Would it be foolish to stop work at 52?

SouthCoastBoy

I have never enjoyed my job and considered retiring or change to a less stressful job, at 52 but still working and planning to work until 60, currently 57. I applied and got offered jobs for substantially less money in the last 5 years, but when push comes to shove I couldn't justify taking 50 to 60% pay cut. 

I also had children about to start uni and the costs have ended up being a lot more than I initially anticipated so overall I am pleased I have continued the daily grind, for me I just think it made sense.

MankyVegSoup

In your position I would go for it. As others have said, life is too short to be doing something that's making you unhappy. Something enjoyable part time would be good for the finances and your well being too.

Have you thought about what would happen if your OH was ill and unable to continue to work as planned? I know you can't plan for every contingency but that's one worth considering.  

k_man

@ChocolateWombat

How long have you been living off £3k ish, as your level of savings suggest you haven't been saving the other £3k for long?

I only raise this as if not long, then the next 2 years will actually show you if you can live on DHs salary for the 'gap' period.

There does appear to be a big step of current salary, to next few years to when the DBs and SPA kick in.

Also where is the £60k for last child coming from, have you got other savings outside of what you listed, as that may change the picture too.

As long as you can change your expenditure if required, you should be fine (many have retired on less at similar ages or earlier).

But if you want to/need to live as you have on £5.75k or so per month, it could be interesting.

As above the next 2 years of living off 3k, and saving 3k will give you a much better idea (and 72k extra saved).

Kim1965

SouthCoastBoy said:

I have never enjoyed my job and considered retiring or change to a less stressful job, at 52 but still working and planning to work until 60, currently 57. I applied and got offered jobs for substantially less money in the last 5 years, but when push comes to shove I couldn't justify taking 50 to 60% pay cut. 

I also had children about to start uni and the costs have ended up being a lot more than I initially anticipated so overall I am pleased I have continued the daily grind, for me I just think it made sense.

I find the closer it gets i mind working less. Knowing that you are making provision is a comforter.. Im 57 too, last child has one more year at uni,  costs me about£400 pm. 

Duggo

I retired 18 months ago, 10 days after I turned 50.  Not regretted it for a minute.  My other half is 8 years older and he retired at the same time. I knew it was young for me to give up work, but couldn’t see myself working if he wasn’t.  Sounds like you have the funds, so go for it, and hope your other half loves his job as much as he claims. Life is short, and you only live once.

ChocolateWombat

Yes, we will have the £60k for the child who will go to Uni in 2 years.  It can be used to pay off student loans/ fund parental contribution and provide a house deposit at the right time.

In terms of accumulating more savings before I’m 52, we are saving about £3k a month at the moment.  £1.5k goes into the student fund and is for paying the school fees and building up the pot of £60k mentioned above.

The other £1.5k goes into SIPPs/ISAs and savings.  We both pay into our public sector DB pensions and the funding for those has gone before we have out £5.75k per month.  So, across another 2 years, we will booost the savings pot by £36k, bringing it to just over £100k.

I guess the fact we will have put aside the £60k for the DC means the Uni costs we will incur are covered - we will take the loans and wait to see what the career turns out to be, before deciding if we use the funds to pay off the loan - it’s more likely to be sued for a house deposit.

Currently we live pretty easily on £2.75k.I see on these pension boards that lots of couples are very happy on £2-2.5k.  We are frugal people and although we will want holidays and leisure, we won’t suddenly turn into lavish spenders.  We have a standard family home in an expensive area, so if we wanted to move, it would buy similar or better in most places.  The BTL could also be sold if necessary or at the point when it’s too much trouble or we don’t like it anymore.

We are quite cautious.  I wouldn’t like to sell it now and be stuck with a large sum that needed to be invested, as still a bit wary about investing.  We have £20k currently in SIPPS/ S and S ISAs and that’s been a new venture for us in the last couple of years.  The terrible interest returns pushed us into it, and of course our savings in standard accounts are losing value all the time.  Perhaps we need to be brave and out more into investments. DB pensions definitely work for us, being so cautious, but with early retirement it will be necessary to have access to some funds, or alternatively to accept the lower actuarial reduction.

Any thoughts on if it’s best to fund the period 60-65 by taking DH DB pension early at reduced level, or to be living off savings and investments.
I worry a little that at any point, if we have large reserves of cash, we won’t do the best with them due to being risk averse, and they will be eroded in value.

Albermarle

Reading this thread , one thought came to mind and now another poster said the same .

Have you thought about what would happen if your OH was ill and unable to continue to work as planned? I know you can't plan for every contingency but that's one worth considering.  

On a more positive note it does not cost £60K to send a child to Uni . It is better to take out as large a student loan as possible, as it will quite possibly never have to be paid back, not in full anyway. Some parental top up is usually needed if it can be afforded . Usually around the £3K to £7K region pa .

Personally I would not retire at 52 in the OP's position . Another two or three years at work would put them in a much more resilient financial position to cope with any unexpected developments .

Goose_Grass

I agree with @Albermarle. Managing just a few more belt-and-bootstrap years now will probably make the decades beyond more relaxing and comfortable for you and your partner.

Also @Kim1965's experience is my own: planning and knowing it's not so very long now is very comforting.  It's allowed me to shrug-off a lot of things at work that used to really get me down. 

k_man

Isn't the plan for 2 more years anyway?
Or are you suggesting 4-5 more years?

ChocolateWombat

I am planning 2 more years until I’m 52.  DH will work another 10 years - 8 after me, until 60.

Being nervous about stopping - I will probably feel like this at any point.

If for some reason DH coukdnt work any longer or decided to stop sooner, we could always offload the BTL.  We can also take our DB pensions from 55 if we choose.  There would be substantial reductions from doing that (esp for DH) but we could certainly live on those sums, and of course the state pension would boost it later.

I guess I wouldn’t call it ‘retiring’ at 52.  For one thing, I don’t want to feel old or too settled.  Lots of people stop work at all kinds of points.  I’ve worked all the time I’ve had children whilst many people haven’t …some are actually returning to work now!  Our wants are relatively few and given we have decent DB pensions, plus a BTL as well, and will have a buffer of £100k, I think it will be okay.  Maybe some kind of part time opportunities might crop up and I’d be interested, although to be honest est, I imagine that once I stop, that will be it and being tied down won’t be appealing.  Maybe there will be the odd short term and part time opportunity - it would be nice to be doing something where it felt it wouldn’t matter if you just decided to leave one day, instead of the current situation where I’ve been working pretty continuously (apart from maternity leaves) for almost 30 years.  I know lots do far more.

I think the DB which can be taken early, means there can be certainty about what we will/can have.  We haven’t got to decide a safe drawdown rate or worry if it will last.  Once we decide to take the pension, we will know what we’ve got.  I am extremely grateful that both of us have these pensions.  Although neither of us has ever been big earners or even into higher tax rates, I feel that we’ve done okay and slow and steady has been enough.  Of course, keeping going longer would mean there would be more….but I think I’d rather have the time.  If by chance I hate not working (hmm…) then I’m sure there will be things of some nature I could do.

It’s interesting  to see the range of responses, from ‘you’ve got enough,go for it’ to ‘it’s nowhere near enough’ and to ‘you’ll be sponging’.  And I think I will ask on a board where people are already retired too, to see their view.  The view of those still grafting and those who’ve stopped can be quite different.