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

[waccoe]

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.

[mudskipper]

Depends what you want from retirement. If you could manage on, say, 20K a year, you could retire tomorrow and downsize when the money runs out.

But you won't

I'm a similar age, but didn't start contracting till 2009. Zero savings before that. Wish I'd done it sooner...

[MyUserName]

Bugger that - I keep getting told how after two years I should be debt free and have a massive war chest etc. neither is true!

[expat]

I keep wanting to semi-retire, and I should be able to alternate 6 months work and 6 months off. Trouble is at any given time I seem to have to start with the 6 months work.

[vwdan]

I'd rather spend every penny living life than have huge savings for a frugal, but long retirement (That sounds an oxymoron, but imagine how much cash you'd need for a lavish and long retirement).

I suspect the ideal is, as ever, somewhere in the middle. But then I'm pretty young and probably won't ever get to retire properly.

[Murder1]

I've not been contracting anywhere near as long but I'm still wondering if I'm maximising the amount I could be making. The two things I see people do a lot that I'm not comfortable doing are:

a) Taking on extra risk in terms of mortgages on rental properties which may be what I'll look to do.
b) Winding up their company and using up their entrepreneur relief limit

I've worked with a couple of people of a similar age to you who've closed their companies twice and then set back up again as a new Ltd Co. Not sure I'd be comfortable doing this mind.

[Unix]

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.

[Project Monkey]

You've got £175k personal saving and (assume) £200 retained profit, yet you're still paying out on a £90k mortgage! Why FFS?

[Boo]

The rates in those 20 years have been average to good, I'm based in the South East, not far out of London.

I'm not asking for your current rate or anything crass like that, but can you tell me what you would call an good rate in today's market ?

Thanks,

Boo

[psychocandy]

£175K savings, £200K in warchest. £750K house.
Pay off mortgage surely? Leaving 85K plus 200K in company. Plus £750K house.
Makes you a millionaire I reckon. Bugger me you're minted. Spend some dude.

I'm same age. £10K savings at mo, £0 in company. About £10K on credit cards (albeit 0%). £230K worth house with £120K outstanding. Not minted :-(

Never been flash with money but like holidays. Son is 10 and has been to Florida 9 times. All adds up I guess. And been able to let mrs work less hours to look after the kids.

And I probably spent too long as a permie bring home £2500 a month which wasn't great.