How Much do You Need to Retire in 2024? (Less than you think)
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- Опубликовано: 9 сен 2024
- Financial Planning Services
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about working with us, please follow this link: go.novawm.com/...
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My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
Everyone needs a different stream of income , unfortunately having a job doesn't mean security due to the high rate of tax , one needs to move ahead their expectation, I would recommend refraining from investing in stocks for now. Instead, it would be prudent to consider retaining a portion of your assets in gold. Alternatively, seeking advice from a financial advisor could provide valuable guidance in this matter.
I'll recommend you create a diversification strategy because building a good financial-portfolio has been more complex since covid. Recently my colleague advised me to hire an advisor, surprisingly I have accrued over $210K under the guidance of my coach during this crash. She figured out Defensive strategies to protect my portfolio and make profit from this roller coaster market.
Mind if I ask you to recommend this particular coach you using their service?
My advisor is Stacie Lynn Winson, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Any uk/EU adviser anyone would recommend?
Great video, although I'm not sure I would've used the names Fred and Rosie in the example case....💀
Fred and Rosie? 🤔😳🤦♂️
Came here for this comment 😅
Something tells me that retirement income won’t be a problem for Rose. She’s not got many expenses.
Lol😂
Don't get it!
Hi James, as an actuary I find your videos very informative and packed with relatively complicated ALM concepts in a simple way to the general public who are not familiar with the amount of assets they will need to retire. Kudos to you!
I began saving for my pension age 18 - company scheme. Along the way I hit higher tax, so added to my company pension with a SIPP (tax benefits). There are a few new cars I didn’t drive, a few mega holidays I didn’t take, and a 3 bed house was more than big enough for our family of 4 - especially as both kids have now left home.
I was able to retire age 56, my choice with no underlying health or other reasons needing to do so. Just pi$$ed off with micro management and lack of trust from my corporate management. They initially replaced me with 2 graduate entrants, then added a 3rd to cover my previous workload.
I’ve just turned 60 and feel so much fitter and less stressed, I volunteer and spend my time helping others, plus doing DIY jobs around our home that I was paying others to do when working.
If you love what you do, especially if working for yourself, that’s fine. If you can’t see yourself running on the corporate treadmill for years into the future - DON’T!
Great story Ian, one to learn from!
I did exactly the same and retired 2 years ago at 53, now loving a stress free life.
So glad to hear you didn't need the flash cars and flash house to have a good life ,
Far to many people get debted up to the eyes ,latest cars and posh homes ,I like you I'm very thrifty
I take home about 2500 a month and easily manage to live on around 1000 no problem
House is paid off
My car is 9 years old ,no finance on it and it drives like new
I easy save 1500 a month ( less if I book and take a little holiday abroad
I'll be retiring in 9 years time
Maybe with only 300k in my pension pot ,but that's more than enough to get me from 60 to 70 then I know my spends will drop even lower as when I'm 70plus
I won't be wanting to do as much travveking as I do now
This is my fifth year after retirement. I’ve been following the 4% rule thing, but this isn’t really how hard I expected things to be. I still have about $460k outside funds in my IRA to invest in stocks. Pls how do I take advantage of the market turnaround?
now you are retired and depend on your investment, it’s best you redistribute your capital. To simplify the process, you could allocate your resources with the help of a financial advisor.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I needed a good boost to help my business stay afloat, hence I researched for license advisors and came across someone of due diligence, helped a lot to grow my reserve notwithstanding inflation, from $275k to approx. $850k so far.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
There are a lot of independent advisors you might look into. But i work with Nicole Desiree Simon , and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her
I just checked her up online, and I must admit that she has an extremely outstanding experience in investment. Thanks for sharing. I'm going to send her an email right away
Thank you. Just what I needed to watch.
My hubby and I are directors of our farm business and own
property, plus small pensions. I am nearly 52, hubby is 55.
We have started to save to
retire from the farm, and possibly live on rental income, I'd really appreciate you go LIVE and talk about how to earn passive income online and retire comfortably, let’s say $1M.
you should consider financial
planning.
It really isn’t about how much you save, it’s about how you manage your money. Whether you work to earn income or invest, it still boils down to income vs expenses, so yeah you may look into financial advisors for a strategy that suits your timing.
