My Retirement update, 2 years on.

[DelianLeague]

Greetings all. It was two years in December just gone that I retired from work. I was grateful to all the tips and encouraging posts on the LF at the time so I thought I should give a very brief update.

Here is how I did it.

Finished work (age 56) in Dec 22 and lived on my savings & overtime payments for one year.

January 23 , I took the 25% tax free lump sum from my SIPP. Diverted some of it into investments and bonds etc. Spent the rest on fast cars and Hookers etc.

January 24 (Now) Some of the saving Bonds have now matured so I am using some of the cash to fund myself. I will also max my ISA in April.

In mid 2024 I will look into drawing down monthly amounts from my SIPP & ISA.

Some info on how I invested. Well, I didn't even have a pension until I was age 30 but once I did I always made sure I put what I could afford into it to take advantage of the companies contribution. Its was a pity that my first pension with my company only put max 4% in but its better than nothing.
I have also paid my ISA for 18 years now.

All pensions were consolidated into my SIPP about 6 years before leaving my last employ and everything invested passively in the broadest global index tracker ( Van FTSE Global All Cap). ISA has a mixture of Investments.

My idea is to draw down about £1000 per month from both pots. I can always up my ISA withdrawal if needed. Then in three years I will have a modest DB pension scheme kick-in and then a few more years the Government pension.

I am just glad that I managed to be in this situation considering I started saving so late and was also working for half my working life on relatively low wages as an apprentice / porter / warehouse work / different factory jobs etc. I am proof that it can be done if you have determination and patience.

Hope you find it Interesting. Keep plugging away. D.L.

[Gerry557]

Can you say more about the car and hookers. asking for a friend.

[swill453]

January 24 (Now)

Er, not quite

Scott.

[Adamski]

Hi, are you finished with work now or are you tempted out of early retirement. The govt was/is keen to tempt early retirees from after the covid pandemic back into work to pay taxes. You're living on £2k a month? Probably about the same as myself. But a hobby job would be tax free and cover household bills.

[Itsallaguess]

I am just glad that I managed to be in this situation considering I started saving so late and was also working for half my working life on relatively low wages as an apprentice / porter / warehouse work / different factory jobs etc.

I am proof that it can be done if you have determination and patience.

Bravo.

As someone who's squinting at a hopefully-growing light at the end of a long working-tunnel, your 'determination and patience' statement certainly resonates.

Well done that man...

Cheers,

Itsallaguess

[DelianLeague]

Can you say more about the car and hookers. asking for a friend.

I originally wanted to quote George Osborne, when he stated we could withdraw the lot and spend it on a Lamborghini. But I wasn't sure about the quote or whether it was him that said it and I couldn't be bothered to google it. So I used my version.

[DelianLeague]

January 24 (Now)

Er, not quite

Scott.

Yep, Not concentrating was I? Meant to read:

January 25 (Now) Some of the saving Bonds have now matured so I am using some of the cash to fund myself. I will also max my ISA in April.

In mid 2025 I will look into drawing down monthly amounts from my SIPP & ISA.

[DelianLeague]

Hi, are you finished with work now or are you tempted out of early retirement. The govt was/is keen to tempt early retirees from after the covid pandemic back into work to pay taxes. You're living on £2k a month? Probably about the same as myself. But a hobby job would be tax free and cover household bills.

Hello Adamski,

No, in short. I know a lot of people love their jobs and I think that they are lucky if that's the case. Although I can say I actually did like parts of my later working life and I was doing work that was rewarding and fairly skilful, I never had a career, It was just a job and I'd had enough of the commute and the shift patterns and the noise of the factory floor. I decided that when I retired it would be because I don't want to work. Not even part time. I Just womble about, do hobbies, travel, ride fast motorbikes bikes etc. All the usual stuff.

Regards, D.L.

[Itsallaguess]

Finished work (age 56) in Dec 22 and lived on my savings & overtime payments for one year.

Coming back to the above, and on a broader point regarding the transition from 'earning' additional work-based funds to 'spending' them once you're not earning them, I'd be interested to hear how you've got on with that, both initially and in the subsequent period, and how the reality over the past couple of years might have transpired against any expectations you might have had in this area before you finished work.

Cheers,

Itsallaguess

[kempiejon]

Can you say more about the car and hookers. asking for a friend.

