How much to live on

Amateurretiree

tichtich said:

Sorry if this sounds alarmist, but I would think very carefully before retiring earlier than you have to, given the current economic conditions. These conditions are--in some respects--different from anything we've seen before. No one really knows what's going to happen in the coming years.

It's possible that there will be high inflation, so you should not rely heavily on a fixed annuity,  which will be devalued by inflation. (I have a small fixed annuity myself,  so I really hope there won't be much inflation, but I'm not relying on it.)

Also, be wary if you are relying on a pension pot or other money that's currently invested in the stock market. The stock market is very highly priced at present, which means that the current valuation of your investments (at current share prices) is probably overstating their true long-term value.

If you don't fully understand your retirement finances, then I would definitely get good advice before retiring early, and a second opinion. 

I’m sure that will be true for some, but most sensible people have an element of flexibility in their spending, so could reduce pension withdrawal if need be.

My view is you could work extra years then suffer ill health and never get to enjoy your retirement.
We are lucky as I have a DB which covers all essential expenditure, if I die DH will get 50% which will cover household bills, his own SIPP and his State Pension.
I think we all need to look at our own individual circumstances.
Not sure if I would feel the same of I didn’t have the DB

Gin_and_Milk

Farway said:

I think if you look too hard at the future you'll never retire

Exactly this.  On the other board I've seen God only knows how many posts about people who have jaw dropping amounts of money, who then decide to do 'one more year', then another etc.  I think retirement is also about your mindset, not just the amount of money you have.  I don't doubt for a minute that it's a big step and somewhat daunting, but surely the planning and saving is the hardest part? Realistically the earliest I can go is 60 (I'm 46), but I would go tomorrow if I could.  For a lot of people, their year is punctuated by seasons, for me it's quarterly reports.  I'm thankful that I actually enjoy my job, but there are so many other things I would rather do.
When my dad (eventually) retired after 53 years, he was surprised at how much he didn't miss work.  He even said once that he didn't know how he had the time to have a full time job.
Life is short, if you've planned to go early and you've got the means to do it, go.

drummersdale

Gin_and_Milk said:

Farway said:

I think if you look too hard at the future you'll never retire

When my dad (eventually) retired after 53 years, he was surprised at how much he didn't miss work.  He even said once that he didn't know how he had the time to have a full time job.
Life is short, if you've planned to go early and you've got the means to do it, go.

Did your Dad work for 53 years before he retired or was he 53 when he retired?  I've been working for 42 years in total (since I left school) and I think that is more than long enough - I certainly wouldn't want to work another 11 years!

blue.peter

Gin_and_Milk said:

Exactly this.  On the other board I've seen God only knows how many posts about people who have jaw dropping amounts of money, who then decide to do 'one more year', then another etc.  I think retirement is also about your mindset, not just the amount of money you have.

Yes, very much so. Some people see work as their life; others see it only as a means to pay for life. At least two contributors to this thread (and, I suspect, more) definitely fall into the latter category.

Gin_and_Milk said:

I don't doubt for a minute that it's a big step and somewhat daunting, but surely the planning and saving is the hardest part?

Yes, the planning and saving is the hard part. But actually taking the step isn't always difficult.

I was made redundant in 2015, at age 56. I had a pretty clear choice: did I look for another job (likely involving a move across the country for the second time), or did I retire? I knew that I wanted to retire, so the only real question was whether I could afford to do so. I spent a good deal of time checking what pension I'd get if I did draw it, the amount of my redundancy settlement, and my expenditure. (The redundancy settlement was very generous, which meant that I was able to live on it for over a year. In turn, this meant that I could draw my pension later, and thus that the pension would be greater when I did.) Having done my sums, I simply didn't bother to look for another job, and thus found myself retired by default when my employment ended. I have no regrets.

Gin_and_Milk said:

Life is short, if you've planned to go early and you've got the means to do it, go.

Yes, yes, and yes again!

Gin_and_Milk

drummersdale said:

Gin_and_Milk said:

Farway said:

I think if you look too hard at the future you'll never retire

When my dad (eventually) retired after 53 years, he was surprised at how much he didn't miss work.  He even said once that he didn't know how he had the time to have a full time job.
Life is short, if you've planned to go early and you've got the means to do it, go.