@@yvonnejoordan I totally agree, I'm 60 and newly retired with about 1.2 million outside retirement funds, no debt, and very small dollars in retirement funds compared to my portfolio balance over the past 3 years till date. tbh, the role of the invt-advisor can only be overlooked, not denied. just have to do your research in finding a reputable one.
@@tateoften mind sharing info on the adviser who assisted you? been saving for pension since age 18 - company scheme. along the way I hit higher tax, so I added to my company pension with a SIPP (tax benefits) I'm 46 now and would love to grow my finance more aggressively, there are a few cars I still wish to drive, a few mega holidays, etc.
Fred and Rosie won’t need to worry about retirement once the police start digging up their patio 😮
Brilliant!
Best hning I did was engage a proper financial planner. They pay for themselves as well as reduce risk.
We need to distinguish between "retiring" and financial independence. If you "may" need to go back to work, sell the house or get side gig, you're not FI. If you are still subject to "trading your time for money", you're still not in FI Nirvana. Going back to work full or part is still subject to someone wanting to employ you which brings its own uncertainties. This is why the 4% rule survives as its the "acid test" and I think it's an excellent benchmark to aim for. I use it to stress test my portfolio and it seems to work. Keep in mind the 4% rule means that with that "massive pot" you'll actually die with that pot still intact! So it's a safe, conservative overestimate. Personally, I don't want to leave anything behind so I'll need less than the 4% rule predicts. I'm probably somewhere between 5-6% or more.
Good video as always to "keep us on our toes"
A lot of retirees get part time jobs out of boredom, not because they aren't FI. Volunteering is great, but a lot of places that accept volunteers nowadays have gotten picky. Oddly enough, sometimes it's easier to get a part time paid job than it is to volunteer.
Fred and Rosie.....Good choice there James 😬
Not sure there's much call for a retirement plan behind bars !
Next week we look at whether Ian and Myra have enough in their ISAs to retire before 55
I thought the same thing 🤣🤣🤣
Most of their Cash was hidden under the floorboards along with the kids.
Sorry bad joke. 😮
Honestly these videos are literally of public interest. Great work
People do not know how these options can make such a big difference. Great job getting people to think about options.
How much you need to retire depends on a number of factors, with the most expensive being the roof over your head. If you own your home and have reasonable property taxes, you can retire with a lot less than someone who still has a decade or more on their mortgage, or is renting. Keeping day-to-day expenses reasonable (utilities, etc.) is fairly straight-forward, adjusting expectations for your vehicle(s) also can lower your monthly costs. Retiring with an understanding of the changes in lifestyle and how you'll keep those changes minimal, are the best way to figure out what you will need - there is no specific formula, you need what you need, but if you plan accordingly, you'll enjoy your retirement way more than if you just hope for the best.
Good advice. The main problem is that people leave it so late to start addressing this stuff instead of beginnig to accumulated capital in their 20s onwards. I thank the school teacher that talked about the burden of his mortgage, thanks to him I made sure I had paid off both my mortgages by 40 and meanwhile my whole life has been focused on accumulating wealth whereas for most people it is something they rarely think about and then when they come into a lump sum they spend it on a car or something equally stupid. I’ve also noticed that ironically those in the best position to do this (I worked in the city) often seem least able to step off the gravy train. Retirement is great, I walked away from a massive income and I’ve not regretted it once…. I also calculated that I save £15,000 gross income a year just by not having to go to work. Subscribed.
Shout out for James’s financial planning spreadsheet, I find it extremely useful for planning my retirement. I only got into this stuff seriously when I hit 40 (42 now) but as I’ve never previously wasted too much money with a bit of focus and tweaking things each year I should be able to retire if I want to at a decent age. Many thanks for the great content
How do I get the spreadsheet
@@wendydavis5129 have a look at one of James’s other videos, about the spreadsheet. There is a link to it
Brilliant video. You missed a scenario though: Fred could go on a spree, Rosie could help out (part-time) and then the government will help with accommodation. I’ll get my coat…
😂👍🏻
Only 27k subscribers? This channel is by far the best out there. You should have 1 million!
