I've retired at 55 with 300k , im 57 now and its amazing , never felt better and no issue's with money. It all depends on your overheads and what it cost you to live every month , I have little monthly bills and owe nothing to anyone.
@@coderider3022 well I guess that's your problem not mine. It's 100% true. I have a dB gold plated pension from the government and a sipp and isa , I also have within that amount 140k in cash which I get 6.1% from nsi, coming up for renewal which is 5% for old customers. I also have zero overheads, own my house outright and have done since I was 35yrs old. It's simple you spend less than what comes in and couldn't be happier
@coderider3022 it's true I retired on 300k, all depends on your outgoings, all together its 300k, I also don't pay any tax and receive 5k a yr in interest because my income is below 12.5k, I also use my isa, be tax efficient and it's easy to retire on 300k, my dB pension is small due to leaving early and sacrifice over half. There's loads of loopholes to be able to do it but I don't need to lie, I'm the one retired and obviously you aren't, belive what you want means nothing to be whether you do or don't.
Totally out of touch, I retired at 56: toilet cleaner, living on such low wages for so long enabled me to live on a little, no travel costs ETC, I was short of cash up to 65 , but my god my freedom and personal time was wort it all, incidentally a gift to my grandchildren was a pension, with the government uplift and the power of compounding could really give them a good nestegg, this gift is so forgotten by grand parents,
I have a newborn baby and am setting him up with a junior SIPP. Everyone thinks I am crazy but I think it is the biggest and most generous gift you can give a child - he wont appreciate it until he is in his 30s but there is a good chance I can make my son a millionaire in retirement due to ~60+ years of compounding. I think parents & grandparents setting up pensions for the young is the only realistic path I see to handling retirement for the new generation, unless we have some kind of giant pension reform in the UK.
@ even the parents think it is a crazy idea, one thing that people don’t realise with a sip ,is if when the child gets to adult hood. if they are bad with money and inclined to squander money , they can’t get there hands on it until 57, by them common sense should prevail! May I wish you well , and for your-futures, and to think you have removed the-pension worries ,really think that is invaluable, BUT there isn’t many of us about ?
I do think the RLS's figures are WAY over requirement. They are current quoting £31,300 for a single person on moderate lifestyle. But even on your around £24k figure that's 2k a month net. What on earth are people spending that on, given they assume a paid off home in their number? The median salary in UK is £27k, so take home is around 18k. I feel like 18k is a good target number for a retirement income, if we also assume a paid off house, based on my own spending which is far less, but which does include some luxuries such as running a car and overseas travel. Regarding the 18k retirement income, you'd be paying tax on income over the personal allowance, but if that was your only income you'd be taxed at the basic rate, so you'd lose around £1,200.
Yes, I agree. The thing is that these basic, moderate and comfortable figures have been produced by the investment industry in order to panic people in investing more money. If the figures were gross of tax I would lean more towards agreeing with them, but net they are just bonkers. Retired people generally have no mortgage, no kids to maintain and are likely to be on the verge of receiving one or more inheritances. You can't compare that situation with a married person aged 35 with two kids and a big mortgage.
@@tancreddehauteville764 Glad you agree - I was thinking I was some kind of frugalistic outlier! :) You also raise an interesting point on vested interests - I had a quick check to see who was behind RLS as I was wondering if this was just the government trying to keep us working (and paying taxes) until we drop dead, but couldn't find any concrete link. You mentioned the investment industry - a ha! - doesn't surprise me at all! :)
@@raymondwebb4179 Hi Raymond, glad to hear it! Rachel Reeves has lit a fire under me because I now realize there is no point in me continuing to work, so 2025 will be the last year of work for me - got to spend down that retirement pot before IHT kicks in. Off to Alicante in Feb, I think there's a very good chance we'll be exiting the UK permanently. Cheers.
Matt don’t sweat it. All these ‘you need a fortune to retire’ videos are a bit exaggerated tbh. I retired at 55 with 5K in the bank and a monthly pension of 1500 pounds from military service. I moved to Thailand and I have now 30K in savings (I’m 62), and live really well on around 1000 pounds a month. Many expats i know are on similar monthly incomes from pensions and many I know are on slightly less and are perfectly happy. Don’t believe the hype folks that you need hundreds of thousands to retire, it’s complete nonsense. Just look at what most people earn annually and live perfectly acceptable lives supporting families etc outside of the turbo crazy Western economies. It boils down to having a regular monthly income of around 1K+, if you have that, retire now regardless of your age and I will see you at. Derrick’s Bar (The Local) on Bang Tao Beach, Phuket soon 😅 The Worlds waiting to meet you.
