Early retirement

[Tony Crawford]

I am a recent ‘retiree’ having decided to stop at Christmas last year at 58 and after 40 years of working. My wife is 8 years younger and will keep going for another year or so as she loves her job. I’m in the live as many good retirement years as you can before age catches up! Have been hitting David Lloyd hard and she’d approx 1.5 stones already and much much fitter!

For me it’s the stress reduction which has made the biggest difference along with the time to do a lot more. The associated ‘guilt’ of not working passed quite quickly!

If you can consider it or just don’t!

 

[Tony Crawford]

I am a recent ‘retiree’ having decided to stop at Christmas last year at 58 and after 40 years of working. My wife is 8 years younger and will keep going for another year or so as she loves her job. I’m in the live as many good retirement years as you can before age catches up! Have been hitting David Lloyd hard and she’d approx 1.5 stones already and much much fitter!

For me it’s the stress reduction which has made the biggest difference along with the time to do a lot more. The associated ‘guilt’ of not working passed quite quickly!

If you can consider it or just don’t!

Sorry typo … just do it!!

 

[Cali Phillip]

The State Pension goes up to £221 a week in April. £442 for a couple.
Now what size of a private pension pot would you need to buy an annuity giving you that level of income, triple locked remember ? A few hundred grand without bothering to look up annuity tables.
So it strikes me that the State Pension is
1) Actually quite generous
2) Unsustainable

With a General Election coming up neither side is going to come out and say they will scrap the triple lock but either it’s going or the state pension age is going up.

I do wonder for many people on low incomes will collect their state pension who have a shorter life expectancy then average.
It has focused my mind on retiring around 60 with my father's younger brother passing away younger than my father, very sudden short illness at 71, fit and very healthy for his age.
I may not get to see many years of state pension so it's dividing assets and pension for the years ahead for an active retirement between 60 and state pension age.

 

[willwander]

I do wonder for many people on low incomes will collect their state pension who have a shorter life expectancy then average.
It has focused my mind on retiring around 60 with my father's younger brother passing away younger than my father, very sudden short illness at 71, fit and very healthy for his age.
I may not get to see many years of state pension so it's dividing assets and pension for the years ahead for an active retirement between 60 and state pension age.

State pension age 67 for me. Mrs WillWander is 6 years older, so will be 73.
It's not so much how many years I will see of state pension, more how many of those years I will still be fit, healthy and up for adventure.

 

[willwander]

The State Pension goes up to £221 a week in April. £442 for a couple.
Now what size of a private pension pot would you need to buy an annuity giving you that level of income, triple locked remember ? A few hundred grand without bothering to look up annuity tables.
So it strikes me that the State Pension is
1) Actually quite generous
2) Unsustainable

With a General Election coming up neither side is going to come out and say they will scrap the triple lock but either it’s going or the state pension age is going up.

Fag packet Maths.

State Pension (couple)
£442 x 52 = £22,984pa
Which would provide minimum lifestyle level of retirement according to PLSA

Retire at 67 with a total pension pot of £500,000, if you take 25% tax free cash, you will be left with £375,000 remaining in your pot. With a lifetime annuity, you might expect to receive £23,600 a year.

So state pension roughly worth £375,000 per couple maybe? My math could be wrong.

 

[Corradobrit]

The current interest rates on savings are flattering the calculations. I hope but don't expect to be getting the 5+% I get now, but I could live comfortably off that income alone.
I have already discussed the annuity option with my 401K financial advisor and it makes the most sense assuming I can enjoy the guaranteed income for 20+ years. My family are generally long lived so I hope I inherited those genes.
I'm happy to leave the property and what is left of savings to my beneficiaries. A stress free retirement should add years......

 

[Ch1pbutty]

The current interest rates on savings are flattering the calculations. I hope but don't expect to be getting the 5+% I get now, but I could live comfortably off that income alone.
I have already discussed the annuity option with my 401K financial advisor and it makes the most sense assuming I can enjoy the guaranteed income for 20+ years. My family are generally long lived so I hope I inherited those genes.
I'm happy to leave the property and what is left of savings to my beneficiaries. A stress free retirement should add years......

Interest rates are great, but you get taxed on the interest (unless in an ISA etc)...but still better than nothing!

 

[Corradobrit]

Interest rates are great, but you get taxed on the interest (unless in an ISA etc)...but still better than nothing!

No free lunch, and yes its a sizeable chunk. A flat 30% more or less in the US although part of that is offset by the income allowance since my salary is made and taxed in Germany. The US does not double tax on income made elsewhere below $100K

 

[Goss]

Fag packet Maths.