This channel should be considered a public service !! Brilliant
Thanks Barry, I'm glad you find it useful!
I read a great article a few years back that said you don't need as much as you think you need in retirement if you avoid all the extra travel that is built into retirement plans. You don't need to take grandiose vacations on expensive golf courses.
It can actually be zero. I could run my 2 person, 2 car household on my state pension alone. Add my partners SP, and we can live comfortably. How? By carefully understanding, and minimizing, our costs. I do not mean frugality, I mean avoiding poor value. Plus- do not believe inflation figures! Over the last 15 years, for which I have detailed figures, our cost of living has risen- almost nothing.
Yes, I have savings- quite a lot. Which have grown steadily during retirement. Not just investment growth- our income is more than our costs (despite loving luxury holidays). I retired at 52- but should have done it years earlier. People focus on income, when the true source of control is spending.
Thanks, makes me feel better about my personal situation. Fear of running out, unknown health problems, inflation etc.
I have been far too conservative, but as I age I am more confident and am spending more, including just paid £15k for a private medical problem to avoid a 2 year NHS waiting list.
You can also move to a country with a lower cost of living. Although you have to consider whether medical services are as good and if not the cost of private medical care when needed. Which as you get older becomes more and more relevant.
I have always worked on basis that I might want £40k or more per annum whilst I am young and fit so I can play golf and travel. However as I get older then I won't need as much as I am less able to do that. Really useful video. Thank you
But still you need your 1 month adventure travels every single year. Asia, Africa, Australia, the Caribbean, Greenland etc.. $40k a year would not even do the pocketmoney..
Great video thanks. I retired two years ago at 60. Im not sure if your chart shows it, however, those retiring also need to consider front loading what they spend. I take £42k per year which I will in no way need to do when (IF!) I reach 75-80. Time is way more precious than money.
I don’t understand how the 4% works at all with yearly income of $40,000/12 months = $3333.00 monthly. Is this for two people or one? With the cost of food, utilities, medication, travel, hobbies, dental and adding assisted living later on, IMHO this would barely support one person, close to poverty. I would definitely plan for double this amount. Am I wrong?
@@monahill7665 Hi, I think you might be American. It’s for one person and £40K in the UK is generally seen as a good salary. We also have free healthcare so they wouldn’t be paying for that. I wouldn’t say it would be poor living at all, £40K/ yr in retirement is very generous.
Doesn’t mention flexible drawdown (some years £40k, other years £35k, or £20k). Someone at 80 has different lifestyle preferences than someone newly retired at 55. Health deteriorating means less skiing, less dancing, maybe even less travelling entirely. Factor in 10% reduction in spending for every 10 years in retirement
Is it bad that I didn't know who Fred & Rosie were? 🤦🏻♂️ before my time!
Easy now, Clarkson
yes lol
Sent me a bit west that
Not at all, it was probably before your time. It did make me chuckle though
I thought it was deliberate and you were having a little fun with us. There were lots of sick jokes about them at the time - sort of served to mask the horror. Great content anyway, Happy Christmas from your neighbours in Ireland 🇮🇪
It will depend on mortgage one signed up for. One should be conservative on expenses, bring more revenue profit than expenses.
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways
Since the crash, I've been in the red. I’m playing the long term game, so I'm not too worried but Jim Cramer mentioned there are still a lot of great opportunities, though stocks has been down a lot. I also heard news of a guy that made $250k from about $110k since the crash and I would really look to know how to go about this.
There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor.
Thats true, I've been getting assisted by a FA for almost a year now, I started out with less than $200K and I'm just $19,000 short of half a million in profit.
@@kenanporubsky2122 Impressive can you share more info?
If only I had watched this video 10 years ago and you made it 10 years ago ( I would be 46 )...... 10 years on, I've had three team meetings with a wealth and pension advisor about pensions and retirement last week then I found this video. I'm now going to check all your other videos.
Thanks for another great video. Something that I’ve not seen any videos on, and I think would be useful to a lot of people, is what are the options for drawing down? In particular, taking money from cash vs alternatives, and taking a lump sum annually vs monthly. I’m sure there are loads of other considerations too!
Sure I'll think about how I can work that into a video in the future.
One of the best videos I’ve ever seen on such a topic.
