In a previous post I had a look at how exactly where I was headed, if I was to carry on as I was and change nothing.
Depending on the assumptions it looked like I could get my independence somewhere between 58 and 69, assuming that funds of £1million would be sufficient. I’m going to ignore state benefits through all this as it is so uncertain and will probably start when you reach 110 in the near future.
So the next step is to have a look at what I need to change to have FINANCIAL INDEPENDENCE by 50. By this I mean to be able to stop work if I want to, not necessarily retire. Perhaps quit work and get some side money by playing in a folk-metal-zombie-pirate band two nights a week. Maybe.
(I have made some changes in the interim to add Ms Zombies pension and a company sharesave we have entered into, bringing the FI age to 56 or 57, so taking a couple of years off on the less prudent assumptions. Hooooooot!)
So what’s got to change, Bob?
I can use a quick projection tool to get an idea, like the one here – https://www.moneyadviceservice.org.uk/en/tools/savings-calculator.
This is obviously very simple, but it gives us an idea. If we take 2% as our real return with a target of 1 million by the end of 2032 and a starting point of current Net Wealth we get the following depressing message
“You need to save £3,412 per month to save £1,000,000 by December 2032″
If I change the real return to 4%…
“You need to save £2,677 per month to save £1,000,000 by December 2032″
This isn’t far off what we are saving a month between us, which is encouraging. And 4% after inflation should be achievable over the long term.
Looks we’ll need to up savings by £200-£300 a month.
Something to aim for
So to have any chance of my super plan working, I’m going to have to up the savings each month and make sure my monthly return is on track. Easy….right?
Let’s do this. Next stop – a plan going forwards.