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Escape tunnel

Discussion in 'Retirement' started by roblow, Oct 13, 2020.

  1. roblow

    roblow New commenter

    Hi there. I'm 54 and got 28 years of TP contributions. I've got 20 plus years of AVC too. Also recently started paying into a SIPP and S&S ISA. Also overpaying on mortgage to hopefully clear it in a years time.
    Has anyone any further advice as to how I can escape quicker as my current job is brutal and these days I'm feeling my age.
    I have no doubt there are others like me. When I look at my school these days there are very few of us in our 50s. Lots of youngsters who I can't imagine going the distance.
    Any advice gratefully received.
    eljefeb90 and PeterQuint like this.
  2. frodo_magic

    frodo_magic Established commenter

    As well as looking at savings, which are all good, start looking at your outgoings with a forensic eye, each utility, each insurance, car bills, holidays, food bills, lunch bills, presents, clothes, specs etc. Become evangelical about saving on outgoings. Maybe knock up a spreadsheet with each outgoing, date due, who it's with etc etc, then look at each one in turn and see if it can be reduced. Almost certainly changing suppliers of utilities, mobile etc can save. Use Aldi, drive a smaller car, buy specs from an online company etc etc. The more you cut back, the more you save, the better your habits. Most of your expenses are down to being suckered into heavy marketing, and no time to be proactively hunting for bargains, changing utility companies each year etc.

    Also, it's been said many times before, but you need far less than you think in retirement. I retired at 51. I'm 58, no debts, own home paid for, small car, and have spent an average of £13k a year since retiring, although a new small car for £10k is going to be spent soon, and a £25k extension next year! 17 years teaching, 13 years before as an engineer. Ok, no kids etc but I haven't held back, with skiing for a month each year, travels everywhere, big opera and ballet fan so go (went) all over the world for that etc. Most hobbies are cheap (mountain biking, hiking) and outside school holidays travel is cheap. My plan this year was to try and spend more from now on, stay in nicer hotels, but I've always liked and prefer basic!! I worked out a pension so that I had around £32k a year until 80, then £22k a year plus any savings until death! More than enough. The truth is, we all overthink / overplan our needs when planning retirement - no bad thing - but you invariably can't spend it unless totally frivalous. Looking back, I could have retired in my late 40s!!

    You are at an age where you can lose your health very quickly and stressful teaching is not good. Once you have £15k a year for fun stuff, with all other bills, insurances etc paid off, just go. You can always do short contracts if you really need to once in the swing of retirement, but you won't want to - trust me!

    PS ask the parents to gift you the house, if it's not too late! Huge financial benefits!
    Last edited: Oct 13, 2020
    eljefeb90, asnac and roblow like this.
  3. Nebka

    Nebka New commenter

    Less cash but so much less stress and so much more enjoyment go for it
    roblow likes this.
  4. diddydave

    diddydave Lead commenter

    I'm sure you've already seen my notes: https://edividers.co.uk/contemplating-retirement-my-path-and-other-notes

    Paying off the mortgage is a big thing, not only from a financial point of view but from the sense of well-being it creates.

    In addition it brings into focus the main elements of planning for a different financial future but the basics of budgeting are the same. You need to 'earn' more than you 'spend'.

    So the questions are:
    1. Can you increase income?
    2. Can you decrease expenditure?
    My answers:
    a) In my last years I went back to being an examiner and have continued after leaving - though this isn't looking quite as reliable a source of income as was at the moment.
    b) I designed and run a few websites for some local companies and charities
    c) Got rid of the lawn and planted vegetables and fruit trees.​

    a) The classic shopping around for lower insurance saves us a few hundred pounds each year.
    b) More significantly looking at budget options for the weekly shop - we did some blind taste tests and were surprised to find, for many items, we couldn't tell the difference or preferred the cheaper ones. (I even had to admit to being a brand snob for much of my life!) A £3 saving on the weekly food shop added up to more than the one-off insurance saving on the car.​
    roblow likes this.
  5. Rott Weiler

    Rott Weiler Star commenter Forum guide

    These two threads might be useful



    Have you got a forecast of what your pension income is likely to be? You probably know this but it bears repeating, your net income on retirement goes down far less than your gross income because of the way the income tax system works, because you don't pay NI on pensions, and because there will be no pension contributions deducted from your pension when it is in payment to you.

