Early Retirement at 57

SharkMX

https://www.boards.ie/discussion/comment/122000174#Comment_122000174

I know a guy who was even on a Eddie Hobbs show with Hobbs showing him all of his financial mistakes of which there were many. He was terrible with money. He is now a QFA and I would never in a million years take any sort of advice from him, never mind financial advice.

well24

https://www.boards.ie/discussion/comment/122000209#Comment_122000209

I wouldnt say a 6 figure salary is a typical wage in Dublin, Im sure their is quite a few ppl on it, but would be a very small % compared to the entire workforce in Dublin.

I aint anywhere near that wage, but I work part time. 48 and will retire at 60, with probably about 1.5m / 1.6 in combined assets (myself and wife) :) Thats the plan anyway.. my wife is 4 yrs younger so she will probably continue to work for a few years (or might even go part time)..

SharkMX

https://www.boards.ie/discussion/comment/122000383#Comment_122000383

Dont make the mistake of counting your house as an asset for retirement unless you are going to sell it and downsize for the difference. I know a few people including my parents who looked at downsizing and the options and benefits of downsizing were dire altogether so none of them bothered.

well24

https://www.boards.ie/discussion/comment/122000395#Comment_122000395

I know that, and it is included in the figure.. however it can be used to fund retirement home for example later on in retirement (we dont have kids!)

Or as we dont have kids we can sell up altogether and buy abroad..

Options!

bilbot79

https://www.boards.ie/discussion/comment/122000395#Comment_122000395

What were the downsides of downsizing for them?

SharkMX

https://www.boards.ie/discussion/comment/122000443#Comment_122000443

There were so many, i'll just mention some of them.

The difference they get to keep unless downsizing to a tiny apartment was very small so not worth it.

50 years living in a house with all your neighbors as friends and if you move away to an apartment or small house somewhere, especially when you wont be as mobile in future was not appealing when they thought about it.

Most people have children and grand children that they like to have stay over the odd time, some even coming back for hols from abroad. Downsizing would get in the way of that.

They felt that they had worked hard, invested in upgrading and maintaining and generally making a life in their house, and downsizing was just throwing that life away.

Good properties to move to were non existent.

well24

https://www.boards.ie/discussion/comment/122000395#Comment_122000395

My parents did the opposite to downsizing, sold hse in dublin for 350k and bought in the sunny south east for 200k (hse was the same size but have an acre of landscaped gardens, which is what they do when not in Gran Canaria..) they got the apartment in GC with the remainder and were also able to get a conservatory in Ireland… so not bad going.. this was 20 yrs ago..

SharkMX

https://www.boards.ie/discussion/comment/122000498#Comment_122000498

Mine didnt want to move away from their friends and neighbors in the end.

Where they live all the old dears call into one old dears house and sit in the garden drinking tea and gossiping all day. They sit in her conservatory if its raining. The men usually go to each others houses and chill far away from the women. God knows what they do, but it usually involves sport, beer and tool sheds :)

yagan

https://www.boards.ie/discussion/comment/122000489#Comment_122000489

I saw a lot of interesting downsizing options in Australia, with reduced property tax benefits. They're a generation or two ahead of us in developing such options.

The trend there seems to be people approaching retirement start offloading the family home, buy a massive RV, put the savings in 5/10 year bonds, go drive around the continent for years as grey nomads, and then sell the RV, and move into a purposefully built retirement community and then maybe take a cruise once or twice a year.

I kinda have a similar plan about campervanning around Europe, but obviously it can get cold in the med too so it would only ever be a part time odyssey.

well24

https://www.boards.ie/discussion/comment/122000493#Comment_122000493

Eh no.. as I said im sure their are alot of people in Dublin earning 6 figures, but this would be a very small % of the entire workforce of dublin.. if you want to pick a particular neighbourhood on the southside or something then yeah it would be typical, but thats not what was said tbf

SharkMX

https://www.boards.ie/discussion/comment/122000676#Comment_122000676

Not exactly true.

To be fair there are people who retired at 18 all over the country :)

Most of them wealthier than people who spent most of their lives in debt buying their houses too.

well24

https://www.boards.ie/discussion/comment/122000676#Comment_122000676

Fair point, but I would still say that 6 figure is still not a high % of people say in their mid 40's to early 50's who are thinking about retirement and how they are going to fund it..

Jim2007

https://www.boards.ie/discussion/comment/122000443#Comment_122000443

The biggest problem is that the housing infrastructure does not support it. Here is Switzerland the philosophy is very different - investing in property is recognised as a very high risk strategy and actively discouraged by the state - you pay wealth tax and capital gains on property, but equity investing is tax free! The rule of thumb is that you should not pay more that 20% of your annual income on your accommodation.

The result is that you have a wide range of different property types in most areas. So it is possible as a young person to start with a small apartment, move to a large apartment or house when family comes along and move later back into a smaller apartment or even some kind of sheltered living, all in the same area. That way you don't have to part from friends or neighbours, give up on hobby clubs, doctors, other services and so on.

well24

https://www.boards.ie/discussion/comment/122000697#Comment_122000697

Yeah sure even millionaires are not super rich these days, its all about billionaires now..

SuperBowserWorld

https://www.boards.ie/discussion/comment/122000701#Comment_122000701

Sounds great. Even though we are in the EU and close to Europe, we seem to ignore all the decades, even centuries knowledge of scaling populations from countries in Europe.

Kaisr Sose

https://www.boards.ie/discussion/comment/122000701#Comment_122000701

I liked that about Switzerland when I lived there. A point worth noting is it is a rental culture due to the disincentives of owning (and cost of property).

