Should i retire?

Evan3020

Hi i am 55 and work for a Ftse 100 company that is making big redundancies and have been offered £42500 to go after 14 years work.
I have a deferred FS pension from another Ftse 100 company currently worth £12170 or £8990 and £60k tax free if i took it now.
Current FS pension would be £4581 or £3308 and £22k or £213k transfer value.
I have £125k in savings and £9k in a SIPP, House paid for (£275k)
I would love to retire and i dont know whats stopping me except for the massive reduction in take home pay which i dont really need anyway.
I cuurently earn £50k so around £2800 take home but i live modestly so all my bills come to only around £650 per month, that includes all household bills, insurances etc.
All my hobbies are free, walking, cycling etc.
So by my calculations i could get £1024 per month and have around £250k in savings.
Is this enough at 55?

Ceme3000

I did exactly that at the age of 53 following redundancy and am quite happy living on about £800 a month.  If you feel your numbers support your lifestyle then I would say go for it. What's the worse that can happen? You can always look for something part time in the future if you need to.

If you do decide to stop working,  I would seriously consider paying as much as you possibly can into a pension in the current tax year, even using any carry forward allowance if your qualifying earnings in the current tax year are enough to support that.  It will be massively tax efficient for you to do that. Free money in fact and as you are 55 then you don't have to wait to access it.

enthusiasticsaver

I would say that is enough.  You have a mortgage free house, live fairly frugally and have a deferred FS pension of £8990 and £3308 which keeps you at or around the Personal tax allowance so as you say £1024 per month.  You also will have a substantial savings/investment buffer of £125k plus presumably the £42.5k redundancy and the two lump sums of £22k and £60k so £250k roughly.  Your state pension will kick in at presumably 67 or 68 so you will have 12 or 13 years with the £1024 per month (presumably index linked) and the £250k buffer.  I would go. 

We retired at 58 on a higher pension than you but there are two of us and our outgoings are higher than yours as we have two cars, a leisure club membership and do two or three holidays a year.  If you are confident that the pension will cover your essential outgoings and the savings etc are there for extras then I would definitely go for it especially if you get the redundancy money on top. 

tibbles209

If you kept the full (uncommuted) FS pensions you'd have a net £1343/month. Check your state pension forecast - if you add in full state pension of ~£9100 from your SPA (67?) which would add a further net £606/month, for a total guaranteed net income of £1949/month from SPA onwards. You could use ~£87.3k your cash savings to top up with the extra £606/month for the next 12 years until state pension kicks in to have a monthly income of £1949/month from now onwards, and you'd still have the remainder of your current cash savings, plus the redundancy payout for extras.

Whether that is enough is up to you.

Edited to correct SPA, I think it is 67 for you

coastline

Another vote here to retire. If you are happy with your lifestyle then fine. I left way before 55 yo and never looked back and you soon see how relaxing it is. All those DIY jobs around the house can be done at much slower pace and not rushed over the weekend. 
Your redundancy payment could easily last you over 3 years without taking any early pensions. Every year you are under the retirement age could reduce your company pension by 3- 5%. That's something worth considering. Good luck.

mark55man

You should go now!

I would be tempted to take the small FS as the lump sum of £213K as that is a 46x the guaranteed income which is quite generous (broadly this means you only need to make an investment return of a little over 2% to make this better value than the income stream and that is very doable).  Also, you already have a larger FS to rely on and a full state pension in due course (presumably - but get a forecast) and these two guaranteed stream together cover your spending needs.

By doing this, and maybe using some of your  redundancy money and or savings, you would then be able to defer taking your larger DB which taken early may be reduced in amount *acturial reduction - possibly by 4-6% per year taken early)

Finally - although it doesn't look like you need to, if you wanted you could always find a smaller lower paying job to help eke things along (and possibly to make sure you earn all your qualifying years for the state pension - needs to be at least £120 per week to do that)

Albermarle

For both FS pensions taking the lump sum and the lower pension look like bad deals . Even taking into account the lump sums are tax free. If the pensions are ones that increase with inflation than taking the lump sums is an even worse option .
I would be tempted to take the small FS as the lump sum of £213K
This is a separate issue of course. If you are thinking about going down this route, there a lot of things to consider. It is a big decision and the process is not hassle free ( and expensive ) .

Dox

Evan3020 said:

Hi i am 55 and work for a Ftse 100 company that is making big redundancies and have been offered £42500 to go after 14 years work.
I have a deferred FS pension from another Ftse 100 company currently worth £12170 or £8990 and £60k tax free if i took it now.
Current FS pension would be £4581 or £3308 and £22k or £213k transfer value.
I have £125k in savings and £9k in a SIPP, House paid for (£275k)
I would love to retire and i dont know whats stopping me except for the massive reduction in take home pay which i dont really need anyway.
I cuurently earn £50k so around £2800 take home but i live modestly so all my bills come to only around £650 per month, that includes all household bills, insurances etc.
All my hobbies are free, walking, cycling etc.
So by my calculations i could get £1024 per month and have around £250k in savings.
Is this enough at 55?

You know your own lifestyle - nobody here does. If you want to retire, sit down and work out what you actually need to live on (essential spending such as council tax, utilities etc) and then discretionary spending (nice to have but not vital).

If the numbers add up, do it. If they don't, don't.

chiefie

Put some of the redundancy into a sipp if it takes you over £50k for the year income. 

Evan3020

We are getting some free access to a paid for IFA and have been told that we can pay some or all of the severance into our pension, i think the AVC part.
I have also been told by the company that a partial transfer is possible.

robrit61

Providing you have enough to do what you want to do then I would retire. I can honestly say I have not regretted it and there is absolutely nothing I miss about working.