Early retirement - is when or how much more important?

dharm999

For me it's going to be 55, as thats the earliest I can access my private pension. My dad died a few months after he was 60, and he had had plans to travel when he retired, which was going to be a few years later, so that didn't happen , a source of great sadness for my Mum, who was retired at the time my Dad died. That was 13 years ago, and I resolved not to be in the same situation. I've been saving hard, overpaying the mortgage and maxing out pension contributions. I know what I need to be comfortable, and with two small DB pensions between us, me and my wife, plus 2 full state pensions, which will cover all outgoings, any income from private pensions, ISAs, P2P, and funds will be a bonus. My wife is older, so when I get to 55, she'll be getting her SP, and her small DB, so we need around 12k to find till I get to SP age.

I enjoy my work, but plan to gradually go part time, by actually getting increased holiday instead of pay increases, for the next few years, so will be getting full salary but working part time. The plan is work 4 days, get paid for 5 then actually reduce my time, to 3 days a week and then call it a day, a kind of gradual phasing in to full time retirement.

Once the mortgage is paid off in 3 years, i could go part time, my wife doesn't get her pension until a few years later, when I get to 55, so things would be tight financially. Assuming the date I can access my pension doesn't change, then I'm going at 55, regardless of what's put to one side.

itwasntme001

Seeing posts on here about people dying in their 50s or soon after retiring makes me think hard how long i should work for. I'm "only" 35 with enough to live comfortably (but not extravagantly), maybe i need to rethink what i should do instead of working for a job i am mainly doing for the money. I think people who do their own thing, businesses etc, are far happier to work a longer time then those "working for the man". Even though business is much higher risk, there's something about working for someone that makes it a lot more stressful.

kev2009

I'm hoping to pay more into my pension once my mortgage is either much much lower or finished. Unfortunately, thats a long way off yet. I'm hoping to pay it off sooner than the mortgage term i initially took less than 5 years ago but will have to wait and see.

At the moment concentrating on trying to OP mortgage and then later hoping to add more to pension.

Kev

JoeEngland

pensionpawn wrote: »

Whilst driving to work around 8 years ago I heard a listener define retirement on Radio 4, and it seems to sum it up perfectly for me! Retirement is when you are fiscally secure enough not to have to go to work, even if you still do.

No, that's called working

JoeEngland

For me it's a mix of a time and money goal. I could give up now but want to get through a few more months to meet some money targets which will make me feel a bit more comfortable. The main time driver is a health issue which I'm struggling with because financially I would be better doing another couple of years or so to build up more contingency. Mentally I've been done with work for a few years which has made it more of a struggle than it would have been.

LateStarter

I'm torn; I know that I'll retire as soon as I can afford it, because every passing year work has become more of a pain in the proverbials. But I also know life needs to be enjoyed now, as there's no guarantee of tomorrow - my father died when he was 59 (I'm 53) and I've never really thought about 65, much less 85. An ex work colleague got to enjoy less than a year of retirement before he shuffled off, which really made me question how I look at money.

I can't really retire "as fast as possible" beacuse I want to have that meal out on Friday with friends, or that weekend away. I've given myself a decent (but not extravagent) entertainment budget, and a fairly ambitious savings target. I'm hoping/plannng to retire before 63, I've started a 10 year countdown, and now I'm worried by the "what ifs". What if I lose my job? What if my health deteriorates? What if my pension doesn't perform as predicted? Suddenly I understand why more people don't really consider the future - it can be more than a little terrifying.

Zorillo

I'm aiming for 65, and I hope I might have options to go a little earlier.

I reckon that will count as 'early' by the time I get there.

pensionpawn

Many comment on overpaying the mortgage / once I've paid the mortgage off etc however considering the amount of money that requires an alternative strategy is overpaying the pension. Times have changed from having a 25 year mortgage and paying it off before retiring. Given that you presently received 20% extra to fund your pension there's a strong argument to use your 25% TFLS to pay off your mortgage, which is a strategy I adopted around 25 years ago. Of course it does link repayment of your mortgage to no earlier than 55, however unless you increase your mortgage your payments (barring a huge hike in interest rates) are fairly constant and actually reduce in real terms as you move closer to retirement date. You could even make an argument for not paying (RIO mortgages) the mortgage off (at least fully / straight away) if monthly payments are well within your drawdown as your kids may benefit more in the present (uni living costs, mortgage deposit etc) than waiting until you croak it to receive their inheritance!

taurustime

6 years ago, I switched my pension pot to a SIPP, effectively managing my own investments which, in the hands of my then paid major financial investment company, had been poorly performing. In the ensuing 6 years, my pension pot has doubled. A second pension pot, which carried penalties for leaving early, was accessed one year ago and, even through the turbulent last quarter of 2018, is still outperforming anything I had been receiving under its former management. I only invest in funds - NEVER SHARES! - and only those with a long term record of steady annual performance. Year on year, returns from my funds are in double digits. The US has been a fertile hunting ground in the past 12 months, almost immune to the vagaries of the markets - and Trump! My top performing fund returned 24% last year. If you can read, you can invest! It's as simple as that! You get a minimum of 25% tax relief from HMRC which comes through in around 6 weeks. Sure, you have to pay tax when you withdraw but not on the first 25% of your drawdown each time AND you have had the benefit of the growth in investment of that tax relief. Win-win! Loads of FREE investment information and guidance out there. I'm amazed that MSE, whilst it gets itself into opinions on crypto currencies and risky investments, for some reason never seems to feature SIPPs, an absolute revolution in sensible long term investment.

bugslett

michaels wrote: »

Did I mention that I and my whole family are available for adoption should you so desire?

Michaels very fickle, he's offered his family up for adoption. I was seriously thinking about it, but now, seems his commitment is less than mine:(;)

k6chris wrote: »

There is also the wider 'pressure' of being told I am 'way too young to retire'. !

I'd be telling them what to do if any one said that to me. Possibly why no one has:rotfl:


And thank you to ermine for his suggestion of waiting six months before making any major decisions. I've been dithering about making a house purchase ( it really is a unique house), but as it would coincide with the time that I retire in June, it confirms what had been niggling at the back of my mind that I need some time to adjust and really decide what to do with the rest of my life.