    The lump sum can also be invested but at current interest rates the general rule of thumb is to use it to pay off all your debts before investing it.
  6. roblow

    roblow New commenter

    Thanks for this - very inspiring. Mind you, you must have prepared well to get 32k a year until 80 (does this include state pension?).
  7. roblow

    roblow New commenter

    Very inspiring - thank you. Mind you, 32K a year is impressive - does this include state pension?
  8. heldon

    heldon Occasional commenter

    £32k is a very healthy pension for 1 person.
    mine will be £22k plus state pension when 67, so quite happy. Also happy I married a teacher who will also have a teachers pension of about £18k.

    I have worked out that we can live and be very happy, as a couple on £2k per month. The rest will be used for adventures!
    roblow likes this.
  9. roblow

    roblow New commenter

    Yes, I think ad a couple we too are ok on 2k a month. Any extra is for fun
  10. frodo_magic

    frodo_magic Established commenter

    Like yourself, I just got burnt out. At 51, stress, exhaustion, endless change, planning, behaviour, managing people who were semi-nutty and always moaning about something were hitting me hard, and things physically resulted. After 6 months of retiring, all the physical problems had gone completely, felt brilliant mentally and even fancied a few months teaching again, but for fun this time (and good money). I started voluntary work abroad in various poor areas, but teaching infants English, songs and fun stuff rather than teenagers, and it was just fabulous!

    Yep. Includes TP at 60, state pension at 67. I have a small but good pension from the engineering days which is just banked at the moment, and have been drawing down on a SIPP to fund 51 to 60 at whatever the personal tax allowance is each year. I did work for three months from 51 - 54, which helped the change and actually ended up financing each of those years nearly.

    A spreadsheet was set up, for each year from 51 to 80, adding the money coming in in each year from pension, added savings etc. Then played around with the annual pension to 'pay' myself, and update it each year. It's useful to see exactly where you will stand. At 80, they'll just be the TP and state pension left, plus any savings left over (which will be considerable if I don't start spending more), but is still more than enough to try to die in an orgy in a brothel from 80 onwards.
    Last edited: Oct 14, 2020
    roblow likes this.
  11. roblow

    roblow New commenter

    Thanks for sharing. Wish in hindsight I had set up a SIPP or something similar to cover me from 55-60. I'm sorted after that.
  12. stopwatch

    stopwatch Lead commenter

    I totally empathise (and sympathise) with you regards being in a brutal job. Brutal obviously means different things to different people. One persons brutal is another's 'challenging/exciting'. I have written on these fora before about my experiences in the 90's where I was planning to give up teaching and go live on a narrowboat as I was almost literally going mad because of my job. Luckily, another alternative came up before I did this.

    Reflecting what others have said, it sounds like you are thinking things through very well, particularly with your finances. I won't repeat what others have said, other than to say I agree with their suggestions and opinions.

    The only other thing I would add (which again, I have suggested elsewhere), is to look at other working/teaching options. Is it the type of school that you are working in that is making it 'brutal'? If it is, perhaps look at other options (smaller/bigger, urban/rural, state/private, full time/part time etc etc). I moved (thousands of miles) to work in a different type of school and this literally saved my bacon for the next 17-18 years up to retirement.

