How to retire at 55 with a few tips from Scrooge
Honestly, how many of you really want to retire at 55? Spending your childrens inheritance and taking numerous holidays to sun-kissed shores might seem appealing but you need some serious funding.
So, with that thought in mind, here are a few pointers on how to build a tidy retirement fund (bearing in mind that you’ll need roughly £550,000 to be comfortable).
We’ve already had some tongue in cheek money saving tips from Scrooge. Now you’re about to get some more advice on how to power up your pension pot.
Raid Your Childrens Inheritance
I didn’t say you’d like these suggestions, did I? If you’re miser like Scrooge then you’ll have no problem depriving you kids of what they consider is rightfully theirs.
The most convenient way of extracting money from your estate is to use an equity release scheme. It works like this: you get some money from the equity release company. When you die they take a chunk of the value of your estate. They’re going to charge you an eye watering level of interest as this is, basically, a loan (wrapped round a hand grenade).
If you really don’t want you children to have a penny then this is the way to go.
Rob A Bank
The geezers that did over Brinks Matt got away with about £17 million. That’s enough to fund over 30 retired lags (with enough change to keep them in snout for about 100 years).
Obviously, there are strings attached to robbing banks. Get caught and you’re going to end up prison for a good few years – apparently, HM Queenie doesn’t take kindly to you stealing her money. Even if you don’t get caught you need to go to ground as the police will be searching high and low for you. Another problem is that the tights you need to wear as a disguise can cause certain skin conditions to really flare up.
The easy days of getting all the cash you want in one heist are long gone so expect to do a few jobs before you retire.
Sell Absolutely Everything
A little more extreme than using the equity release path but you don’t need to pay for the privilege of borrowing cash. If you’re really nice you can even leave what’s left over to your kids.
Scrooge assumes you’re planning to move abroad. After all, why sell your home if you’ve got nowhere to stay. Unless, you’re planning to move in with your children and let them watch you blow all your money – that’s really cold. If you simply want to sell up and move then take a leaf out of Ian Usher’s book and eBay the lot. Once the cash is in the bank simply close your eyes and stick a pin in a map of the world, pack your bags and go (unless you managed to stab Churchill, Canada in which case, try again).
The beauty with this piece of advice is that you can spend the rest of your days living on a sun drenched beach where you bank account will have you living like a King (or Queen).
Fake A Crippling Injury
Did I hear a gasp of shock? Did Scrooge really suggest you fake an injury in order to get a cash payout that you can retire on? Yes!
Don’t be shocked – there are an awful lot of people doing it so why not grab a piece of the action? Like some of Scrooge’s other suggestions, this one isn’t for the faint of heart as your scam is going to raise the cost of other peoples insurance premiums. The easiest injury to fake is the tried and tested ‘bad back’. Pay a visit to your doctor, groan and grimace when you asked to touch your toes and Bob’s your uncle – welcome to the insurance gravy train.
Bear in mind that if you do decide to go down this path you have a lot to risk. The slightest hint of you having fun (para gliding, playing football, etc) will result in you having to pay your ill-gotten gains back.
Ok, that was all a bit tongue in cheek so how about some more realistic approaches to retiring at 55 (or younger)?
Here are 5 tips to get your pension ready to support you:
Start a pension now
If you don’t have a pension you can’t claim one! The sooner you start one the more money you’ll have in the fund to draw on when you finally do retire.
If you’re 30 you’ll need to save about 15% of your earnings in order to retire comfortable at 65. If you want to give up working at 55 you’ll need even more money going into your fund.
Get the tax man to pay into your pension pot
Did you know that for every £1,000 you put into a personal pension plan the HMRC will add another £250. You can also claim additional money back through your tax return (which will help higher rate tax payers).
This means that, with very little effort, you for every £1,250 in your fund you’re only paying £625.
Sign up for your work pension
If your employer offers you a pension, grab it with both hands. Many companies offer excellent pensions. In most cases, the best pensions are found in large companies but never miss out on something for nothing.
By 2016, all companies will be obliged by law to offer their employees a workplace pension. This all adds to free money for you retirement so don’t look this gifthorse in the mouth.
Don’t lose track of your old pensions
It’s unlikely that you’ll spend your entire working life with one employer. It’s also unlikely that you kept track of all the pension plans you’ve enrolled in. If this is the case then you’re missing out on part of a vast pot of cash estimated to be worth billions of pounds.
If you remember joining more than one pension but don’t have the details to hand, you can trace them free with the Pension Tracing Service.
Know where your money is being invested
Slightly trickier but if you make the effort this can pay real dividends. To get the best returns you’re going to have to do some research before you decide which pension to sign up to. Unless you know what you’re doing this last option is probably best off being handled by a financial advisor.