This is not a mid-life crisis

Legacy_user

Hello. I’m 46, and having a midlife awakening. I have no children, no responsibilities, and have no longer any wish to be trapped for the bulk of my life under strip lights in an office doing meaningless work. At 60 I will receive my occupational pension.

My plan is that for the next 14 years I will make the most of my time on earth. My hobbies and interests do not cost a lot of money. I have £200k to last me for 14 years. Housing isn’t an issue as I can use my parent’s home as a base.

200k divided by 14 years = £14k a year. This is my expected spend. I am looking for advice as to how best to make my money work for me whilst I slowly spend it each year. I have no wish to buy a rental property nor lie awake at night sweating about a falling share price.

However I can a certain level of calculated risk, if the risk is manageable and 14 years is enough of a timescale to save me from any huge swings in the stock market.

It’s highly likely I’ll take up employment in some form over the next 14 years, so I’m sure my NI contributions for my state pension will be taken care of.

At the present time my 200k is sat in a bank accounts earning around 2%. It would be nice if this could increased to 5-6% with little worry.

I appreciate any helpful comments and advice.

AnotherJoe

Are you happy with the level of your occupational pension in 14 years time if you make no further contributions to it from now on? Have you checked the pension estimates you've had dont assume you work until age 60?
Everyone would like 5-6% with no worry. You can get that at the unicorn store. Unless you are prepared to take some risk with investments,and who knows how much worry that would cause you, you are going to be stuck with 2%. You could do slightly better with a savings ladder. And of course you could do a mix, say £100k in investments and £100k savings.
Also, and just so as you are aware ,you are taking a calculated risk planning on living with parents. Possibly investment in the stock market would be lower risk.

colsten

How many years do you expect to live after 60? How much will your works pension, plus later your state pension, pay you a year? How long can you use your parents' house, how long will they be paying for its upkeep?

Sorry, I can't help with any 5-6% suggestions. I think you'd be best advised to see an independent financial professional who can properly assess your requirements and your risk tolerance, and suggest a course of action accordingly. You'd be crazy to put your money where a bunch of strangers on the Internet suggest you should put it.

System

Thanks for your reply. My level of Occupational Pension will be enough for me. I have little desire to ever give up work completely so a little part time job will be all I need. Yes the terms of my pension are 60. If I stayed in the job it would 55, 60 if you leave. Hah yeah, living with parents....That's not really the plan, is just somewhere to keep possessions. I intend to be off working voluntarily a great deal, which involves free board and lodgings in return for work. I suppose what I'm asking is, is 14 years enough of a period to ride out falls in the stock market if I put say, half my cash into an investment product? If it's not, then I suppose I'd rather sleep at night.

System

Appreciate your feedback. My Occupational Pension would be sufficient for me, not for many people, but for me - slightly less than my current budget of 14k per year. It's kept me in a job I no longer enjoy for a lot longer than I would have liked, and I'm not willing to keep sacrificing my soul to keep it going. I will think about the IFA, thanks.

Exodi

Sounds like you're having a midlife crisis.

slapup wrote:

This is not a mid-life crisis

Oh guess you're not then.

I really don't think you're planning has been thoroughly evaluated. Presumably, you don't own a house (else you wouldn't use your parent's home as a 'base') - the knock on effect of this means you'll be paying rent in your retirement if you do not purchase one (or you stand to inherit your parents house and intend on living their until you yourself are elderly?) - this then has a further knock on effect as if you plan on being unemployed for 10+ years, you'll also be building up a lower pension.

5-6% with virtually no risk? Sign me up.

Your whole post sounds immature (and sounds like you're genuinely having a midlife crisis) - if you feel you're wasting your life under strip lights at an office then get a different job.

Remember that even if you do buy a house, and house prices subsequently plummet - as you have no children and may opt to live in it for a couple of decades, the price of your house is immaterial.

A 46 year old that is unemployed and lives at home is unlikely to attract many prospective partners if you're single? I actually think your idea is wasting your life more than working.

You won't be able to go on many holidays (unless you won't pay bills at your parents) and I feel sorry for the parents whose child intends to milk them until their demise.

Probably not what you want to hear (actually certainly not).

LobsterMemory

slapup wrote: »

I suppose what I'm asking is, is 14 years enough of a period to ride out falls in the stock market if I put say, half my cash into an investment product?

It wouldn't be 14 years though

If investing half, you'll be using the rest for living and at £14k p.a. that'd run out just after 7 years or so which is when you'd have to access your stock market investments

5 years is the very minimum anyone would recommend holding equity investments so at the very cutting edge of risk


EDITED due to crap maths

AnotherJoe

What's the plan aged 60 if parents do not / cannot leave their Property to you? How will you bridge the gap to SP age, probably 67 ? So your £200k needs to last you 21 years not 14. Unless you take a risk.

ColdIron

Sounds like a pretty grim existence to me

A_T

slapup wrote: »

Hello. I’m 46, and having a midlife awakening. I have no children, no responsibilities, and have no longer any wish to be trapped for the bulk of my life under strip lights in an office doing meaningless work. At 60 I will receive my occupational pension.

My plan is that for the next 14 years I will make the most of my time on earth. My hobbies and interests do not cost a lot of money. I have £200k to last me for 14 years. Housing isn’t an issue as I can use my parent’s home as a base.

200k divided by 14 years = £14k a year. This is my expected spend. I am looking for advice as to how best to make my money work for me whilst I slowly spend it each year. I have no wish to buy a rental property nor lie awake at night sweating about a falling share price.

However I can a certain level of calculated risk, if the risk is manageable and 14 years is enough of a timescale to save me from any huge swings in the stock market.

It’s highly likely I’ll take up employment in some form over the next 14 years, so I’m sure my NI contributions for my state pension will be taken care of.

At the present time my 200k is sat in a bank accounts earning around 2%. It would be nice if this could increased to 5-6% with little worry.

I appreciate any helpful comments and advice.

1. slight contradiction there. are you worried about shares falling or not?

2. there's no worry-free investment that returns much above 2%

shinytop

Why don't you compromise, say another 5 years under the office lights. That'll give you more money and less time for it to last. Lots more options and time to plan With a definite end date and plans the time might pass quicker.

With 5 years to go I'd stick 1/2 the money in a low cost tracker and the rest in the highest interest cash accounts I could find. But that's me...