    Good Luck
    eljefeb90 and lindenlea like this.
  13. heldon

    heldon Occasional commenter

    you can run a sipp through to age 75 whilst you are drawing your tp. you can contribute £2880, which will be made up to £3600 by the government, you can continue to run it whilst drawing your teachers pension
    Free to hold as cash with HL as long as you keep £1000 in it

    will only make you £180 per year but that is like 18% rate on your money for a a bit of moving from place to place

    see below:

    Assuming you're drawing the £3600 out as a 20% taxpayer, you'll pay 15% tax with consideration to the 25% TFLS.
    Therefore £3600 x 0.85 = £3060.
    This gives a gain of £180 which is still worth doing.
    Better than a slap with a wet fish as they say!!!
  14. the hippo

    the hippo Lead commenter Community helper

    There is a simple answer to the OP's question: Bulgaria. Taxes and the general cost of living are absurdly high in Rip-off Britain, so my advice would be to get out ASAP and go somewhere that is much, much cheaper. If you have any property in the UK, then you could rent it out and that would be like an extra pension. Even if you are retired, you still have to pay Council Tax in the UK, whereas the equivent tax for our house in BG is forty pounds a year. Our new house has a garden of 3000 sq metres and that is quite small by Bulgarian standards, but great if you want to grow your own veggies.
    Prim likes this.
  15. heldon

    heldon Occasional commenter

    but hippo many of are happy with where we live in the UK

    people speak my language, local services like swimming pools, tennis courts, nhs, u3a groups, parkrun, cornish pasties, haggis etc etc

    i will visit Bulgaria at some point, but for a holiday

    happy you are happy there though!!
    asnac and Lucy2711 like this.
  16. frodo_magic

    frodo_magic Established commenter

    Nice country to visit, Bulgaria. I can't ski now because of the knees, but they have three or four big ski resorts, which are cheap and perfectly acceptable for beginner / medium skiers, and cheap. Plenty of mountains and outdoor stuff, interesting to travel around, never got to the coastline though - it was on the cards before C19. Some very interesting Roman history stuff about, too. It's still properly grim, rundown in many places, still a poor country and a lot of poverty, no doubt.
  17. the hippo

    the hippo Lead commenter Community helper

    Well, maybe BG might not be everyone's cup of tea. Yes, there certainly are some grotty bits, poverty and so on. Mrs. Hippo is Russian, so she feels very much at home here, as the language is very similar.

    If you have lots of friends and family in the UK, then probably living overseas is not for you.

    As for Cornish pasties and haggis, well, i do miss them, but there are some rather good local delicacies here in Bulgaria.
  18. lindenlea

    lindenlea Star commenter

    i don't think I've ever read that your wife is Russian, which of course , explains a lot - makes your move much easier to understand. Not that we ever wanted to go to land of husband's birth - Scotland. I'm comfortable in England - even now I'd rather be here than anywhere else.
  19. the hippo

    the hippo Lead commenter Community helper

    lindenlea, we were driving back along the West Coast of Scotland and I said to my dear wife, "I hope that we do not get lost, as I will not be able to ask for directions."
    My wife replied, "Why not? They speak English in Scotland."
    Well, we did get lost and so in Glasgow I asked a local chap how I could get to the motorway. After his incomprehensible (and perhaps inebriated) reply, my wife asked me, "What did he say?"
    I replied, "I have no idea."

    Poverty in Bulgaria, frodo_magic? Yes, there are some horrible, derelict bits and it does not help that the Bulgarian local governments usually leave buildings to fall down, rather than demolishing them. On the other hand, the countryside is virtually empty, with lots of mountains, lakes, forests and rivers. The roads can be a bit rough, so you need to buy a car that is quite chunky and can deal with the potholes. many of the main roads have been upgraded, often with money from the EU.

    The big attraction for many Brits is a simple one: price. A country house might cost you as little as 10,000 euros, although it might need some renovation. Maybe 20,000 or 30,000 might get you something a bit nicer. Property taxes are much lower too.
    lindenlea likes this.
  20. PeterQuint

    PeterQuint Lead commenter

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