@Lookup2WakeupTrue enough. However you gotta go live your life. There’s risks. But that could happen anywhere. Any of us could get hit by a bus or find out we have the Big C tomorrow. But I’m sixty+. If not now, then when ? (to quote Tracy Chapman) Bottom line, live, take risks, pay for decent med insurance.
@Lookup2Wakeup God bless you dude. I got your point. These videos are a bit scary I think. So I like to share my experience. Us oldies have to stick together 😊
I think moving to 100% equities was a good suggestion. My experience with bonds is they are broken - they no longer perform as expected - they are meant to provide ballast/stability to a portfolio during down times - but I've found my 100% equity funds always outperformed my mixed funds, such as Vanguard Lifestrategy.
Bonds are only to be used if you actually buy and hold the Bond itself (Gilt or Treasury). Do not invest in Bond Funds. Especially ones that have some form of 5 year limit where the fund automatically sells it's Bonds no matter the timing of the market!
Having single gilts on a small ladder for 2-3 years is my plan. When markets take a hit, bonds maturing can buy cheap equity or to be lived on. You’re saying you will sell equity at deperessed prices. And if you’re early , that’s going to hurt.
@@sassasins031 I was going to reply to say the same. Directly buying bonds (creating a bond ladder for example) ~5 years from retirement could make a lot of sense. But bond funds are extremely dangerous and I feel terrible for those who invest in them thinking it is the safe thing to do!
Good content Matt, good to see new UK Financial advice (to add to James S, Pete M etc.) NB. Keep a close eye on managing/editing the comments, there is already a spam advisory thread touting some supposed advisor... 😐
@@MattRoutledge_FP Great to hear and thanks for the speedy response! It must be so annoying, when scammers do this, you've got valuable accurate content to share, so it's key to keep the misinformation out of the comments! 👍
Whilst I cannot see myself retiring fully early (mortgage), I can see a reduction to a 4 day week (or 5+3 fortnights) initially, then 3 days (or seasonal contracting to get summers off) would be a path to take. It also hopefully removes the risk of 'ultra-boredom loss-of-routine death' that many recent retirees seem to be afflicted by, as well as growing the pension pot further to a long-term sustainable level, which is the core issue with £300k at 55 (even £500k would be tough at 55 unless you had a few full years of ISA contributions to use before hitting the pension).
Since we're talking about presentation, the waving the hands around for every sentence is visually distracting, and I personally find it annoying. Hand gestures to emphasise a point is fine, but mindlessly waving your hands around, .... just no.
How many people live to 97? How many people need in their 90s as much as they need in their 50s? The tool did not discuss this and to be honest maybe only 10% only live that long and the state pension alone will suffice. I certainly plan up to 80 and then have state pension only
This is a good point. The software does have a feature that shows the probability of survival and running out of money together. One to show in future videos I think 👍
@@PeterHitchens-d6x Are you going to be jumping on airplanes at 85+ to go on holiday? Are you still going to be driving? What about getting on a bus even? If you've got the health to do it then you are very lucky. The odds say you won't be.
Good video and I think helps people understand the value of talking to a financial planner. I was fairly confident I could retire at 56 in three years time and just did a similar modelling exercise with a financial planner. This was very reassuring. In my case at 53 I have £1m in pension, £100k in an ISA while my wife has £200k in a pension. We also have an investment property worth £250k with no mortgage on that or our main home, which is worth £800k. I will have a small DB scheme paying me £5k pa from age 58. In three years we will add another £300k to the investments. We’ll both get full state pensions. I was looking for reassurance that I could take £6k per month net, reducing to £5k net when we get older (from 70). The modelling suggested no issues, which has made me much more relaxed about a cliff edge retirement in 3 years time.
I retired to SE Asia over 12 years ago at 49 with less than half that, but I'm single. Haven't touched the SIPP yet as live off rental income from a London property. The above goes to show that even if you have the resources some people do not have the cojones and cannot stop feathering their nest despite being well past what's required. I know guys here who did the same and retired years after they could have.
Nope, almost certainly doesn't have enough to support a 23k income, even with full state pension kicking in at 65. Initial drawdown rate is far too high and will deplete the pot too quickly unless early returns are very favourable but luck is not an advisable strategy
You can't evaluate a drawdown plan based on median success rate!! You have to be conservative and see what the near-worst case outcomes are.. hence why jacking up to 100% equity is a terrible idea
Good clear presentation style however in the £300k pot drawdown, annuities and boundaries examples given, withdrawing £23.3k per annum, I think you missed out the impact of tax on withdrawals? Obviously dependant on personal circumstances I also think that £300k isn’t enough to retire on unless you have other significant cash reserves, i.e. in an ISA that you can also draw down on.
