To retire in 20 years....

[BlackenedBiker]

You're right. It's what you do, all I'm saying is that everyone says they'll retire early, tour the world, but the people I know (and there's a few more), who've genuinely had the chance to persue "their/those dreams" haven't. Their work defines them. It's their life. They are scared, I suspect, of leaving even though they've enough money never to worry about the rest of their lives. I've had friends die of cancer at 26 and 37. One this year at 62 (a very rich man) has just found out he's got prostate cancer...we all worry about tomorrow, and forget today. You can't take it with you.

No but you need it to spend it

[moorfield]

40oddK = 40 odd thousand = >40K and <50K

Google for an annuity calculator and put in aged 57 etc

Hargreaves Lansdown have an excellent calculator you can play around with.

[alreadypacked]

There is no way to retire in 20 years with enough money, unless you have a Crystal Ball or a Time Machine. So forget about it and live for today, and visit those nice people in Zurich with your last 5K.

[shoes]

It seems to me that those who manage to get themselves into positions where they are raking in enough dough to retire comfortably only manage it by working in a field they enjoy. Once there, why retire just when you're enjoying yourself?

For the rest of us, take time out when you can to do those things you expect you'll want to do in your old age. They won't be as enjoyable when you're old, and whose to say you'll even get there, or that if you do, they'll still be possible.

[Tarquin Farquhar]

For Goodness' sake, please either work it out in today's money from start to finish, or work it all out in variable money with an estimated inflation rate. Never mix them in any one calculation, or it will bite you back.

For example, I do it in today's money: I want an annuity of £40k (2010 equivalent) so I need to save a pot of £750k (2010 equivalent). I can work out how much to save, assuming say a growth of 3% on top of inflation. This method makes the calculation easy, but you still have to figure in inflation to get the nominal figure for any given year. Come retirement I need to have saved £750k in 2010 money: whatever that may become with the passage of the years.

You might do it in nominal money instead: You assume 4% inflation for the next 20 years, so your annuity of £40k in 2010 money will be £87,644 in 20 years time. You would assume nominal growth of 7% per year, which would be the equivalent of the above-mentioned 3% plus inflation.

[milanbenes]

ok I am confused, what's new...


'I don't understand this: why would you save £1m then buy an annuity?

Why not save £1m and live on the money itself?'


if you have £1,000,000

and you want to retire on £1,500 per month

then Shirley....

£1,500 x 12 = £18,000

£1,000,000 / £18,000 = 55 years !!!

add in interest on the £1,000,000 compounding....

why to buy the annuity ?

why not just live off a combination of the draw down of the cash and interest ?

or am I missing something ?

Alternatively, buy for cash a combination of properties with solid rental capabilities and live from the rents therefore protecting the investment pot and getting the benefit of capital appreciation on the properties ?

and before anyone asks I'm not talking about numpty buy to let ramped up apartments that nobody will even rent

so, why the annuity ?

have you actually physically saved the £1,000,000 in cash in a bank account or is it that your pension fund product will be worth £1,000,000 and you will have not choice than to purchase an annuity ?

I guess this is the case.

Milan.