So many people I know are taking early retirement

[markyh]

On ‎11‎/‎02‎/‎2019 at 19:07, winkie said:

Should have bought some bitcoin.?

PMSL , or do both, like me, HPI gains and Crypto gains, with more of both to come!

[markyh]

On ‎11‎/‎02‎/‎2019 at 20:10, longgone said:

better than ageist 

I don't know, you can go as low a 16 without any legal trouble!

[Arpeggio]

7 hours ago, MarkG said:

 and cheese (we literally have cheese gangs smuggling cheap cheese across the border from the US). 

Breaking the Roule of law, not gouda.

Edited February 13, 2019 by Arpeggio

[markyh]

On ‎12‎/‎02‎/‎2019 at 12:08, scottbeard said:

1. Not back in the 1980s/90s - that's why all the schemes got into deficit in the 2000s.  But since then contributions to these schemes have been massive.  Some of the very largest companies I've seen put in £1 billion into their DB scheme in a single year.  These days contributions of 50% of salary for current employees, plus further contributions to pay off the deficit, is not abnormal.

2.  It varies of course - a small number still have 100% equities.  Many of them now are invested something like 0-25% equities, 25%-50% corporate bonds and 50%+ government bonds and other liability matching investments, maybe with a bit of cash as a float.

3. No.  They have tended if anything to invest ever more safely over the last 10-15, and just demanded more and more money from the sponsoring employers.  When I started work 20 years ago it was very common to have 80% of the fund in UK Equities, but after they got caned by stock market crashes in 2000-2002 the schemes all closed to new employees and have been de-risking ever since.

4. Simply holding bonds is a pretty good hedge to start with, and then derivatives to manage the interest rate and inflation risks.  If your hedging is good enough you don't really care about the market value of the bonds - as long as they keep paying out.  You just get £X million a year of income and use it to pay your £X million a year of pensions.  You don't need to buy or sell them, so who cares what the value is.  Of course you EXPECT a few corporate bonds to default - companies go bust from time to time - so you factor that in and make sure that you hold a bit extra to cover the defaults. UK government bonds will not default unless the entire UK collapses - most UK final salary pension schemes are NOT insulated against that eventuality.

My wife got into one of the last UK Final salary pension schemes I know of, in 2006, when she started @ GE on about £23k.That is still running but closed to new starters a few years back now. We took the family decision back in 2013 to up her contributions from 4% to 9% of salary to stay on 1/60th terms rather than remain on 4% contributions, but go to 1/80th terms. 

She is on £45k now just earning under her age. If she makes it to 67 say on £67k (it would more likely be more) , then she will be in for 33/60th, so about £37k p/a final salary pension. 

But as she has seen many many of her co workers in the last 15 years get to 55-60 and get offered very lucrative "packages" to retire early etc as they become too expensive to employee for their roles and they like to keep the staff "younger". 

So I suspect she will get offered a deal sometime in the next 10-15 years.  By then kids will have finished school and be working, maybe uni still, and she can take a more local easy life job on 4 days a week or something.

[elephant]

1 hour ago, Bluestone59 said:

 

There was even an advantage in that many sales calls seemed to be aimed at homeowners, not being one made them very easy to get rid of and within a few months they stop calling. There must be a grapevine whereby non owners can be identified and ignored.

 

You’re the second person to say this recently (or is it the second time you’ve said it?).

You do realise that even if you’re a homeowner you can still tell the sales guy you’re renting if you want them to ignore you?

There must be many more real advantages to renting than this, surely?!

[Bluestone59]

56 minutes ago, Dorkins said:

I say you become a second class citizen when somebody has the power to force you to move house at 2 months' notice for no reason. That's how the law is written to allocate power, it isn't a matter of opinion.

You spent 6 years living in the UK private rented sector, which is not long at all. I wonder if you would feel differently if it had been 16 years.

Realistically have to come out with my hands up. I was thinking about other people's perceptions, entirely because I felt those a couple of times. Being forced to move out didn't happen to me. It would definitely have left me feeling shafted by a rotten system but it wouldn't make me regard myself as a second class citizen even if in practical terms that were the reality.