I originally wanted to quote George Osborne, when he stated we could withdraw the lot and spend it on a Lamborghini. But I wasn't sure about the quote or whether it was him that said it and I couldn't be bothered to google it. So I used my version.

I was thinking George Best.
I spent a lot of money on booze, birds and fast cars. The rest I just squandered.

[James]

I originally wanted to quote George Osborne, when he stated we could withdraw the lot and spend it on a Lamborghini. But I wasn't sure about the quote or whether it was him that said it and I couldn't be bothered to google it. So I used my version.

I was thinking George Best.
I spent a lot of money on booze, birds and fast cars. The rest I just squandered.

Or Tom Waits: Fast women, slow horses, unreliable sources.

[DelianLeague]

Finished work (age 56) in Dec 22 and lived on my savings & overtime payments for one year.

Coming back to the above, and on a broader point regarding the transition from 'earning' additional work-based funds to 'spending' them once you're not earning them, I'd be interested to hear how you've got on with that, both initially and in the subsequent period, and how the reality over the past couple of years might have transpired against any expectations you might have had in this area before you finished work.

Cheers,

Itsallaguess

Hello Itsallagues,

If your asking about say 'additional work-based funds' such as overtime as opposed to normal base salary then for me it was never a problem or concern as the said extra monies were never spent on lifestyle events/purchases anyway. I never saw the money. Any extra income was saved for retirement in the form of extra pension contributions or Isa contributions.
So, psychologically my brain was already wired for the change as there was no change. No matter how much I worked, I never had a different lifestyle in monetary terms. I only used to check my pension once a year to see if I was on track.
I was under no illusions that there would be some extra costs in retirement and also some savings. I was confident that I had enough saved to live just on the yield without any capital withdrawals and this would have some inflation protection because most is still invested and also I have my small final salary pension kicks-in and then the state.

I actually spend more now on enjoying myself. I have switched from buying assets to liabilities now Holidays, Motorcycles etc. Isn't this the point?
It would be a mistake to retire and be afraid to spend.

Regards, D.L.

P.s are you planning to retire soon?

[Itsallaguess]

psychologically my brain was already wired for the change as there was no change. No matter how much I worked, I never had a different lifestyle in monetary terms. I only used to check my pension once a year to see if I was on track.
I was under no illusions that there would be some extra costs in retirement and also some savings. I was confident that I had enough saved to live just on the yield without any capital withdrawals and this would have some inflation protection because most is still invested and also I have my small final salary pension kicks-in and then the state.

I actually spend more now on enjoying myself. I have switched from buying assets to liabilities now Holidays, Motorcycles etc. Isn't this the point?

It would be a mistake to retire and be afraid to spend.

Yes, thanks - it was that transition from accumulating on the run-up to retirement and then into the phase of not being able to accumulate in the same way any more, and needing to de-accumulate to pay for your retirement lifestyle, and I wondered how you'd found it.

From what you've said above, it seems like you've had no great problems! :O)

P.s are you planning to retire soon?

It's on the radar now, and it's questions like the one above that I find myself considering, so I thought I'd ask someone who's had a few recent years to have gone through that type of transition how they got on with it.

I agree with your view that it would be a mistake to retire and be afraid to spend, although I'm concious that putting such thoughts into action might take an effort of will that I'll hopefully be happy to be able to test out at some stage.

All the best with your retirement.

Cheers,

Itsallaguess

[kempiejon]

Does the plan to stop accumulating have to be a move towards deaccumulating. It might be a petty difference but I do not necessarily intend to decrease my net worth early on but stop focussing on increasing it. The addition of new money and reinvesting of accumulated dividends will stop as I live off my ER investments. I have a mind to extract the natural yield from the ISAs, take from the SIPP to the tax threshold and by my planning these do not necessarily decrease to size of the pot. I am not ruling out spending down capital and as I see it plausible returns outstrip my spending needs so will answer that deaccumulation question then.

[Itsallaguess]

Does the plan to stop accumulating have to be a move towards deaccumulating. It might be a petty difference but I do not necessarily intend to decrease my net worth early on but stop focussing on increasing it.

The addition of new money and reinvesting of accumulated dividends will stop as I live off my ER investments. I have a mind to extract the natural yield from the ISAs, take from the SIPP to the tax threshold and by my planning these do not necessarily decrease to size of the pot.