Long term care planning is the elephant in the room.
While I appreciate some may feel they "need" £40k pa to "live", I'm not sure that's at all necessary to live a "simple life" once you own your own home. Even at the absurd current prices, energy would "only" come to around £4k a year, plus food, council tax, no car to run (if you love somewhere you love)... These figures people throw around seem to be aimed at those who want to live an extravagant life in retirement, as opposed to a simple one, from experience I very much doubt my grandparents spent more than a few thousand a year to live happily when they retired.
Why didn't I know about this 55 years ago? Retiring too late was such a waste of my life!
You know about it now, so it's time to act!
Excellent strategies James. What I do is use my current projected non-discretionary spend into a lump sum and then the difference between that and my portfolio represents my current max discretionary pot for my lifetime. I then vary what I take out of this each year. This makes it easy to row back one year if things look uncertain (2022 is a good example where my discretionary spend has been very close to zero)
Good video, but one issue is you saying it's a fault of the 4% rule that it doesn't take in account state pensions, but it's up to you to adjust what data you're inputting instead of the 4% rule being the answer to everything. e.g. instead of a $40K need adjust it down to $25K if you have a $15K pension.
68 and still working in my own business can work as I like generally don't see the point in full retirement and lifestyle change and can be so boring I have noted in others.
I think most people work longer than they need to because they want to retire on the same income they have whilst working. That's not necessary.
It's mainly an inertia bias. But also people get used to spending without a care whilst they have an income. Having to then consider what you're spending is a big shift.
Excellent video. You are so right about this dilemma. Your plan is well thought out but there are just too many imponderables, the main two being inflation and health. I have an answer to this tortured question.
It's a bit extreme and radical but bear with me..
Set an age at which your quality of life will be sub par to the extent life is taking more out of you than you are taking out of it.
Statistics will help you to do this.
Assuming you want to enjoy your hard earned cash rather than the government or greedy relatives getting their hands on it, you want to die when you've spent your last pound.
So, you write down the age at which you are happy to drop off your perch.
Then divide up all your your assets to sustain you until that date.
When it's all gone, jump off the perch!
The only problem with this strategy is that, like most human behaviours, favouring the You of today over the You of tomorrow. Your future self may not look back kindly on this decision when you get there.
@@JamesShack I concur. I have known several old folks who talked easily about kicking the bucket for years, until things got earnest, and then they hung onto life with a fear in their eyes you would not believe.
it also depends on how extravagant a lifestyle you lead.
That makes all the difference!
Fred West and Rose West not been able to invest in their SIPPs for some time
🤣😂🤣
Nice to see Fred and Rose getting a mention.
I was going to make that comment. Maybe not the best names to have chosen!
James proving that he is still the GOAT of RUclips finance
Haha thank you!
Your videos are SO useful, James! It's fantastic that you're empowering people to help themselves better, as of course, none of this info is taught at school, despite it being so important to help navigate life well. Your videos are helping to educate me on financial planning, as I was burrowing my head in the sand before, and avoiding facing it (am sure you hear this a lot)! Perhaps a different question than you might often get here.... I am intrigued to know which platform/software you use to make your videos? I work as a Dietitian, and am considering making some educational videos for the public too.
Hey ! Sure, I use Final Cut Pro to edit, it’s professional enough to do everything I want but not overly complex. Most RUclipsrs use it.
I then just use Canva to make all the slides… looks fancy but it’s not!
People retiring now don’t realise how fortunate they are - they have final salary pensions and council houses they bought for under 30k worth 5 to 10 fold.
Money purchase pensions, even the best ones are nowhere near as good. Appreciate it’s a short term view but both my money purchase pensions over the last 11 years are valued at what has been paid into them effectively. A higher rate taxpayer with 17% going into pension and my estimated annual income at retirement wouldn’t afford gas and electric bills alone. Most young people today will need to be left money by their parents to stand a chance of having a decent financial outlook.
I'm 61 and have my pension pot ready, but I'm still working and driving myself to distraction trying to design a portfolio that gives me the best chance of riding out the future market crisis. Have you done a video on this?