A friend and his wife had young children at the time she decided she preferred someone else so he moved out of their house. She had picked up a lover who already had a house and they rented the other one out, natch. My friend literally flogged himself to buy another house and got in before prices would have ruled him out.  A couple of years earlier I had come across a cheap vaguely habitable flat but I couldn't play the game any more and swerved, continuing to rent.

Down the pub a few years on, his place had risen from £135k to £325k. The flat I didn't buy rose from £40k to - well it was in the Brighton area so just make up your own number.

He seemed to spend the evening trying not to gloat. One comment he made was along the lines he didn't know how a non house owner in Britain could sleep at night. He definitely thought I was second class.

My response was that he'd called it correctly, I hadn't. So I guess I'm a second class decision maker, which I already knew.

 

 

 

[Bluestone59]

2 minutes ago, elephant said:

You’re the second person to say this recently (or is it the second time you’ve said it?).

You do realise that even if you’re a homeowner you can still tell the sales guy you’re renting if you want them to ignore you?

There must be many more real advantages to renting than this, surely?!

Maybe it was me, I have said this before. I also said that some people I knew started saying they weren't home owners to get rid of salesmen. Could just hang up too I suppose.

Other advantages to renting?  I found that more of my time was my own, no house maintenance to waste my Saturdays on. And once I'd paid the rent and bills I always seemed to have more money than as an owner occupier before.

Do I think renting is just great?  No, but also I do not consider buying should be undertaken at literally just any cost.

[longgone]

1 hour ago, markyh said:

I don't know, you can go as low a 16 without any legal trouble!

 you could hang out the school gates with a laptop showing those legal girls your crypto rise and fall. 

1 hour ago, markyh said:

PMSL , or do both, like me, HPI gains and Crypto gains, with more of both to come!

Hpi may follow BTC lol double whammy 

[sideysid]

6 hours ago, markyh said:

My wife got into one of the last UK Final salary pension schemes I know of, in 2006, when she started @ GE on about £23k.That is still running but closed to new starters a few years back now. We took the family decision back in 2013 to up her contributions from 4% to 9% of salary to stay on 1/60th terms rather than remain on 4% contributions, but go to 1/80th terms. 

She is on £45k now just earning under her age. If she makes it to 67 say on £67k (it would more likely be more) , then she will be in for 33/60th, so about £37k p/a final salary pension. 

But as she has seen many many of her co workers in the last 15 years get to 55-60 and get offered very lucrative "packages" to retire early etc as they become too expensive to employee for their roles and they like to keep the staff "younger". 

So I suspect she will get offered a deal sometime in the next 10-15 years.  By then kids will have finished school and be working, maybe uni still, and she can take a more local easy life job on 4 days a week or something.

That’s an admirable plan, and I am in a similar situation (except career average, no final salary) but I fully expect the goalposts to be moved.

I think in the next 20 years we may well see the biggest overhaul to existing pension conditions as we enter the downturn in the next stage of the financial cycle. I fully expect pension ages to increase, and previous conditions frozen and forced moves onto new conditions.

If this cycle does turn out to be the next Great Depression, could well see government inventions and confiscation of wealth.

[dpg50000]

1 hour ago, sideysid said:

I think in the next 20 years we may well see the biggest overhaul to existing pension conditions as we enter the downturn in the next stage of the financial cycle. I fully expect pension ages to increase, and previous conditions frozen and forced moves onto new conditions.

Hence why I'm looking to accumulate enough savings to quit work if they do move the goalposts again. As people have said many times on this forum, the social contract is broken. Working hard is not rewarded.

[winkie]

How many do you think are relying on an inheritance to retire made up of high house price values?.....if not their own property someone elses or both?.......

[regprentice]

39 minutes ago, winkie said:

How many do you think are relying on an inheritance to retire made up of high house price values?.....if not their own property someone elses or both?.......

