Retirement Planning.... with contingencies!

Work, work, work!!!! and relax!

I like to review my retirement age prospects from time to time, in terms of how much in savings I'd need to retire at what age.

It's still the case that retirement for me depends on two things...

1. Is having 16 years of a teacher's pension which kicks in when I'm 60.
2. Is having the mortgage paid off, which should happen by the time I'm 56, I could bring that forward, but 56 is easy.
3. I'm going to allow myself the luxury of factoring in a £2K a year passive income in this model!

I've got TWO models below...

• Retirement Light is a scrimping model in which I am prepared to work 2 days a week up until 60, and then 1 day a week post-60. My income here is set at £17K a year.
• Retirement Lush assumes NO paid work and I've set my income here at £22K a year.

If these incomes seem low, they are in pounds and this is with NO mortgage!

Retirement Light Additional Income Needs...

This is what I'd need at different ages if I'm prepared to work 2 days a week, which would bring me in around... £10K a year, very approximately and quite conservatively!

• 60 = £0K
• 59 = £5K
• 58 = £10K
• 57 = £15K
• 56 = £20K
• 55 = £30K (pay mortgage down!)
• 54 = £40K (pay mortgage down!)
• 53 = £50K (pay mortgage down!)

So in this model, factoring in that I'm earning £10K a year from regular work, have £2K a year passive income, then I'd only need £5K in the pot a year to draw down.

HOWEVER, I pay around £5K a year on the mortgage, so to retire earlier than 56 (when the mortgage is paid off I'd need an additional £5K a year....

NB this is ALREADY ACHIEVED!

If I'm happy to work just two days a week for £10K a year and I can maintain a passive income of just £2K a year and I can live off £17K a year (after housing costs) then I can retire SOON, VERY SOON!

RETIREMENT LUSH....

This model assumes NO WORKING after I'm 60, still the £2K passive income and an overall annual income of £22K a year, much more comfortable!

NB I need to get through to 67, my state pension age....

• 60 = £70K
• 59 = £90K
• 58 = £110K
• 57 = £130K
• 56 = £150K

There's not a lot of point calculating it down further than that! I don't think I've got much chance of saving up £150K before I'm 56, at least not £150K I'm prepared to use as draw down money.

So far this shows what a MASSIVE different taking a £5K a year income cut and being prepared to work just 2 days a week does, and TBH neither of these are particularly harsh circumstances to find oneself in.

NB this is all VERY CAUTIOUS....

TBH I am about there already in terms of the second model if I factor in all of my crypto wealth, but I don't want to draw that down, at least not all of it, and I'm NOT going to base my retirement plans on volatile crypto.

Also with that £150K I don't want to draw it down I want it yielding, and if we say a 5% return (which is cautious) then that would yield £7.5K a year which is a significant chunk, around a third, of my LUSH income needs.

Rather than draw down, I'd rather keep working that 2 days a week into my late 50s to protect that wealth, stack a little more and then draw down from 60, I mean with £200K wealth at 5% that would give me that £22K figure....

FINAL THOUGHTS....

This is all very cautious on my part, it's kind of worse case scenario retirement thinking, assuming my blog income goes to near 0, and it's not factoring in Hive earnings at all either.

I have other contingencies, in other words!

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