Hi Peter, thanks for the feedback! The tool I used for the drawdown example does factor in tax and to keep things simple assumes all payments are made via UFPLS (25% tax free and 75% taxable) to receive a £23,300 net amount - albeit this might not be the most tax efficient. I have a video planned in a month's time to cover this 🤞 However the annuity example is gross so tax would need to be considered. Yes having additional funds will definitely help with income. I'm hoping to make a similar video with a different case study so if you have any ideas it'd be great to hear them 👍
subscribed bud. Watched less than 1 minute of your video(at the moment), but the comments/feedback are excellent. I appreciate his expected life expectancy, but why limit the historical data to the late 1970's, thats an unusual restriction considering we are in the 2020's
Thanks! The latest retirement test scenario is as if the retirement stated in 1978 so it gives a full 43 year worth of data. So data up until 2021 is included as this is testing the 43 years between 1978-2021, hope that makes sense!
You didn't mention UFPLS ? You kind of gave the impression their was only two options available. Also i agree 300k is a small pot ro retire on age 55. But it also depends on your debts and outgoings.
Something I see that is never touched on is if said person owns their own home. How would this factor in? I’ve got lots of investments, but I rent (don’t want to buy). For this example, does this person have 300K and they own their home? Or they have just 300k net worth? And does that net worth include if most of their wealth is tied up in their home?
4% of £300,000 is £12,000 per year and some people say it is too much and 3.5% is better. Are we really still advising on annuity?? With platforms there is so much better deals - they are a very bad investment
Reviewing the 4% rule is a potential video idea as there is debate about whether this is still valid. I don't tend to recommend annuities that often despite the rates being better than they used to be but they still have their place and I thought worth sharing for a comparison.
Fixed term ones to give you that “base load” apparently are what people look at. Bridge that 8yrs to state pension age. Alternative is a bond ladder but you take risks. 100k to guarantee 1k a month of 8-10 years sounds good to me.
May I ask how you live and have any fun on 23k? My partner and I wrote down our spending in feb. It was less than we guessed, still £4,500 a month. No holiday budget for, we live a cheap life. Very basic new car, I drive my old works van, We eat out, caravan most weekends and I spend £100 pmth on gym club. I would say with holidays, 30k each nett is a minimum to retire. I don’t have a pension, just rental properties. I pay myself 50k a year net. So 23k can’t be enough.
If you have no mortgage, and therefore pretty minor housing costs, then £4,500 a month is a huge amount of cash. You certainly won't be living a "cheap life".
We retired at 58,a couple, of years ago, we were in a very fortunate position of both having final salary pensions. Our net income from this is around £4700 a month. We also have an investment portfolio of around 600k in SIPPs/ISAs and a general stock account. We paid off our mortgage several years ago. The income meets all our needs, so we don’t need to access our portfolio for the foreseeable future. We could have just carried on working but my brother passed away a couple of years ago and that made us focus on life priorities. But as I say, we were very fortunate to have both worked for organisations that offered brilliant pensions, something which is increasingly vanishing over the years.
Hi my wife and i are contemplating retiring in 2 years (i will be 56 my wife 58) we paid off two mortgages this year which will allow a new start in Northumbria once we finally finish work. We both have 30+ years in NHS DBs and DC pensions (with lump sums) and a small SIPP, plus 2 accounts with full premium bonds. We are also very fortunate to be left substantial inheritance that once added into the calculation would see a similar position to yourself before State pension is added later at 67/68. Can i ask did you miss your salary or have you not noticed any change? What did you do in the first 2 years of retirement i would be interested to here Did you find that you spent more on new cars, holidays etc...) what hobbies did you take on how have you passed the time. Any tips?????????
@@MattRoutledge_FP Not yet but in 2 years hopefully. I'm wanting to fill up premium bonds on both accounts first then retire as this would provide a tax free income of potentially £4k a year without being taxed. (this can vary depending on rate)
This really does depend on your lifestyle. Some people spend £1k a month, others spend £5k. I used the £23k at the time based on the Retirement Living Standards Guidance at the time but also from my experience with clients around £2,000pm is common.
Car will cost money, house repairs , replacing things, carpets, tv, Pets/ vets. All adds up if you look at these other things which aren’t monthly spends. 2k a month is 1800 after tax and that isn’t much. Go do your sums, all adds up.
Hi Matt, great video thank you. We would like to get in touch with you to consider us for a case study on your channel. My wife and I are 56 & 53 UK based, have 1x DB pension, 2x DC SIPP's, 2x BTL's, 2x ISA's, 2x 35 years full State Pensions, and both still working. We are looking to retire in the next 2 years. Do you have an email? Thanks :)
£300k is nowhere near what you need to retire at 55. I have £600k at 57 and I'm not even thinking about retirement. I would advise this person to soldier on in work until 60, maximising contributions, and then they would be in a much better position.
