Will I be able to retire in 11 years?

[newguy]

So realistically £800K would be two high for me but £500K would almost certainly be two low.

Now try running some numbers again for the £500K capital-spending scenario, but where you might maintain a number of years past 55 only working in a part-time capacity...

A potential scenario might be where you look to cut your working hours in half around that age (2.5 days instead of 5, perhaps..), but where you're still left with a monthly working wage that covers all running-expenses, even if there is little left after that for additional saving or investment, but where the key thing then would be to maintain your already accrued capital without having to draw anything down, and also allow it to continue growing by being fully invested as normal.

There an awful lot of middle ground in all of this, with plenty of potential scope for playing financial tunes with your cash and your human capital, and some hours spent scenario-planning with a spreadsheet can help to expose these types of possibilities.

Whilst a position of full retirement might well be a worthwhile goal, there might also be lots of personal and financial benefits to considering some years of part-time work before you might reach that point, as a potential trade off for you at some stage...

Cheers,

Itsallaguess

Thanks again Itsallaguess. I've been running some different numbers this morning and working part could make quite a difference.

[newguy]

I live in Scotland as well…..and it is generating some most unusual publicity worldwide just now for things I’d better not get into….

But yes, higher rate tax is 41%, increasing to 42% from April.

A sweeping generalisation I know but for anyone wishing to retire early, in mid to late fifties, unable to access state pension till 67/68, but still able to access a private pension at 55/57, then a pension will smash an ISA.

You make an instant 72.4% - it will cost a net £58 for a £100 uplift in pension - uplift the minute you make the pension contribution.

At age 55 or 57, assuming you have no other taxable income, then you can use your personal allowance to take out say 4% a tax free.

Let’s be modest and say personal allowance is only £14,000 in 11 or 13 years time.

So you have a pension pot of £350,00 that can be drawn down income tax free. Let’s assume you have withdrawn the 25% lump sum, also tax free. So you can build a pension pot of around £466k and withdraw 25% in a lump sum tax free and withdraw a further tax free income of £14,000 a year, using your personal allowance.

So virtually everyone in normal modest higher rate circumstances, the pension route is better than the Isa route.

In your circumstances I’d also consider a modest drawdown on the capital within the pension as you do not intend to leave it to anyone and again a modest equity release scheme may be appropriate for your final property.

I wouldn’t bother worrying about nursing fees when calculating what you need - you’ll never make a comfortable sum and it is more than likely you will not make it to a nursing home.

Fees in the main city in Scotland are running at £1,500 to £2,000 per week for nursing home fees now so utterly pointless attempting to save for this - your property and pension at the time would get you into a decent one at the beginning and then it is down to luck as to what happens re longevity.

Thanks Thebarn, I appreciate your response. It makes a lot of sense.

[newguy]

@newguy, let us know how you get on, you might want to post your portfolio changes on portfolio management thread.

Thanks Adamski, I might well post something in portfolio management as I really need to think about whether my porfolio is too growth focused at this stage.

[newguy]

Thanks everybody. This community has always been very excellent and a source of great knowledge. You have all given me a lot to think about.
Thank you
Newguy