I think a lot of people are banking on an Inheritance to clear an IO mortgage, or to topup a poorly performing endowment. 

Interestingly more and more boomers are SKIing (Spending the Kids Inheritance). My in-laws retired and have bought a campervan , a holiday cottage, 3 holidays a year.  While previous generations have passed on cash and property the boomers, as a broad generalisation, seem determined to spend absolutely everything and leave nothing.

My parents and my in-laws use the same phrase , 'when you get to our age' or 'when you are in our position' not realising how much they have benefited from HPI and from final salary pensions which is a 'lottery win' of wealth which the majority of my generation won't match. 

[winkie]

3 minutes ago, regprentice said:

I think a lot of people are banking on an Inheritance to clear an IO mortgage, or to topup a poorly performing endowment. 

Interestingly more and more boomers are SKIing (Spending the Kids Inheritance). My in-laws retired and have bought a campervan , a holiday cottage, 3 holidays a year.  While previous generations have passed on cash and property the boomers, as a broad generalisation, seem determined to spend absolutely everything and leave nothing.

My parents and my in-laws use the same phrase , 'when you get to our age' or 'when you are in our position' not realising how much they have benefited from HPI and from final salary pensions which is a 'lottery win' of wealth which the majority of my generation won't match. 

There are so many variants......but in the future I think a larger chunk of asset wealth will be used before younger generations have access to it, mainly being spent to live and support themselves, equity release, buying/renting/leasing suitable retirement accomodation and the big one the high cost of future long-term care.......best not to expect anything, because that is what just may well get.

To be fair not got an issue with people who were fortunate enough to have had a decent pension and worked and saved for a retirement, own a home worth many times what they bought it for, where they can do all the things they never got the chance to do whilst working, good for them, many will have probably helped their children if they were able if their children needed it.

It is the growing numbers of young people who are not building up a future store of income savings, no longer  have access to the old style more secure pensions that is the focus, but have a pension linked to turbulent markets, those that are not paying in enough to buffer them, those who cash chunks of it at 55 and spend it well or not so well.....people joining the workplace later will mean working till much older.......then there are the renters, renting till retirement and beyond.....who will pay their rent when far to elderly to work? Their children may well be far worse off than them, can't expect them to put them up, they may have still got their own kids still living at home.

 

[bomberbrown]

On 12/02/2019 at 09:35, scottbeard said:

Be careful - the rules around DB pensions changed in 2005.  This is not true any more.

Before that pensions in payment were 100% saved, and those not yet in payment could be reduced substantially, even to zero.

However, from 2005 schemes that go bust typically end up in the pension protection fund, where everyone gets less than they were promised - future pension increases links to inflation are cut back, and those under normal retirement age (where drawing their pension or not) get a further 10% haircut.

This 2005 change was done precisely to avoid the "cliff edge" of people retiring early being saved at the expense of those not retired.

 

Being 50 and planning to retire early at 55 with DB (USS) pension, this has been news to me so if correct, thanks for sharing as this might alter my plans now as the primary reason for doing so was to get out at the first opportunity to protect the payments.  

[winkie]

2 minutes ago, bomberbrown said:

Being 50 and planning to retire early at 55 with DB (USS) pension, this has been news to me so if correct, thanks for sharing as this might alter my plans now as the primary reason for doing so was to get out at the first opportunity to protect the payments.  

When anyone saves they check the progress......there are figures to let you know the strength of a policy and the company, where the investments made and the amount invested, the numbers of people in the pot with a claim to it.....is it not due diligence to check from time to time the standing, how healthy and invested in it is......it is your money.......having said that anything can happen, anything can happen anyway........nothing in life is totally guaranteed.

[GeneCernan]

17 hours ago, PeanutButter said:

Having lived in Australia I can only stress how awful the climate is for much of the time.

Hopping from aircon the aircon, while the country gets hotter and hotter each decade no end in sight, animals dying, the reef on its last legs (one of the wonders of the world!), the casual racism, homophobia, climate change denialism, and chest beating alpha-dog masculinity - there’s simply no comparison with the UK. 