Perhaps he wants to live on 12-15k per year then he can do it but it will be a very frugal retirement. I expect more like you in retirement so 300k won’t be enough for me either. I expect to be at least 900k at 59 so then I can retire
It certainly is challenging based on the income Alex wanted. If you have any other amounts/retirement dates you want to look at then let me know as I plan to make a similar video in the future 👍
I agree £300k is not enough to retire at 55, but £600k might be sufficient, it depends on whether you have a mortgage, car loan or other dept, what savings you have and your lifestyle. I just retired at 55 with £600k, but I’m mortgage free with ISA savings and passive income from a BTL.
@@MattRoutledge_FP maybe slightly different to this video, but how about a situation similar to mine. When could a 35 years old anticipate being able to retire with the below situation? Single, will be mortgage free at retirement, earn £52.5k, I pay 10% into my pension and my employer pays in 6%. Current pension balance of £75k.
@@MattRoutledge_FP 62, £950k pension, no debt, own house mortgage free, inheritance due, looking to stay self employed to 65 then part-time to 67 then maybe retire
When will financial advisors start recommending investing in Bitcoin? I'm 36 with about £250k across Crypto and crypto related stocks in ISA, but not too much in the old pension. Looking to sell all crypto by end of year. Not sure where to put it yet. Retirement seems too far away.
Rules on promoting crypto are fairly new and many advisers are wary as it is not regulated by the FCA. Financial Planners in the US seem to promote it more so perhaps that trend may come over here.
Great Vlog . Are you not concerned about the Government means testing the state pension ? This would make saving & investing in pensions pointless. Imagine you just put 600 k into a private pension & the Government says . ... kool you aint entitled to a state pension now as you have the income from your 600k Pension. Deeply worrying , especially as now the Government are passing legislation to spy on pensioners bank accounts. Pretty obvious thats their plan dont you think ? Just wasted 600 k for nothing .
The government would be insane to means test the state pension. There would be a massive backlash. What they might do, however, is increase income tax for the richest pensioners, which would make more sense. I suspect that this would only affect the richest few percentage of pensioners such as that David Whiteman above.
I've retired at 55 with 300k , im 57 now and its amazing , never felt better and no issue's with money. It all depends on your overheads and what it cost you to live every month , I have little monthly bills and owe nothing to anyone.
Great to read this. It’s my future self.
Sorry, I don’t believe you.
@@coderider3022 well I guess that's your problem not mine. It's 100% true. I have a dB gold plated pension from the government and a sipp and isa , I also have within that amount 140k in cash which I get 6.1% from nsi, coming up for renewal which is 5% for old customers. I also have zero overheads, own my house outright and have done since I was 35yrs old. It's simple you spend less than what comes in and couldn't be happier
@@lrac111 yeah, that’s more accurate, you post said 300k at 55 which couldn’t be true.
@coderider3022 it's true I retired on 300k, all depends on your outgoings, all together its 300k, I also don't pay any tax and receive 5k a yr in interest because my income is below 12.5k, I also use my isa, be tax efficient and it's easy to retire on 300k, my dB pension is small due to leaving early and sacrifice over half. There's loads of loopholes to be able to do it but I don't need to lie, I'm the one retired and obviously you aren't, belive what you want means nothing to be whether you do or don't.
Totally out of touch, I retired at 56: toilet cleaner, living on such low wages for so long enabled me to live on a little, no travel costs ETC, I was short of cash up to 65 , but my god my freedom and personal time was wort it all, incidentally a gift to my grandchildren was a pension, with the government uplift and the power of compounding could really give them a good nestegg, this gift is so forgotten by grand parents,
I have a newborn baby and am setting him up with a junior SIPP. Everyone thinks I am crazy but I think it is the biggest and most generous gift you can give a child - he wont appreciate it until he is in his 30s but there is a good chance I can make my son a millionaire in retirement due to ~60+ years of compounding.
I think parents & grandparents setting up pensions for the young is the only realistic path I see to handling retirement for the new generation, unless we have some kind of giant pension reform in the UK.
@ even the parents think it is a crazy idea, one thing that people don’t realise with a sip ,is if when the child gets to adult hood. if they are bad with money and inclined to squander money , they can’t get there hands on it until 57, by them common sense should prevail! May I wish you well , and for your-futures, and to think you have removed the-pension worries ,really think that is invaluable, BUT there isn’t many of us about ?
