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Early-retirement wannabe

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  • Yorkie1
    Yorkie1 Posts: 12,258 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Congratulations - both on the house renovations journey and the potential exit plans bonus!
  • MallyGirl
    MallyGirl Posts: 7,333 Senior Ambassador
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    That is all great to hear @hugheskevi. I was also lucky enough to get paid to leave which brought retirement in a year early for me but does mean husband is still working atm. I am hoping he will get his bonus in March and then either retire or move to reduced days.  My preference would be the former as I am a little in limbo now, not wanting to do things that he would also want to do. Exercise and the garden are not his bag so I have plenty to occupy as much of my time as I want occupied.
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
    & Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
    All views are my own and not the official line of MoneySavingExpert.
  • chile_paul2
    chile_paul2 Posts: 52 Forumite
    Fourth Anniversary 10 Posts Name Dropper
    edited 15 October at 12:09PM

    Great to see this post towards the top of the forums again and to read the updates from @hugheskevi .

    Long-time lurker but first-time poster here. I’ve been reading through lots of the great discussions on early retirement over the years and thought it was time to share my own situation and ask for a bit of perspective from those further along the journey.

    Using the questions from the opening post back on page 1  :D

    Who is aiming for early retirement (or who has already done it)?
    I’m 45, married with two daughters aged 14 and 10. My wife (43) retired from paid work when our girls were born and is now a stay-at-home mum, doing some voluntary work in the community and helping out our elderly parents whose support needs are increasing year on year. I’m working full-time in a well-paid but (currently) not overly demanding job. My goal is to either retire early before 50 or at least meaningfully ramp down within the next 2–3 years.

    When did you begin planning and what drove the decision?
    I started seriously planning around 5 or 6 years ago, when I realised I’d lost the motivation and passion I once had for work and the company I was working for made some changes in strategy that I was not particularly supportive of. The thought of continuing for another 20+ years just didn’t appeal, and it became clear that early retirement might actually be a realistic option if I planned carefully.

    Current joint financial position:

    S&S ISAs: £380k

    Children’s ISAs: £57k (intended for them when they turn 18)

    DC Pension: £275k

    DB Pension: £16k p.a. from age 67

    Cash ISA: £30k

    Cash savings: £12k


    Mortgage: £155k outstanding at 1.25% fixed until Sept 2026 (house value ~£470k)

    Credit cards: £27k across 0% deals (aiming to clear before mortgage renewal next year)


    The S&S ISA should grow to approx £530k by the time I'm 48 with the DC Pensions at ~£350k 

    Strategy for getting there:
    My plan has evolved over time. Initially, I was targeting complete retirement at 48, and my cash flow and drawdown spreadsheets suggested that was feasible, albeit not without risk. More recently, though, I’ve been leaning towards a phased slowdown:

    • This year I’ve moved to a compressed fortnight (10 days into 9).

    • Next year, I’m planning to take a month of statuatory unpaid parental leave to spend more time with the kids while they still want to hang out with us!

    • Around age 47/48, I’m considering shifting to a 3-day working week – keeping the benefits of part-time employment (healthcare, sharesave, salary sacrifice car scheme, etc.) while easing into the lifestyle change and having the flexibility to increase hours again if needed.

    This gradual transition also gives me time to work out what I’m “retiring to”, not just “retiring from”.

    Upcoming financial decisions:
    The big one on my mind at the moment is the mortgage renewal when my fix ends in Sept 2026. Paying it off is possible but doesn’t seem the most efficient option. I’ve been considering switching to interest-only and clearing it around age 57 using DC pension tax-free cash – but having read hugheskevi’s recent posts I’m also going to consider whether offset mortgages might be an option.

    Decline in income and spending assumptions:
    I’ve tracked our spending in detail for the last four years, so I’ve got a pretty accurate picture of what we actually need.

    We currently spend around £46k per year on day-to-day living for our family of four, plus around £9k on mortgage repayments and £1.5k on major one-off purchases (cars, house projects, etc). My drawdown models assume maintaining this level of spending (inflation-adjusted), with step-change reductions when the kids reach adulthood and (hopefully!) become more financially independent at age 21.

    We don't have any major desires for lengthy long-haul travel, but plan to spread our wings a little bit more in the next 12-18 months to test out that assertion.

    Main concerns:

    • Managing the transition – I’ve got plenty of hobbies outside of work (gardening, hill-walking) but do somewhat wonder what I will do to fill the time, especially in the long, dark, cold winters.

    • Balancing the desire for more time now whilst we're healthy with the need for long-term financial security in what appears to be an increasingly uncertain world.

    • In the short term, making the right call on the mortgage in 2026.

  • michaels
    michaels Posts: 29,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 15 October at 6:30PM
    I went for flexible part time working in order to spend more time with my kids, accepting that this pushed back my retirement date overall. I looked at the 15 hours extra time per week as taking some of my retirement early by installments. 5 years at 3 days a week is actually better than 3 years at 5 days a week as you pay less tax.

    With a current account offset mortgage you can actually get really cute on tax and even universal credit.....
    I think....
  • Yorkie1
    Yorkie1 Posts: 12,258 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Without being able to comment on the details of your post, you don't mention whether you intend to support your children through university, if that is what they wish to do. Or whether their ISAs are intended for that?
  • FIREDreamer
    FIREDreamer Posts: 1,148 Forumite
    1,000 Posts Second Anniversary Name Dropper Photogenic
    michaels said:
    I went for flexible part time working in order to spend more time with my kids, accepting that this pushed back my retirement date overall. I looked at the 15 hours extra time per week as taking some of my retirement early by installments. 5 years at 3 days a week is actually better than 3 years at 5 days a week as you pay less tax.

    With a current account offset mortgage you can actually get really cute on tax and even universal credit.....
    With a decent ISA it was possible to do very well on child tax credits.

    On Universal Credit it would be marginal and would be for a max of one year with a large monthly deduction for capital of £16,000.

    So I didn’t migrate. And retired a few months later instead. 😀


  • chile_paul2
    chile_paul2 Posts: 52 Forumite
    Fourth Anniversary 10 Posts Name Dropper
    Yorkie1 said:
    Without being able to comment on the details of your post, you don't mention whether you intend to support your children through university, if that is what they wish to do. Or whether their ISAs are intended for that?
    Yes, the intention would be that we support them through university should they choose to go. Whilst they will have access to their cash ISAs when they turn 18 we will be trying to instil the MSE saving and budgeting behaviours and encourage them to be saving most of it for a future house purchase or similar.
  • chile_paul2
    chile_paul2 Posts: 52 Forumite
    Fourth Anniversary 10 Posts Name Dropper

    michaels said:
    With a current account offset mortgage you can actually get really cute on tax and even universal credit.....
    Interesting, tell me more!
  • michaels
    michaels Posts: 29,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    michaels said:
    I went for flexible part time working in order to spend more time with my kids, accepting that this pushed back my retirement date overall. I looked at the 15 hours extra time per week as taking some of my retirement early by installments. 5 years at 3 days a week is actually better than 3 years at 5 days a week as you pay less tax.

    With a current account offset mortgage you can actually get really cute on tax and even universal credit.....
    With a decent ISA it was possible to do very well on child tax credits.

    On Universal Credit it would be marginal and would be for a max of one year with a large monthly deduction for capital of £16,000.

    So I didn’t migrate. And retired a few months later instead. 😀


    Yeah - I waited as long as possible to migrate an then retired 12 months after being forced too.  But then I also had savings outside of pension, current account mortgage could have addressed that problem.
    I think....
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