I am not ruling out spending down capital and as I see it plausible returns outstrip my spending needs so will answer that deaccumulation question then.

I agree, and my emphasis should really have been on the transition related to the specific removal of work-based payments, and them being replaced with 'something else' generated from previously accumulated funds, related to either natural-yields, draw-down, or a combination of similar approaches.

Cheers,

Itsallaguess

[kempiejon]

I agree, and my emphasis should really have been on the transition related to the specific removal of work-based payments, and them being replaced with 'something else' generated from previously accumulated funds, related to either natural-yields, draw-down, or a combination of similar approaches.

For that transition, once I stop adding to the tax shelters I have calculated an income figure based on drawing the natural yield of the ISAs and the personal allowance from the SIPP. This gives me a fairly useful number and can cut my cloth accordingly. I can draw this sum lumpily or monthly from the cash pot that'll be the same as getting a work based payment. The mindset of no longer putting a percentage of my wages aside, looking for investments and defering gratification to just using all the money is just in my head so we'll see how that pans out.

[DelianLeague]

psychologically my brain was already wired for the change as there was no change. No matter how much I worked, I never had a different lifestyle in monetary terms. I only used to check my pension once a year to see if I was on track.
I was under no illusions that there would be some extra costs in retirement and also some savings. I was confident that I had enough saved to live just on the yield without any capital withdrawals and this would have some inflation protection because most is still invested and also I have my small final salary pension kicks-in and then the state.

I actually spend more now on enjoying myself. I have switched from buying assets to liabilities now Holidays, Motorcycles etc. Isn't this the point?

It would be a mistake to retire and be afraid to spend.

Yes, thanks - it was that transition from accumulating on the run-up to retirement and then into the phase of not being able to accumulate in the same way any more, and needing to de-accumulate to pay for your retirement lifestyle, and I wondered how you'd found it.

From what you've said above, it seems like you've had no great problems! :O)

P.s are you planning to retire soon?

It's on the radar now, and it's questions like the one above that I find myself considering, so I thought I'd ask someone who's had a few recent years to have gone through that type of transition how they got on with it.

I agree with your view that it would be a mistake to retire and be afraid to spend, although I'm concious that putting such thoughts into action might take an effort of will that I'll hopefully be happy to be able to test out at some stage.

All the best with your retirement.

Cheers,

Itsallaguess

Don't forget that last January I took my 25% tax free lump sum, so at the moment I have more money in cash than I have ever had before.

Regards, D.L.

[DelianLeague]

One thing to add that has made things a little easier concerning future plans such as when to start my Sipp drawdown is the fact that I remained invested. I only cashed in enough equity that was equal to my 25% tax free cash sum.

I allowed/planned that the remaining 75% would grow to the original sum equal to before I took the cash (after about 4 years). When I checked my account last week, I only needed 8% more growth. I didn't expect that after 1 year.

So I think it pays to be conservative with planning. I also found the Monte Carlo calculators useful.

Good luck to all. D.L.

[kempiejon]

Don't forget that last January I took my 25% tax free lump sum, so at the moment I have more money in cash than I have ever had before.

Did you consider taking an amount each year with 25:75 untaxed/taxed. I have been back and forth on the 25% lump at the start or staggered UFPLS. I do have a specific large expenditure due fairly early in reitrement but have enough outside the SIPP I could use. As it'll be some time between SIPP and state pension I think I get more tax free over that decade not using the lump all at once with the current tax treatments.

[DelianLeague]

Does the plan to stop accumulating have to be a move towards deaccumulating. It might be a petty difference but I do not necessarily intend to decrease my net worth early on but stop focussing on increasing it. The addition of new money and reinvesting of accumulated dividends will stop as I live off my ER investments. I have a mind to extract the natural yield from the ISAs, take from the SIPP to the tax threshold and by my planning these do not necessarily decrease to size of the pot. I am not ruling out spending down capital and as I see it plausible returns outstrip my spending needs so will answer that deaccumulation question then.

I also plan to only live off the yield in a tax free manner for as long as my lifestyle allows. It is one of the reasons that I split all my investments almost equally between my pension and Isa. Obviously this will only work if Isa's aren't changed for the worst.

Regards, D.L.