Dithering over early retirement

OldMusicGuy

I retired a bit early at 60, was planning to carry on to 63/64 as I have no DB pensions and wanted to do a final bit of saving before I went. But work was too stressful so I went earlier than intended despite finances not being as robust as I planned, it's been fine. Best decision I made because retirement passes quickly.......

I keep meeting a friend who is in a similar line of work and suggesting he retired early as he was finding work increasingly stressful. For several years I was urging him to retire. He kept saying "just one more year". Last time I met him he had just been diagnosed with cancer. 

Moral of the story - don't waste your active healthy retirement years.

gwynlas

I unexpectedly retired 5 years early due to redundancy figures stacked up so I did not to go back to work. I have some regrets that I was not able to plan better but absolutely no regrets at retiring early. Your financials are in place and you could take on a minimum wage job if you wanted to so go for it.

garyelder

I didn’t dither I always planned to pack up work start of the tax year I was nearly 60 that’s the best thing I’ve done 

Gary1984

Put your notice in today if you haven't already. Stress will shorten your life. You're wasting time being stressed at work when you could be having fun and spending quality time with your husband even if you need to be a bit more frugal until DB kicks in.

Albermarle

Sunsh1ne54 said:

Thanks everyone for your replies. It seems I’m not daft to be planning to retire early after all!  My DB pension will cover expenses when it starts at age 60, with some spare so that’s good. I won’t use all my DC pension covering 16 months of not working either. My partner has a reasonable DB pension and his State Pension - he’s 68 - another reason to retire so we can enjoy life together while we’re still young enough! I had a brush with cancer last year and have been declared cancer free - so I know first hand that time is precious. 

Long thread here on the subject
What made you 'pull the trigger'? — MoneySavingExpert Forum

On a practical note, have you thought about taking your DB pension early and keeping the DC pension invested for later? Although the annual pension will be reduced, over an average lifespan it usually works out about the same.
A DC pot can be passed on as an inheritance in case that was of any interest.
Also normally with a DB you will be given options to take a lump sum with a reduced pension ( whether you take it early or not) so you will need to think about that as well. 

Not recommending any particular course of action, just pointing out possible options. 

hildasmuriel

OldMusicGuy said:

I retired a bit early at 60, was planning to carry on to 63/64 as I have no DB pensions and wanted to do a final bit of saving before I went. But work was too stressful so I went earlier than intended despite finances not being as robust as I planned, it's been fine. Best decision I made because retirement passes quickly.......

I keep meeting a friend who is in a similar line of work and suggesting he retired early as he was finding work increasingly stressful. For several years I was urging him to retire. He kept saying "just one more year". Last time I met him he had just been diagnosed with cancer. 

Moral of the story - don't waste your active healthy retirement years.

My sister kept saying 'one more year'. Her husband had retired early and was few years older than her so she didn't feel right retiring at 55...or 56.
She never got to retire because an unexpected and extremely rare condition took her life in just a couple of months. Seven years ago today she died at 56. Her husband is now very well off (her employee benefits) but is a broken man.

Sorry to be a doom-monger (today is a difficult day) but life is really too short to be unhappy if you have a plan to get out.

Scot_39

Taking the DB pension early might be undesirable, as normally get an actuarial reduction per scheme or part scheme year (some are hard step - so 1yr 1 month gets 2 years penalty )

One of my schemes wanted c30% at 8.5 years.  I decided to start using savings to fund reduced hours - 4days 1st year then 3d next 2 -  and now 0, and using DC pots.

The DC schemes can pay 25% tax free of any fraction put into drawdown  - useful if used up your £12570 tax allowance by working out notice or s you plan working to summer this year.

Taxable Drawdown incone and/or ufpls can be mixed to use up any remaining it pa this year if paying 0 tax a priority.

Or lift more if happy to pay tax.


The following year it can pay out tax free 25% of anything not put into drawdown this tax year  - and lift taxable upto it pa (£12570)- or that can mix with ufpls to lift 25% tax free 75% taxable upto the pa and still pay no tax - £16760 pa or for tax smoothing c1396 pm income. 

Or more if willing to pay some tax.

And if have any significant savings interest exposed to tax - remember the £1000 personal savings allowance - but also the savings starting rate nil tax band of £5000 for those earning upto PA.

So can earn £18750 - £12570 in pension or earnings - and £6000 in interest - all tax free.  Add the 25% tax free over the £12570 - £4190 from ufpls if use full it pa - and any from a drawdown.

Your - assuming sufficient funds in DC - getting to a reasonable if not exactly lavish - income until DB kicks in. 

And if want more - just lift more and pay a bit of tax.  People get hung up on minimising it - but if want and can afford - the 80% after basic rate tax - buys a lot of life's little luxuries - holidays, meals out etc.

At best rates now, 20k at 1 yr taxable fix would now earn c £900 £75pm (of £1000 psa.)

Lifting a larger tax free lump sum than needed and sticking it in a 4% plus fix isa to 20k allowance and taxable fix at 4.5% beyond - for 1-1.5-2 years - might not be a bad alternative to money in sipp / dc invested in safe cash funds for security as close to retirement etc.

Most people who can afford it don't regret going early.

Getting rid of stress would certainly be a factor in many a decision, but only you can weigh up the pros and cons.

Lostweekend

I've been meaning to post on the 'what made you pul the trigger' thread but here seems as good a place as any. 

I retired just over a year ago, I'm 58.  Short answer - it was the best thing I've ever done and every day feels like a gift.

Longer answer - I have been in the same profession for over 30 years and loved it for most of that time, always wanted to work hard and contribute and generally felt valued and respected. But everything changes eventually and there comes a point when you just fall out of love with a situation. At that point all the hitherto unseen (or forgiven) negatives become apparent and grow into resentments. In my case:

• a movement from quality to quantity
• a feeling that fewer people in the workplace are enjoying it leading to a general malaise
• massively increased targets and therefore stress
• a hugely increased internal training programme, leading to less time actually working productively - more stress
• Workplace 'groupspeak' with no-one feeling able to shout 'but the emperor has no clothes!'

Retirement is a forward, not a backward step. The positives (for me):

• Time to explore my real interests, using the library to learn and inform myself better
• Sitting watching the world go by, priceless during rush hour
• learning skills and activities I wouldn't have indulged myself with when I was working (guitar, longer bike rides, cooking, languages)
• Spending quality time with the family (spouse went P/T, children still around (and costed!)

There are lots of reasons not to retire - extra years could provide more financial security (but nothing is ever certain); you might miss the work, the colleagues, the craic etc.  The stock market might go up, down or backflip but no use trying to predict anything with any certainty. In my case I miss how I used to feel about work years ago, but not the recent reality.  Typing this in the garden with a pot of coffee, the birds are singing and I'm frustrated with my guitar progress but I don't remember feeling happier.

atw_uss

Wonderfully said, @Lostweekend - sums up the essence of my thoughts on retirement (although I still have just over 3 months to go until the magical day).

I had intended to pick up my guitar again too, so I am now a little concerned that all this free time still won't enable me to become the rock guitarist I always wanted to be

Lostweekend

atw_uss said:

Wonderfully said, @Lostweekend - sums up the essence of my thoughts on retirement (although I still have just over 3 months to go until the magical day).

I had intended to pick up my guitar again too, so I am now a little concerned that all this free time still won't enable me to become the rock guitarist I always wanted to be

a guitar tip from one of my more experienced friends was to take short videos of yourself playing. However bad you feel you are playing you were probably worse last month