Thank you. Just what I needed to watch. Me and hubby are directors of our farm business and own property, plus small pensions. I also earn passive income online. I am nearly 52, hubby is 55. We have started to think about when we could retire from the farm, and could we afford to live on rental income. We want to get private health cover, especially as our plans could include living in Spain for at least part of the year. Will watch more of your videos, get the spreadsheet, and start to think more in detail.
Another option is to retire to a cheaper place, where £20,000 will get you much more. Where selling your home for 200k will potentially buy 2 homes, or renting out your uk home and the income pays your rent and leaves additional income.
You will only pass on the tax payable on cap gains to your beneficiaries.. Btl was great was upon time, now just a CASH COW FOR GOVT, ISA ARE THE BEST ROUTE IMO WITH ZERO CAP GAINS BUT TAX PAYABLE ON WAY IN. PENSIONS ARE ANOTHER CASH COW FOR GOVTS
Thanks for explaining these options, this example is very close to my situation, you are a Star, might be able to Retire same time as my Husband who is 5 yrs older than me. Nice x
You can never be sure , I retired at 60 , 5 years ago. Since then everything has gone up to the extent
that my outgoing is twice what it was when I decided to retire. Lucky I can still afford it but you can never plan for everything. I now get my UK state pension, but I would be in a different position if I was
not getting it
Kind of depends on who you are, where you live, how much you spend, whether or not your home is paid off and what you expect out of retirement. This is kind of like saying, "Here's a pair of size 9 shoes, you should be all set!" Some people wear a 7 or an 8, or a 10 or a 12! Are you retiring in New York City, or Macon Georgia? Will you be spending your summers traveling Europe, and your winters skiing in Aspen? Or will you spend your summers gardening and your winters volunteering?
Ideally everyone should look to generate a second income outside of their daily job, these can sometimes be scaled up over time to eventually help you with early retirement.
Great video James. Have you considered doing a video on the effect of charges? When I first started to save into a Personal Pension in 1990, I modelled the growth of my pension using spreadhseet software, and was suprised at the effect that charges had on the final portfolio value.
Why do you want a constant income? You don't need lots of money at 91. Spend more money when you are fit then just live more frugally when older.
I consider myself financial independent, but not by the four percent rule. Instead I use another simple rule I invented for myself: Given that the dividends from my assets are exactly the same as the inflation rate, and given that my current expenses will be unchanged except for inflation adjustments, at which age will I run out of money? The calculation is simple: Divide your assets by your yearly expenses, and add this number to your age.
Don't forget to add the cost of a new patio into the figures...
The problem is that most people don't have a pension. Only government workers have that these days.
best vid on this I've seen. thanks
Alternative: Spain, Vietnam, Malaysia, Chile etc.
if they start going towards remote part time work. it will both give them something to be busy with and also keep their investment growing while they draw out of it.
Here is the answer to your question. You don't need anything because the government will look after you. We have two private pensions, savings, and state pensions, yet we live no better than our neighbors who didn't bother to save a thing
Why not?
@@rajmehta6210 benefits
Hi James, IFA here, brilliant video as always.
Great video. I think the another big one is to factor inflation in as far as possible as well.
Before I found your videos in the March 2021 lockdown, I thought I could never retire, as even though I have a large pot, HL Pension Statement estimated only 6k PA at retirement age. I did not realise this was assuming I would get a announity. I now realise I should be able to retire at 57 or later if they Goverment change the age you can access you pot. Keep up the great work.
That’s great to hear! Yes the pension estimates are very conservative, which often leads people to think pensions are crap.
@@JamesShack Also a lot of people think pensions are scammy, because you put money in, die, and then hardly anything is passed on - maybe a pittance to the other half. There needs to be a lot more visibility about pension schemes you can pass on what remains at death to children - if this is possible, especially without inheritance taxes.
@@AgileSnowWeasel It's an education problem. Defined contribution pensions, the one that most people have now, do have great inheritance benefits.
Great video, especially in the current climate. Downturns and recessions WILL happen before and after retirement, so prepare, plan, and don’t panic. ‘FIRE’ is a great goal but remember to tend that fire carefully or you’ll get burnt.
Stock market crashes are a feature of investing. Not a bug. They're part of the contract we sign as equity investors.