 

As for living somewhere cheap, surrounded by far poorer people - it’s not for me. 

 

I agree with every word. As has been said before, Australia is nowhere near as good as Australians think it is.

[winkie]

45 minutes ago, GeneCernan said:

I agree with every word. As has been said before, Australia is nowhere near as good as Australians think it is.

Global warming?

[Riedquat]

11 hours ago, Bluestone59 said:

Other advantages to renting?  I found that more of my time was my own, no house maintenance to waste my Saturdays on. And once I'd paid the rent and bills I always seemed to have more money than as an owner occupier before.

Maybe it's just me but I find doing those jobs quite satisfying. It's the ones I can't do that are an advantage of renting, where I could just get the landlord to sort them out (my last landlord was good at getting things done) rather than going through the bits I really don't like doing such as trying to find people to do the job and phoning around.

[Bluestone59]

4 hours ago, Riedquat said:

Maybe it's just me but I find doing those jobs quite satisfying. It's the ones I can't do that are an advantage of renting, where I could just get the landlord to sort them out (my last landlord was good at getting things done) rather than going through the bits I really don't like doing such as trying to find people to do the job and phoning around.

Yes, I used to really enjoy this work but I guess I've been doing it too long. 

When I was renting I only bothered about things that I may have contributed to or had some material effect. If it was minor I ignored it. 

[Pop321]

On ‎13‎/‎02‎/‎2019 at 15:00, prozac said:

You are intelligent and have worked hard, good for you

Lucky and incentivised....there was hope in 1986, not sure how I would fair today. 

[winkie]

 

[Pop321]

8 hours ago, regprentice said:

Interestingly more and more boomers are SKIing (Spending the Kids Inheritance). My in-laws retired and have bought a campervan , a holiday cottage, 3 holidays a year.  While previous generations have passed on cash and property the boomers, as a broad generalisation, seem determined to spend absolutely everything and leave nothing.

My parents and my in-laws use the same phrase , 'when you get to our age' or 'when you are in our position' not realising how much they have benefited from HPI and from final salary pensions which is a 'lottery win' of wealth which the majority of my generation won't match. 

I see this too but obviously with exceptions. I reflected on why it might be...are boomers entitled, are they greedy, don't they care.....or is it a lack of understanding of the challenges faced by millenniums. 

I am 50, so Gen X rather than boomer but as an early parent and career starter I am on the shirt tails of boomers. So I may be able to offer some light....but please note this is not MY VIEW of younger generations but more a possible explanation of 'a failure to communicate' between Boomers and younger generations

Boomers 'know' (wrongly now) every generation has it better than the last...whilst they were young that happened and had always been the case. So perhaps they feel what they see is the same. i.e. there appears to be a lack of 'struggle'....For example, I started as an office junior at 18. At 21 had 2 children and had no new clothes, no travelling, no holidays, no colour tv, food shopped frugally, never went out and really did struggle until we were 25. An old lady left a pound I our pram once...she could see we needed it (benefit of hindsight I could have sued her under health and safety regulations :)….We lived on £4K a year (say £14K now). 

Now bear in mind this is a perception. But it may appear millenniums are going to Uni and trying to get the top paying £35k a year jobs then say they don't have enough money.  Many boomers may not earn that even now. (ignore housing costs this is perception theory). Many boomers will see 30 year old bosses coming through...earning more than they ever did at such a young age. 

I have seen examples....people in their mid 60's with an inherited house, plus their own house, plus their pension, plus their state pension etc and when I ask if they are handing over anything to their 35 year old kid they say no 'he earns a fortune'. 

Obviously this is a cohort, certainly not all.....but I wonder if boomers do not see the struggle of the millennials because it is visibly so very different to the one of yesteryear.

One to ponder....its not a justification but I am sat in the middle (ish) and do see very distinct challenges. Not sure I would cope today....in the 1980's I knew the formula to succeed, not sure I do today. 

