Contracting for 20 years, should I have made enough to retire on?

[Unix]

I wouldn't beat yourself up, you have been investing in property - your own house counts and is a good investment due to leverage and no tax on gains !
Only trouble I can see is lack of diversification. you could easily remortgage and free up 400k, and invest that, would that make you feel better about your reserves ?(dont do this, just to illustrate perception...)
Add up all your assets, including house. Is that 25x your current outgoings ? Then you are in a good position as this is somtimes used as 'can I pack in work' amount.
Or work out 4% of this total, can you live on this, this is considered a safe amount to take out of your pot forever and still not run out of cash or deplete reserves even if invested conservatively.
Or use this to consider how much you need - net (obv needs adjusting to your lifestyle)
1000/month - basic amount to live
2000/month - comfortable with holidays etc
3000/month - v. comfortable life, multiple holidays, able to assist kids etc.
So - you have 660k in the house, 175k stashed and 200k in the business (call this 165 to be safe).
Sounds like a cool million in assets to me, potential 40k a year ? Just make sure you don't end up asset rich and cash poor with a million pound house !
Clearly you have been enjoying yourself as well so you are doing ok I reckon !!

It's pointless counting your own home as it isn't an asset as such it's a liability (it incurrs costs doesn't generate income). I would sell the house and invest everything in a lazy portfolio and rent the smallest house possible. Living off half the income and let the rest grow.

[d000hg]

Having a house you paid £750k for is probably the issue here. Just think, if you had a house worth £500k that's another £250k in savings.

[expat]

After 20 years contracting, I'd expect either to be retired / semi-retired or to have lived the life of Riley and had long breaks, spent some family time, decent holidays, generally chilled...

If "semi-retired" = frequent bench time, "long breaks" = some long bench periods, "family time" = regular periods at home, then I've got it made.

[oracleslave]

Having a house you paid £750k for is probably the issue here. Just think, if you had a house worth £500k that's another £250k in savings.

Robert Peston look out!

[lukemg]

It's pointless counting your own home as it isn't an asset as such it's a liability (it incurrs costs doesn't generate income). I would sell the house and invest everything in a lazy portfolio and rent the smallest house possible. Living off half the income and let the rest grow.

It's pointless counting your own home ? Next sentence - sell the house and invest it !!!
LOL...
You dont count your own house, you count the amount of equity you have in it as this would in theory be available to invest or to live off.

[Project Monkey]

Why! Once is enough!

+1

[Project Monkey]

If your return on investment exceeds the cost of borrowing, then it makes sense to keep the mortgage. for the same reason that companies borrow money / issue bonds while they have large piles of invested cash elsewhere.

Assumption is that "personal savings" means personal saving account(s). No mention of investments in OP.

[Sausage Surprise]

Hi all,
This July, I will have been contracting for 20 years. I've never been out of work, not even for a week, across the whole 20 years, and never taken an extended sabbatical or holiday, so pretty much 20 years of solid contracting. Everyone has their own reasons for going freelance, to take extended holidays, variety of work etc, etc, mine is plain and simple, to earn the most money that I can I don't want to blow my own trumpet, but I do like to think that I'm good at what I do, C++ & Unix, for the last 18 years in finance. Typically when I get a contract, I tend to stay, and leave if I don't like it or I'm fed up, I've never not been renewed, and have always left on my own accord. The rates in those 20 years have been average to good, I'm based in the South East, not far out of London.

After a few conversations with the other contractors at my current gig, when it come up how long I've been in the game, there were talks of "you should have made enough to retire on", and it got me thinking. Why haven't I made enough to retire on?. I'd say I'm relatively well off, 90K mortgage left on a property worth around £750K, personal savings in excess of 175K and around 200K in the company account. I'll be 46 this year, and I'm not sure how long I can go on earning what I am. I know I've messed up a bit on the way, I should have invested, particularly in property, something which I've only just started over the last year or so. My general questions are,

- How much do you think you need to retire comfortably on. I know it will vary depending on your needs, regardless of that, some kind of income is needed for retirement.
- Do others have an "exit plan", i.e. earn a certain amount, then retire, or go permie
- How long do you intend contracting for?
- What should I have done differently? Has anyone else contracted for this length of time, would be interested to know how much better off they are than me, and what they've done differently.

No wife or kids then?

[yasockie]

90K mortgage left on a property worth around £750K, personal savings in excess of 175K and around 200K in the company account.

I'd say you can easily retire on that, as long as you're not stuck on the idea of living in london - one the most expensive cities in the world.
Just rent out your property - at that valuation I expect it should fetch no less that £2k pcm which is a good enough lifestyle say in south of Spain - enough to cover renting a small villa with a community pool and eating out everyday etc...

If you can't get that, sell the property and buy two smaller flats that more easy to rent.

[Zero Liability]

Working your life away as a contractor so you can have a little more than the average permie at 50 is a bit depressing. People exaggerate the income a contractor makes, not you won't be retiring at 40 with a Porsche and no mortgage on a mansion in London. I am contracting so I can do a technical job with no stress of managing people and get paid as much as a permie manager married to his job.

Agreed.