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what to do? retirement at 45
charley
Posted: 31 May 2018 18:27:13(UTC)
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hi, I would love some sugestions..

I am 44, own a property in spain out right. and plan to retire there later this year. i would be looking for an income 15 - 20 k..

i have, i hope, soon, in cash, uk house sale. 300 k

sipp 77 k ( fully invested)

isa 330k ( 65 in cash)

a diverse global portfolio, in investment trust and funds.... ( and yes too many!!) i do have the option to keep my business going if needed, net profit 10 k
Joe Soap
Posted: 31 May 2018 18:52:27(UTC)
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So after the house sale you'll have about GBP 550k available to generate an income? If you look to generate between 3 and 4% income per year then you're going to be looking at between £16.5k and £22k a year - Before tax. You might be able to sustain this without touching the capital sum which may grow. Or it may not. You need to bank on 50 years retirement. If it were me, I'd be uncomfortable with those sums and would be looking to increase the £550k considerably before retiring or getting a part time job. But that's just me. Good luck to you.

Sorry - Just noticed my sums are wrong, but you get the gist!
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charley on 01/06/2018(UTC)
Captain Slugwash
Posted: 31 May 2018 19:29:29(UTC)
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SIPP is not accessible till you are 55 , hoping that future Gov't don't tinker.
I also feel you are slightly low on invested capital to be totally safe.

If like me you are in the sort of career where a period of part time or reduced hours are not available, then maybe a few more years of hard grind maxing out those SIPP and ISA contributions?
1 user thanked Captain Slugwash for this post.
charley on 01/06/2018(UTC)
Tim D
Posted: 31 May 2018 19:50:31(UTC)
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charley assuming you're going to become tax resident in Spain, are you aware of what it means for the tax status of your ISA, complications with SIPPs for those non-UK resident and have you looked into Spain's own tax regime and the possible tax advantages of some things I think are called Spanish Compliant Bonds which expats there seem to regard as quite important? Those are the sort of things which'd be influencing my calculation of what level of income I could hope to achieve with those resources anyway.
3 users thanked Tim D for this post.
Guest on 31/05/2018(UTC), charley on 01/06/2018(UTC), Mike L on 02/06/2018(UTC)
King Lodos
Posted: 31 May 2018 20:25:37(UTC)
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Also, what are you going to do for the next 40-50 years?

It's not enough money to live like a jet-setter, but seems about 20-30 years too young to want to sit in the sun drinking forever.

Unless there's more to your situation, I'd say it sounds like you need a year-long holiday .. Then I'd get to work turning that retirement fund into several million, or pursuing something more meaningful
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Jon Snow
Posted: 31 May 2018 21:49:10(UTC)
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I've always hated the word retiring, with its connotations of a Logans run future - "You have served your purpose now prepare for disposal by boredom."

You have done well to get a rather decent ISA sum. The numbers based on your capital and income requirements seem to work although £20k pa income is a bit tight for living expenses (pre or post tax? and unforeseen costs) also there is a real risk of capital erosion given such a long time period.

There are a few other issues I'd want to have a thought about (don't want to sound like a lifestyle guru here and you may have it all planned out, so please excuse me) -

What about when the UK leaves (?) the EU, do you speak Spanish, where do you live in Spain and why, will you move, will you take out Spanish citizenship.

Legal and fiscal issues to understand and resolve regarding tax liability, SIPP and ISA status and UK state pension eligibility.

What am I going to do with all my new freedom, maybe you have some great plans, friends in a similar situation or other network or hobbies etc. Whiling your days away in the sun, from my own experience is great for 3 weeks, after that you need some stimulation, challenges and objectives.

Can you keep your business going in/from Spain?

BTW - Portugal and particularly the north is apparently the up and coming place and have you seen the tax breaks!

https://www.pwc.pt/pt/fi...pe_best_kept_secret.pdf

Good luck.
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philip gosling
Posted: 31 May 2018 22:17:38(UTC)
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charley;63202 wrote:
hi, I would love some sugestions..