Great advice. But Fred and Rosie? Didn't they take in tenants to subsidise their pension?
First, what is wrong with work? Second, I am 60 and I have no idea what I would do with myself all day if I did not work. All the things that I can imagine that would keep me active, engaged and mentally busy would cost more money than I will ever have. My idea of retirement would be to stop working on Monday and Fridays so I have enough 'pin money' to play and enough 'work aggravation' to appreciate the long weekends more. I plan to work in some way till I cant any more. I like to work.
Enjoyed this video, we are on option 2 and looking at option 3 within the next two years. You are so right that nothing is black and white, we might still work a little bit up to state pension as doing nothing would bore us to death 😬.
the wests sound like a lovely couple
I like your example of Fred and Rose West :-)
u can actually spend down the pot over time as well. no point going to the grave with the original pot still in place
Isn't pointless if you want to leave an inheritance for your children/grandchildren
That's what is being tested here. A success means that they had more than £1 at the end of the plan.
Dont think its the people who want to work until they die. Its the Government if they provide a pension keep pushing up the age to retirement. In some places it was like 50yrs old now 65 and increasing...
Do we all really need to try and never deplenish that initial pension lump sum? As we get older, into late 70s and 80s, whats wrong with the pension lump sum being run down. I've seen it many times, an old retiree dies, a youngster buys a new car with the inheritance. I'd prefer to spend my hard-earned pension on myself.
I agree....never understood leaving the pot untouched.
I intend to bounce my last direct debit before I pop my clogs.
My dad always said he'll spend his last penny on his death bed, leave nothing for the kids 😂. Good on him I say, it's his money and he's already done plenty for us. Spose we'll get the house though!
In order to ensure that in worse case scenarios you don't run out too soon. Which means in the average and best case scenarios you'll have a surplus. You could up your spending later, but I'm not sure many 80 year olds will be able to enjoy a new Porsche 911.
Hi Gavin, this model is not trying to maintain the value of the pot. It's testing to see if you run out of liquid assets before you're expected to die.
you can't be too flexible if inflation is at 10% like it is now in Europe and the US. If you're willing to use Geo Arbitrage then things may work out as housing is the #1 expense of a budget, if you can dramatically reduce your housing costs that would make a massive impact. Unfortunately housing is skyrocketing to the moon in most of the developed world, moving to Southeast Asia or South/Central America are good options but of course there are pros/cons.
Genius content. I want him as my adviser!!
I get what your point is but, 'living to 101 is a downside scenario', is not quite what i think you meant!
I do not understand the 4% rule. If you were to put your investments in the S & P index fund and get back an average of almost 10%, your money would actually grow - yes?
Less than you're being told because you're old and will not do anywhere near the things you think you will once you retire. You won't be able or want to.
The Trinity Studies that modelled the 4% rule assume it ensures an infinitely self-perpetuating safe withdrawal rate where you don’t touch into the principal at all, so you have statistically equal chances of running out of the money in your lifetime as you have it accidentally becoming $9M :)
😢and it’s inflation-adjusted average growth, important to bear in mind, not nominal growth (because that flat white will cost you £60 in some decades’ time. Or way sooner by the current rate of things 😅)
Just use dividends in the early years of retirement and only dip into the capital if you have a bad dividend year. I've received £24K in dividends this year from £400K invested.
Dividends can help a lot, but it’s more efficient to invest for the best possible total return rather than specifically focusing on dividends.
I love your videos. Thanks for your content. Amazing work really. I had one request. Would love your take on property investment versus stock market investment over long term including tax implications. Thanks again.
Our biggest concern after retiring 2 years ago is the inflation figures. We have seen a large drop in investment value too. So a double wammy. But were fortunately able to wait until the markets go positive. Don't wait to retire is our advice. Life adjusts to your income and drawdown is a short term option too.
Hi Shaun, as you say, you just adapt. How have you found mentally going from being a saver to a spender?
@@JamesShack Hi James, it was a non contribution DB pension from 18 to 55 years old and a middle management role. Way over the LTA even after penalty for retiring early. We did have our moment and had 20k to spend on watches and a handbag. But that's it, our new Motorhome was paid for from downsize. We've saved all our working lives and now spend money to enjoy ourselves but as an IFA in the 90,s and 00,s we keep an eye on our savings and I found your LTA video invaluable.
