How much would you need to comfortably retire on?

[WomblingBy]

DB has decided to retire at the age of 45. He has his own business which he’s selling for nearly £1m. Once mortgage and debts have all been paid, he’ll be left with £500k. No children and his DW will still be working earning roughly 30k which she will keep for her own expenses.

AIBU to think he’s mad?

Ok, £500k sounds like a lot of money but he’s only 45!

£20k p.a really isn’t much for a ‘golf club lifestyle’. My DB is in a similar position & wants to retire to play golf but golf club fees, new clubs, socialising, golfing weekends away etc really add up. How will his DW feel if she is carrying on working and subsidising his lifestyle ? (not being sexist, would be the same way if she was the golfer ).

I forgot to include assets worth around £250 but is planning to hold on to those as they’re in quite a niche market and won’t realise full worth (after dealer’s cut) for another 5 years or so depending on the market.

But if he were to liquidate now, it would add approx £200k to the pot.

The rule of thumb is that you can draw an income of 4% from a well managed portfolio of diverse investments and retain its real value. So that’s not sticking it in a savings account and drawing some out each month, that’s having a professional investment manager on the job. But, that’s a long term average. You could be lucky, or unlucky.

However, does he have a personal pension pot as well? If so, he could start drawing on that at 55, and as already stated state pension at 68. So he should be able to draw more than 20K from the capital and still have enough to see him through.

Finance is one aspect of the question, the other being how he will spend his time. That’s very individual.

No, I don't think this is enough. DH and I discussed him retiring at 55 (3 years for me and 6 years for DH) but we would have to be scraping the pennies together like we did 20 years ago. Plus, he's worked hard to get his business a good reputation and doesn't feel he'll be ready to give it up then. I enjoy working anyway so it'll be 60 at the earliest, probably 65 for me. I want us to have enough to be comfortable when we do retire.

He's deluded

That's nowhere near enough

Not to mention (I hate to bring this up but it’s relevant) potential inheritance from our parents.

He’s not going to get a state pension unless he buys a LOT of years

£1m before or after capital gains tax?

Well if he gets one of those little trollybags old people bring their groceries him in, he'll fit in ok. He's obviously very ambitious.

Add up what you averagely spend in a year and multiply it by 25 and that is how much savings you need to retire early (I read it somewhere)

Presumably his £20k pa inst just for him to spend oat the golf club? He’ll still need to contribute to the household expenses won’t he?

I really don’t think it’s enough to retire on, my DH & I are fortunate enough to have paid off the mortgage but even to just pay all the household expenses you still need a fairly decent income when you retire. I can’t think where I would cut down, no travel costs to work, no ‘posh’ clothing needed for my job, I don’t buy lunches or anything ... it would probably cost more to be at home as I’d have to pay for heating and coffee