Having problems deciding whether to press that resignation button....

mat1964

I posted on this previously, but things have moved on.  I have a choice to either retire at the end of May 2022 (a month before I turn 58) or the company have offered me 3 days a week as an alternative.  The problem is my health is not great and I have seen from others who do 3 days, that it often ends up as 5.  I could get some occasional part time work if I do resign completely.

Finances are okish but not great:

Cash £70k (but will need to finance a car as have to return company one)
DB in payment £8500 (index linked to RPI) plus another £1400 from another DB in 2 years which will also give £9k lump sum..
DC pots around £310k

We are debt free.  Largest fixed costs are Council tax £3500 a year, estate charge £1000 a year and Electric/gas/Water/Broadband/TV around £3000 a year.

Partner has no pension provision but we will both get full SP at 67 (she will get hers 2 years before me).

I think we will need around £25k a year.  It seems we will just about have enough and I would be very happy to stop work after 40 years.  However, just can't decide - given the new offer of 3 days a week and only have until end of this month to make a decision.......

SMcGill

I went down to 3 days a week in May and it’s worked out brilliantly, it all depends on your line manager and your team if you have one. Any reason you couldn’t give 3 days a week a try, and agree to review things in 6 months? So the option of retiring is still there.

xylophone

Cash £70k (but will need to finance a car as have to return company one)

You could pay a deposit and then get no interest finance deal to spread the cost?

You could put this in train before resigning so as to have a smooth transition?

Largest fixed costs are Council tax £3500 a year, estate charge £1000 a year and Electric/gas/Water/Broadband/TV around £3000 a year.

You can't do anything about the CT but you have compared costs from various providers for the utilities etc?

The problem is my health is not great 

Would it benefit from losing the stress of your current employment and the freedom to take ad hoc work as available?

Partner has no pension provision 

Because?

Fu_Man_Chu

Obviously I have no idea what your job is like but I can tell the tale of a friend and ex colleague of mine. He was in a very similar position and after some negotiation agreed with our employer that he would drop to a 3 day week. Tuesday, Wednesday and Thursday.
It sounded like the dream. A long weekend every week but still keeping busy in a job he enjoyed and still earning.
In reality he lasted 10 weeks.
He found that when he came in on the Tuesday he had 4 days work built up. 100's of emails, frantic enquiries and he would then spent the next few days frantically chasing his tail only for the same to happen the following week.
In essence he wasn't working 3 days a week, he was squeezing 5 days work into 3 days.
He didn't last long and has now fully retired. Last time I saw him he looked 10 years younger and was the happiest he's been since his kids were young.

AlanP_2

Does your partner work as building their pension up would be a good idea.

Get tax relief on the way in at 20% (so £80 contributed becomes £100 in pension).

Withdraw at a rate that keeps them below the personal allowance (£12,570) and it can be taken tax free. Adjust amount withdrawn as SP kicks in for them.

You could funnel some of the £70k cash through it.


NOTE: If they aren't working you are limited to £3600 pa gross = £2880 net + £720 from taxman.

MaxiRobriguez

You say "we will need £25k a year" - presumably you therefore mean the household requirement, not you personally.

If so, and your partner will be in receipt of state pension then you're almost there from that combined with the DB pension from when you're both 67.

So really, the question is does your £400k of other assets (DC pension + cash) give you enough to bridge the gap until then. With £400k ready to go, a ten year horizon and £25k annual requirement then the answer is a resounding yes. 

You could quite easily weather a relatively severe and long equity crash with that sort of buffer, and if that doesn't happen then you've got a lot more than £25k from 67 onwards.

mat1964

thanks for the replies.  Very helpful

Partner was a carer for her late husband and only worked part time and never made any private pension contributions.  We are just now topping up her NI as she is 4 years short.  We will also start her a pension so she gets the tax relief.

Fu_Man_Chu said:. 

He found that when he came in on the Tuesday he had 4 days work built up. 100's of emails, frantic enquiries and he would then spent the next few days frantically chasing his tail only for the same to happen the following week.
In essence he wasn't working 3 days a week, he was squeezing 5 days work into 3 days.

This is what I think could happen.  I work very long hours now 5 days a week just to keep up.

SMcGill said:

Any reason you couldn’t give 3 days a week a try, and agree to review things in 6 months? So the option of retiring is still there.

I am on 6 months notice and they want to know by end of this month what I am doing.  If I hand in my notice end of the month, I get 6 months more on full pay.  If I decide to go part time, then I am on 60% from 1 January - so if it doesn't work out and I quit after a couple of months, I could actually be worse off.

squirrelpie

mat1964 said:

This is what I think could happen.  I work very long hours now 5 days a week just to keep up.

Have you discussed with your employer how they will be doing the rest of your present work if you do go to 60%? Have they identified and trained somebody?

Sorry if I missed something, but what actually happens if you do retire? Does another pension start, or is it one of the ones you already mentioned, or something else?

SouthCoastBoy

Difficult one, only you can decide. Can you approach your manager and ask to have a one/two month experiment for a 3 day week and if it doesn't work for either party go back to 5 days a week?

About 10 years ago I did go down to 4 days a week, but found I was working longer days for those 4 days, so in reality more like 4.5 days for 4 days pay. I reverted back to 5 days after 3 months. 

ggmf

I 'retired' but went back after 8 or 9 months to do 3 days per week. 3 days became 4, verging on 5  when you include catchup, unpaid overtime and additional travel costs & time.

WEF from August I have now retired at 63, despite talk of being asked back for 'short project' work, I'll not be going back. Take a look at https://www.guiide.co.uk/ but remember that no tool, IFA (this is not IFA bashing, I use an IFA) or crystal ball will be able to predicted the future, but this might help to give a indication of possible outcomes etc.

Albermarle

Largest fixed costs are Council tax £3500 a year, estate charge £1000 a year and Electric/gas/Water/Broadband/TV around £3000 a year.

£7.5K from after tax income is a lot !

Maybe you could consider moving to somewhere smaller ?