Stopping work early with big change to lifestyle?

tony4147

One of the main reasons I work is so that I can have a retirement that will hopefully give me a similar standard of living as to what I've had when working, I don't want the shock of a big change in lifestyle.
I know a few people that have retired and the biggest problem they have so they tell me is filling out their days.

I'm 53 and 30 years ago I thought I would retire at 50, but now that has come and gone I can honestly say I wouldn't want to retire this side of 60.

I will probably work fulltime until 62/63 and then go part time 3 days a week until 67, one thing is for certain I've no intention of working past 67.

cns06

Thanks all interesting that Mr Moustache site is pretty much exactly what I am thinking of although that said a lot of his security came from excellent growth in the markets. But still interesting reading.

marlot

cns06 wrote: »

Lets say you are 40, don't have much debt and have reasonable savings and really hate working..

After I was made redundant (at 49) I pretty much did this. I downsized the house and took a job paying about half what I'd previously earned. My wife gave up work at the same time.

I was fortunate in that I'd been putting lots of money into my pension when times were good. This turned out to have two advantages - firstly I didn't ever get used to the high salary, and secondly, my pension was well stocked. It would have been a great strategy had Osborne not reduced the LTA.

Aiming to fully retire at 55 or so. About 2.5 years from now.

My advice would be to try living on the amount you aspire to, and put the rest into pension.

robin61

I guess I have been going through a kind of trial retirement financially speaking for 2 or 3 years now.
I have not been spending anything like my income. By putting quite a bit into the AVC linked to my company pension and for the next year or two also my SIPP and my wife's SIPP we are living quite comfortably on less than we will have when I retire in a year or two at either 56 or 57 all being well. The extra we will have in retirement compared to now will pay for the loss of my company car, one or two extra holidays per year and some more hobbies and leisure etc. I work from home mainly so don' t have a lot of expense from going to work.
I know what my retirement income will be and financially speaking I am confident this will easily meet my outgoings with a decent contingency.
Both of us have been increasing our hobbies and interests as much as time allows and I have some plans around this when I get more time. We don't want to spend our retirement watching rubbish on daytime TV.

cns06

Just thought I would update this thread with our progress. We have upped our savings rate the last 12 months to around 50%. We have set up a target early retirement number and we are working hard to get to that number. It looks like we will be ready to quit work in a few years at 42. If things go well maybe even slightly earlier.

We have also carried out an in depth analysis of our spending and what we will need once we stop working. Our base line number is £24k PA. As things stand my target is to stop work once we have £35k PA passive income. This gives us 30% margin for expensive / poor performance years. Or in the years where things are going well more to travel with.

Just got to make it happen now!

kidmugsy

cns06 wrote: »

Our base line number is £24k PA.

That's nearly equal to twice the Personal Allowance against income tax. So if you both swapped to part-time work earning £11.5k p.a. you'd accumulate rights to your eventual State Retirement Pension and pay no income tax.

You'd need a passive income of only £1k p.a. plus enough to compensate for your National Insurance contributions, call it another £1k p.a. Piece of cake. Why hang around?

svain

My father retired once at 40, got bored after a year or so, started a new business and retired again 52 ..... Finance/income was never a problem.

Retiring so early had a general negative affect imo ... losing that interaction with the colleagues and public had a negative affect.

Being so young his friends and family were out working so socially filling the days he found difficult. (My mum wanted to carry on with her part time job).

This result of early retirement for him was he became old before his time, insular and lost touch.

Its now 20+ years since he retired and i think it was worse thing he could of done. It has certainly made me realise that "full time retirement" is not for me (at any age) and i hope to continue working well into retirement (but them im lucky in that i enjoy my work)

ermine

svain wrote: »

Retiring so early had a general negative affect imo ... losing that interaction with the colleagues and public had a negative affect.

[...]

Its now 20+ years since he retired and i think it was worse thing he could of done.

This was surely a tragedy for him, but I find it disturbing that so many people feel that working is the best thing they can be doing with their time, Stockholm Syndrome writ large

You have far more control over what you do with your time as a retiree. Just as steam gives way to sail, sure, fit in with others where you are interacting with the working population. It's the polite thing to do, but there is a big wide world out there.

I am amazed that since stopping working I have encountered a wider range of people than the narrow-ish social circle I had through 30 years of working. I'm not particularly gregarious, and somewhat introverted, but am prepared to make the effort.

Some of these people are of working age but who choose to live differently, at a lower level of material consumption and often living closer to the edge than I did. But they seem to have happiness and quality of life.

It makes sense to attend to who you will be spending time with before you retire early, but it also makes sense to be open to new opportunities. Early retirees are likely to be more enterprising and in better health. Leaving the world of work is a great opportunity to reinvent yourself. It is also a different stage of life, and entering retirement making the same assumptions about life as your working self reminds me of the words of the psychologist Carl Jung -

Thoroughly unprepared we take the step into the afternoon of life; worse still, we take this step with the false presupposition that our truths and ideals will serve us as hitherto. But we cannot live the afternoon of life according to the programme of life’s morning—for what was great in the morning will be little at evening, and what in the morning was true will at evening have become a lie.

Work is part of that lie, IMO, due to its outward focus. It is right in the morning of life, but takes up far too much headspace in the afternoon in my experience.

enthusiasticsaver

I think 40s would have been too early for us. We retire(d) late 50s and aimed for similar lifestyle to when we were working so the money had to add up. Having kids and helping them through Uni and on to the property ladder, weddings and grandkids etc delayed us slightly but on reflection I think we are going at the right time in our life for us. Just as grandkids are arriving, still fit enough to do the things we want to and most of our friends in the same position. It also means I am able to support my elderly mother more than when I was working. I know someone who took redundancy in their 40s and never worked again and they seemed to lead a purpose less life, just drifting along and filling their time. Strangely enough because their kids were in their early teens when he finished work they never really had a working parent as a role model and the kids have struggled to get into full time work even though they never did uni and are in their late 20s, early 30s now. I am not sure if that is anything to do with it but it makes me wonder.

Marine_life

A couple of thoughts here.

I was never in a situation where having lots of money made things worse - so I would always make sure I had a buffer (we do).

Some people will say - you could get hit by a bus tomorrow so enjoy life now - statistically you probably won't.

Once you retire the more difficult it will be to go back - the higher your income the more difficult it would be.

But...

I think everyone imagines their retired self as their younger self and they (probably) do not take into account declining health / ability.



It a fine balance