 

[winkie]

1 hour ago, Pop321 said:

One to ponder....its not a justification but I am sat in the middle (ish) and do see very distinct challenges. Not sure I would cope today....in the 1980's I knew the formula to succeed, not sure I do today. 

 

Our communities like our jobs have changed.....In the past you worked for a firm you were treated as one of the family, you were looked after, you worked hard and got back reward and recognition in return......fewer people nowadays have a stake in their jobs or their communities........people now don't stay anywhere long enough to grow and build relationships, all snatch and grab short-termisum......profit before people.

Edited February 14, 2019 by winkie

[onlooker]

51 minutes ago, Pop321 said:

I see this too but obviously with exceptions. I reflected on why it might be...are boomers entitled, are they greedy, don't they care.....or is it a lack of understanding of the challenges faced by millenniums. 

I am 50, so Gen X rather than boomer but as an early parent and career starter I am on the shirt tails of boomers. So I may be able to offer some light....but please note this is not MY VIEW of younger generations but more a possible explanation of 'a failure to communicate' between Boomers and younger generations

Boomers 'know' (wrongly now) every generation has it better than the last...whilst they were young that happened and had always been the case. So perhaps they feel what they see is the same. i.e. there appears to be a lack of 'struggle'....For example, I started as an office junior at 18. At 21 had 2 children and had no new clothes, no travelling, no holidays, no colour tv, food shopped frugally, never went out and really did struggle until we were 25. An old lady left a pound I our pram once...she could see we needed it (benefit of hindsight I could have sued her under health and safety regulations :)….We lived on £4K a year (say £14K now). 

Now bear in mind this is a perception. But it may appear millenniums are going to Uni and trying to get the top paying £35k a year jobs then say they don't have enough money.  Many boomers may not earn that even now. (ignore housing costs this is perception theory). Many boomers will see 30 year old bosses coming through...earning more than they ever did at such a young age. 

I have seen examples....people in their mid 60's with an inherited house, plus their own house, plus their pension, plus their state pension etc and when I ask if they are handing over anything to their 35 year old kid they say no 'he earns a fortune'. 

Obviously this is a cohort, certainly not all.....but I wonder if boomers do not see the struggle of the millennials because it is visibly so very different to the one of yesteryear.

One to ponder....its not a justification but I am sat in the middle (ish) and do see very distinct challenges. Not sure I would cope today....in the 1980's I knew the formula to succeed, not sure I do today. 

 

Permit me, as a genuine Boomer, to make a couple of comments.

It is true in my industry, that some of the young people coming up are earningmuch  more than I did at their age.  I mean in inflation adjusted terms. My perception of the job market today, is that employees are paid what they are worth to management, who are under the cosh to perform and make profits. In my day, management was haphazard at best, and nepotistic at worst, so the argument always went: 'You think you are worth what?!!, Nobody else gets paid that!! Maybe after you have worked here for 20 years!!'.

As to SKIING. It is an old joke: 'There is not much fun having pots of money when you are old - but at least your kids keep in touch with you'. There is more truth in that than many people will admit. Many young people only call their parents when they need something. OTOH, I have been generous with my children, helping to buy houses, providing free grandchild babycare. I don't complain. I know of several of my friends who have done the same and few who haven't. That is life.

Getting back to the thread title. One of the issues is motivation. If you retire early, you better have a good hobby or your brain will atrophy, and your social circle shrink. If my industry were in a better shape now, I would still be working, because I found work stimulating.

 

[wish I could afford one]

1 hour ago, winkie said:

Our communities like our jobs have changed.....In the past you worked for a firm you were treated as one of the family, you were looked after, you worked hard and got back reward and recognition in return......fewer people nowadays have a stake in their jobs or their communities........people now don't stay anywhere long enough to grow and build relationships, all snatch and grab short-termisum......profit before people.

I think it's a two way street.  The average firm provides no allegiance to you and in return you provide no allegiance to the firm.  It's just a contractual arrangement these days.  I'm not sure who started it but it's not a good thing for either party IMHO.