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HOW TO STICK TO ONE PLAN

Investment discussion for beginners. Why you should invest your money, get help getting started
GoSeigen
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Re: HOW TO STICK TO ONE PLAN

#305582

Postby GoSeigen » May 4th, 2020, 1:31 pm

ISAnoob wrote:
Gosiegen wrote:
What to do?

1. As others say, keep doing what you're dong.
2. You're one of the 2% if not one of the 1%. Every day thank the gods or whoever put you in that position for your good fortune and don't forget the average man who was born to different circumstances.
3. Pay down the whole mortgage if possible. Being shot of the bank is a great feeling and it gives tremendous flexibility for your next property move.
4. "my holocaust fund": are you planning to fund a holocaust -- or just go and experience one?? Maybe buy a book about the actual holocaust, read it and help other people your age understand what happened. The last person in our family who had to flee the holocaust has few years left -- if he doesn't succumb to coronavirus in New York.
5. "14 plate Focus"? Luxury! I drive a 05-plate Skoda! But when I was your age in your position (after paying off 2 mortgages) I splashed out on a new Audi convertible and don't regret it at all. As others have said use your cash wisely to do things that bring you and others around you joy.
6. Regarding pension vs ISA etc. I've always done this: maximise my employer's contributions to my pension, matching if necessary; but for own savings I focused first on debt reduction (pay off mortgage), second ISAs and only then pensions. The problem with pensions is you can't touch them till you retire. So you tie up your funds and you become a hostage to law changes. The point of saving and investing is to attain freedom of action, not to be rich but bound. You can still use the 40% relief later when you are closer to retirement age.

Good luck.

GS
[Retired since age 37...]


Hey, thanks for your comments. I would be interested to hear more about your background and how you managed to retire so young? property?

Taking your points in turn:

1. I will, thank you.
2. I do consider myself lucky. I have been lucky all the way along - just got the grades to go to Uni and then managed to get on a Graduate programme with a massive international company (I was by far the least educated and qualified of the 20 of us that started that year out of 1500 applicants) and then managed to end up in a well paying role that comes with a massive standby retainer, almost unlimited paid overtime and a car allowance. I could easily have ended up in a completely different situation as I was applying for jobs straight from school in case I did not get into Uni.
3. I only took a 19 year mortgage (1.99% fixed rate for 5 years) and do intend to pay this down sooner.
4. Apologies for my poor choice of words - what I meant was a disaster fund i.e. lose my job
5. haha how did you end up from the Audi to an old Skoda?
6. I will keep this in mind.

Thank you.


2. I bet you got lucky before that too. e.g. I bet you weren't born in a remote Indonesian village with a dark skin, one parent dead and the other supporting several kids with an income of £200 per month. Believe it or not that is the start in life life for the average human, not the poorest! (Okay plenty people have two parents but ...)
An income of £60k per year at age 29 puts you right up there. My peak wage was £45k plus pension, company car etc.

3. Good job. Our second mortgage was 15 years IIRC. Getting a shorter mortgage than the standard 25 years makes a huge difference to ability to save and is a great idea if the terms of the best mortgages penalise lump sum payments.

4. No worries I was somewhat amused and hope people your age realise the enormity of the holocaust. I do family history, researching my kids ancestors and am horrified at the number of lives I track that end in a ghetto somewhere in Poland between 1941 and 1945. Really brings it home.

5. Retired! Sold the Audi to travel the world with kids (which we've done twice, a year at a time). The skoda helps keep the expenses down and they're actually damn good runabouts too, VWs in disguise.

To be fair I retired too soon: bringing up three young kids with savings from 15 years' work at under 50k wages is not easy. I've been lucky with investment though, starting with property in 1994 (perfect time) moving to shares in 2004 (again pretty good), then cash/gilts in 2007, then buying bank bonds in 2009 to 2011.

The biggest factor though in achieving the above is a wonderful wife on the same wavelength (mostly!) and super kids who relish an adventure. Best way to stay married and preserve your wealth is not to get divorced!!


GS

scotia
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Re: HOW TO STICK TO ONE PLAN

#305593

Postby scotia » May 4th, 2020, 1:52 pm

Just in case no one else has mentioned it - I don't think that retiring abruptly at 55 necessarily guarantees an optimal lifestyle. By all means, make reasonable financial plans to allow early retirement, but you may find that a more gradual switch is more rewarding. I was fortunate to enjoy much of my work, and I started slowly retiring from my early sixties, holding onto the parts I most enjoyed until finally fully retiring in my early seventies. Yes - I could have fully retired a decade earlier, but I enjoyed the transition.