I do think the RLS's figures are WAY over requirement. They are current quoting £31,300 for a single person on moderate lifestyle. But even on your around £24k figure that's 2k a month net. What on earth are people spending that on, given they assume a paid off home in their number? The median salary in UK is £27k, so take home is around 18k. I feel like 18k is a good target number for a retirement income, if we also assume a paid off house, based on my own spending which is far less, but which does include some luxuries such as running a car and overseas travel. Regarding the 18k retirement income, you'd be paying tax on income over the personal allowance, but if that was your only income you'd be taxed at the basic rate, so you'd lose around £1,200.
Yes, I agree. The thing is that these basic, moderate and comfortable figures have been produced by the investment industry in order to panic people in investing more money. If the figures were gross of tax I would lean more towards agreeing with them, but net they are just bonkers. Retired people generally have no mortgage, no kids to maintain and are likely to be on the verge of receiving one or more inheritances. You can't compare that situation with a married person aged 35 with two kids and a big mortgage.
@@tancreddehauteville764 Glad you agree - I was thinking I was some kind of frugalistic outlier! :) You also raise an interesting point on vested interests - I had a quick check to see who was behind RLS as I was wondering if this was just the government trying to keep us working (and paying taxes) until we drop dead, but couldn't find any concrete link. You mentioned the investment industry - a ha! - doesn't surprise me at all! :)
@@CaldonianDude I retired at 56 , 77 now and ites been wonderful , you need less in retirement , no getting to work costs zeTC
@@raymondwebb4179 Hi Raymond, glad to hear it! Rachel Reeves has lit a fire under me because I now realize there is no point in me continuing to work, so 2025 will be the last year of work for me - got to spend down that retirement pot before IHT kicks in. Off to Alicante in Feb, I think there's a very good chance we'll be exiting the UK permanently. Cheers.
@ have you sorted out your chance to stay pemently in Europe, possibly easier for pensioners than workers?
Found from Pete Matthew's comment on Linked-In... Enjoyed the content and subscribed!!!
Awesome! Thank you!
Woo! Another regulated financial advisor on TH-cam. Subbed! Great video 😊
Thank you! 😊
Matt don’t sweat it. All these ‘you need a fortune to retire’ videos are a bit exaggerated tbh. I retired at 55 with 5K in the bank and a monthly pension of 1500 pounds from military service. I moved to Thailand and I have now 30K in savings (I’m 62), and live really well on around 1000 pounds a month. Many expats i know are on similar monthly incomes from pensions and many I know are on slightly less and are perfectly happy. Don’t believe the hype folks that you need hundreds of thousands to retire, it’s complete nonsense. Just look at what most people earn annually and live perfectly acceptable lives supporting families etc outside of the turbo crazy Western economies. It boils down to having a regular monthly income of around 1K+, if you have that, retire now regardless of your age and I will see you at. Derrick’s Bar (The Local) on Bang Tao Beach, Phuket soon 😅 The Worlds waiting to meet you.
Hmmm. I don't think I can persuade my wife to retire to Thailand.
Thats one incredible response! Super!!
@Lookup2WakeupTrue enough. However you gotta go live your life. There’s risks. But that could happen anywhere. Any of us could get hit by a bus or find out we have the Big C tomorrow. But I’m sixty+. If not now, then when ? (to quote Tracy Chapman)
Bottom line, live, take risks, pay for decent med insurance.
@Lookup2Wakeup God bless you dude. I got your point. These videos are a bit scary I think. So I like to share my experience. Us oldies have to stick together 😊
I think moving to 100% equities was a good suggestion. My experience with bonds is they are broken - they no longer perform as expected - they are meant to provide ballast/stability to a portfolio during down times - but I've found my 100% equity funds always outperformed my mixed funds, such as Vanguard Lifestrategy.
Bonds are only to be used if you actually buy and hold the Bond itself (Gilt or Treasury). Do not invest in Bond Funds. Especially ones that have some form of 5 year limit where the fund automatically sells it's Bonds no matter the timing of the market!
Having single gilts on a small ladder for 2-3 years is my plan. When markets take a hit, bonds maturing can buy cheap equity or to be lived on. You’re saying you will sell equity at deperessed prices. And if you’re early , that’s going to hurt.
@@sassasins031 I was going to reply to say the same. Directly buying bonds (creating a bond ladder for example) ~5 years from retirement could make a lot of sense. But bond funds are extremely dangerous and I feel terrible for those who invest in them thinking it is the safe thing to do!
New follower - Great videos and very clear - thanks
Thanks!
Good content Matt, good to see new UK Financial advice (to add to James S, Pete M etc.) NB. Keep a close eye on managing/editing the comments, there is already a spam advisory thread touting some supposed advisor... 😐
Thank you! Yes cheers for the heads up, I've reported them but will be keeping a close eye.
