Would you retire really early and burn down most of your DC pension assets?

gundo

shinytop said:

Seriously, if you're really not enjoying work and you can afford it then you should consider going.  The trouble is, once you know you can afford to do it, work somehow becomes even more irritating/stressful/boring and the lure of jacking it all in becomes stronger.

Exactly the position I'm in currently (56, looking to go at 60 when 2 DB pensions start paying out). WFH thanks to Covid has given me a taste of what retirement could be like and to be honest I love it.

MaxiRobriguez

AlanP_2 said:

MaxiRobriguez said:

My goal is also 50.

No DB schemes for me as I'm a millenial and we aren't allowed to have nice things. Forecast to have about £250k-£300k in my S+S ISA by then, which I'll drawdown on until 55 at which point can access pension, which hopefully will have £800k+ in it, which should be enough to keep me going til I croak it. Expecting to withdraw about £30k annually, reducing when state pension kicks in, assuming it does by time I get there.

Unlike most I'm planning to carry mortgage into retirement, to take advantage of salary sacrifice scheme (again, assuming in one, and assuming it's still worthwhile) as I'll have fewer years of being able to utilise that.

Looking at my calculators every other week keeps me going at work. I like the feeling that I'm getting closer to being able to wave byebye and do so when absolutely no one expects.

You work for the wrong employer then 

I work at a local authority and there are many millenial employees enjoying access to a DB.

Both my sons are in the private sector and both have / had DB schemes. One has changed jobs so his is deferred now, the other is still an active member.

Your choices, not your age, mean you don't have a DB pension.

Yes well I was being slightly facetious, as obviously the majority of the public sector still has access to them including my wife (albeit on less generous terms).

My employer matches my DC contributions up to 10%, and gives it to me via salary sacrifice, and pays me a salary far in excess that I'd get in a LA or at my wife's place, so it's not all bad, and is half the reason I reckon I'll be able to wave bye at 50.

I'm one of the fortunate millenials though.

AlanP_2

MaxiRobriguez said:

AlanP_2 said:

MaxiRobriguez said:

My goal is also 50.

No DB schemes for me as I'm a millenial and we aren't allowed to have nice things. Forecast to have about £250k-£300k in my S+S ISA by then, which I'll drawdown on until 55 at which point can access pension, which hopefully will have £800k+ in it, which should be enough to keep me going til I croak it. Expecting to withdraw about £30k annually, reducing when state pension kicks in, assuming it does by time I get there.

Unlike most I'm planning to carry mortgage into retirement, to take advantage of salary sacrifice scheme (again, assuming in one, and assuming it's still worthwhile) as I'll have fewer years of being able to utilise that.

Looking at my calculators every other week keeps me going at work. I like the feeling that I'm getting closer to being able to wave byebye and do so when absolutely no one expects.

You work for the wrong employer then 

I work at a local authority and there are many millenial employees enjoying access to a DB.

Both my sons are in the private sector and both have / had DB schemes. One has changed jobs so his is deferred now, the other is still an active member.

Your choices, not your age, mean you don't have a DB pension.

Yes well I was being slightly facetious, as obviously the majority of the public sector still has access to them including my wife (albeit on less generous terms).

My employer matches my DC contributions up to 10%, and gives it to me via salary sacrifice, and pays me a salary far in excess that I'd get in a LA or at my wife's place, so it's not all bad, and is half the reason I reckon I'll be able to wave bye at 50.

I'm one of the fortunate millenials though.

So was I.

Exactly, its the total remuneration that's important, keeping an eye on what you will need in retirement and living for today in a job you enjoy hopefully.

Eldi_Dos

@thickasabrick, sounds like great tour.Did you notice any large increases in prices anywhere. Have had some negative comments from friends who have been away recently.

MallyGirl

Eldi_Dos said:

@thickasabrick, sounds like great tour.Did you notice any large increases in prices anywhere. Have had some negative comments from friends who have been away recently.

we went to the Lakes recently - to somewhere we have been a lot - and the prices in pubs/restaurants had definitely increased significantly. I can understand it when their business model had become so staff heavy (table service for beer) and reduced (less tables, mostly outside and subject to weather) but it was still quite a hike.

gtat

MaxiRobriguez said:

My goal is also 50.