EthicsGradient
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Re: HOW TO STICK TO ONE PLAN

#305604

Postby EthicsGradient » May 4th, 2020, 2:21 pm

scotia wrote:Just in case no one else has mentioned it - I don't think that retiring abruptly at 55 necessarily guarantees an optimal lifestyle. By all means, make reasonable financial plans to allow early retirement, but you may find that a more gradual switch is more rewarding. I was fortunate to enjoy much of my work, and I started slowly retiring from my early sixties, holding onto the parts I most enjoyed until finally fully retiring in my early seventies. Yes - I could have fully retired a decade earlier, but I enjoyed the transition.

The full plan did include "hopefully go part time at 50".

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Re: HOW TO STICK TO ONE PLAN

#305609

Postby tikunetih » May 4th, 2020, 2:47 pm

scotia wrote:Just in case no one else has mentioned it - I don't think that retiring abruptly at 55 necessarily guarantees an optimal lifestyle. By all means, make reasonable financial plans to allow early retirement, but you may find that a more gradual switch is more rewarding. I was fortunate to enjoy much of my work, and I started slowly retiring from my early sixties, holding onto the parts I most enjoyed until finally fully retiring in my early seventies. Yes - I could have fully retired a decade earlier, but I enjoyed the transition.


Everyone's going to talk their own book, but I do think the longer your career, particularly if it is an interesting one, the harder it becomes to imagine a new, different life away from all of that. And conversely, the earlier that you do this then the smaller will be the regular "career" portion of your life in comparison to the rest of your life.

Me? I never wanted to go to work in the first place: before I'd even had my first job, indeed before I'd even sat my A levels (I remember when I decided!), my "ambition" was not to have to go to work for a living. When I did enter the workplace my goal was, within reason (ie. still have a life), to make as much as I could as fast as possible in order to amass sufficient to realise my teenage "ambition".

scotia
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Re: HOW TO STICK TO ONE PLAN

#305617

Postby scotia » May 4th, 2020, 3:31 pm

EthicsGradient wrote:
scotia wrote:Just in case no one else has mentioned it - I don't think that retiring abruptly at 55 necessarily guarantees an optimal lifestyle. By all means, make reasonable financial plans to allow early retirement, but you may find that a more gradual switch is more rewarding. I was fortunate to enjoy much of my work, and I started slowly retiring from my early sixties, holding onto the parts I most enjoyed until finally fully retiring in my early seventies. Yes - I could have fully retired a decade earlier, but I enjoyed the transition.

The full plan did include "hopefully go part time at 50".

Yes - but it was the "retire at 55 at the very latest" that seemed an absolute end point that bothered me . And he mentioned he was an engineer, and he loved his job. Engineering is a creative occupation, and does provide job satisfaction, albeit with not the same financial returns as other occupations. And although as you grow older you get a bit slower mentally, your past experience proves useful when collaborating with the younger generation. I'm glad I continued into my seventies - and only finally made the break when a number of considerably younger colleagues decided to retire.

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Re: HOW TO STICK TO ONE PLAN

#305638

Postby ISAnoob » May 4th, 2020, 4:45 pm

scotia wrote:
EthicsGradient wrote:
scotia wrote:Just in case no one else has mentioned it - I don't think that retiring abruptly at 55 necessarily guarantees an optimal lifestyle. By all means, make reasonable financial plans to allow early retirement, but you may find that a more gradual switch is more rewarding. I was fortunate to enjoy much of my work, and I started slowly retiring from my early sixties, holding onto the parts I most enjoyed until finally fully retiring in my early seventies. Yes - I could have fully retired a decade earlier, but I enjoyed the transition.

The full plan did include "hopefully go part time at 50".

Yes - but it was the "retire at 55 at the very latest" that seemed an absolute end point that bothered me . And he mentioned he was an engineer, and he loved his job. Engineering is a creative occupation, and does provide job satisfaction, albeit with not the same financial returns as other occupations. And although as you grow older you get a bit slower mentally, your past experience proves useful when collaborating with the younger generation. I'm glad I continued into my seventies - and only finally made the break when a number of considerably younger colleagues decided to retire.


100% agree with this idea and I do enjoy my work but when I'm working on a nice day, I wish I was out walking my dogs!

