Is this the secret to retiring at 40?
WITH a rising state pension age and stagnating living standards, most workers would consider early retirement out of reach for all but the richest.
But a growing band of frugal employees are joining a movement that claims even modest earners can quit work for good in their 40s.
So- called ‘ strong-willed super- savers’ hold back up to 75 per cent of their salaries and resist spending a single penny for five days a week – all while making shrewd investments.
Those behind the plan say anyone can ‘go from broke to never needing to work again’ within ten years if they follow the Financial Independence Retire Early (FIRE) formula – an idea born in the US.
But the mathematics require a person to have a nest egg equivalent to 25 times their annual spending – meaning huge cutbacks. That includes only taking cheap holidays, no expensive cars and never shopping for leisure. The leftover cash must also go towards the mortgage, ideally on a modestly sized home.
Anyone wanting £25,000 a year to live on will need to build up £625,000 in savings and returns from investments or buy-to-let properties and only draw out a ‘safe’ 4 per cent a year when retired.
The formula takes inspiration from the 5:2 diet, which allows dieters to eat whatever they like for five days in a week as long as they fast for two. However FIRE savers are only allowed to spend money on two days.
Accountant Barney Whiter, a married father of three from Farnham, Surrey, walked away from work at 43 by restricting his family to just £24,000 a year in spending.
He then invested the salary he saved in low-risk stock market funds and shares over two decades. Mr Whiter told The Times: ‘If you can save 50 per cent of your take-home pay, it will take 19 years to go from broke to never needing to work again. If you can save 75 per cent, it will take seven to eight years.’
More than 100,000 people globally are now said to be following blogs by FIRE proponents, including Mr Whiter.
ALL of us have met friends and former colleagues who’ve recently retired and felt a twinge of envy when we see how well and happy they look. They are less stressed, they have more energy and suddenly they seem years younger. But as we approach retirement ourselves, we may start to think about relatives who have died when they were not much older than we are now.
and we’re right to be concerned. an unsettling report from the Institute of economic affairs in 2013 showed that although it initially boosts health, retirement increases the probability of having at least one diagnosed physical condition by 60 per cent and raises the chances of suffering from depression by about 40 per cent.
add to that the fact that dementia now affects one in 14 people over the age of 65 and there seems a lot to feel apprehensive about.
‘at work, you have constant challenges,’ says Owen, a 65yearold production manager. ‘ The thing I’m most anxious abou when I retire is keeping mentally alert when I don’t have to problemsolve every day.
‘I’m aware I can be a bit lazy mentally. I’m not great at learning new things and new technology. I know I need to keep on top of that but I’m not sure if I will.’
His view is a typical one for people of his age. But the latest research into brain health offers some surprising — and remarkably positive — findings.
Study after study has found that what’s good for your body is also good for your brain: a healthy diet, regular exercise, social contact and plenty of mental stimulation.
The strongest evidence of a beneficial effect on brain health comes, perhaps surprisingly, from physical activity, rather than from brain puzzles and crosswords. RESEARCHERS
at the University of canberra in australia found that regular aerobic exercise dramatically improved cognitive abilities such as thinking, reading, learning and reasoning.
Muscle strengthening, meanwhile, had a significant impact on memory and the brain’s ability to plan and organise.
Studies at the University of edinburgh found that people who did more physical activity experienced less brain shrinkage, as well as less scarring in the white matter — a key area involved in the transmitting of information.
all this is an excellent reason to rethink the exercise you do, with research showing that even those who have done little exercise before the age of 60 can see cognitive benefits almost immediately.
Increasing your walking speed to brisk, carrying the shopping home rather than getting the car out, and digging the garden can make a huge difference.
Other forms of moderate aerobic exercise that can help include swimming, riding a bike, pushing a manual lawn mower, tennis and walking football.
aim to do musclestrengthening exercises, which include yoga, climbing stairs, hill walking, cycling and lifting weights.
aside from physical activity, there are plenty of other ways to stretch and challenge your brain.
Learning to play a musical instrument not only boosts creativity and the ability to focus, it can lower the risk of dementia and cognitive impairment by more than a third, according to a study at the University of california.
Frances, a former senior civil servant now semiretired, was so determined to avoid her father’s dementia that she took an accountancy qualification.