Furze99

https://www.boards.ie/discussion/comment/122000443#Comment_122000443

There's the opposite pressure now for some in the need to upsize! To cater for adult offspring who can't afford rent or ownership without at least some help. Living in the box room, as the new lad in charge puts in, is only good for a while. So this is a whole new ballgame for some.

Jim2007

https://www.boards.ie/discussion/comment/122000440#Comment_122000440

I'd be very slow to encourage anyone to move permanently abroad on retirement and I'm retired in Switzerland after having worked here for over three decades.

It's possible to survive in most European countries as a long term tourist, but if you don't speak the language competently it becomes much more difficult when you need to access local services. For example, you need home help, it is available but not in English because most of the staff are from Eastern Europe and have just about managed to learn the basics of the local language. The same with specialists, I'm having eye treatment at present that involves attending hospital as an out patient every month for injections into the eyed ball. Yes the specialist speaks English, but the majority of the staff I see at the hospital every month have little or no English…

Jim2007

https://www.boards.ie/discussion/comment/122000174#Comment_122000174

There is nothing between them and if all you got is that the exams include some multi choice questions then I would not put much store on it.

downtheroad

https://www.boards.ie/discussion/comment/122000859#Comment_122000859

Very wrong Jim

As per the LIA:

QFA- The Professional Diploma in Financial Advice is a six-module level 7 qualification.

CFP- The Postgraduate Diploma in Financial Planning is a highly regarded postgraduate qualification (Level 9) and is the gateway qualification to the prestigious international CERTIFIED FINANCIAL PLANNER™ designation.

In fact there are 2 levels between them. You sound like a man with QFA qualification.

bikermartin

https://www.boards.ie/discussion/2058345724/early-retirement-at-57

it's not that bad idea, go for it, live a good life.

Supercell

https://www.boards.ie/discussion/comment/122000498#Comment_122000498

That's exactly our plan (I'm 53 with 4 years 11 months until mortgage paid off, i'm counting the days almost!). Sell here in Dublin and buy in Wexford or Waterford and an a apartment in Spain. I'd love a slightly bigger garden and a greenhouse to potter about in. Plan is to live in Spain for six months (Nov - April ish) and rent the apartment out the rest of the year for some income to append our pension and savings. Hoping to be ready around 60 for that, though in fairness I'm ready now but the funds aren't! If my health is good I might alternatively take a less stressful but lower paying job instead for another few years once the mortgage is done and the kids through third level, if they go there (around when I'm 62).

Jim2007

https://www.boards.ie/discussion/comment/121997766#Comment_121997766

Actually 2M is not the much, it's requires a combined monthly contribution of about 450 Euro a month over one's working life.

Raoul Duke III

https://www.boards.ie/discussion/comment/122000910#Comment_122000910

The problem there is that most Irish people neglect to get started early with their pension planning and thus miss out on a lot of multi-decade compounding.

Which is why auto-enrollment is such a good idea but that's one for another thread....

CelticRambler

https://www.boards.ie/discussion/comment/122000526#Comment_122000526

I head off into the mountains in my MH for the winter because it's easier to keep warm than the house. :D Mind you, so far I've only had it down to -15°C ; maybe things would be different if it got really cold …

Regarding the financial implication of "extra" post-retirement travel in particular, you're no longer tied in to a certain number of days' leave that have been graciously granted to you by a benevolent employer - provided you book them on the general rota six months in advance and don't mess up someone else's plans and don't take all of it in one block, etc, etc.

Apart from the obvious saving booking off-peak fares/hotels, this also gives you the opportunity to cut out much of the actual travel expense. Instead of having to book three return flights for three different periods (plus airport taxi/parking plus overnight stay near the hotel plus expensive airport food … ) you can book one flight and make a three-centre holiday of it over an extended period of time.

Depending on what local transport option you've chosen, this may also give you the opportunity to get away from over-priced tourist hotspots and enjoy a cheaper, more genuine version of the local culture.

But you need to know that that's the kind of thing you really, really want to do. There are a heck of a lot of continental retirees with a campervan that spends 300 days a year parked on their drive.

TheBlock

Here's my Plan

Current Age 51

Current Pension Pot €600,000

Monthly Contributions €2,000

Family of 5, 1 pension plan as wife doe not have the option at the moment. I want to retire at 58 (Same age as my Father retired, all be it his was due to poor health) At which stage my youngest will be 20 and will be self sufficient.

My pension has an average annual growth rate of 8% since inception so will use that to predict future pot size of €1,240,000. I will take the tax free lump of €200,000 from this leaving a balance of rounded €1,000,000.

At retirement age of 58 I will have a cash pot inclusive of the tax free lump above of €400,000 (€200,000 from other sources) and no Debts.

I reckon we will need approx €48,000 net per annum and in order to get to this I would expect that I would do a combination of things.

We need to cover ourselves from 58-61 from the cash above plus some part-time work (this will be important to ensure full contributory pension for wife). I reckon if we do 20ish hours each at min wage jobs we will bring in a combined €26,000 per annum and can top up from the cash pile.

Cash pile reduces to roughly €300,000 at 61.

From 61 I can draw down from ARF (should be €1,200,000 at that stage allowing for 4% per annum growth) at roughly 5% to kind of track average ARF returns €60,000. This should net about €4,000 a month without effecting principal.

At 66 both qualify for full contributory pensions total of approx €28,000 plus the 5% drawdown of ARF above of €60,000.

€88,000 for a couple at 67.

Leving whatever cash we have built up plus the principal of the ARF?

Think we are in a good place if my maths are correct.