Table Of ContentWhat does it take to
make enough money
to retire earlier than
you’d ever imagined?
Gone are the days of retirement being in the distant future,
mapped out for you by someone else. You have the power
to take control and retire when you want and on your
own terms.
How to Retire 10 Years Early shows you how. Martin
Bamford, personal finance expert, gives you the plan
and the mindset to start planning early retirement NOW.
You’ll find straight-talking advice on debt destruction right
through to taking risks and cutting costs, as well as an early
retirement checklist to make sure nothing is left to chance.
Your road to financial freedom starts here.
‘Soundfinancialadviceinacrazyworldisofteninscant
supply.Thisbookdeliversitinspades.Ifhehadwritten
it10yearsago,Iwouldnowbehappilyretired!’
Jeff Prestridge, Personal Finance Editor, Financial Mail
‘Retirementisabouttakingadvantageofanotherstage
inlife.Thisbookapproachesplanningforretirementin
arefreshinglymodernandcandidway.’
Nick Cann, Chief Executive, Institute of Financial Planning
£9.99
PERSONAL FINANCE
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HOWT_A01.QXP 25/10/07 13:36 Page i
‘The book every wage slave needs to turn their early retirement
dreams into a reality.’
Mike Southon, co-author of ‘The Beermat Entrepreneur’
and other business books
‘Financial planning puts clients’ needs first and helps them to
achieve their financial and lifestyle goals. Retirement is not
about preparing to die but taking advantage of another stage in
life. Proper preparation will ensure that these goals are met.
This book approaches planning for retirement in a refreshingly
modern and candid way.’
Nick Cann, Chief Executive, Institute of Financial Planning
‘Sound financial advice in a crazy world is often in scant supply.
This book delivers it in spades. If he had written it 10 years ago,
I would now be happily retired!’
Jeff Prestridge, Personal Finance Editor, Financial Mail on Sunday
‘Early retirement doesn’t happen by accident, it happens by
exercising control and planning. If you really want to, you can
make it happen; this book will help you achieve that goal.’
Tom McPhail, Head of Pensions Research, Hargreaves Lansdown
‘Once again, Martin has delivered a no-nonsense, jargon-free
guide to managing your finances. Retiring early is a dream for
many, but this practical book shows how, by taking several
straightforward steps, it can become a reality.’
Melanie Wright, award-winning personal finance journalist
‘When most people are worrying about whether they will ever
be able to retire, it is refreshing to read a positive and practical
book that can help you escape the rat race 10 years early. The
early retirement check list is a fantastic guide to the things you
should start doing right now to get on an even financial keel,
regardless of whether you want to stop work or not.’
Jill Insley, Cash and Property Editor, The Observer
HOWT_A01.QXP 25/10/07 13:36 Page ii
HOWT_A01.QXP 25/10/07 13:36 Page iii
How to Retire 10 Years Early
HOWT_A01.QXP 25/10/07 13:36 Page iv
Prentice Hall LIFE
If life is what you make it, then making it better starts here.
What we learn today can change our lives tomorrow. It can
change our goals or change our minds; open up new
opportunities or simply inspire us to make a difference.
That's why we have created a new breed of books that do
more to help you make more of yourlife.
Whether you want more confidence or less stress, a new
skill or a different perspective, we've designed Prentice Hall
Lifebooks to help you to make a change for the better.
Together with our authors we share a commitment to bring
you the brightest ideas and best ways to manage your life,
work and wealth.
In these pages we hope you’ll find the ideas you need for the
life youwant. Go on, help yourself.
It’s what you make it
* * *
HOWT_A01.QXP 25/10/07 13:36 Page v
How to Retire 10 Years Early
Your Plan for Less Work and More Life
Martin Bamford
HOWT_A01.QXP 25/10/07 13:36 Page vi
PEARSON EDUCATION LIMITED
Edinburgh Gate
Harlow CM20 2JE
Tel: (cid:2)44 (0)1279 623623
Fax: (cid:2)44 (0)1279 431059
Website: www.pearsoned.co.uk
First published in Great Britain in 2008
© Informed Choice Ltd 2008
The right of Martin Bamford to be identified as author of this work has been asserted
by him in accordance with the Copyright, Designs and Patents Act 1988.