‘It was extraordinarily tough, which is why I did it,’ she says. ‘It made me use parts of the brain I wouldn’t access otherwise. I passed the exam by the skin of my teeth, but what mattered to me was the benefit I got from making my brain work.’
By contrast, brain games and puzzles make people better at those activities, but may not lead to improvement in other areas. although that doesn’t mean they’re not worth doing.
When you retire, your energy levels are as much about attitude as anything else — having a reason to get out of bed makes an enormous difference.
‘I’ve noticed that I’ve suddenly felt full of energy when I’ve been very busy with work-type things,’ says Mary, 75.
‘ I really think that constant tiredness is more to do with lack of motivation than ageing.’ It’s a sad fact that stories of people whose mental health went downhill rapidly when they retired are common.
There are two probable causes. First, this is a time when people inevitably look back at their achievements, and may feel disappointed that life hasn’t quite lived up to their expectations.
Second, work is a great way to avoid dealing with underlying problems. ‘The way that work can hold people together and keep problems at bay for a long time is common with the people we see,’ says Mark Vernon, a psychotherapist at the Maudsley Hospital’s Older adults Unit in London.
‘retirement or their kids leaving home is a real crisis point.
‘essentially, a focus in their lives that held things together for them is no longer there. Very often mental health problems that were nascent suddenly become completely dominant.’
adrenaline also takes a lasting toll, and it affects people who have retired from any job with a high level of stress. Some people who suffer from anxiety in retirement attribute it to adrenaline still pumping around with nowhere to go.
Former police officer, Nick, turned to meditation as a way of coping. ‘When it all started kicking off at work you’d get these massive adrenaline surges,’ he says. ‘It was a kind of drug.
‘Five years on, I’m still working through that.’
experts agree it’s perfectly natural to feel a bit low when you retire. The key is to stop negative feelings descending into fullblown depression or anxiety.
‘I remember thinking when I first retired, “Why bother? Why cook and clean if no one was due to visit? Why comb your hair if you’re not going out?” ’ recalls Jean. ‘at work I had often been called on to make life-or-death decisions. Now the only decision I had to make was whether to microwave a meal or stick it in the oven.’
The solution can often be simple. anxiety in retirement tends to have its roots in loneliness and lack of purpose.
Finding new activities and social connections can help people feel better quite quickly.
Men’s Sheds, which has branches all over the country where men can meet and make things, is a great example. even small steps to connect with people will reap immediate benefits.
Just walking to the local shop and making an effort to smile is a good start.
Doing something to help somebody else is surprisingly effective: research has shown significant links between acts of kindness and an increase in wellbeing.
even something that requires minimal effort — sending a getwell card or taking a meal round to a sick neighbour — can make both giver and receiver feel better.
research suggests that games played with other people, such as bridge or online Scrabble, may have particular benefits. The same goes for singing in a choir or playing music with other people. LEARNING
something new in a group, and enjoying the whole process, is thought to underpin its benefits. Perhaps best of all is a combination of physical activity, mental stimulation and sociability. Mixing exercise with exploring new ways of doing things and sharing ideas makes it more likely that new nerve cells in the brain will form functional circuits.
It could be anything: you could try sailing, dancing, tennis or something more unusual, such as historical sword fighting. as long as it’s something you really enjoy.
Train driver chris is now in his fifth year of retirement. ‘ When I took my driver’s key out for the last time, the thought that I would never drive out on the main line again, rolling along through the countryside, did give me a twinge of regret,’ he says.
‘But the overwhelming feeling was “good, the time has arrived, I can now look forward to a new phase of my life’’.
‘a few days later I went on holiday with my wife; it was a lovely sunny week in Dorset. Walking on the coast path I thought, this is the start of the rest of my life. This is my time now. That was a really, really wonderful feeling.
‘With the right approach, retirement can be one of the best times of your life.’
Not Fade Away: How to thrive In Retirement, by Celia Dodd, will be published on thursday by Green tree at £12.99. © Celia Dodd 2018. to order a copy for £10.39 (a 20 per cent discount), visit mailshop. co.uk/books, or call 0844 571 0640. P&P is free on orders over £15. offer valid until Saturday.