of very relevant factors such as State Pension eligibility and sliding scales, Availibility of Jobseekers Benefit, Disability Benefits, Inflation, Indexation, Compounded Growth, Investment Choices, Employers contributions, etc etc, all of which matter). There are a number of pension specialists around these parts who will do a far better job than I can at working out exactly how much you need in order to retire early and have a reasonable income. But the basic message is that early retirement needs planning and the sooner you get started the better.
> 
> Last point - don't let yourself be bamboozled by pension speak - if your adviser isn't making sense thats not your fault, tell him/her to try again, try harder or replace them !


Some good advice there, didn't realise that you can contribute the extra amount the whole year when you bracket changing birthday occurs as it were...

Think we should be like Japan where older workers can claim lump sums, pensions etc but still work in their old employ on a more casual basis. 

That would be my plan, not to retire 'retire' but get out with lump sum, small pension,  pay mortgage off and do part time work. like another poster, it's the mortgage that is the big drain,  without that it's a lot easier ....


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## thewire2020

michaelm said:


> Why would you not clear the mortgage today?


Because I am currently out of work right now and on a reduced salary so am afraid to not have money in the event that I need it for something (I'm not sure what , but there you go)


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## iamaspinner

@Freelance Thank you for explaining that. I don't know how that applies to me being on a public service pension though (I joined in 2007). I am buying extra years (notional service) and even then I won't have the full 40 years if I retire at 65 (I will have 35 years at 65). I'm nearing my 50th birthday. I wonder if the changes in tax relief and contributions are applied automatically. I must ask how it works.

In any case I suppose it doesn't look great for me to retire at 60 or before.


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## Sadim

Marco 1972 said:


> Some good advice there, didn't realise that you can contribute the extra amount the whole year when you bracket changing birthday occurs as it were...
> 
> Think we should be like Japan where older workers can claim lump sums, pensions etc but still work in their old employ on a more casual basis.
> 
> That would be my plan, not to retire 'retire' but get out with lump sum, small pension,  pay mortgage off and do part time work. like another poster, it's the mortgage that is the big drain,  without that it's a lot easier ....



Yes I don't like the word "retire" either, a glide path as some contributor has referred to it or some bit of scaling back would be ideal. Nobody went to their grave shouting I wished I had worked longer!


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## Shazzaqwe

I read this thread and dream.  It inspired me do register to do a money makeover


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