@@MattRoutledge_FP Great to hear and thanks for the speedy response! It must be so annoying, when scammers do this, you've got valuable accurate content to share, so it's key to keep the misinformation out of the comments! 👍
Whilst I cannot see myself retiring fully early (mortgage), I can see a reduction to a 4 day week (or 5+3 fortnights) initially, then 3 days (or seasonal contracting to get summers off) would be a path to take. It also hopefully removes the risk of 'ultra-boredom loss-of-routine death' that many recent retirees seem to be afflicted by, as well as growing the pension pot further to a long-term sustainable level, which is the core issue with £300k at 55 (even £500k would be tough at 55 unless you had a few full years of ISA contributions to use before hitting the pension).
Sounds like a plan! You're right a lot of focus is on the financial side but phasing out of work can help you adjust to this change in routine too
May I recommend dialling down or switching off the background music, thanks, great video, clear messages and UK based
Since we're talking about presentation, the waving the hands around for every sentence is visually distracting, and I personally find it annoying. Hand gestures to emphasise a point is fine, but mindlessly waving your hands around, .... just no.
Appreciate the feedback 👍 Will play around with music for the next one
@@AlfredLewis-p6t never noticed, didn’t bother me
@@MattRoutledge_FP I would prefer no background music too.
Great Video Matt - Thanks
How many people live to 97? How many people need in their 90s as much as they need in their 50s? The tool did not discuss this and to be honest maybe only 10% only live that long and the state pension alone will suffice. I certainly plan up to 80 and then have state pension only
This is a good point. The software does have a feature that shows the probability of survival and running out of money together. One to show in future videos I think 👍
Yeah but what if you don't plan for it & you DO live to 97?!
@@PeterHitchens-d6x you have the State pension and maybe any DB or other annuity to fall back.
@@PeterHitchens-d6x Are you going to be jumping on airplanes at 85+ to go on holiday? Are you still going to be driving? What about getting on a bus even?
If you've got the health to do it then you are very lucky. The odds say you won't be.
Very good point. After 80 I will certainly no longer be travelling. It will be life at home and walks in my local area, not cruises, fly-drives etc.
Good video and I think helps people understand the value of talking to a financial planner. I was fairly confident I could retire at 56 in three years time and just did a similar modelling exercise with a financial planner. This was very reassuring. In my case at 53 I have £1m in pension, £100k in an ISA while my wife has £200k in a pension. We also have an investment property worth £250k with no mortgage on that or our main home, which is worth £800k. I will have a small DB scheme paying me £5k pa from age 58. In three years we will add another £300k to the investments. We’ll both get full state pensions. I was looking for reassurance that I could take £6k per month net, reducing to £5k net when we get older (from 70). The modelling suggested no issues, which has made me much more relaxed about a cliff edge retirement in 3 years time.
Great, nice to hear you see the value and sounds like you've got a plan in place 👍
Pretty obviously you're minted so I see no issue at all. You can retire asap.
err £2m+ at 53, yeah may be tight, but think you'll be OK. 🤔
I retired to SE Asia over 12 years ago at 49 with less than half that, but I'm single. Haven't touched the SIPP yet as live off rental income from a London property. The above goes to show that even if you have the resources some people do not have the cojones and cannot stop feathering their nest despite being well past what's required. I know guys here who did the same and retired years after they could have.
@@keithclunk3125 you are single. You can’t comprehend the cost of having a wife and two teenagers 🥺
Nope, almost certainly doesn't have enough to support a 23k income, even with full state pension kicking in at 65. Initial drawdown rate is far too high and will deplete the pot too quickly unless early returns are very favourable but luck is not an advisable strategy
The obssession with IFAs planning into your 90s puts me right off. Realistically how many of us will reach that age?
Hi Matt, I cover this in my latest video which looks at longevity data too.
Very infomrative, can you explain the use of the cash kept back in year one.
I am covering this in more detail in my video this Thursday so be sure to watch out for that!
You can easily live comfortably with 150k retiring at 55
Good vid. 👏
Glad you enjoyed it!
I retired at 48. How? I moved to Spain! Highly recommended
Love this!
Great info, however please don't have background music when talking, it is very distracting to follow along especially when you are hard of hearing!
Thanks, I have removed background music for my future videos 👍
@@MattRoutledge_FP Perfect 👌 thanks
You can't evaluate a drawdown plan based on median success rate!! You have to be conservative and see what the near-worst case outcomes are.. hence why jacking up to 100% equity is a terrible idea
Good clear presentation style however in the £300k pot drawdown, annuities and boundaries examples given, withdrawing £23.3k per annum, I think you missed out the impact of tax on withdrawals? Obviously dependant on personal circumstances I also think that £300k isn’t enough to retire on unless you have other significant cash reserves, i.e. in an ISA that you can also draw down on.
