Early Retirement Achieved

[erith]

Hi

I'm Erith, I live in the UK, I'm already retired and have been for 5 years. The bad news is I am 60, so why am I reading Early Retirement blogs? The answer is they are fascinating. My younger son introduced me to MMM about a month ago, then I found ERE etc

I really applaud the mindset, and have loads to learn, not only to ensure a prosperous retirement, but also work with my kids to help them on their way. They are also on the journey. Live simply, save everything else. At 30/33, they left college with no debt, and are already mortgage free having saved hard for years, and with a little bit of help from us...

My story - In 2009, I got fed up with all the travelling for work, getting up at 4am on a Monday morning to climb on a plane, coming home sometimes at 11pm on a Friday night and living out of suitcases in yet another hotel,is a really rubbish way to live. So I decided to take a break for a few months, and work out my way ahead.

That was such a breakthrough. I discovered how little we needed to live on. I thought I might get bored, as I was a workaholic. No chance! So after my break, I went back in September 2010, with 1 goal, how soon could we retire? Answer: DH retired July 2011, I went Oct 2011 having just turned 56. It is amazing what a bit of focus does.

Key decision factors
1) - really understanding what our minimum financial needs were. We still travel, (one son lives on the other side of the world)
2) - working out the most advantageous way of saving while still working. (answer for me in the UK - Pension AVCs, they go in before tax, and I got to take them as a lump sum at retirement. Gain 40% plus investment improvement)
3) - really looking at all our finances, kicking some investments into touch, putting more into others. Understanding our Net Worth, versus our spend.
4) - from the moment I started the break, we decided to live at our minimum level. Everything else was saved. It's not total frugality, more living simply.

Now, not only are we comfortably at FI, we have got so used to living economically, we are still saving a lot of our income... It's not that our pensions are high, it is because our spend is so low, with the exception of that 1 long haul trip every year.

And now I am really looking to reading and enjoying the forum posts - and first question - what is SWR? I noticed a recent post from Jacob, asking for everyone's SWR?

[BRUTE]

FIRE on the first post! congratulations.

[BRUTE]

SWR stands for "safe withdrawal rate", i.e. how much money can be spent of a total net worth without drawing down the principal (or going completely bankrupt, depending on who's asking). usually it's considered safe to have a SWR between 3-4%, which has historically been a relatively safe rate of interest to achieve.

[saving-10-years]

Welcome Erith. I also am 60 and retired 'early' at 57, a former workaholic who loved my job. My husband who stopped full-time work after redundancy in 2011 became harder and harder to leave home alone (where he clearly enjoyed his work-free life). My AVCs became a rental property - first retirement project - in 2014. Being retired means that I have some time (not enough) to read the forums here (fascinating and loads to learn).

SWR = safe withdrawal rate. Its the percentage that you would be able to withdraw from savings to cover your expenses without running out of savings ever (depends on life expectancy). This MMM post explains. http://www.mrmoneymustache.com/2012/05/ ... etirement/ and Jacob explains this and lots more in his book.

As your net worth increases and/or your expenses are cut back the SWR goes down. There has been discussion here about whether the 4% rate is a safe withdrawal rate. Its most relevant to people who are funding early retirement through investments. You may be funding your retirement through a pension, or part pension/part investment?

My son is 19 and going off to Uni with lots of frugal ideas. You should be glad that your children are not having to face the current Student Finance England ideology. Aaargh.

[sl-owl-orris]

Welcome

[erith]

thanks Saving-10-years, I am fortunate, our work pensions are enough to live on, and we haven't yet touched either DH or my Pension Fund. I hope it will be 10 years before that is forced upon us. I took a hefty discount to take my pension early, but I decided it was worth it, rather than using our savings. I reckoned it would be 15-18 years, before it made a difference... We left DH's one to come at the correct date last year. State pension will come in another 6 years, hence why I think it will be at least 10 years before we need to start worrying about a SWR.

Even though we're retired, my husband does a bit of part-time consultancy for his old firm, on his own terms, no admin, just the stuff he wants to do, with the result that we are putting all of that away each month. So our assets are continuing to grow. Interested that you used your AVC's for another property. I am also considering that. Just not decided. At the minute they are invested.