Early Retirement - what does it mean

MalMonroe

Deleted_User said:

I retired early last week at 55. The pubs in tier 3 better start to open soon as life in early retirement is quite boring.

Wow!! I retired ten years ago and often wonder how I ever had time to work. I love it, so much to do, so many people to see (via Zoom now but still) - the internet is full of information, I've been learning loads of things. Boring is not in my vocabulary. Neither is boozing. 

MalMonroe

sheslookinhot said:

I’m think of early retirement in Mar 22, but realised I am 62 next birthday, August. My works normal retirement age is 65 (was 60 until about 12 years ago. My State Pension age is 66, 4 years in August.  Interesting to hear people’s definition of early retirement. Would I be classed as an early retiree ?

You are free to retire whenever you like. But you won't get state pension until you're 66.

Linton

jamesd said:

Sea_Shell said:

If you are living off savings, rather than being able to access any pensions yet, then banks etc may classify you as not actually having ANY income, for application purposes, which you don't technically!!!

I discussed this with a mortgage lender yesterday. Ineligible for their retirement interest only mortgage because they ignore income drawdown and ineligible for a lifetime mortgage which requires a property value of at least £125k.

I have an interest only lifetime mortgage partly based on my drawdown income.  It was arranged through an IFA/broker who talked directly to the underwriter to explain my financial situation.  At that time, a few years ago, it seemed that the mortgage companies did not really understood drawdown. There weren't any questions as to whether the drawdown was actually sustainable.

pensionpawn

jamesd said:

Sea_Shell said:

If you are living off savings, rather than being able to access any pensions yet, then banks etc may classify you as not actually having ANY income, for application purposes, which you don't technically!!!

I discussed this with a mortgage lender yesterday. Ineligible for their retirement interest only mortgage because they ignore income drawdown and ineligible for a lifetime mortgage which requires a property value of at least £125k.

"ignore income drawdown"...? So you could demonstrate > £500k (with ~£50k in cash) in your pension, and hence a healthy "income", and they weren't at all interested? Besides someone showing a bank balance of £500k (or balances accumulating to £500k) what could the lender possibly view as more secure?

green_man

Sea_Shell said:

A I'll claim early retirement at 47!!

As it's been reported on here, most people worry or get confused about the "technicalities" of declaring yourself "retired" especially around things like Motor Insurance, if you are not yet able to draw from a "pension".   

If you are living off savings, rather than being able to access any pensions yet, then banks etc may classify you as not actually having ANY income, for application purposes, which you don't technically!!!

It can put you in a financial limbo, when it comes to "official" stuff.      Personally, I'm a "Homemaker" at present, even if by DH is too (he's not 55 yet either).    What I am NOT, is Unemployed!!!!!

Same here. I retired at 47 and have encountered the above Car Insurance issue.  They would not allow me to declare myself as ‘retired’ due to my age.  Despite the dictionary definition being: “ having left one's job and ceased to work.”. Which is exactly what I have done. 

Alice_Holt

Deleted_User said:

I retired early last week at 55. The pubs in tier 3 better start to open soon as life in early retirement is quite boring.

          
   I retired early 16 years ago at the age of 51, having effectively achieved FI.
  Got a bit bored after 6 months, and volunteered for a local advice charity.   
  That eventually lead to an interesting funded part-time job.
  I'm still working 2 plus years post SPA, but thinking of re-retiring when things open up again.
  Can I be simultaneously classed as both an early and late retiree?   

pensionpawn

FIRE is fine in principle as long as you don't 'mortgage' your 20s & 30's to then find that you don't make it past your 40's or that you didn't factor on your body not being able to cash the same cheques as it did in your 20's and 30's. You have the live in the moment as well as make provision for the future. Tomorrow isn't promised.

Linton

pensionpawn said:

FIRE is fine in principle as long as you don't 'mortgage' your 20s & 30's to then find that you don't make it past your 40's or that you didn't factor on your body not being able to cash the same cheques as it did in your 20's and 30's. You have the live in the moment as well as make provision for the future. Tomorrow isn't promised.

Yes but if you die in your 40's  (very few people do) your pension and other savings no longer matter to you - you are dead.  If you do not  keep sufficient for the future you could live your final miserable decade in what you consider to be dire poverty. So the best policy ISTM is to spend now at a rate you will be able to afford to spend for the rest of your life.

jamesd

pensionpawn said:

jamesd said: ...

I discussed this with a mortgage lender yesterday. Ineligible for their retirement interest only mortgage because they ignore income drawdown and ineligible for a lifetime mortgage which requires a property value of at least £125k.

"ignore income drawdown"...? So you could demonstrate > £500k (with ~£50k in cash) in your pension, and hence a healthy "income", and they weren't at all interested? Besides someone showing a bank balance of £500k (or balances accumulating to £500k) what could the lender possibly view as more secure?

The view expressed was that it could all be spent in one day. The pre-pension freedoms concern that largely hasn't happened.

The person I was discussing it with said they had discussed it internally before and she'd raise it again.

Linton said:
I have an interest only lifetime mortgage partly based on my drawdown income.  It was arranged through an IFA/broker who talked directly to the underwriter to explain my financial situation.  At that time, a few years ago, it seemed that the mortgage companies did not really understood drawdown. There weren't any questions as to whether the drawdown was actually sustainable.

Which lender?

Nice that at least one had some understanding.

It's still quite a few years before I'll need such a product.

pensionpawn

jamesd said:

pensionpawn said:

jamesd said: ...

I discussed this with a mortgage lender yesterday. Ineligible for their retirement interest only mortgage because they ignore income drawdown and ineligible for a lifetime mortgage which requires a property value of at least £125k.

"ignore income drawdown"...? So you could demonstrate > £500k (with ~£50k in cash) in your pension, and hence a healthy "income", and they weren't at all interested? Besides someone showing a bank balance of £500k (or balances accumulating to £500k) what could the lender possibly view as more secure?

The view expressed was that it could all be spent in one day. The pre-pension freedoms concern that largely hasn't happened.

The person I was discussing it with said they had discussed it internally before and she'd raise it again.

Linton said:
I have an interest only lifetime mortgage partly based on my drawdown income.  It was arranged through an IFA/broker who talked directly to the underwriter to explain my financial situation.  At that time, a few years ago, it seemed that the mortgage companies did not really understood drawdown. There weren't any questions as to whether the drawdown was actually sustainable.

Which lender?

Nice that at least one had some understanding.

It's still quite a few years before I'll need such a product.

"The view expressed was that it could all be spent in one day." - completely barking considering that they will probably lend to someone on £50k who could possibly be made redundant a month later!