Early retirement - is when or how much more important?

JoeEngland

pensionpawn wrote: »

The point being that he was going to 'work' for fun rather than necessity. Hence retired.

I think you mean he was financially independent. Retired means having stopped working.

JoeEngland

ermine wrote: »

That s inherent in the nature of the beast. I sweated through three years of hating work but at the peak of my earning power because the spreadsheet said that there was no way of shortening that time - each year shorter would six years stacking shelves at Tesco, and I wanted a total out from work. I took a chance with physical and mental health, and was lucky enough to get away with it. I didn't have enough energy left to even think of part-time or doing some crap job, because I got to hate the whole power and authority structure of work.

As for retiring before SIPP age, that's what your ISA is for. You have to ride two horses - you need enough ISA savings to burn up before 55. But you need SIPP savings too - for many the obvious cross-point is save into a SIPP to bring you below the 40% tax bracket, save the rest onto ISAs. But it's tough - the wall you run into trying to bring retirement forward is a double whammy, not only do you have to save enough to carry you longer, but your total earnings fall because you are foregoing years of earnings - and often at the peak of your earning power.


I would dispute this. I am probably healthier and fitter than my working self. For two reasons - one is I don't have the pressure and jumped up pipsqueaks saying your crap to performance manage the paybill down, which ground me down. But the other is that I walk everywhere, I spend more time in Nature and less time in front of a screen. I would be a lot richer if I'd carried on working, but probably in poorer health. You can get away with hardly any exercise up until your late 40s, but probably not much after that.

The difference is tangible. Near where I live there's a landmark hill that's about 500 ft high. We aren't talking mountain climbing. There's a quiet place about halfway up it where I like to sit on a bench and listen to the birds and look out at the view. I try and do that regularly.

My forty-year old younger self once failed to climb that hill, giving up halfway, because it was too much like hard work and I got out of breath and my heart was pounding, the view wasn't worth the climb. Although it's not particularly high it's reasonably steep.

I can do that easily now. Nearly two decades have passed. I have never been inside a gym or played sports since leaving school. I would say retirement has been good for my health, and hopefully that will be of help even after I reach retirement age, it's still a long way till I get to SP age. I would say in some areas it does matter what you were doing 10 years before normal retirement age, and hillwalking beats sitting in an office, not just for the experience at the time but overall physical health.

Sure, your mother probably got the balance wrong. But your retired self needs less money that your working self. They aren't paying into a pension, or commuting to work, has probably discharged the mortgage. They can travel outside the peaks and the school holidays, they can spend more time at the destination or travel slower. They can adapt their plans to take advantage of deals or opportunities.

Good post. One of the attractions of retirement, or even semi-retirement, is being able to live a slower life, and have the time and headspace to properly enjoy simple things like a walk. As a poet once said:

What is this life if, full of care,
We have no time to stand and stare.
No time to stand beneath the boughs
And stare as long as sheep or cows.
No time to see, when woods we pass,
Where squirrels hide their nuts in grass.
No time to see, in broad daylight,
Streams full of stars, like skies at night.
No time to turn at Beauty's glance,
And watch her feet, how they can dance.
No time to wait till her mouth can
Enrich that smile her eyes began.
A poor life this if, full of care,
We have no time to stand and stare.

pensionpawn

JoeEngland wrote: »

I think you mean he was financially independent. Retired means having stopped working.

I don't believe that many on this thread would voluntarily stop working unless fiscally independent.

waveydavey48

Fascinating post and replies, thank you. I could go now but have reduced to 16 hours a week and will probably do another year or so (I'm 57).

It struck me the other day that since the age of 5 I've had to get up earlier than I wanted, to go somewhere I didn't always want to go. I will embrace retirement with an open mind and a sense of optimism but I'm sure it will be a massive change.

Bravepants

waveydavey48 wrote: »

Fascinating post and replies, thank you. I could go now but have reduced to 16 hours a week and will probably do another year or so (I'm 57).

It struck me the other day that since the age of 5 I've had to get up earlier than I wanted, to go somewhere I didn't always want to go. I will embrace retirement with an open mind and a sense of optimism but I'm sure it will be a massive change.

I'm 51 this year and like you feel that since day one I've worked; primary school, secondary school, university, jobs. I'm luckier than most in that the only time I've been unemployed, or not doing anything constructive, was during the first three month summer holiday when I was at University! I remember my first day at University sitting in the library waiting to see my tutor like it was yesterday, but it was 32 years ago!


