Early-retirement wannabe

hugheskevi

Since this thread popped up, I may as well add in a quick update

I had expected to be finished with work by now, but as is so often the case a few minor - but welcome - delays crept in.

Both myself and my wife have been offered paid exits at work, at a very fortuitous moment given we were leaving anyway. What isn't clear is exactly when we will leave, although it will be early in 2026.

Upgrading our new house has been a very expensive undertaking, but it will all be finished at the end of this month. We have had the entire exterior landscaped, including a new drive. Inside everywhere has been decorated, and lots of new flooring. We replaced an ensuite to our guest room too, as well as a new roof on the main house and also the conservatory, and bought a new car along the way when our faithful 13 year old Nissan Micra's starter motor failed. Fortunately the exit payments will cover all of that. Taking into account spending more on the purchase price than we envisaged, the cost of moving has been a few hundred thousand higher than planned a couple of years ago.

Taking into account all of the remaining work to the house, along with the most pessimistic assumptions about exit payments, we will be aged 48 when we leave work and retire. Our post 55 income will be about £75,000 p/a after tax, coming from personal pension, occupational, and State Pensions.

For the period 48-55 we will have a minimum of £37,000 p/a available from cash and stocks and shares ISAs, possibly more depending on the timing of exit payments and if they fall into 2026/27. There will also be surplus funds in our DC pensions, although that is inaccessible until age 55. Hence as we get toward age 55 we will start to withdraw from our mortgage offset savings account (currently fully offset, and will remain that way for at least 3 more years), and then replenish that at age 55 from tax-free lump sums. Doing this will add about £25,000 p/a, leaving an annual expenditure amount of about £62,000 to age 55.

Depending on exit date and type of exit, we might work longer and so get more salary, get higher exit payments, and/or get exit payments paid in 2026/27 and so benefit from new tax allowances. That has consequences for both the amount we get, and the distribution between cash and pension, as we will put everything subject to higher rate into pensions. Hence the figures above should only improve as they are based on the worst case of prompt exits at the lowest amounts all paid in 25/26.

I am very much looking forward to having some peace and quiet come November as all house works finish, and then just a few more months of work before full retirement ahead of Spring 2026, which is the most likely outcome. 

Although we spent far more on the house than planned, we are now living in a great place, modernised exactly how we like it. A bonus of it being much bigger than we either wanted or needed is that at least it is great for guests, with plenty of space for friends and their children, and the guest facilities are now really good with a modern room and ensuite with balcony overlooking a lake. It has been a very rapid change from living in London, having lived in our last house for 15 years and not really improved it much due to knowing we would be going travelling the Americas for a long time and renting it out or selling it. So the quality of life in our new place is on a completely different level.

So things are all coming together well, not quite as envisaged, not without hiccups, not without a lot more effort than expected, but everything is in a very good place and the future looks great.

Yorkie1

Congratulations - both on the house renovations journey and the potential exit plans bonus!