Hi Peter, thanks for the feedback! The tool I used for the drawdown example does factor in tax and to keep things simple assumes all payments are made via UFPLS (25% tax free and 75% taxable) to receive a £23,300 net amount - albeit this might not be the most tax efficient. I have a video planned in a month's time to cover this 🤞
However the annuity example is gross so tax would need to be considered.
Yes having additional funds will definitely help with income. I'm hoping to make a similar video with a different case study so if you have any ideas it'd be great to hear them 👍
What tool are you using for visualizing numbers and is it available to the general public?
The tool is called Timeline and as far as I'm aware it's only available to Financial Advisors.
@@MattRoutledge_FP thanks . Shame we have no decent options in the uk for public unlike USA .
subscribed bud. Watched less than 1 minute of your video(at the moment), but the comments/feedback are excellent.
I appreciate his expected life expectancy, but why limit the historical data to the late 1970's, thats an unusual restriction considering we are in the 2020's
Thanks! The latest retirement test scenario is as if the retirement stated in 1978 so it gives a full 43 year worth of data. So data up until 2021 is included as this is testing the 43 years between 1978-2021, hope that makes sense!
You didn't mention UFPLS ? You kind of gave the impression their was only two options available. Also i agree 300k is a small pot ro retire on age 55. But it also depends on your debts and outgoings.
For simplicity I used drawdown as a catch all term to take money flexibly from a pension.
Hi Matt, can I just check the annuity rates you mention - are they really based on retiring at 55 years old?
Yes they were at the time.
Something I see that is never touched on is if said person owns their own home. How would this factor in? I’ve got lots of investments, but I rent (don’t want to buy). For this example, does this person have 300K and they own their home? Or they have just 300k net worth? And does that net worth include if most of their wealth is tied up in their home?
Hi Simon, the case study assumes they have £300k in a pension plan. I haven't factored in the equity in their home for this example. Cheers, Matt
4% of £300,000 is £12,000 per year and some people say it is too much and 3.5% is better.
Are we really still advising on annuity?? With platforms there is so much better deals - they are a very bad investment
Reviewing the 4% rule is a potential video idea as there is debate about whether this is still valid.
I don't tend to recommend annuities that often despite the rates being better than they used to be but they still have their place and I thought worth sharing for a comparison.
No, annuities are good, unless you absolutely want to leave a pot from your pension as inheritance.
Fixed term ones to give you that “base load” apparently are what people look at. Bridge that 8yrs to state pension age. Alternative is a bond ladder but you take risks. 100k to guarantee 1k a month of 8-10 years sounds good to me.
Did this plan include state pension at 67? I don’t recall it being mentioned.
Yes from 8:20 I amend the forecast to include his State Pension 👍
@@MattRoutledge_FP thanks
Can I ask a random question - What camera do you shoot on Matt? do you add a filter/Lut?
I use a Sony ZV1. I edit in Capcut and play around with the contrast and brightness depending on lighting.
@@MattRoutledge_FPThank you
Invest in a crystal ball. That’s what we all need. There’s no right answer.
I've got one, but it says the future's uncertain!
May I ask how you live and have any fun on 23k? My partner and I wrote down our spending in feb. It was less than we guessed, still £4,500 a month. No holiday budget for, we live a cheap life. Very basic new car, I drive my old works van, We eat out, caravan most weekends and I spend £100 pmth on gym club. I would say with holidays, 30k each nett is a minimum to retire. I don’t have a pension, just rental properties. I pay myself 50k a year net.
So 23k can’t be enough.
The £23,000 came from the www.retirementlivingstandards.org.uk/ at the time of recording but just seen they have increased their guidance.
If you have no mortgage, and therefore pretty minor housing costs, then £4,500 a month is a huge amount of cash. You certainly won't be living a "cheap life".
We retired at 58,a couple, of years ago, we were in a very fortunate position of both having final salary pensions. Our net income from this is around £4700 a month. We also have an investment portfolio of around 600k in SIPPs/ISAs and a general stock account. We paid off our mortgage several years ago. The income meets all our needs, so we don’t need to access our portfolio for the foreseeable future.
We could have just carried on working but my brother passed away a couple of years ago and that made us focus on life priorities. But as I say, we were very fortunate to have both worked for organisations that offered brilliant pensions, something which is increasingly vanishing over the years.
You and your partner are extremely lucky. I can only assume that you worked for some large companies who safeguarded your pensions. Enjoy your wealth.
Hi my wife and i are contemplating retiring in 2 years (i will be 56 my wife 58) we paid off two mortgages this year which will allow a new start in Northumbria once we finally finish work. We both have 30+ years in NHS DBs and DC pensions (with lump sums) and a small SIPP, plus 2 accounts with full premium bonds. We are also very fortunate to be left substantial inheritance that once added into the calculation would see a similar position to yourself before State pension is added later at 67/68.