State Pension (couple)
£442 x 52 = £22,984pa
Which would provide minimum lifestyle level of retirement according to PLSA

Retire at 67 with a total pension pot of £500,000, if you take 25% tax free cash, you will be left with £375,000 remaining in your pot. With a lifetime annuity, you might expect to receive £23,600 a year.

So state pension roughly worth £375,000 per couple maybe? My math could be wrong.

Why couple? I guessing one of you didn’t pay stamps?

Goss

 

[willwander]

Why couple? I guessing one of you didn’t pay stamps?

Goss

Just an example. Bit easier to work out in this instance.

 

[willwander]

Interest rates are great, but you get taxed on the interest (unless in an ISA etc)...but still better than nothing!

Deposit rate good at moment, but very recent thing, may not last.
Inflation is the killer.
You need to look at rate above inflation, otherwise you are actually losing regardless.

 

[pjm-84]

I think shift work is tough.....

Fag packet Maths.

State Pension (couple)
£442 x 52 = £22,984pa
Which would provide minimum lifestyle level of retirement according to PLSA

Retire at 67 with a total pension pot of £500,000, if you take 25% tax free cash, you will be left with £375,000 remaining in your pot. With a lifetime annuity, you might expect to receive £23,600 a year.

So state pension roughly worth £375,000 per couple maybe? My math could be wrong.

Yep I was surprised at that when I looked at annuity rates. I've put most of my pension into income funds (not all and I don't know the exact split ) so the annuity offered is not that great.....

My pot has generated £6k in the last 4 months which equates to £18k a year without touching the original amount. If I stuck it all in one pot then the income would be £27k a year .......

 

[Jay586]

James Slack's videos on YouTube are pretty good for thinking about the financial stuff.

My other half jokes I retired at 35. My dad died early and I was pretty young, so it had an impact on my thought processes.

 

[Wannabecamperman]

Some insipring and generous advice in this thread!

As someone looking at retirement pots and seriously thinking about soon emptying my pension pot at 55 to travel it has been insightful readin, and made me more determined to carpe diem.

Sadly my younger wife is less eager to travel on a budget and is quite content with the creature comforts our double income provides, so it's a work in progress...

 

[CaliforniaPhil]

Sorry typo … just do it!!

Think if you are a VIP member, you can go back into a post and edit your text and save it. I've found it quite useful, with predictive text, glasses and sausage fingers. Last funny one I had was a dental appointment with Virginia, it didn't come up with Virginia!

 

[subthree]

How much income do you need in retirement?
According to the PLSA.

Single Person
Minimum £14,400
Moderate £31,300
Comfortable £43,100

Couple
Minimum £22,400
Moderate £43,100
Comfortable £59,000

What would be more useful, is the pension pot size you would need to achieve the above depending on the age you retire. Rest assured....it's a lot.
Discuss.

Home - PLSA - Retirement Living Standards

Home - The Retirement Living Standards have been developed to help us to picture what kind of lifestyle we could have in retirement.

www.retirementlivingstandards.org.uk

The rule of thumb for defined contribution is to withdraw 4% per annum. Suddenly for £40k (single) or £60k (couple) that is a big number. Conversely as a higher rate taxpayer to save £100k costs less than £60k (tax relief) and then you get taxed as a lower rate taxpayer on retirement. Apparently 8/9 of higher rate taxpayers are lower rate taxpayers.

It is only recently I have appreciated the benefits of ADDITIONAL pension contributions from a tax perspective. Hence why we're are now trying to increase our annual contributions.

For those on a lovely Defined Benefit pension none of the above applies!

 

[kave]

I used to think “you can always get more money but you can't buy time.” Thought I would retire early. My dad retired at 55 and died at 75. My mum died aged 63. Aggregated - as silly as that sounds it’s actually statistically quite a good indicator - that gives me to age 69. I’m 53.

BUT, being 53, like many, I have begun eating healthier, exercising more and watching Netflix documentaries about living to 100. The message of these seem to be that my traditional retirement idea - an eternal holiday - would be a health disaster.

Yesterday I did a HIT/yoga thingy, today I ran 10k and tomorrow I will probably fast for 36 hours!

A healthy long life seems to require a fair bit of physical and mental activity. That has changed my views a bit. It has also revived my idea of retiring to France or Spain which I think I would find quite challenging but possibly life lengthening.

EDIT: The Netflix documentary series is called Live to 100: the Secrets of the Blue Zones.

