To think it's perfectly understandable that a high-paid, child-free couple could retire at 50?

[LoomyDee]

Someone I work with is retiring in a couple of years aged 50.

I have the same plan but I'm only just 40.

We were chatting about it the other day at work, and a couple of people were or acted completely befuddled by the situation. When the lady in question went to the toilet, a couple of people starting up with "But how on earth will she afford it?"

I don't get it.

Surely it's not extraordinarily strange and incomprehensible to realise that a couple with high-paid jobs, a fairly normal lifestyle and no children will be able to retire very early?!

Am I missing something? I've run my own numbers and 50 seems very comfortable but I worry I've completely overlooked something with how incredulous these other colleagues were!

Most people have pensions and state pensions designed to kick in at 65/67 . So to retire at 50 you need an extra 15 years money. About £350000. You can downsize or save to get it.

Assuming you live on a rough income of £60k a year you will need to have about a million in the bank to support you until you get your old age pension. Plus having paid off your mortgage etc. Not many people can achieve that.

Depends how much of the £60k they're spending though.

We're generally talking about people who earn £60k but live/spend as if they earn £40k and save the rest. So they save/invest a lot, it builds up to a big pot, which lasts longer because they spend £40k, not £60k.

Indeed. I'm 47 now and every day I thank my younger self for realising the benefits of tax relief and the magic of compound returns from equity investing over a span of decades. What gets me is that some people seem to actively want to be ignorant about it. MN isn't too bad in fairness, but look at the comments under any article on pensions in, say, the Guardian, and 90% are absolute drivel banging on about Robert Maxwell, Equitable Life, Gordon Brown, 'The pension company will take everything in charges', 'you have to live to 100 to get your money back', and other such nonsense that belies a total lack of knowledge about the subject. I've pretty much stopped bothering engaging with it now; if people don't want to take the opportunities offered to them and thus guarantee that they'll have to work til they drop then that's their lookout.

To retire at what age?

I’d interested to see the calculations you did on this.

Taking £60k net from a £1m pot would be very bold. The traditional advice for a safe withdrawal rate is 4%, and that's before tax and fees.

OP, you also need to make sure you have enough money outside your pension, as you won't be able to access the pension until 58.

Thanks for all your insights on this. I'm kind of looking forward to retirement now - only ten years to go 😂

I don't think its beyond wild for a well earning couple with no children.

Children are expensive.

But people on here talk about them like they are pets, an optional extra in society. I'm not saying people should be having 10 kids but society does actually need the next generation.

Worth mentioning when politicians bang on about economically inactive people, this group had one of the biggest increases post covid. People retiring early is one of the reasons we had a labour shortage. I’d do it if I could afford it, but have loads of volunteer stuff I’d fill my day with.

I’m planning on retiring at 54, and I have kids too. The key thing is that we own the house outright, secondly the kids are left home with careers and houses, thirdly we don’t have expensive tastes eg fancy cars nor big house.

The other factor is that if you don’t have kids yo have more freedom as to how you spend your days so retirement becomes more attractive. If you have kids at home of school age you can’t just go off travelling and doing mini breaks the whole time because they still need you around. Theres a risk you retire and it’s kind of boring.

It’s like when people say “if I won the lottery I’d just give up work and travel” like they’d just take the kids out of school because now they’re rich. Newsflash: billionaires kids still go to school 😂😂

I always get annoyed when it's talked about living "joylessly" to achieve retirement at an early age, but really for me it's about prioritising.

Holiday accommodation is a big one for me.

We travel a lot, and we're out of the accommodation a lot. We happily stay on a Parkdean in the UK for a fraction of the cost of a holiday cottage, but our friends always prefer fancy airbnbs. Abroad, we make sure the location works for us, but again, we're able to work with whatever we're given.

The people I know with the most financial stress (and resulting life stress) are those who refuse to compromise in any area of their life. They're the type of people who talk up EVERY purchase to be most expensive one then cry foul when it adds up. E.g. the friend who is crying down the phone about the pressure of working with a newborn to cover the expensive house, the long haul holidays, the weekly manicures, the fourth child....

The second most stressed group are the people who make every decision in the most frugal way possible, not always rationally. E.g.my mum never came in attractions with us as kids to save money, and she has memorised which individual items cost across four supermarkets to buy the cheapest teabags to use twice...

The majority of the rest of us muddle through one way or another, prioritising.

My life certainly isn't joyless because I live within about 60% of my means. I just only spend on things that actually give me joy, rather than a momentary dopamine hit.

Perfectly achievable. I have very expensive kids at Uni and I want out at 55.

House paid, even if I don’t put another penny into my pension pot or it achieves no further growth my income is equivalent to my current salary right now. It should still grow.

I can take one at 60, some at 62, then 65 and 68.

Not had a single penny of help in my life, just saved everything I could, always maxed out matched contributions, no inheritance coming my way.

High earner? I did ok. I’ve just been very careful.

This mainly. People I know who have retired relatively young have invariably then taken on non-exec director roles, undertaken further study in a new area, or started a new business simply because they are 'do-ers'.