Can i ask did you miss your salary or have you not noticed any change?
What did you do in the first 2 years of retirement i would be interested to here
Did you find that you spent more on new cars, holidays etc...) what hobbies did you take on how have you passed the time. Any tips?????????
Having a combination of DB and DC pensions is great as you can often can the best of both. I hope you're enjoying your retirement!
@@MattRoutledge_FP Not yet but in 2 years hopefully. I'm wanting to fill up premium bonds on both accounts first then retire as this would provide a tax free income of potentially £4k a year without being taxed. (this can vary depending on rate)
FYI, typo in the title - "I’m 55 with £300,0000" - 3m quid
Thanks for letting me know! That would be quite a different video 😂
Will he be paying the government income tax on this income of £23.300 if he retires at 55
The £23,300 is after tax but yes there will be tax to pay when he draws from his pension (25% is tax free and 75% is taxable)
Why would you need a 23k income if you have no mortage and no debt ?
Depends what you want to do in retirement, lots of holidays would quickly diminish that income
This really does depend on your lifestyle. Some people spend £1k a month, others spend £5k. I used the £23k at the time based on the Retirement Living Standards Guidance at the time but also from my experience with clients around £2,000pm is common.
Car will cost money, house repairs , replacing things, carpets, tv, Pets/ vets. All adds up if you look at these other things which aren’t monthly spends. 2k a month is 1800 after tax and that isn’t much. Go do your sums, all adds up.
So No, you can’t retire at 55 with 300k. You need about 400k at 60 to be in ball park and retirement and have a 60/40 min to be confident .
Hi Matt, great video thank you.
We would like to get in touch with you to consider us for a case study on your channel. My wife and I are 56 & 53 UK based, have 1x DB pension, 2x DC SIPP's, 2x BTL's, 2x ISA's, 2x 35 years full State Pensions, and both still working. We are looking to retire in the next 2 years. Do you have an email?
Thanks :)
Sure it's matt@momentumwealth.co.uk
@@MattRoutledge_FP sent. Thanks 👍
Why would you wish to have money at 97.
Youll have enough.
Think spend on life 60-80. Job done.
£300k is more than enough to retire
You need a minimum of £1 million
£300k is nowhere near what you need to retire at 55. I have £600k at 57 and I'm not even thinking about retirement. I would advise this person to soldier on in work until 60, maximising contributions, and then they would be in a much better position.
Perhaps he wants to live on 12-15k per year then he can do it but it will be a very frugal retirement. I expect more like you in retirement so 300k won’t be enough for me either. I expect to be at least 900k at 59 so then I can retire
It certainly is challenging based on the income Alex wanted. If you have any other amounts/retirement dates you want to look at then let me know as I plan to make a similar video in the future 👍
I agree £300k is not enough to retire at 55, but £600k might be sufficient, it depends on whether you have a mortgage, car loan or other dept, what savings you have and your lifestyle. I just retired at 55 with £600k, but I’m mortgage free with ISA savings and passive income from a BTL.
@@MattRoutledge_FP maybe slightly different to this video, but how about a situation similar to mine.
When could a 35 years old anticipate being able to retire with the below situation? Single, will be mortgage free at retirement, earn £52.5k, I pay 10% into my pension and my employer pays in 6%. Current pension balance of £75k.
@@MattRoutledge_FP 62, £950k pension, no debt, own house mortgage free, inheritance due, looking to stay self employed to 65 then part-time to 67 then maybe retire
I think the comments have made my mind up to retire early on less. 🙂
When will financial advisors start recommending investing in Bitcoin?
I'm 36 with about £250k across Crypto and crypto related stocks in ISA, but not too much in the old pension. Looking to sell all crypto by end of year. Not sure where to put it yet. Retirement seems too far away.
Rules on promoting crypto are fairly new and many advisers are wary as it is not regulated by the FCA. Financial Planners in the US seem to promote it more so perhaps that trend may come over here.
Great Vlog . Are you not concerned about the Government means testing the state pension ? This would make saving & investing in pensions pointless. Imagine you just put 600 k into a private pension & the Government says . ... kool you aint entitled to a state pension now as you have the income from your 600k Pension.
Deeply worrying , especially as now the Government are passing legislation to spy on pensioners bank accounts.
Pretty obvious thats their plan dont you think ? Just wasted 600 k for nothing .
The government would be insane to means test the state pension. There would be a massive backlash. What they might do, however, is increase income tax for the richest pensioners, which would make more sense. I suspect that this would only affect the richest few percentage of pensioners such as that David Whiteman above.