Analysis paralysis - do you think I could stop working soon?

[Deleted User]

I would say that the OP is in a good position to quit working, as long as he is prepared to vary his income if things go wrong on the stock market. 

Brenster

Seems like you are in a good position to retire (quite frankly the thought of £700k + not being enough scares the hell out of me!), but a couple more years should give you additional comfort.  Why does it have to be an all or nothing scenario with work (full time > or Zero time), why cant you pick up a part time job which will keep you active and social whilst supplementing your income by say £10k per annum ? could be a job that you enjoy and actually look forward to going to so it wouldnt seem like work, just a part of your social life ?  Working in a supermarket, shop, pub, coffee shop, charity shop etc for example (all not great examples in the current climate, but you get my point) or delivery jobs.  This way you will be working in a job you choose to, not a job you have too, this midset difference i imagine would be massive.  
Good Luck 

BritishInvestor

Deleted_User said:

BritishInvestor said:

tacpot12 said:

You have been given some good advice on the financial side of your question, but I wanted to touch on a couple of points that have not been addressed already. 

The period between child maintenance ending and your children leaving home is a tough gap to bridge, but you shouldn't feel that it falls only to you to bridge it. Don't let the other parent off the hook just because the are retiring - if they have child maintenance commitments, they need they can still to meet their commitments if they want to retire.
 
Your children will need to be educated on how expensive it is to live, and that they cannot expect you or their other parent to keep funding them through their adult lives - they need to become productive adults so they can pay their own way in life. The sooner you start to expect this of them, the sooner they will get the message and start to consider their options. You should continue to support them emotionally to make those hard choices about whether to go to university or get a job after A levels, and what career they will chose.  Even if they have to claim benefits to live on, they should be giving you a substantial portion of their benefits to cover their rent and the impact on your council tax of having them at home. 

The JISAs are a fantastic legacy for them providing they don't squander it. When/if they want to buy a home with a partner, you should talk to them about the idea of a Deed of Trust to ensure that if the relationship breaks down, they don't end up having to give half of their deposit to their ex. 

I think you should retire as soon as you are reasonable able to. I retired at 53 from a stressful job, and have been much healthier as a result because I have the time to prioritise my own health. 

I would work the numbers carefully. I am operating my drawdown with a safe withdrawal rate of about 6.5% and this seems to be working out fine - I'm four years into my retirement. 

The thing that no-one seems to mention when trying to adjust the 4% US Safe Withdrawal Rate for the UK is that we have a State Pension. If we didn't have a state pension, the 4% US SWR would translate to 3.5% SWR for the UK (we can't achieve the same returns as the Americans for some reason), but we have a state pension, so if you have a full entitlement, you will find you can withdraw funds at the rate of a lot more than 4% in the UK.

"The thing that no-one seems to mention when trying to adjust the 4% US Safe Withdrawal Rate for the UK is that we have a State Pension. If we didn't have a state pension, the 4% US SWR would translate to 3.5% SWR for the UK (we can't achieve the same returns as the Americans for some reason), but we have a state pension, so if you have a full entitlement, you will find you can withdraw funds at the rate of a lot more than 4% in the UK."

I'm not sure I see the logic. The SWR relates to a specific set of assets. Are you saying that your initial withdrawal rate from a given portfolio can be higher in the early years of retirement as it will drop once the state pension starts?
It would be interesting to see your research that says you can withdraw a lot more than 4% in all cases, thanks to the state pension.

Yes. State pension and any other DB income should be treated as part of your overall portfolio, the fixed income portion.  Its like an inflation linked bond with no expiry date.   Up to a certain age you withdraw from other portions of your portfolio.  So, if you set the withdrawal rate to 3.5%, you can divide state pension by 0.035 and add the result to your portfolio. And then you can withdraw 3.5% of the total. Which is wuite a bit more than 3.5% of your investments.  Delaying state pension means that you can actually afford to spend more.  This is a very rough approach but there are spreadsheets out there which do it for you.

Maybe it's nuance, but I would rather it was worded
"Without a state pension, the SWR from a given portfolio is 3.5%, but with state pension, the initial withdrawal rate can safely start at 4% because it will reduce to 3% once the state pension kicks in."
Just makes it clearer for someone reading around the topic for the first time. 
I would potentially consider the DB/SP income as distinct from fixed income (and will give a different SWR), but a conversation for another day.

[Deleted User]

There is more than one way to represent the same concept. Fundamentally, DB pensions = fixed income.  And for a young person, his skills and education are also akin to fixed income. It should generate 30 to 40 years’ of salary.  Thats why young people don’t need FI within their portfolios.

Albermarle

Working in a supermarket, shop, pub, coffee shop, charity shop etc for example (all not great examples in the current climate, but you get my point) or delivery jobs. 

This idea of downsizing your job/work would only suit some people . If you had a job with any kind of responsibility and more critically some autonomy , being ordered around by a supermarket manager half your age would not be great . Or getting stick because you only made 40 deliveries a day instead of 45 etc 

Toucan13

Thank you all for sharing your thoughts - really appreciate you taking the time to reply.  It's given me a lot to mull over - I think I'm concluding that I'm probably safer to do the infamous "one more year" and see what happens in markets and the wider economy in the meantime.  But if for some reason work wise I'm forced into Plan B there is a reasonable chance I will be OK if markets are kind / I can be flexible in my spending.

I suspect there are a lot of people giving all this some thought at the moment!