I am 44, own a property in spain out right. and plan to retire there later this year. i would be looking for an income 15 - 20 k..

i have, i hope, soon, in cash, uk house sale. 300 k

sipp 77 k ( fully invested)

isa 330k ( 65 in cash)

a diverse global portfolio, in investment trust and funds.... ( and yes too many!!) i do have the option to keep my business going if needed, net profit 10 k


Stop.
I retired at 55 but rather than look for another challenging job I spent 12 months doing evening University courses on a whole range of subjects then spend 4 years at Edinburgh University reading Politics and International Relations for my MA . Best thing I ever did. Switched off from my previous job enjoyed University . OK as the "granddad ' to most students but fun and so interesting. Can you speak fluent Spanish if not how will you mange and enjoy Spain - impossible unless you live with many other Brit and just speak English then why go to Spain? You could /should live to 80 and would need even in cheaper Spain £25-30,000 per annum guaranteed to grow with inflation. I would recommend buying a lottery ticket or building up much more of a pension/SIPP pot first.
6 users thanked philip gosling for this post.
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Alan Selwood
Posted: 31 May 2018 22:44:51(UTC)
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Others have already picked up what I was going to say, and my summary is:

  • Do watch the Spanish tax liabilities on your worldwide income if resident there. They are likely to be more than here.


  • Check whether ISA and SIPP income is taxable there.


  • Do follow up the idea of choosing Portugal instead of Spain for tax reasons.


  • You are too young to retire with the amount you have so far, and as others have said, you will need much more mental stimulation than you may realise if you are to live happily till you are 80 - 90 years old.
9 users thanked Alan Selwood for this post.
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Jon Snow
Posted: 31 May 2018 22:45:14(UTC)
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philip gosling;63211 wrote:
charley;63202 wrote:
hi, I would love some sugestions..

I am 44, own a property in spain out right. and plan to retire there later this year. i would be looking for an income 15 - 20 k..

i have, i hope, soon, in cash, uk house sale. 300 k

sipp 77 k ( fully invested)

isa 330k ( 65 in cash)

a diverse global portfolio, in investment trust and funds.... ( and yes too many!!) i do have the option to keep my business going if needed, net profit 10 k


Stop.
I retired at 55 but rather than look for another challenging job I spent 12 months doing evening University courses on a whole range of subjects then spend 4 years at Edinburgh University reading Politics and International Relations for my MA . Best thing I ever did. Switched off from my previous job enjoyed University . OK as the "granddad ' to most students but fun and so interesting. Can you speak fluent Spanish if not how will you mange and enjoy Spain - impossible unless you live with many other Brit and just speak English then why go to Spain? You could /should live to 80 and would need even in cheaper Spain £25-30,000 per annum guaranteed to grow with inflation. I would recommend buying a lottery ticket or building up much more of a pension/SIPP pot first.


Absolutely, I did a full time MBA at 49, worked my bits off in semester 1, loved it.

What an experience that was.

They have some very good business schools in Spain....you have to learn the language though.

We had a chap from Khazakstan on our course, he struggled with the language, they gave him a diploma and that was probably because he could import horse meat for a traditional dinner he gave, I declined the offer.

Jon starts to go off topic and sound like an old bore.....
2 users thanked Jon Snow for this post.
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c brown
Posted: 01 June 2018 07:51:52(UTC)
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You have not got enough to retire on. If you have an emergency then you are going to eat into capital fast.

The tax system can be changed in a flash. Spain is struggling. What about brexit & heaven forbid a labour govt? British citizens with properties abroad will be hammered. Spanish health care is not great so Private Medical will also be essential as you get older.

Have lovely holidays & keep your business going!

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charley on 01/06/2018(UTC)
Catch The Pigeon
Posted: 01 June 2018 08:26:37(UTC)
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You should speak to a Financial Advisor who has a good understanding of Spanish taxation.

