Advice on retiring before 65?

[Warner31]

Hi,

I am someone in my late 20s have a job paying just under the national average. I am someone who wants to achieve financial freedom well before 65. I mean I do not mind working in my 60s but I would not want to work full time as I would like my later years to be more relaxed.

Currently have no debt and about £5k in savings should I start investing in things like index funds, ETF and hold the money for the next 30 years and put additional contributions every year to help the money grow?

It would be nice to hear your recommendations to help find ways to grow money substantially over 25-30 years.

Thank you.

If you are working always pay as much into your pension as you can afford to for your retirement
1;The government currently gives you tax back on any saving you make- eg 20% gain if basic rate payer. No return on any other savings will get you anywhere near this
2 Saving into a pension is free from capital gains when you eventually take it ( although you obviously pay tax on income you draw from that pension pot…but even here the first 25% lump sum is tax free
3;Your money will be invested and will grow for long time as you are young…which is excellent . Whilst pension pots are invested more conservatively than say a equity only fund, it also means your money is safer for such a critical saving pot that you can’t afford to loose really

Remember that even for draw down pension, a £100k pot will only result in a £7-9 k pension income per year . People don’t understand the sheer amount required..so anything you save now will be worthwhile as it will Havelonger to accumulate

Look a your employer pensions first…many of those scheme allow AVC or similar (additional voluntary contributions) and will match your additional savings with a further contribution - meaning even more free money, look at that first before buying a stand alone product.

You need to balance a pension saving , with savings for other things in your life..here is where you can use ISAs etc to protect against tax. Right now holding cash is slashing its buying power every day (interest rates around 1% vs inflation at 7%) so look at stock and shares ISAs. Look at how long you want to invest for(eg when are you likely to need savings) and what risk you can take with money and feel comfortable.

But any investment outside a formal pension product won’t get you the government tax rebate at 20% or above, so if you can afford to put as much as you can into pension if you can lock it away until retirement

Maxing out your pension is your best idea - tax efficient and your employer will pay in

Put as much as you can in pensions, get a mortgage and try and overpay. Don't get into debt.

Pay as much as you can into your company pension, and start a private pension on the side into which you can add small amounts and lump sums as you go along. Play around with a compound interest calculator too to see the amounts you need to save to retire when you'd like! (It's a lot!). I'm considering spending some time in the civil service too since the pensions are so good.

Agree, max out company pension first and start a self invested pension as well. Under current regs, you would be able to access from 57 so would provide a bridge between when you retire and state pension age.

If you are in UK, the current state retirement age is 66

Depending on your age, other people will not receive their state pension until 67 or 68

You can check your state pension forecast on www.gov.uk

Suggest pay into a work pension, the company should add some free money & the tax man too into the pot. Due to compound interest the pension money should grow even more

Suggest if possible pay off mortgage & other debts before 60

Spend some money too, life is for living & having fun