FIRE - Financial Independence Retire Early
Comments
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how much is it without the nursery? It seems a lot… although of course it depends how many holidays.
left the forum March 20230 -
It does seem a bit higher than I expected given we don't have a car and that doesn't include any holidays abroad, all UK based on mostly cheapish ones.
Still, for a a bit over 2 years the nursery fees were ~£1100/month so almost half of our outgoings. Now with the childcare help I think it's down to £700/month so still a good chunk.
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hence my comments above on children Vs Early retirement…
left the forum March 20230 -
Interestingly...
Having children who need nursery for a combined 8 years at a combined cost of 1000 quid average per month, is equivalent (for someone earning at least 62K after employee pension deductions) to squirrelling about 1666 per month in a pension fund, which in 8 years means 160K contributions, which, if done early in life, over time will easily yield an extra pension.
Given the cost of childcare in the UK, I am staggered we don't have the lowest birth rate in the world... it really is very odd
left the forum March 20230 -
Tbh when I see FIRE stuff it more focuses around the completely outlandish side of things that revolve around retiring earlier than 40, and not doing anything outside of working during those 40 years. All whilst earning a salary well ahead of your peer group.
It doesn't make me feel particularly angry, just bemused. Delayed gratification is great and all, but I do think it can go too far.
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Which is one of a number of reasons we are only having 1.
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When I were a lad, in Italy some categories were allowed to retire early with a generous state pension... typically teachers, firefighters, police, doctors and nurses. Occasionally some managed to retire before 50. It was a very good, if unsustainable, deal, maybe something worth thinking about to entice young graduates (and not so young career changers) into careers like teaching... giving them the option to collect their private pension 5 years ahead of everybody else and the state pension maybe at 60
left the forum March 20230 -
If I'd stayed with my first employer I would have hit maximum pension by 56. That would have given me 50% of my final pay as a pension plus a lump sum of 3 times that. If I'd got promoted to a similar level to where I am today that would have been a pension of around £25k at least plus a £75k lump sum. I could certainly have retired on that. Obviously it has changed a lot since 2014 (and it changed a bit in 2008). Even if I left in 2014 I would have had close to 40% of my final salary plus a healthy lump sum. I sometimes regret being unable to cope with the boredom I found working in local government plus like many I probably under-estimated the value of that pension when taking the extra salary in the private sector. I have friends who joined the police in the who have retired, their scheme allowed them to leave once they hit 50 and had served over 25 years whilst taking an immediate pension (they usually seem to continue in the police on a part-time civilian role). Most teachers I know have retired by 60 at the latest but I don't envy them having worked 35 years dealing with other peoples' kids!
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Fair point, but I would question how prepared you can be in the worst case scenario.
Average residential care in the UK is over £1000 a week, much more if it is a nursing home.
Say you are very fortunate and build up £1 milion and plan to retire at 40, budgeting for another 40 years. Things don't workout and at 70 you need nursing care and live until you are 80. In 10 years one could accrue well over half a million in care home costs, and with your savings you won't get any state contribution. I am not knocking those who retire early and my point is perhaps at the extreme end. However, it is valid, even with a massive pension pot, you aren't going to be able to plan for all eventualities, especially towards the end.
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I don't think it is reasonable to plan for that. It is the responsible thing to do if you have children, but otherwise I will take my chances. The amount one would need to save to cover that eventuality, would take any joy out of the rest of your life
left the forum March 20230 -
Isn't that what your house is used to pay?
Get unlucky, fund your care; get lucky, kids/grandchildren benefit. They are well sorted anyway, it would just be a bonus.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
I would completely agree Ugo. Wakemalcolm seemed to be making the point (admittedly fair) that the type of early retiree the op is referring to would plan for such an eventuality, but as you say I think it is very difficult to cover all possible scenarios. You have to accept an element of the unknown, even with a huge pension pot.
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That's why I keep telling my other half we need a bigger house PB! ;)
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In the UK Fire community, I don't think I've encountered anyone who's FIREd without owning their own home. That makes the care issue the same uncertainty as someone retiring at a more conventional age who might see their home as their passport to care funding.
According to BUPA the average stay in a care home is 'just' 19.6 months and only around 1 in 5 deaths occur in a care home. It's an incredibly difficult outcome to plan for.
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Cake is just weakness entering the body0 -
Bigger house means less pension though. 'Tis a conundrum. Or not. Average house will cover average care.
We could all get blown up tomorrow so planning for all eventualities is impossible.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
It is about 9 years in a residential home, and something like 9 months in a nursing home.
There are other ways of paying for it than trying to draw down on your pension / savings / investments but you would need to speak to a care adviser...
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