Steve Adcock and his wife both retired in their early 30s despite coming from a modest background with no inheritance. He discloses how he retired young with one million dollars in the bank.
Retiring early doesn’t have to be a pipe dream, some people are managing to put their feet up before their 40th birthday.
A former IT consultant has shared how he managed it and says it is possible with hard work and sensible financial planning.
“I will remember December 23, 2016 for the rest of my life. It was my last day working a full-time job,” he told CNBC.
“My wife and I retired early at 33 and 35, respectively, after accumulating $870,000 working in information technology.”
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The finance expert shares 13 tips for others looking to retire early:
- Don’t follow your passion if it won’t make you money
- Learn from millionaires – follow what they do and invest well
- Ditch the losers and hang out with high performers – people tend to act like the people they associate with
- Exploit the nine to five by making the most of employee benefits and employer pension contributions
- Don’t stay in one job too long – pay rises often come with new jobs
- Automate everything from paying bills to investing
- Ignore the haters who might not understand spending less on nights out
- Don’t try and keep up with the Joneses – cars depreciate and don’t make you rich
- Talk about financial goals with a partner
- Prioritise health as money isn’t everything
- Don’t take on credit card debt
- Say yes to a promotion and learn how to do it later
- Ditch the bar and invest the money instead.
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The full new state pension is worth £9,627 which is just short of the £10,200 a year the Pension and Lifetime Savings Association (PLSA) states is needed to achieve a “minimum living standard” in retirement.
To enjoy any luxuries in retirement people will need to have at least double this, according to the PLSA calculations.
According to the Office for National Statistics, the average salary for full-time workers in the UK is £38,131.
The good news is it’s possible to save one million for retirement on an average wage if people start early enough.
Pension expert Tamsin Calne told Express.co.uk: “If you are able to save 10 percent into a pension (five percent personal contributions and five percent employer contributions, so £317.76 per month) and your investments grow at five per annum, in 10 years you would have £49,548. In 20 years, you would have £131,154.”
In 40 years of saving like this, someone would have £758,422.
Tamsin added: “If we assume that the income increases with inflation of three percent (I know it’s much higher at the moment), this amount becomes £167,837.
“Increasing the contributions to 15 percent (10 percent from the individual and five percent from the employer), you would have £1,137,639.”