Watch Live to 100: Secrets of the Blue Zones | Netflix Official Site

Travel around the world with author Dan Buettner to discover five unique communities where people live extraordinarily long and vibrant lives.

www.netflix.com

A year ago today I also believed in fasting, LCHF, doing cardio for 10 hours a week. Now I eat healthy carbs, no fasting and doing only strength training. I have went from 75kg to 91kg. I feel so much better now. The only “proof” we have fasting extends life is mouse studies, mice who are not allowed to eat the amount they want live longer than mice that eat how much they like. What they forget to tell you is the fasted mice had really bad skeletons and muscles restricting their life. I am not interested in breaking a femoral at 65 restricting me for life.

 

[subthree]

James Slack's videos on YouTube are pretty good for thinking about the financial stuff.

My other half jokes I retired at 35. My dad died early and I was pretty young, so it had an impact on my thought processes.

Thanks for suggesting James' channel. Just been watching some of his vids - enlightening.

https://www.youtube.com/@JamesShack

 

[JollyGoodShow]

So many common threads! Cancer, semi-retirement/early retirement, anxious research about standard of living in retirement, etc. Worry that we will live too long and run out of money, or not long enough to enjoy some leisure.

I semi retired aged 56 and work part time. I love working and want to work a little longer while also enjoying some leisure, and part-time work is perfect: enough income to defer drawing on savings and enough leisure to have fun. I had cancer treatment last year and while that wasn’t the main factor for getting a Cali, it certainly meant that we got on with it.

 

[Van Diesel VW]

I’m thinking about this, VR on offer at work, but not sure if will be accepted, if I am figures stack up for retirement at 58

 

[Ch1pbutty]

I’m thinking about this, VR on offer at work, but not sure if will be accepted, if I am figures stack up for retirement at 58

If you have worked there for a while, might be better to wait for CR.

 

[Dill Tart]

Think if you are a VIP member, you can go back into a post and edit your text and save it. I've found it quite useful, with predictive text, glasses and sausage fingers. Last funny one I had was a dental appointment with Virginia, it didn't come up with Virginia!

Best one I sent out to the whole WhatsApp cycling group was that I couldn’t come out cycling because I was in bed with a really bad chesty cough, autocorrect was “cougar” you can imagine the levels of sympathy!

 

[Dill Tart]

How much income do you need in retirement?
According to the PLSA.

Single Person
Minimum £14,400
Moderate £31,300
Comfortable £43,100

Couple
Minimum £22,400
Moderate £43,100
Comfortable £59,000

What would be more useful, is the pension pot size you would need to achieve the above depending on the age you retire. Rest assured....it's a lot.
Discuss.

Home - PLSA - Retirement Living Standards

Home - The Retirement Living Standards have been developed to help us to picture what kind of lifestyle we could have in retirement.

www.retirementlivingstandards.org.uk

Approximate calculation is that you should be able to draw about 4% from your pension pot without ever depleting it. You can work backwards to see how much pension fund you need, every £4k of income needs £100k of fund.

The other things to factor in are State Pension which we (spouse and I) will both receive at age 67 which should be £8-10k each as we have 35 years of NI contributions. This will allow us to take more than 4% income from our pension pots now as State Pension will kick in later.

Also we think we will be ‘active & well’ (touch wood) for another 20 years and anticipate taking more income than 4% of our pension pots now anyway while we enjoy holidays, skiing etc and perhaps less income later after 75 or 80.

It’s not an exact science but keeping fit & well for as long as possible is key.

 

[Azteccamper]

As stated above I retired at 59. Lots of intentions (and offers) to do a bit of part-time work, but even they want a commitment every week. To me that takes away the spontaneity of just grabbing your stuff and going somewhere for a couple of days - along with asking for a 10 week holiday to tour Europe in the summer! So I just do my own thing and realise that after the first year I didn’t need a part-time job financially as you ‘cut your cloth’ accordingly. And when our state pensions kick in (albeit a few years yet) we’ll be fine - so spending a bit of our savings now when we are young, fit and energetic enough to make use of it seems the way to go.
Life is just different when you retire, takes a while to get into it, but no turning back now.

 

[willwander]

Approximate calculation is that you should be able to draw about 4% from your pension pot without ever depleting it. You can work backwards to see how much pension fund you need, every £4k of income needs £100k of fund.

Thats a good way to work it out.

(Forgetting about state pension, drawdown later in retirement and other factors for the time being) A couple on £40k a year (moderate level of retirement) need a pot of £1,000,000

I explained this recently to our 30 year old millennial, made him very depressed.