I look back and remember friends I'm no longer in contact with, and I can't believe how long we've not been in contact. I met up with a friend once and said "We can't leave it 10 years till next time!"; that was 17 years ago!!!



The years have flown by....why?...because I spend all my time working; and I try to fit in all the other interesting stuff in 30 days annual leave a year, holidays, work on the house, catching up with friends, travelling to visit said friends! This stuff makes me feel quite sad; I cannot remember how I got to 51 years of age all of a sudden!



No time for life! I want more time and the sooner the better for me thank you very much!

akh43

I went for the option I will retire when I can meet my number regardless of age, but have reached that number by reassessing my DB works pension for past 5 years and starting to pay AVC's. I could have gone from 55, but I was not happy with the figures I would get so started to pay AVC's increasing from £500 it increased until I was on £1,000 a month just over 2 years ago. I am now at a figure I am happy with and retire in 3 weeks time at 60 :j I have been living on approx £200 less a month than my pension will be for past couple of years so know I can manage moneywise and have reached the time when I am ready to leave work. I could have stayed a further 5 years and had a bigger pension, but the time is much more important to me. I won't be getting anywhere near some of the figures I have seen some others get, but its about what is right for you in your circumstances and what you need to enjoy your retirement and not struggle.

Sea_Shell

This song sums it up nicely too...(sorry lyrics not available to copy and paste)

https://youtu.be/5MiJB2hcOHw

The wisdom of standing still.

lisyloo

Bravepants wrote: »

I look back and remember friends I'm no longer in contact with, and I can't believe how long we've not been in contact. I met up with a friend once and said "We can't leave it 10 years till next time!"; that was 17 years ago!!!

The years have flown by....why?...because I spend all my time working; and I try to fit in all the other interesting stuff in 30 days annual leave a year, holidays, work on the house, catching up with friends, travelling to visit said friends! This stuff makes me feel quite sad; I cannot remember how I got to 51 years of age all of a sudden!

No time for life! I want more time and the sooner the better for me thank you very much!

Im curious.
Is your job really so bad that you can’t see friends/family on some evenings, weekends, bank hols?
If so have you considered changing jobs as this is not normal.

We don’t live near family/friends so evenings are out for us and also travel at weekend and have to visit a parent in a nursing home which both restrict us further.

However I do manage to arrange seeing friends and family even if it means waiting for a bank holiday and many months to see them.

Triumph13

ermine wrote: »

There's absolutely nothing wrong with living intentionally - life is as much about the quality of the ride as the destination. However, the pay down the mortgage before retiring is a massive psychological attractor, so it's worth at least thinking about the counterfactual.


Coming to the conclusion - yes, paying off my mortgage will mean I am shorter of money in the earlier part of my early retirement, particularly pre-55, but I am prepared to pay that price for peace of mind is a perfectly reasonable decision.


Where I failed is being dreamily unaware that that peace of mind meant I would be more skint for the first few years, and correspondingly better off fairly soon. In personal finance, though an awful lot is luck, knowledge is also power. It's not about which path you take, it's about knowing there is a choice of paths to take and the territory they run through.


Particularly for early retirees between 50 and 55, this is a place when you can hold the amount to pay off the mortgage as cash in a SIPP, you can avoid investment risk then, if that is a fear. Inflation risk probably won't kill you over five years, and the bung from the taxman helps offset inflation risk as it is, and people are likely to be at the peak of their earning capacity at the time if they are able to entertain the idea of retiring early. Not paying off the morgtage deserves serious thought, even if the answer is 'sod that' in the end.

I retired at 52 and, as it turned out, I wouldn't have got any tax benefit if I'd tried to use a SIPP to pay off the mortgage because they reduced the LTA. I don't like to think how cross I would have been if I had 'manned up' and used the pension rather than paying the mortgage directly, suffered the additional stress and then had the tax benefit taken away from me.
And before anyone says anything, yes I know that breaching the LTA is a nice problem to have. In my defense, that money needs to cover helping my kids through Uni and house deposits as well as our living expenses as a family of 4.

bostonerimus

lisyloo wrote: »

Ther is nothing wrong with endowments per se.
The issue was the unrealistic assumptions attached to them.
For example I was told verbally in 1990 that 20% could be expected and even the cautious paper work was 6,9,12%.

I disagree. I think endowment mortgages are evil. I make it a rule never to gamble with the repayment of a loan and an interest only loan can lead people into borrowing more than they can really afford. Give me a simple mortgage where both interest and principal are paid back and there are no surprises.