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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

Work hard now to pay off your mortgage by 30, and retire by 40

473 replies

Ieattoomuchsugar · 09/01/2022 07:38

And to buy a house at 19/20 whatever age

Maybe exaggerating with the ages a bit but these are examples I've seen.

People who've gone without holidays, new clothes etc, lived with the bare minimum and worked endless overtime for years in order to achieve the above.

Has anybody actually done this or in the process of doing it?

I do see the appeal but I personally wouldn't want/wouldn't have wanted to spend my 20s and 30s living that way. I do think life is to be enjoyed, I of course want to save but I am not prepared to go without things I enjoy for such a long time. I think it's better to strike a balance, and I'd rather enjoy life now just as much as when I am 50/60.

OP posts:

Fretfulmum · 09/01/2022 10:20

It is actually a very poor financial decision to concentrate on paying off your mortgage before anything else given how low interest rates are. It is much better financial sense to invest that money elsewhere which will earn far more than the measly interest rate of your mortgage

JinglingHellsBells · 09/01/2022 10:20

If you pay off a mortgage quickly, then you probably aren't saving or investing in pensions as well.

So retiring at 40 and living for another 45 years- what would you live off?

Of course a lot depends on location and house prices.

Some figures quoted here for the cost of buying a home are what people in the south east / London charge for renting out their driveway as a parking bay!

Mellowyellow222 · 09/01/2022 10:21

@burnoutbabe

Yes have effectively done this, mortgage cleared before 40 (I was single) which meant a redundancy wasn't an issue and then I could decide to go back and study at university a subject I was interested in in last few years.

So I am not retired but I only work one day a week, which covers all my outgoings. Then masters course the rest. I'll probably work more when finished, we'll see.

I am curious about how this works. Were you also able to overpay your pension during this time so you have a decent pension at 65?

Have you been able to build up saving as well? A lot can happen in the next 40 years. The roof of your house needs redone, appliances will need replaced, cars will break down etc etc.

I am just jealous😂 but curious how normal people who don’t have passive income can retire so early

JanuaryBluehoo · 09/01/2022 10:23

Eg any increase in salary goes into the stock and shares fund.

echt · 09/01/2022 10:24

Retirement is pretty boring and unchallenging for most people and something you only need to do when your mental capacities decline

And you know this how? I don't know any retired people, and I know good few, who find it boring. Their days are full to the brim.

As for the decline of mental faculties - don't be so bloody rude.

burnoutbabe · 09/01/2022 10:24

Yes my pension as maxed out when I worked full time.

And I have a flat so minimal repairs. No car as in London etc.

No kids so that saves a ton of money.

JanuaryBluehoo · 09/01/2022 10:26

also in the fire movement whether they have paid their houses off or not is an moot point. . What they have done is built up enough capital to live off the dividend etc.

This will be more than enough to pay off mortgage if necessary but its not paying off the mortgage that's the key here iyswim

burnoutbabe · 09/01/2022 10:27

And I agree about just focusing on paying off mortgage.

The main point is to save and then choose what to invest in.

When I say I overpaid my mortgage I actually put it into savings as mortgage rate was 0.02% for me. (A very good base rate tracker) Then when savings rates plunged I did pay it off.

But investing in pensions for the tax saving is important as well as shares (in an isa).

Main thing is to save rather than spend.

AgrippinaT · 09/01/2022 10:28

@Maverick101

Five people I knew all died in their early 40s in the last couple of years (none from Covid). Life is about balance whatever age you are. Financial security is fantastic but not at the expense of any quality of life.

This.

rwalker · 09/01/2022 10:28

Bought a house when I was 18 ( different times literally 3 pay slips and been in job over 12months and they lent you 3 1/2 times your wage).

House was a complete hovel all I could afford took years to do . All my friends cars , holiday and nights out . Looking back I missed out on so much .
Moved 10 years later crippled myself with overpayments house paid off in 40's .
Whilst it's nice not to have mortgage I could afford one now but missed out on so much in late teens and early twenties .

daisychain01 · 09/01/2022 10:28

@user5656555

It costs less than £2k rather than £10-£15k

The poster degrading "cheapo holidays" was talking about the frivolous environmental impact, I'm curious what makes a middle class holiday more moral than a "cheapo" holiday, but need the parameters of a cheapo holiday first.

See, you've bought class into it, not me.

I didn't even think about what class in society we're talking about, and I don't think the OP did either, it was just a general observation on my part, not aimed at anyone specific or any class, that if people spend less money on empty purchases (which they do!), they would be able to put more into the mortgage. That's about as benign as my comment got, but do feel free to ridiculously add the words middle class and "moral" to misrepresent my words and intentions any way you choose .

Roominmyhouse · 09/01/2022 10:30

[quote Porcupineintherough]@Roominmyhouse I dont think it works like that. My sample size is admittedly small (2) but in both cases it wasnt about retiring, it was about building a business you really believe in, working all hours (obsessionally really) to do that and then one day realising that youd done all you wanted to with the business (in both cases it was getting so big it didnt feel do much like "theirs" any more), it didnt satisfy you in the same way and life was passing you by. So business gets sold them - boom! Retired. Certainly in my brother's case he's a very all or nothing person. He could never do a 9-5 job. It would either be 24/7 or not at all.[/quote]
Fair enough I guess if it’s a business you are passionate about and then you sell it. I guess I’m very much not a work 24/7 sort of person 😆

ShanghaiDiva · 09/01/2022 10:31

@echt

Retirement is pretty boring and unchallenging for most people and something you only need to do when your mental capacities decline

And you know this how? I don't know any retired people, and I know good few, who find it boring. Their days are full to the brim.