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Re: HOW TO STICK TO ONE PLAN

#305702

Postby zico » May 4th, 2020, 11:24 pm

scotia wrote:Yes - but it was the "retire at 55 at the very latest" that seemed an absolute end point that bothered me . And he mentioned he was an engineer, and he loved his job. Engineering is a creative occupation, and does provide job satisfaction, albeit with not the same financial returns as other occupations. And although as you grow older you get a bit slower mentally, your past experience proves useful when collaborating with the younger generation. I'm glad I continued into my seventies - and only finally made the break when a number of considerably younger colleagues decided to retire.


If it's an option, having a mid/late-life career break is one I'd recommend. I effectively retired 3 years before my "official" retirement date because I was on a scheme where after 1 year off without pay, I had the option to ask for a further year off or could return to a job at the same level and salary. This gave me a "free hit" at seeing whether not working at all for a year had any negative impacts on me. Without this option, I'd have continued working for probably at least another year, just to be on the safe side.

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Re: HOW TO STICK TO ONE PLAN

#305855

Postby vagrantbrain » May 5th, 2020, 3:08 pm

Just my 2p:

I'd echo the comments about making sure you have some fun while you're younger - i've just turned 40 and looking back I sacrificed a lot in my 20s and 30s to save a reasonable sum of money, however it's a fairly modest sum compared to my current salary. I think i'd rather have saved a bit less and had a holiday every year

Always have an exit strategy. I've seen some friends come unstuck after thinking that north sea O&G would pay big wages forever and set their lifestyles accordingly. Readjusting to life on a building site on £30k after a couple of decades on double that has been a bit painful for a few

Although you can access your pension at 57 currently i'm expecting that to change and I think the tax relief rates will drop in the near future. Might be worth running the numbers and seeing what an increase to 60 or 62, or a cut in relief to 20% does to your plans and see if you're still happy.

Choose well with women and children - i've seen a few friends and family financially back to square one after a messy divorce...

HTH

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Re: HOW TO STICK TO ONE PLAN

#305872

Postby swill453 » May 5th, 2020, 4:02 pm

vagrantbrain wrote:Although you can access your pension at 57 currently i'm expecting that to change

It's 55, was that a typo? The plan is for it to be increased to 57 in 2028, then increase in line with state pension age, though nothing's set in stone yet.

Scott.

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Re: HOW TO STICK TO ONE PLAN

#305917

Postby Itsallaguess » May 5th, 2020, 9:03 pm

swill453 wrote:
vagrantbrain wrote:
Although you can access your pension at 57 currently i'm expecting that to change


It's 55, was that a typo? The plan is for it to be increased to 57 in 2028, then increase in line with state pension age, though nothing's set in stone yet.


I think the OP said he was 29 currently, so under current expectations then the minimum age for pension access would be 57, changing to that age from the current 55 in 2028, although it's been mentioned a few times in this thread already that expecting even the 57 age restriction not to change upwards again between now and 2048 might be, as they say, a somewhat brave assumption..

Cheers,

Itsallaguess

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Re: HOW TO STICK TO ONE PLAN

#305920

Postby swill453 » May 5th, 2020, 9:14 pm

Itsallaguess wrote:I think the OP said he was 29 currently, so under current expectations then the minimum age for pension access would be 57, changing to that age from the current 55 in 2028, although it's been mentioned a few times in this thread already that expecting even the 57 age restriction not to change upwards again between now and 2048 might be, as they say, a somewhat brave assumption..

Ah, I missed the nuance of pension age being a long time away for a younger person...

But as I said, there's nothing in law to increase it from 55 yet. Though I of course wouldn't bet against it.

Scott.

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Re: HOW TO STICK TO ONE PLAN

#306025

Postby jonesa1 » May 6th, 2020, 9:43 am

swill453 wrote:
Itsallaguess wrote:I think the OP said he was 29 currently, so under current expectations then the minimum age for pension access would be 57, changing to that age from the current 55 in 2028, although it's been mentioned a few times in this thread already that expecting even the 57 age restriction not to change upwards again between now and 2048 might be, as they say, a somewhat brave assumption..

Ah, I missed the nuance of pension age being a long time away for a younger person...

But as I said, there's nothing in law to increase it from 55 yet. Though I of course wouldn't bet against it.

Scott.


In the brave, new, post-Covid 19 world we could see a lot of changes. One I expect to see is a reduction in inward migration to the UK, coupled with an increased need to do more locally because of reductions in global sourcing. That could potentially drive both increased incentives for people to work rather than claim benefits (i.e. making it harder to get benefits) and incentives for people to work until they're older (by making it harder to access pensions). If this proves to be the case, then we're likely to see changes sooner, rather than later. On the other hand there might be a vaccine break-through in a few months, with general availability in a couple of years and within a decade it will all be a distant memory.


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