How much is required to retire

4

45 and gone

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Ok just gone 40 and I think im in a good financial position , married with 1 child

house - mortgage free valued @ €450k
cash savings €670k - 300k of this inherited
Pensions € 110k
Investments €130k
Farm land worth €350k inherited
Wife pension €80k
Wife Savings €30k
Salary 85k + Bonus
we own both our cars approx €65k between both cars
 
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When your savings and passive income (dividends, rental income, pensions) provides enough to cover your cost of living now and in the future then you can probably retire. Many, many variables though.
 
you have a salary of 85k and yet you have €1.63 million in assets (property/land/investments) and €190,000 in pensions and you are just 40 years of age??? I presuming you and your wife have both inheriting significant wealth from both of your parents?
 
i have inherited 150k cash and the farm land worth 350k approx. just gone 42 now. everything else we have both worked hard for for the past 20 years. ill be due to inherit from my parents when the time comes also this is not included in the above.
 
How much you need is a very open question - based on everything from if and how many children, what and how much money you need to spend to have the life you want etc - could be anywhere between 1.5-4m depending! Theres plenty of good websites and forums based purely around FIRE and the calculators there will help you understand the range and what affects it. Clearly if the lifestyle you want costs 40k per year the answer will be very different to 80k per year! One of the often quoted figures is 25x your anticipated spending, but many will argue that it should be more cautions than this, especially with you being in your 40s - you could live another 60 years and who in 1962 would have been able to plan their spending requirements in 2022!
 
45 and gone said:
i have inherited 150k cash and the farm land worth 350k approx. just gone 42 now. everything else we have both worked hard for for the past 20 years. ill be due to inherit from my parents when the time comes also this is not included in the above.
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You saved €500k cash, and paid for a house worth €450k, over twenty years from a salary now reaching €85k?

So averaging €47k p/a from your after tax income? Ignoring mortgage interest and other assets you've acquired.

Remarkable.
 
Way too little info above. Does/did your wife work ? Do you have kids ? Are you planning on selling PPR and moving ? How much do you spend pm ? Your pensions are way too low but your cash and assets are good.
 
evil_g said:
You saved €500k cash, and paid for a house worth €450k, over twenty years from a salary now reaching €85k?

So averaging €47k p/a from your after tax income? Ignoring mortgage interest and other assets you've acquired.

Remarkable.
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While not directly related to your question I find this baffling aswell.

Obviously it’s your own business but very curious as to how this level of savings and assets was achieved
 
45 and gone said:
i have inherited 150k cash and the farm land worth 350k approx. just gone 42 now. everything else we have both worked hard for for the past 20 years. ill be due to inherit from my parents when the time comes also this is not included in the above.
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very strange scenario, i just assumed you inherited a load of cash because on a salary of 85 grand a year, the figures do not stack up.

How long have you had cash savings of 670k for?!!!!! Another crazy number and earning nothing in terms of interest for the last number of years. And that's on one salary, you don't say when your wife stopped working. You'd think when you got to €100k or €250k or €400k or €500k in cash savings, you might have said "come on here a second, what the hell am I adding to this cash pile for?!"

You've paid off a mortgage on a house now worth €450,000, saved €550,000 (€670k - €150k inherited + €30k (wife)) in cash and built up combined pension pots of €190,000, and bought two cars outright, lived and spent money doing so etc. Absolutely incredible. You should be giving talks lads.

I have no reason to doubt your honesty or figures, but this is one the strangest and head shaking posts I've ever seen on AAM
 
Your ability to save a very sizeable amount of capital, on a fairly modest salary, would indicate that you don't have an extravagant lifestyle .
I get that , because spending big on holidays, or desinger clothes, or cars, or fancy restaurants is not everyone's idea of the good life.
With that in mind, I would say you, probably, don't need a huge pension fund. Unless you are planning to change that lifestyle, in retirement, you, probably have enough to retire in your mid to late 50's . If you have , in the region of 1 million euros , that should give you 30k a year. You will, presumably, qualify for the state pension at 66, so that adds another 13k per year. Inflation might become an issue, but with the right investment advice your 1million should be able to keep pace, over the 30 or so years you would have in retirement.
My own advice would be to front load some of that income, so that you can enjoy your active retirement years in your 60's or early 70's. I've always thought that running a pension fund so that you get the same income at 60 and 85 is a poor choice. Maybe you'll be skiiing down Mont Blanc in your 80's but its unlikely. If you make it that far ( and more than half of us won't), you'll be living an even more modest lifestyle.
 
