“We overpaid the mortgage”
The property helped the Mackens retire early in two ways. First, they had a flexible mortgage which helped them pay off the £400,000 loan in 2019 by overpaying with reserve money and bonuses. The second was to live off rental income as much as possible, both from tenants and tenants in their own homes.
In 1994, Ms Macken used her first salary to buy a £50,000 starter house when she was 23. A tenant shared the bills, so when the couple bought together in 1996 their mortgage was “very small”.
In 2007 they bought a buy-to-let for £56,000 and added several one-bed flats which fetch over 6pc. Average rents are £550 per apartment per month, falling to £240 after charges and taxes. Ms Macken’s late father then bequeathed his home to her two years ago, which was included in the buy-to-let empire. “This latest income has given us the confidence to finally leave the rat race behind,” she said.
Before the jump, they calculated their monthly expenses – utilities, taxes, food, insurance, entertainment, plus a 20% buffer – the latter of which helped them manage the rising cost of living with inflation reaching 7% in March.
The Mackens also used a financial adviser from Herbert and Webster for years, who helped the couple organize their finances, rationalize their assets and choose funds to grow their investments. This included consolidating six small pensions into one while retaining their generous end-of-career salary pension from Unilever.
They have also each invested the maximum £20,000 in an Isa, with Mr Macken investing in the 8AM Clever Model 5 portfolio, which has around 55% invested in equities, with the remainder split between bonds, property and cash . Ms Macken opted for the FEI Hybrid Risk Level 2 portfolio, a significantly lower risk option that has 70% cash investments.
“We are seeing good returns and using Isas means we can withdraw money quickly if needed,” Ms Macken added.