No DB schemes for me as I'm a millenial and we aren't allowed to have nice things. Forecast to have about £250k-£300k in my S+S ISA by then, which I'll drawdown on until 55 at which point can access pension, which hopefully will have £800k+ in it, which should be enough to keep me going til I croak it. Expecting to withdraw about £30k annually, reducing when state pension kicks in, assuming it does by time I get there.

Unlike most I'm planning to carry mortgage into retirement, to take advantage of salary sacrifice scheme (again, assuming in one, and assuming it's still worthwhile) as I'll have fewer years of being able to utilise that.

Looking at my calculators every other week keeps me going at work. I like the feeling that I'm getting closer to being able to wave byebye and do so when absolutely no one expects.

Is there a chance this might be 57 by the time you get there if you are a millennial?

LV_426

finance101 said:

Apologies for returning to the original topic (!) but this topic really interests me, and the comments are fascinating.  I'm 46, and have been planning for a while to retire early, when I can access DC pensions, so 57 for me.  However I have had a big focus on paying off the mortgage early (50 target) and I've started running scenarios where I don't do that, keep the savings and use them to bridge the gap till I can access the DC assets, and quit at 50.  Like many others I have an old DB scheme and that plus the state pension will give me a baseline income from 60, rising when state pension kicks in at 67.  I could downsize to get rid of the mortgage (although I have no desire to, i love my home), but running the scenarios has made me more aware of all the levers I have available to pull.  I'm trying to run a range of ideas to look for worst case and disaster scenarios at the moment.

I find the more I think about it the more it appeals!  It's not that I necessarily would quit but knowing I could seems very freeing.  Part time or lower paid work would also be an option for bridging the gap.  I do like my job, and live a good life while saving quite hard. I'm not a fan of full FIRE, that seems too much like jam tomorrow and no jam today, but I'm paid well and having seen a lot of colleagues match their spending to their income and being locked into high stress lives just to keep even, I want to be sure I bank some of the winnings.  I've looked at the boards where people with lower incomes have gone early and are living very frugally- I could do that now, I'm sure I would live a lot cheaper in retirement based on Covid experience but I don't want to stop and have no money for holidays and live in fear of a large bill.  So I think the goal is 50, but that means accepting burning assets and a greater level of uncertainty than going later.  Seems worth the risk though!

Thank you for getting us back on topic
Your outlook chimes directly with mine.
It is incredibly freeing, knowing that you don't have to do your job, and could quit tomorrow. I find it's made me more willing to speak my mind.

But yes, the idea of burning everything is quite scary to me, and although it's technically possible for me to retire at the end of this year, when I'm 55, realistically I'll probably compromise on my retirement date, probably 56 or 57.
However when I've left my current job, I'll be free to work on something more interesting, probably remote contracting roles, which is almost impossible for me to do now as I'm on a 3 month notice period. And the beauty of not having to work means, if the job isn't to my liking, I can just quit.

finance101

thanks ajfielden, yes its not necessarily retirement I want, its choice!  For me the only difference will be that I won't make automatic overpayments into the mortgage, but will continue to save at the same rate and put it into ISAs and my investment account instead.  It means I will pay a bit more interest on the mortgage but with rates so low it won't hurt too much.  And if I change my mind I should be able to clear the mortgage at 50 anyway. I'm making pension contributions into my DC but only at the level to max my employer contributions as my concern is the pre pension access years. Ironically they would be the years when I would expect some high spending so need to save hard!

QrizB

My goal was to retire at 50 too. I'm now 51 and still working so you can tell the plan didn't survive contact with the enemy

I'm currently hoping to retire at 58, by which time my kids will be out of university (possilby a year or two earlier if the world avoids too many more surprises). That's still early, nearly a decade before my SPA of 67, but seems a lot later than 50 somehow.

finance101

lol i was looking at the sums and seeing if I could make it work sooner but I can't, because every year pre DC access costs so much.  I work in pensions so have always been good at paying into those (and my current employer has a very generous scheme), but even if they do better than expected it doesn't help me bridge that gap.  I could look at part time but I prefer at this stage to go hard for a small extra number of years (wfh helps) and then know I can stop completely.  Although that may change.....