Did your Dad work for 53 years before he retired or was he 53 when he retired?  I've been working for 42 years in total (since I left school) and I think that is more than long enough - I certainly wouldn't want to work another 11 years!

He worked for 53 years.  Started off as an apprentice at 15, left as a manager at 68, and did nothing but moan about work in between!
The last part is a bit of an exaggeration, but working for 53 years is not a trait I've inherited from him!

Keswick1uk

This is the biggest issue I'm finding with consideration of retiring quite early.

At 55 I've got to think more about inflation, car replacement or repairs and property maintenance costs. These are all currently growing rather fast and there may be a lot of them to fund during retirement. Although, to some degree, the level of these are choices.

I'm sort of lucky in that I have two part time income streams, so I'll probably retire from one and continue to work on the other to maintain the pension fund in place for longer and get nearer the state pension income, then see how I get on with that one. 

Farway

blue.peter said:

I was made redundant in 2015, at age 56. I had a pretty clear choice: did I look for another job (likely involving a move across the country for the second time), or did I retire? I knew that I wanted to retire, so the only real question was whether I could afford to do so. I spent a good deal of time checking what pension I'd get if I did draw it, the amount of my redundancy settlement, and my expenditure. (The redundancy settlement was very generous, which meant that I was able to live on it for over a year. In turn, this meant that I could draw my pension later, and thus that the pension would be greater when I did.) Having done my sums, I simply didn't bother to look for another job, and thus found myself retired by default when my employment ended. I have no regrets.

Gin_and_Milk said:

Life is short, if you've planned to go early and you've got the means to do it, go.

Yes, yes, and yes again!

Very similar with my voluntary redundancy.

I knew I wanted to stop working but wasn't sure when to go, the sudden option of nearly two year's pay as a voluntary redundancy cash sum [due to long service accrual plus Union, and not a generous employer I should add] meant I could have two years doing nothing and being paid for it, and thus after some sums meant I had three years to self fund from savings before State Pension arrived

Five years total before SP

I did "sign on" but that was me going through the motions TBH, just to ensure my NI Stamps were OK, which having always worked from 15 they were anyway, after a couple of months it reached the stage of "you must take next job" I dropped out of the system, I never drew any dole or benefits so there was nothing to be gained by me turning up once a week

mjm3346

I started work at 18, partially retired at 50 and went the whole hog while still under 52 - haven't regretted a day of not working and remain grateful for the circumstances which gave me the nudge.
12 years later and the pay for the grade I was in is still not up to the pay level used to calculate my pension (I would have to have worked at least 6 more years to get the same pension once overtime and premium payments dropped out of the figures used for the calculation). Took a hit for taking it early but there have been RPI/CPI increases on the pension which have nearly always been more than any pay increases.

hugheskevi

mjm3346 said:

12 years later and the pay for the grade I was in is still not up to the pay level used to calculate my pension (I would have to have worked at least 6 more years to get the same pension once overtime and premium payments dropped out of the figures used for the calculation).

I have a very similar position for my pension.

The final salary used under the scheme rules to calculate my pension is now £7,080 higher than my actual salary. So that means for each year of pension I accrue my employer is very generously giving me a non-contributory DB pension on that £7,080 slice

Many of my colleagues are in the same situation, but have no idea as they don't know how their pension works.

mjm3346

hugheskevi said:

mjm3346 said:

12 years later and the pay for the grade I was in is still not up to the pay level used to calculate my pension (I would have to have worked at least 6 more years to get the same pension once overtime and premium payments dropped out of the figures used for the calculation).

I have a very similar position for my pension.

The final salary used under the scheme rules to calculate my pension is now £7,080 higher than my actual salary. So that means for each year of pension I accrue my employer is very generously giving me a non-contributory DB pension on that £7,080 slice

Many of my colleagues are in the same situation, but have no idea as they don't know how their pension works.

Under our pension scheme at the time they used the highest salary figure in the last 3 years and 2 were already gone so it was a no brainer to leave and lock in the higher rate as well as save the cost and time of a 3 hour commute