Early retirement on inheritance.

countermon

Thank you all so much for all the time and effort you have put into helping me with this.

At this stage I don't feel sufficiently clued up to come back at you with questions to your answers, but rest assured I will fully digest what has been said and spend my hopefully-soon-to-be increased leisure time doing the required research.

If proof was ever needed that I have spent so much time earning a living that I have neglected to think about the future, I have just realised that I also have a pension from a previous employer which will be claimable at age 60 in 3.5 years time! That accrued pension at date of leaving in 1991 was worth £3.4k p.a. and is index linked. I have even more options than I thought.

Thrugelmir

innovate wrote: »

One thing people keep saying is that once you retired, you need a lot less money - no business suits, no daily commute, a lot fewer lattes and cappucinos, a lot less on lunches and dinners, etc etc. Of course some will already have the minimum costs for that, but many people will find there's a marked reduction in monthly "necessities".

Lot more time spent at home. Utility bills will continue to rise.

Perelandra

gadgetmind wrote: »

2x 20% bands for dividends (no more tax to pay)

Somehow, this one hadn't occurred to me! :eek:

Thanks gadgetmind, very helpful as always.

Cornucopia

Might want to consider becoming a private landlord - that's something that has some capability for frugality, and an income, whilst not being overly complex.

atush

Quote:
Originally Posted by innovate
One thing people keep saying is that once you retired, you need a lot less money - no business suits, no daily commute, a lot fewer lattes and cappucinos, a lot less on lunches and dinners, etc etc. Of course some will already have the minimum costs for that, but many people will find there's a marked reduction in monthly "necessities".
Lot more time spent at home. Utility bills will continue to rise.

Plus we already save money on working life. No poncy coffees, and apart from work lunch meetings etc, do a packed lunch. OH even shares the commute with eldest son now.

The main things that will be cheaper in retirement will be no new suits/shirts, no DC of suits/trousers and less petrol.

As for becoming a PL, only if you have skills int he Building trade would I rec that with a pot of only 300K. As I would rec to buy a cheap property in an area that is largely rentals (ie poorer areas) of 25-45K that needs work (cost of which 5-15K with your labor and contacts). That is the way to get rental yields in double digits.

Getting 5% yield closer to more expensive areas wouldn't be worth the work and risk.

nearlyretired2004

Sounds to me like a no-brainer for you if you are unhappy at work.......

in 2004 I found myself in a simlar situation and took a 'payoff' from work (rather than early retirement...) with a deal that pension would be payable from age 55 (.... which was in 2011)

Together with a small inheritance in the same year and sales of some shares that gave me 'cash' of about 2/3rds your level.

I had a personal pension from which I started to take an income at age 50 in early 2005

In addition I worked VERY part time (1 to 2 hours per day from home) until 2011 when my Occ pension became payable (only slightly more than yours) when I retired completely

In addition, again a slightly similar situation to you, (..... and this sort of 'luck' doesnt usually happen to me ...) last year I had a letter from the department of work and pensions enclosing a further letter from an old employer of mine telling me that they thought I had a pension entitlement from them.

I guessed this would be pence/a few pounds.

Turned out to be circa £5K p/a which I was able to take immediately and a tax free lump sum in five figures!! (... so dont forget your 'forgotten' pension will generate a tax free lump sum if you wish to take it ....)

So I'm now drawing on three pensions ......

I've never regretted getting out of the rat race and corporate politics, although I admire those who genuinely enjoy being at work !!!

Good luck in whatever you choose to do ...

countermon

nearlyretired2004 wrote: »

Sounds to me like a no-brainer for you if you are unhappy at work.......

in 2004 I found myself in a simlar situation and took a 'payoff' from work (rather than early retirement...) with a deal that pension would be payable from age 55 (.... which was in 2011)

Together with a small inheritance in the same year and sales of some shares that gave me 'cash' of about 2/3rds your level.

I had a personal pension from which I started to take an income at age 50 in early 2005

In addition I worked VERY part time (1 to 2 hours per day from home) until 2011 when my Occ pension became payable (only slightly more than yours) when I retired completely

In addition, again a slightly similar situation to you, (..... and this sort of 'luck' doesnt usually happen to me ...) last year I had a letter from the department of work and pensions enclosing a further letter from an old employer of mine telling me that they thought I had a pension entitlement from them.

I guessed this would be pence/a few pounds.

Turned out to be circa £5K p/a which I was able to take immediately and a tax free lump sum in five figures!! (... so dont forget your 'forgotten' pension will generate a tax free lump sum if you wish to take it ....)

So I'm now drawing on three pensions ......

I've never regretted getting out of the rat race and corporate politics, although I admire those who genuinely enjoy being at work !!!

Good luck in whatever you choose to do ...

Inspirational words, thank you.

I know it can be done, but after all these years of being institutionalised by the corporate machine it still takes a leap of faith.

But I have had my eureka moment, and the split will come. Just need to get the research done right so the "divorce" and afterlife are very happy.

jackyann

Definitely ask your wife to get her pension forecast. She should have received home responsibilities protection until your youngest child was 12.
The current number of qualifying years is 30, but it is going up as part of the new arrangements (? 35, not sure). However, it does depend on what she paid ( some married women paid the "small stamp" which was changed in 1978)
Depending on the exact amounts it will probably be worthwhile buying extra years as gadgetmind said, but you won't know until you get an exact forecast.

atush

Home responsibilities used to be to age 16, and changed a few years back. So she might have enough. So yes, she should get a forcast.

then there is the matter of her personal allowance. If she has no private pension, she won't use her full personal allowance on retiurement and it will be wasted.

So you need to equalize things and put some of the non Isa investments into her name, and perhaps pay into a personal pension for her. As she can pay in as much as 3600 per year (which will cost you only 2880).

gadgetmind

jackyann wrote: »

Depending on the exact amounts it will probably be worthwhile buying extra years as gadgetmind said

Gadgetmind knows cheaper ways than buying extra years via voluntary class 3 NI contributions.

Pension contributions for your wife are also a splendid way to make the money work harder, particularly if you're likely to still be within the triviality limit when she's 60.