I am an IFA myself but not familiar with Spanish taxation.
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charley on 01/06/2018(UTC)
Catch The Pigeon
Posted: 01 June 2018 08:31:04(UTC)
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To clarify, is your total wealth £707,000?

As a gross 4% yield would generate £28,000 per annum. Remember this is the gross amount. One issue is you can't access your SIPP until 55 (increasing to 57 from 2028).

Do you have some UK state pension entitlement? As that will provide additional income in later life.

It would be wise to meet with a Financial Advisor who uses Cash Flow modelling to see if the income you need is possible.
1 user thanked Catch The Pigeon for this post.
charley on 01/06/2018(UTC)
halfinchnut
Posted: 01 June 2018 09:10:17(UTC)
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You have more than enough, retire at 45 and you will kill yourself through boredom before you are 60. Far too young, I tried it at 48, didn't last a year, went back to work and just semi retired at 58 last year, I'm about ready to go back to work again. Work was a huge chunk of my life, when I wasn't there I missed it. I have numerous hobbies, golf twice a week, love photography, go cycling, three days a week shopping with the wife.

In all seriousness, unless you are content to sit twiddling your thumbs endlessly, keep working for at least another 10 years, retire at 45 and your similar aged social group will still be at work and you will be waiting for every weekend to come around for some interaction, work gives you that and you get paid for it. Finally, Spain is a wonderful country, but it isn't the UK, and you will find that out very quickly, especially if you are there alone.
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charley on 01/06/2018(UTC)
charley
Posted: 01 June 2018 10:35:42(UTC)
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gosh... thank you to all for your response!!

just quickly, will try to answer all questions.. could anyone recommend a uk/Spanish financial advisor? I have spoke to a few but not impressed


my situation is I have drank and smoked all my life, yes must start vaping!! the last 3 years struggled with life, but getting better... because of work have missed out on a lot, being flat out from march to September..have sampled retirement in other months and always kept busy and happy

yes maybe a good idea for me to downsize business and make 10k coming back to uk for 1 month a year

yes all a gamble with brexit, but I do like a flutter, and the pleasure of sun most days is good

would try to stay uk resiedent, a lot of expats do!! cus of tax, becoming Spanish resident you do loose isa tax free allowance, and a nasty wealth tax!!!

yes total investable assets 707 k not including villa in spain at 250k owned outright

don't think I would get bored.. fishing, shooting, metal detecting, skiing 3 hour drive away, watching local football team etc and would like to help at local animal charities. and yes I am will learn Spanish (always order a canu, not a large beer!!)



Alan Selwood
Posted: 01 June 2018 12:09:25(UTC)
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charley;63243 wrote:


could anyone recommend a uk/Spanish financial advisor?
Try asking your solicitor about suitable ones to consider?

vaping
Recent article about this not being as healthy an alterntive to tobacco as people had thought.

coming back to uk for 1 month a year
To avoid becoming Spanish resident, you need to look carefully at the Spanish residency rules (as far as tax is concerned), including ownership of a Spanish property.
A friend in Italy lives near the French border, and makes sure he moves between the two countries regularly to avoid being considered tax resident in Italy (or France).


Alison Bundles
Posted: 01 June 2018 14:23:24(UTC)
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One glaring error here, Charley. Do not sell your UK house! I did and retired to Spain. 14 years later, Spanish property prices had stagnated. UK prices had rocketed. I found it impossible to return to a decent equivalent property in the UK. Fast way to lose money.

Living with the Spanish is lovely, they are an hospitable people but live to a different drumbeat. We had the Industrial Revolution in which our ancestors moved from farming to the cities and learned bureaucracy, accountancy, civil services etc. In short we have built into our lives an honesty gene. The southern Mediterranean people's parents still farm or labour. The rush of money in the 60's - '70's from tourism and villa sales created much corruption. A Spanish saying is, "only a fool or an expat pays tax. Why give it to the politicians to steal." They use the black money system. Every week a local Mayor or town planner, politician or administrator gets arrested.