As for the decline of mental faculties - don't be so bloody rude.

Retirement can be as challenging as you want it to be. I am retired and do a lot of voluntary work and am a councillor. My mental faculties have yet to decline.

ChiefWiggumsBoy · 09/01/2022 10:33

I’m 40 in October. Just got a new mortgage in October as we moved.

I mean, wonderful for those who have the means to save that much money, but the reality (and expectation) for me and most people I know, is that we’ll work hard and spend hard because you can’t take it with you. Life is for living, not just for accumulating wealth.

gracedentsleftbumcheek · 09/01/2022 10:35

We could have done this if we'd stayed put in our last house and would've been mortgage free at 42 (me) and 37 (DH) - however, the house wasn't working for us with 2 small DC so we are about to buy another - 700k mortgage and house needs work. But I'll be working until at least 60 anyway as DC are 3 and 1 so youngest won't finish school until I'm 60. So I kinda figure I may as well carry on.

Also, like others have said, I'd rather have money and experiences now whilst the DC are young. My dad retired at 65 on a really good pension and shortly after developed Parkinsons so can't travel or anything because of insurance (and also his mobility) - we just don't know what is going to happen in life so I think it's about balance really. Enjoying the here and now and experiencing things, but also with one eye to making sure you're not destitute in retirement.

LovelyYellowLabrador · 09/01/2022 10:36

We’ve been a bit guilty of this, and We are trying to be less sensible
Really what’s the point in having loads of money when you are old ?
You’ve got to enjoy your children being young

Freelady · 09/01/2022 10:37

Friend of family age 22 is doing this. Gets free coffees from.apps, buys rarley but well, livws with parents, has First class degree as engineer. He is very focussed . Apart from.being able.to live with family( sofa bed in situ , small house) the famliy have no saving or historical privellidge

Porcupineintherough · 09/01/2022 10:39

@Roominmyhouse I'm a pretty 24/7 person just like my brother. Unfortunately whilst his interest was in IT, mine was in bugs, beetles, garden birds etc. So I'm still working I do like my job though.

SuPerDoPer · 09/01/2022 10:41

I'm the opposite - I've stretched out my mortgage to its limit and I pay the smallest amount possible (its not huge anyway). It means I can work part time and have more time and money to do things with the DC. I also pay as much as possible into my pension. When the DC are teenagers and don't need me for the practical day-to-day stuff so much I'll work longer hours and pay off the mortgage. Life is for living, there's no prizes for having the most stuff.

user5656555 · 09/01/2022 10:42

@daisychain01 why don't you answer the actual question, what is a "cheapo" holiday and what is the issue exactly? (That presumably "expensive" holidays don't have)

Riverlee · 09/01/2022 10:43

People have commented about paying off mortgage or investing elsewhere. For me, paying off the mortgage is a priority, as I would feel more secure. You literally have a roof over your head. As others have said, you don’t know what’s around the next corner. You may never live to enjoy all that pension money you have saved (sorry if that sounds morbid).

Roominmyhouse · 09/01/2022 10:43

[quote Porcupineintherough]@Roominmyhouse I'm a pretty 24/7 person just like my brother. Unfortunately whilst his interest was in IT, mine was in bugs, beetles, garden birds etc. So I'm still working I do like my job though.[/quote]
That definitely sounds more like a good for the soul job though even if it’s not good for the wallet!

SockFluffInTheBath · 09/01/2022 10:43

We’re on track to have cleared the mortgage by the time I’m 50. Not spectacularly early but gives us a little bit of breathing space. Like pp have said, it’s a balance between the mortgage, savings, and living life now. We probably can’t afford to stop work before DCs are through uni anyway, so that also brings me to 50. Plans for retirement are travelling and another degree. I have a few years to plot the rest!

ShadowsInTheDarkness · 09/01/2022 10:43

Gosh that sounds quite a miserable existence especially as most people have DCs during the years that you'd need to be saving like mad so would mean less money spent on them too.

We have an opposite outlook (necessitated by me having small DCs when I met DH and going back to uni at that point). We rent now and will do until our 40s, and have lived in some lovely places. The DCs get a much bigger bedroom and outside space than we would be able to afford if buying and we rent some land where we keep livestock just up the road. When we are in our 40s or older we will be in a position to buy something possibly outright or at least with a much shorter mortgage than would have been possible if we bought sooner. We will be able to look at small holdings or houses with land attached for our animals.

It's completely upside down compared to how everyone else does it but it's working well for us and has meant that we don't have to do the scrimping and saving thing with small children. I did that when I was a single parent and it was incredibly tough so we made a choice that we would prioritise the DCs childhood now and renting frees up the money to do that.

OneInEight · 09/01/2022 10:44

There has to be a balance. Through a combination of dh's ill health and children's SEN out household income is probably a quarter of what it was ten years ago so I am very glad our mortgage was paid off by then. On the other hand the same factors mean that I am glad we had at least a few long haul holidays when dh was fit because he simply could not do them now with any semblance of enjoyment or at all really.

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