To retire or not to retire??

welorac

Hi

I'm a just-60 female and can retire with a public sector final salary pension. Is this a good or poor time to retire? Should I wait a year?

Any advice/views would be greatly apprecaited.

Carole :huh:

lilac_lady

If you can live comfortably on your state and public sector pensions, you should retire IMO. I'm biased though because I retired at 60 and I love my life now.

Pollycat

Both my husband & are are retired.
It really IS the best job we've ever had!
We can take advantage of last minute holidays, I can see more of my family, I can spend time cooking (which I love) etc.

I took early retirement (with immediate payment of pension plus a lump sum) 5 years ago at age 50.
My hubby finished work 2.5 years ago aged 51 but his personal pensions don't kick in until age 60.

We spent ages setting up a spreadsheet with income and expenditure, with estimated cost of living increases, holidays, replacement of cars, household goods etc up to year 2040. :eek:

We account for everything we spend month-by-month, down to magazines, greetings cards etc.

After 5 years of doing this, we are on track and despite the downturn in the economy, which has obviously impacted on our shares and savings, we are confident that we did the right thing. It may sound anal to some people but it was a life-changing decision and we made it on an informed basis.

I think there are a couple of things you need to consider here:

1. Can you AFFORD to retire?
What bills do you have? Mortgage? Debts? What's your current standard of living? Do you want to continue at that level or are you happy to cut back?

2. Do you WANT to retire?
What will you do with your time? Hobbies? Are you on your own or is your partner retired? Or is he still working?

Regards

jennyjerome1

In my experience, without exception everyone I know who dithered prior to taking retirement (concerned about whether they would manage financially, whether they would find enough things to do to fill their day, whether their social life would suffer, etc) quickly realised their worries were totally unfounded. As long as you have an active life and are financially astute, retirement is absolutely fantastic.

However, I would add also that the majority of these people were sick to death of the daily commute and restrictions on their lives imposed by their jobs. If you love your job, then that's a whole new ball game!

EdInvestor

Pollycat wrote: »

My hubby finished work 2.5 years ago aged 51 but his personal pensions don't kick in until age 60.

Just to note that you can take personal pensions from the age of 50 at the moment.The age goes up to 55 in April next year.It's also possible these days just to take the 25% tax free cash out and leave the rest to grow for later, if that suits you better.

Pollycat

EdInvestor
Thanks for that.

At the moment, we don't need any additional income so we're happy leaving things as they are.

My hubby is 55 in March next year so that change in legislation won't have impact on us personally.

whitfreak

welorac, as you're on a final salary scheme you have defined benefits. So you are not at the mercy of anunity rates, so what the markets are doing isnt an issue for you. You should be able to get hold of a pension forcast (as your pension will be either 1/60 or 1/80 times years in service times final salary (or last 3 year average, or index linked highest from the last 10 years or something else)). Once you've got hold of your forcast you should be able to see if you can afford to retire, and be able to see what working another couple of years does to your pension.

If you have other savings/investments that you intend to supliment your income, then you might want to hang fire, thats an awkward one to call.

cyclonebri1

You don't need to ask that question, by the fact that you have the option in mind I detect that you can afford to retire?

I always wanted to retire at 55, but never would have done, just too cautious, but due to an accident at 53 I had to. No regrets whatsoever.

Am only on 1/3 of the income I was before, but its adequate. It really is suprising when you are out of the rat race, how little you need to live on. Of course your choice of lifestyle governs the the rest. not touched the savings over the last year, so well pleased.

How many years do you want to do as you please before you die? Thats the clincher for me.;)

exil

Nice to hear from these happily retired people, I've been offered the chance of early retirement at 50. Small pension - too small to live on without my OH's income - so would be looking for a new career/job (not doing what I do now, which I dislike intensly and have only done for the last 30 years because I can do it and get well paid for it).

So - do I carry on at the grindstone to 55 or 60 - when starting something new might be no longer an option - or jump ship now, in the middle of a recession? Not easy to decide.

The fly in the ointment for retiring early on a final salary pension is ACTUARIAL REDUCTION - which can be very severe - as much as 50% if going 10 years early

Pollycat

exil
I agree about the actuarial reduction if you choose to retire early - it can have a massive impact on your pension.

Fortunately for me, I left work (voluntarily) as part of a down-sizing exercise and as I was just over the age of 50, instead of redundancy I qualified for 'Early Voluntary Retirement' with immediate payment of benefits and no actuarial reduction.

You have a difficult decision ahead of you.

exil

That's more or less my situation - except the so-and-so's are not buying out the actuarial reduction :-(