Live there for the fun and sun. Don't trust them with your money! Lock it in the UK system.
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charley
Posted: 01 June 2018 14:43:21(UTC)
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thanks for last to posts.. advisors in spain just want your money!! at the moment so many expats stay british citizen.. and at moment get away with it.. can the Spanish afford to rock the boat? probably not...( sorry to mention boats with the Spanish!!)

they already get a little more tax on top of council tax 550 euros, if non resident they do ask for a holiday let tax regardless if you do let out, for me I think 700 euro... yes one option is to buy a second hse in france or Portugal if things turn sour..



Alison Bundles
Posted: 01 June 2018 15:11:32(UTC)
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I'm glad you spotted the advisors, Charley. Over the last decade a raft of dodgy UK IFA's have been driven out of the UK by toughening legislation. They ended up in the Costas. If an IFA boasts about "being passported in" and using well known British banking brands run for the door! They are illegal if not registered with the Spanish Financial board.
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charley on 01/06/2018(UTC)
Robin Stone
Posted: 01 June 2018 16:28:48(UTC)
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I have a retire at 50 plan with an acceleration to 45 option. So I have been thinking too about this.

I think you potentially do have enough money given your stated low expenses but would echo doing some learning/ trying to get some work you enjoy possibly part time. One alternative is rent out a room/Airbnb type thing to get a bit of income. This can be something you enjoy(eg I like family trees so I could do this you could do music or something else you enjoy). I would also flag things like a car needs replacing/boilers or aircon goes wrong. Home repairs eg new kitchen/bathroom in 20 years these will potentially burn a years income. If you stop you can’t easily restart in 5 years , LinkedIn is full of 50 year olds flagging how hard it is to get a job - a 5 year gap is going to cripple you.

First period - now to 55. Minimise your expenses and try and avoid eating into capital as if you can it disproportionately helps. I intend to eat into capital due to big pension pot but if you don’t you are sorted.

Next period 55 to 67. You now can use your pension pot, taking out in a tax efficient manner. Be warned 55 may move to 57

Final period 67 plus. For this you need to make sure you have fully qualified for the pension go on gov.uk to check as I am pretty sure you don’t qualify for full pension yet and you will want to pay up to get this which is an expense.

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DJLW
Posted: 01 June 2018 18:44:02(UTC)
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I stopped working at 47 a couple of years ago and also have a Spanish and London base. My orginal plan was to retire at 50 but opportunity presented itself earlier. Some of my thoughts and observations are as follows:

1) Best you avoid the word retirement for a while, well meaning people will be traumatised for you and will worry that your life will become a vacuous non existence not validated by having a job. You may well suffer terrible issues and struggle to cope but that’s your own issue to manage and from what you say re hobbies activities etc. I doubt it.

2) Money question or how long will you live question. You allude (I think, sorry if that was not your intention) to having health issues so you may consider your life expectancy is on the lower side of the average. Ultimately none of us know how long we will live and you will always find a a rationale to believe you need more money to retire. I guess the main issue for me when mulling the same issue was whether I was throwing away my peak earning years and might not be able to earn again later in life. I think you and other posters have already highlighted possible future income stream oppotunities and this combined with you lower expenditure should mean you are OK.

3) Tax residency etc. I will sleep easier knowing that I am observing rules 183 days in London to be Tax resident etc. Plenty of others have ignored the rules without problem for many years. Ultimately their ability to do this (in my opinion) is only likely to decrease with increased data collection sharing and analysis by relevant authorities.

The Portugal NHBR that someone has already mentioned is something I am looking into but it may not work for you if you already have an established Spain base and don´t want to change it.

4) I am guessing that you are ordering a Caña when at the bar in Spain otherwise I am intrigued to know what they bring you when you ask for a Canu.

Buena Suerte with whatever you decide,
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