Keep up the good work and Merry Christmas to you and your family.
So,, your tool compares results based on the last 100 years of the stock market. Despite having, by regulation, to tell your clients that the past is no guide to the future. Not little guide- no guide. You then guide then using the past.
I have gone for a different way, I got 2 rental property's outlay total for both with some works 140k but I've re mortgage since then so got back about 40k so now only in for 100k and have about 100k equity. But I rent out for 4200pm both places including bills my bills are about 650 per house 1300 total leaving me with 2900pm I have a few extra expenses per year so about 2500 pm after them profit
In the US, the country with the 2nd highest poverty rate out of all the 34 First World Countries, the total retirement savings as the age of retirement is just $16,000. "Retirement" is not even a word that most americans know.
You should be able to retire at 65..You had 45 years to save and invest ( should have learnt that in school)..The only way the 4% rule would work is if you retire abroad ( away from North America) to South East Asia or Mexico..Hoping to have 10-15 years of life remaining according to stats..It’s not rocket science…
I must google this at least x2 a week!😀 Great video and extremely helpful! Thank you
In my family, most people have not lived beyond 84, and frankly their final 2 or 3 years were pretty miserable, Why do financial planners use age 90 or 95 in their calculations? I am currently 62, and anticipate that I will stay relatively active until around 75.
Let me cut to the chance…. You will need 2 million in fixed income. Best bet tax free insured muni bonds at approximately 4%. That 80 grand no tax
I honestly believe it's just a matter of time before the state pension becomes means tested.
Will the government still be paying a full pension for life to people with a million pound plus pension pot..
Part of the pension is already means tested.
Will they means test the component that depends on your NI contributions? Nope. Mainly because no party will want to alienate the huge pensioner electorate. Look what happened to Teresa May when she suggested pensioners with the assets should pay for their own care rather than imposing yet another burden on the tax payer. God forbid the inheritances they leave behind be impacted. How much more unreasonable outrage would at means testing pensions?
Agreed Bruv
Great as always James, Thank You. It would be great to see similar early retirement simulutaions but with inclusion of income from state pension and maybe defined benefits pension along the way. And in this context consider own assets protfolio not as a source of income untill death but as a temporary bridge to fund your life untill becoming eligible for mentioned pensions. I am sure then the path to financial freedom becomes even more realistic, achievable and atractive. But that would be mostly for those who are willng to live on moderate income in retirement. I know I am because time is more important to me than luxuries of this world.
Yes, if you're only looking for say £20k per year the state pension and DB pensions have a BIG difference. I may do a video on this and annuities too, and they're back in fashion.
No debt = early retirement.
Fred & Rosie?! Really?!
Why not just go ahead and call them Mr & Mrs West?
For me the key is to find a job that you love and it takes away a lot of the worry. I decided 3 years ago that I was going to change career and do something meaningful with my time. I now work 2 days a week in a job that gives me great satisfaction and I have no plans to retire even though I could at 55.
Yeah exactly, lots of people think that not working will bring them happiness but I don't think it does, the thing that makes people happy is the freedom and autonomy that having enough money gives you.
@@sb_dunk I like going to my work and just can’t imagine it not being part of my life. A lot of people thought I was crazy when I packed in my career but it was fairly stressful and now I’m stress free. It’s good to have a purpose in life.
@@nomadicsouls3290 Me too, but I also enjoyed life before working, even though I was dirt poor. I think you can just get used to your lifestyle!
Great stuff!
I like my job but no job can beat my fishing hobby.
What is the most tax efficient way to get paid from abroad? Can it be paid directly into a stocks and shares ISA
Rosie should register as self-employed, and pay voluntary class 2 NI contribitions at £3.15 per week, in order to get her full state pension. But treat this advice as if you heard it from a bloke down the pub.
What is the modelling software you're using?
Men, don't get married and live minimalist.
With a state pension which is currently almost £10k so to get an ok pension for most single people they only need around £10k per year from their pension pot, so even on an enquiry at current rates you would only need under £300,000 pension pot even if you retire at 58 ish? Or are my calculations incorrect?
It all depends what your expenses are