How To Retire Early On The Average Wage (Simple Steps)

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Financial Planning

DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice. Any opinions or assessments expressed are James’ own opinions or assessments, which are not affiliated with any third party. Any representations stated as facts or views based on such facts are relevant to circumstances applicable at the time of publication. This information should never be relied solely upon to make decisions, and James accepts no liability for any investment actions undertaken by viewers. Please seek regulated financial advice or an advisor if you require assistance. The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested.

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00:00 Intro
01:29 Average Wage Example
08:07 Average Wage Retirement Lifestyle
10:35 Lower Wage Examples
11:49 Effects of Saving More

[JamesShack]

CLARIFICATION: Auto Enrollment rules only apply to the portion of your salary above the lower earnings limit of £6, 240. Although this limit is expected to be removed shortly.

[UKGeezer]

Unfortunately I didn't start saving into a pension until 41, and then it was only in the default fund for 10 years until I learnt recently that this was a really bad idea. Now I'm pouring much more money than I should need to at my age into both my pension and stocks & shares ISA to try and catch up a bit.
Learn from my mistake all you youngsters out there, you have no idea how lucky you are to have all the financial videos like this and information on the web freely available now.

[Philippe_R]

When he says if you are 20 and are watching this video, you are very lucky to have learnt this at such a young age. YOU HAVE NO IDEA how lucky you are. If I knew this information at 20 I would have probably saved at least another £100k into my pension.

[JohnGreenwoodPhotography]

That was the most comprehensive and balanced video I have have seen on saving for a pension, and I have seen hundreds. Thank you so much.

[phildavis]

The government should employ people like you and Martin Lewis to teach this stuff in schools - but then the government dont want a money savvy population who can all retire early and not have to work until they clock out in a coffin do they!

[dabe]

A reassuring and very timely video James. I was a very late starter to Pension savings and started from Zero at age 36 but now at 52 I've managed to accrue a £195k pot from an average wage thanks to hard saving and good advice from you and other YouTubers. However I'm probably going to be leaving my job soon as I've not been happy there due to some changes in the last few months and they're offering a generous voluntary redundancy package so I'm hoping to take advantage of that. I've reassessed my life since the turn of the year after suffering a heart attack out of the blue in January so suddenly excessive money doesn't seem important as my life expectancy is probably going to be shorter than I once thought ! The lockdowns we went through already proved to me that I can live quite a frugal life with just the basics so I might even be in a position to be able to step away from the working world - or at the very least have a summer break and then take on a simple 'pocket money' job whilst my pension grows a little more until I reach the magic age of 55, This video gives me some confidence that my plan may be OK.

[kieron]

To unlock pro level, also invest in a S&S ISA, retire earlier, use the ISA to bridge that gap until your pension kicks in….

[nigelallen]

Self employed since 19, started pension at 23 once I’d had a house a few years (with 13% interest). Hammered it late 20’s when I earned more, rather than buy a nice car, and was fully funded for a while. Put in max contributions in my 40’s to take advantage of 40% tax relief and retired at 57 last December. Compound interest really does work. My father in law was given this advice by a bank manager in the 1950’s : Buy the cheapest reliable car, and the most expensive house you can reasonably afford. That was good advice. I’ve discovered your channel recently, and I seem to have followed most of the same strategies that you recommend for both investing, and then withdrawing income. Great channel, I’m sure many people will benefit from your advice.

[dar]

As a 50 something with no idea about this stuff when I was young I feel a bit gutted. I’m enrolled in my company default pension and I’ve no idea how to choose available funds on my own. You educate us and young people now really don’t know how lucky they are to have you give them this solid gold knowledge. Too late for people my age to compound this pension wealth but at least there will be something. Great work James. 👌🏻

[stevegeek]

I recently retired aged 55. I was able to do this as a result of saving as much as possible into my company pension over the last 15 years, including annual bonus which was paid by salary sacrifice into pension. Meanwhile my colleagues were busy buying new cars, bigger homes etc. and they will be working another 10 years most likely.

[cardermedia]

Great video - as always - clear, to the point, no crap jokes or padding. Oh, and loving the look of that Compound Return chart!

[JamesShack]

If you're watching this in your 40s or 50s and feeling behind, watch this next:

[showady]

Thankfully my Dad taught me young. Been putting 8% into pension since 18, with the employer averaging 20%. I'm 45 now, hoping to retire at 55. Just waiting on a projected quote 😊

[marcotinnirello]

Very nicely done, with great clarity, as usual.
2 key points to hammer home
1) this isn’t rich vs poor, it’s financially educated vs not. Richer people tend to seek this advice/info more. This financial awareness needs to be taught at school, mandatory for everyone.

2) When people hear “put extra x% of salary i to pension”, they immediately do the calc of how much less they have each month to spend. BUT, they miss the tax benefit element which means the impact is less than it seems, tragically meaning people don’t consider doing it enough.

James, how about we start a campaign to get this level of financial knowledge (and things like credit, loans, mortgages) into the school curriculum?

[christocmp]

Thanks for another fantastic video. These lessons are so important they need to be taught in school. Just the other month I had to talk a younger guy just starting out not to opt out of the work place scheme. For someone just starting out the numbers unsurmountable and videos like this really help.

[danielgatfield]

Absolutely brilliant video, first time I've actually been able to grasp the understanding of pensions! Bravo 👏

[bakey]

That was the most relatable video yet and has given me some reassurance as my investment returns are in the early stages.

[PineHosting]

Financial planning is like navigation. If you know where you are and where you want to go, navigation isn't such a great problem. It's when you don't know the two points that it's difficult

[Bustergonad]

Just sent this video to my 22 year old son who is just about to start a career as an accountant and is oblivious to how important this is.

[neilcole]

You know what, l wish we had the internet information 40 years ago ! Finances back then was baffling and so we thought for the wealthy. But the young today have got people like yourself to make finance matters easy! Put some money away every month over your entire working life to have a decent retirement! Thank you for the wisdom, albeit for me a little late!