Sorry I’m very late today. I just realised @Gemilo was saying to get an income of 60 K in retirement, with the 1 million

Yeah, a single child free person with no Mortgage doesn’t need that in retirement

I’m a lone parent, age 47 and on track to retire in the next couple of years. I did get on the housing ladder at 19 and paid off my mortgage before
moving and paying off my second mortgage by age 40 so this has definitely helped. I’ve been in a minimum wage job since getting made redundant in 2019, but was earning a decent wage prior to that.

people are very bad really comprehending that other people lead very different lives to them (very evident on here). They can just about get that celebrities or whoever are in different positions but when it comes to friends, colleagues etc. who on paper appear to have similar lifestyles/jobs to them they assume that, give or take a few quid, their finances are roughly similar, whereas what seems like small changes can actually make huge differences.

i.e. neighbours in identical houses on the same street - one could have bought just a year or two earlier before a property boom, tied into a 5year deal when interest rates were lower, with a slightly higher deposit = hundreds of pounds difference every month in their repayments.

you vaguely know your friend's mum 'helps out a bit with childcare,' = just that one day a week, for 4 years could be £17,000 saved on nursery costs. For two days a week, and 2 kids, that's nearly £70,000!

1 person goes to uni when fees were £3k p/y, their colleague is only 1 year younger but started when fees went up = triple amount owed to start from £9k for a 3 year degree, to £27k, which only increases dramatically as interest is added. Over 30 years that's a huge difference.

Even tiny things like phones = newest iphone £50 a month plus £10 insurance vs friend with a version 2 years older that is now out of contract, so only pays £4 a month or whatever with giffgaff or lebara. but looking at it you'd both seem to have 'decent smartphones,' which do 99% the same things.

I don’t believe MN would class us as a high income couple but we have no children and am planning on going part time next year. We could retire fully and live with cheaper holidays but I’m 46 and DH in his 50s so we thought we might do part time or temping type jobs for a bit (assuming we can get them) so the plan is to use that income for bills and holidays and let the investments grow more.

We have pets and nice holidays which we have never been budgeted for but we have never had an expensive car or eaten out much or smoked or had expensive hobbies.

We have just consistently saved into investments and paid the mortgage off about ten years ago. We buy what we can second hand and have always bought fixer upper houses which has helped massively as we will eventually downsize and free up some cash plus it has enabled us to save a fortune in interest and there have been some side hustling to help along the way

Those of us with children like to pretend we don’t know how much they cost because it makes us wish we didn’t have them 🙈

Juat ignore them, they’re lying to themselves. Leave us child bearing, poor folk to our delusion and enjoy your retirement.

I agree with this. I was called a liar, a chatbot and a man 😮for talking about some financial stuff on here once.

You know there’s a “money matters” section?

I must admit, I thought this thread was in there. I’m shocked to see that you put it here I didn’t realise that

There is lots of sensible talk in that section of the board. So that’s the place to post the good stuff.

I must admit, I am just looking at my furniture as my neighbour had a big delivery….

It’s a bit shabby. Never mind - money is in the retirement pot.

This is the thing, it's almost a coda on here that talking about economising is treated as something with a) everyone should have to do, there's a COL dontcha know or b) of course we should mindlessly spend to the max of the budget.

People assume we spend a lot on holidays because we got lot, without noticing that we never travel peak season and we often just spin the wheel on where has cheap flights or accommodation. Friends come to us asking travel advice saying things like, "I want to go to Tuscany in August from this specific airport" when our approach is to point Skyscanner at a month and see where we can fly for fifty quid and get an apartment for 300.

Depends on the details. I am 50 and in a high paid job but my career has only really got going in the last decade. And, connected to that, I only bought my first property at 40. My partner is 10 years younger than me and also earns well now, but has only started to do so in the last couple of years. So we are late bloomers! And we’ve only been together about 8 years. If I’d been with the same partner since my twenties and had got my act together on the work front, then maybe possible.

our approach is to point Skyscanner at a month and see where we can fly for fifty quid and get an apartment for 300

I don't think I realised that there were people who didn't do this.

But then you see people on here who will say things like 'we can only go away from 16 to 23 August, where should be go' and I'm thinking, well wouldn't it help to know which flights go from your nearest airport on those days for sensible money and also preferably not arriving at midnight and departing home at 6 am because as well as being unpleasant, that's two days you're paying for a hotel but not getting a day's holiday. No point suggesting Crete if the only flights on those days are £500 pp.

I have a long list of where I would like to go and for any particular trip, usually an idea about what type of holiday I'd like (beach, city break, hiking etc), so I'd see where the cheap flights go during that travel window and see if anything stood out. If flights to Crete were £500 pp, that's staying on the list for now and I'll go somewhere else.

Our best friends want to go on holiday with us, but they are fixed with dates (fine, teachers), need to budget (fine, expecting a baby), but also are fixed on location which basically rules it out!

There are tonnes of other places available to go to at the same time, but they don't even want to try them out.