ISBN: 978–0–273–71427–9
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Bamford, Martin.
How to retire 10 years early : your plan for less work and more life / Martin Bamford.
p. cm.
Includes index.
ISBN 978-0-273-71427-9 (alk. paper)
1. Finance, Personal. 2. Retirement income--Planning. 3. Investments. I. Title. II. Title:
How to retire ten years early.
HG179.B287 2008
332.024'014--dc22
2007039399
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without either the prior written permission of the publisher or a
licence permitting restricted copying in the United Kingdom issued by the Copyright
Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. This book may
not be lent, resold, hired out or otherwise disposed of by way of trade in any form of
binding or cover other than that in which it is published, without the prior consent of the
Publishers.
10 9 8 7 6 5 4 3 2 1
11 10 09 08 07
Typeset in 10pt IowanOldStyle by 3
Printed in Great Britain by Henry Ling Ltd., at the Dorset Press, Dorchester, Dorset
The Publisher’s policy is to use paper manufactured from sustainable forests.
HOWT_A01.QXP 25/10/07 13:36 Page vii
Contents
About the author xi
Thank you xii
Introduction
2
■ Why this book? 4
■ Why bother? 6
■ It’s not just about the cash 7
■ Reasons to retire early 8
■ What you will find in this book 9
■ A word of warning 11
1 What is early retirement?
0 14
R
E ■ What is retirement? 17
T
P
A ■ What is early retirement? 18
H
C ■ Myths about retirement 19
■ Good news and bad news 24
■ There is nothing average about you 28
2 Getting ready for the early retirement plan
0 30
R
E ■ First, some good news 32
T
P
A ■ Getting organised 33
H
C ■ Early retirement roadblocks 35
■ The perils of parents 40
■ Where are you right now? 41
■ Building your toolkit 47
vii
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Y 3 Budgeting for an early retirement
RL 0 50
A
E R
S E ■ The benefits of budgeting 52
R T
A P
YE A ■ Some rules 53
0 H
E 1 C ■ Signs of bad budgeting 55
R
ETI ■ Some assumptions 57
R
TO ■ What next? 59
W
O ■ Spending money when you have retired 60
H
■ How to manage your budget 63
4 Debt destruction
0 66
R
E ■ Why is debt a problem? 68
T
P
A ■ Two types of debt 69
H
C ■ The first steps 72
■ Your mortgage 73
■ Mortgage mistakes 75
■ Early mortgage repayment rocks! 77
■ The power of offset 80
5 Financial vehicles for a smooth ride to early
0
R retirement
E 86
T
P
A ■ Financial tools and vehicles 88
H
C ■ The difference between products and investments 89
■ Five things to watch out for 90
■ The ‘p’ word 92
■ Turning your pension fund into income 98
■ Whatever you do ... 103
■ The non-pension alternatives 103
viii
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6 Taking risks C
0 110 O
N
R T
E
E ■ The relationship between risk and reward 112 N
T T
P S
A ■ Risk and retirement planning 113
H
C ■ Risk and early retirement 116
■ How much risk should you take? 118
■ The best way to control risk 120
■ Where should I invest for my early retirement? 122
7 Slash your costs
0 124
R
E ■ Over 20 ways to spend less money 126
T
P
A ■ Extreme budgeting 135
H
C ■ Slashing other costs 136
8 A helping hand from the taxman
0 140
R
E ■ So, what’s the problem? 142
T
P
A ■ Evasion and avoidance 144
H
C ■ How to pay less tax 145
■ How does tax relief on pensions work? 148
■ Tax and investments 150
9 Staying on track
0 154
R
E ■ How much will you need to retire? 156
T
P
A ■ Monitoring your progress 161
H
C ■ Your annual financial review 162
■ What to keep and what to dump 166
ix
