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

MallyGirl

I plan to retire in 4 or 5 years time (I say 4, OH says 5) so we are in the process of remortgaging to a 5 year fix that is less than a third of the rate we have been paying. At the end of that 5 yr fix we can use some TFLS to pay down/off depending on what the interest rates are doing. I am of an age that I remember pay 14% on my first flat.
It is going to be a mindset change as we currently have an offset mortgage so have not had 'savings' to manage, apart from S&S ISAs, for years.

LV_426

Lovely to hear about all you sensible people in a position to retire early. I feel this is the only place I can really talk about it, even though I want to shout from the rooftops that I can give up work. I always have a slightly guilty feeling telling other people about my plans. In fact I'm not planning to really tell anyone in my extended family. I fear it would cause some resentment.
But then I think, well I've saved diligently all my life, so I deserve it.

MaxiRobriguez

gtat 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.

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

Maybe, but my pension is with Aegon and they've confirmed that existing plans will be accessible at 55 based on current Govt narrative.

Obviously that can change in the next 25 years....

MaxiRobriguez

ajfielden said:

Lovely to hear about all you sensible people in a position to retire early. I feel this is the only place I can really talk about it, even though I want to shout from the rooftops that I can give up work. I always have a slightly guilty feeling telling other people about my plans. In fact I'm not planning to really tell anyone in my extended family. I fear it would cause some resentment.
But then I think, well I've saved diligently all my life, so I deserve it.

People boast about their fancy clothes, nice cars or big houses. If you want to shout from the rooftops about your ability to sack off the 9-5 then do it. If anyone is resentful for you because of it then they should have made different choices. My Yaris is ten years old and done 95k miles but because of going that route rather than a nicer a car or a more expensive finance option I've got an extra £50k+ in the pension pot I've been able to accrue over those years.

Pays your money take your choice.

LV_426

MaxiRobriguez said:

ajfielden said:

Lovely to hear about all you sensible people in a position to retire early. I feel this is the only place I can really talk about it, even though I want to shout from the rooftops that I can give up work. I always have a slightly guilty feeling telling other people about my plans. In fact I'm not planning to really tell anyone in my extended family. I fear it would cause some resentment.
But then I think, well I've saved diligently all my life, so I deserve it.

People boast about their fancy clothes, nice cars or big houses. If you want to shout from the rooftops about your ability to sack off the 9-5 then do it. If anyone is resentful for you because of it then they should have made different choices. My Yaris is ten years old and done 95k miles but because of going that route rather than a nicer a car or a more expensive finance option I've got an extra £50k+ in the pension pot I've been able to accrue over those years.

Pays your money take your choice.

Indeed. Nicely said.

Sea_Shell

ajfielden said:

Lovely to hear about all you sensible people in a position to retire early. I feel this is the only place I can really talk about it, even though I want to shout from the rooftops that I can give up work. I always have a slightly guilty feeling telling other people about my plans. In fact I'm not planning to really tell anyone in my extended family. I fear it would cause some resentment.
But then I think, well I've saved diligently all my life, so I deserve it.

I know exactly what you mean!!!    I haven't told my family - and it's been 2 years!!!!     I just don't want either the guilt trip or the expectation of my time (and money!) - not yet - we want to enjoy it ourselves first, which has been scuppered so far by "you know what"!

finance101

I think it’s such a shame people don’t talk about money. I know it’s difficult and an emotional topic for many but it’s so important. Not in itself but because of the choices it gives you. I’ve been wealthy and I’ve been very hard up, and the driver to earn well and save was the period of being hard up! And it isn’t about having loads, it’s about what you can live on and the trade between time and money, work and choice. I’ve seen people with very little accumulate assets slowly and steadily, and see people with huge incomes burn the lot, get laid off mid fifties and have a desperate scramble for the last few working years. 

I would not dream of telling individuals what to do with their money, but I would love to see conscious choice in spending and saving, and people understanding the trade offs they are making. 

Terron

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.

Fortunate indeed. My first employer's pension scheme was only open to managers, so I had to organise one myself. I moved to a job with a FS scheme, but missed the small print - "increases once in payment are entirely at the discretion of the trustees". After 2 takeovers that is effectively none at all. My last employer closed the scheme I was in and replaced it with a DC scheme matching up to 5% (later 6%).

cfw1994

finance101 said:

I think it’s such a shame people don’t talk about money. I know it’s difficult and an emotional topic for many but it’s so important. Not in itself but because of the choices it gives you. I’ve been wealthy and I’ve been very hard up, and the driver to earn well and save was the period of being hard up! And it isn’t about having loads, it’s about what you can live on and the trade between time and money, work and choice. I’ve seen people with very little accumulate assets slowly and steadily, and see people with huge incomes burn the lot, get laid off mid fifties and have a desperate scramble for the last few working years. 

I would not dream of telling individuals what to do with their money, but I would love to see conscious choice in spending and saving, and people understanding the trade offs they are making. 

I agree: as a Country we are almost scared to talk about money.
I think the people who are savvy enough to in habit these forums (you lot!) have a duty to share knowledge we learn, where possible.  
DD told me recently her goal was to retire as early as I did, so at least one positive influence 🤪👍....& we have encouraged and helped kick start both our offspring with pension/LISA/ISA stuff 

We almost need a secret pub meeting of forumites, to talk money, away from family!  Wonder if MeetUp might have some....

Whilst I haven't talked actual numbers, I haven't hidden my plans from family: none of them would "put upon" us, & it is nice to be able to involve them in discussions or ideas.  The only remaining matriarch above (MIL) already has time from us (more from wife than me) anyway, so that isn't a problem either.

LV_426

cfw1994 said:

finance101 said:

I think it’s such a shame people don’t talk about money. I know it’s difficult and an emotional topic for many but it’s so important. Not in itself but because of the choices it gives you. I’ve been wealthy and I’ve been very hard up, and the driver to earn well and save was the period of being hard up! And it isn’t about having loads, it’s about what you can live on and the trade between time and money, work and choice. I’ve seen people with very little accumulate assets slowly and steadily, and see people with huge incomes burn the lot, get laid off mid fifties and have a desperate scramble for the last few working years. 

I would not dream of telling individuals what to do with their money, but I would love to see conscious choice in spending and saving, and people understanding the trade offs they are making. 

I agree: as a Country we are almost scared to talk about money.
I think the people who are savvy enough to in habit these forums (you lot!) have a duty to share knowledge we learn, where possible.  
DD told me recently her goal was to retire as early as I did, so at least one positive influence 🤪👍....& we have encouraged and helped kick start both our offspring with pension/LISA/ISA stuff 

We almost need a secret pub meeting of forumites, to talk money, away from family!  Wonder if MeetUp might have some....

Whilst I haven't talked actual numbers, I haven't hidden my plans from family: none of them would "put upon" us, & it is nice to be able to involve them in discussions or ideas.  The only remaining matriarch above (MIL) already has time from us (more from wife than me) anyway, so that isn't a problem either.

That is great to hear that you've had a very positive influence on your DD.
I think as a society we're far too obsessed with buying stuff. Does it make us really happy? I don't believe so. I've never been one to spend my money on expensive items and always lived well within my means. Do I regret not buying more stuff? No. My indulgence now is buying a caravan, and that is only after a lifetime of unwillingness to spend. I'm getting better at it, and knowing I've saved enough into pensions does help