I have invested over the years example 100k and got a return of 19% in 9 months, back in the day 100k on depoist with Anglo gave you 9% for 12 months, interest up front.

I like my cars have a nice a5 and 1 series, wife was on 55k when she stopped 3 years ago,
used to go skiing every year and a sun holiday, not afraid to enjoy myself

300k of the 670 is only is the last year from inhertinance ,
 
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45 and gone said:
I have invested over the years example 100k and got a return of 19% in 9 months, back in the day 100k on depoist with Anglo gave you 9% for 12 months, interest up front.

I like my cars have a nice a5 and 1 series, wife was on 55k when she stopped 3 years ago,
used to go skiing every year and a sun holiday, not afraid to enjoy myself

300k of the 670 is only is the last year from inhertinance ,
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Well, in that case, I concur with the rest of the posters.
You should set up your own website and tell us all how to do it.

You certainly don't need any advice from me.
 
45 and gone said:
I have invested over the years example 100k and got a return of 19% in 9 months, back in the day 100k on depoist with Anglo gave you 9% for 12 months, interest up front.

I like my cars have a nice a5 and 1 series, wife was on 55k when she stopped 3 years ago,
used to go skiing every year and a sun holiday, not afraid to enjoy myself

300k of the 670 is only is the last year from inhertinance ,
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What? You said you inherited the land valued at 350k and a house that you sold for 150k was inherited. Now you are saying that 300k of the 670k savings was inherited last year?

How much have you saved yourself and how much fell in your lap? Is the revised total that you inherited now 800k (350k + 300k + 150k)
 
sorry if I wasnt very clear

total inherited €150k cash and a house which sold for €150k also. totally 300k cash which is included in the 670k cash

farm worth 350k approx also
 
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So your total assets are worth 1775K

You have 1180K then you can use to build your retirement fund. Say you retire at 57 and live another 30 years to 87, and your assets did not grow you would have €39K a year plus 2x€13K state pension if you are entitled to max from 66. So can you live on €39K a year until 66 and then €65K a year for both of you?

You clearly have a flair for investment, so max out your pension each year and put some into high risk vehicles for you to grow your investment until you have to drawn down.
 
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45 and gone said:
sorry if I wasnt very clear

total inherited €150k cash and a house which sold for €150k also. totally 300k cash which is included in the 670k cash

farm worth 350k approx also
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Clap on the back for you. Yes, you're on the right path and will have no problems retiring early unless you make a total cock up of everything. Just watch out for the grim reaper, he sometimes shows up uninvited ;)
 
Clamball said:
plus 2x€13K state pension if you are entitled to max from 66.
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For this dividend or rental income must exceed €5k pa for both spouses so PRSI gets paid. Otherwise no full state pension entitlement!

@45 and gone this will have to be a big part of your early retirement strategy. Will the farmland provide a rental income? Otherwise (and opinions differ on this) but an investment property which brings in net income of at least €1k a month would be a good use of your cash I think as it will mean you pay PRSI on the rental profits and build up state pension entitlement at 66. Two apartments outside Dublin at €200k each could gross you €40k a year if you are prepared to be a landlord. Splitting it over two properties means you still have income in the event of voids or a bad tenant.

Otherwise you've accumulated a lot of wealth but it's not best allocated for an early retirement strategy. You are far too heavy in cash and too low in equities. Suppose you want to retire at 45. Maximise both spouses' tax-relieved pension contributions until then. You can then tap into the pension fund from 50.
 
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NoRegretsCoyote said:
For this dividend or rental income must exceed €5k pa for both spouses so PRSI gets paid. Otherwise no full state pension entitlement!
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Or you can just make voluntary payments of €500 per year to the Dept of Social protection to claim the OAP
Probably the best return on a yearly €500 that any of us could make!!
 
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