44 and dreading the thought of working past 50

hartlepool_jono

Retirement planning.... its something I've given a fair bit of thought too lately. 
I've spent off and on the last 20 years contracting of some sorts.. which means no company pensions. But I do feel for my age I'm in a pretty good position in life. Happily married with 3 kids, ages 12, 17 and 18. The eldest has just joined the forces, so hopefully he's pretty much self sufficient now. I'm also mortgage free with a house worth circa 550 at a guess, and savings/ assets of circa 200k ish. And current SIPP worth jointly 120ish. However I'm just not sure of what I should be now doing... I havnt contributed to my sipp for the past maybe 2 years.. I have no ideas of how much il need as a pot. I'm just a bit unsure of which direction to focus... 
I've never seen any financial advisors as I'm just sceptical of bad advice.. so really looking for some options from those a bit more clued up. Any guidance or pointers greatly received. Thanks. 

QrizB

What's your number? How much do you need, per year, to live the life you want? £20k, £40k, £60k? Some people are happy with a lot less than others are.

Once you know that, you can come up with a plan to achieve it, with a low risk of failure, for the rest of your life.

If you don't know your number, there's no way to tell when you have finished working.

JoeCrystal

Have you joined your workplace pension scheme, or if you are self-employed, paying into one?

As QrizB pointed out, you need to know your number and the expected living cost for you and your family. Have you checked your state pension forecast? However, if your children all left at 18 and became fully independent, that is one less expense to worry about. But just in case, you also need to consider the potential cost of your children's education at universities, for example. 

You are very well off, so having a retirement plan is even more essential for you and your other half, especially working with your old half on what their retirement plan is as well. They may still prefer to work.

The truth is that you need to get used to the fact that 50 is very early age for retirement and maybe unviable considering your family, income and pension situation. 

hartlepool_jono

Hi as per original post its only the eldest who's starting to be self sufficient now, no company pensions. Nor am I paying into any other than my sipp... my number I think per year would probably need to be around 40k per year gross. My wife isn't working though is thinking to go back part time so maybe her income be circa 12k or so... state pension contributions I'm virtually up to date  with

hartlepool_jono

I also currently have a hobby which could give me 1 to 1.5k net per month.

handful

The biggest cost of retiring early is funding the period until you/both receive SP. It's therefore important to make sure you have made the necessary contributions to get full SP. That's a good starting point to check. I wish my hobbies brought in money like yours do btw! Can you not work less and do more of your hobby to get more work/life balance?

SouthCoastBoy

hartlepool_jono said:

I also currently have a hobby which could give me 1 to 1.5k net per month.

I'm interested in that hobby, what is it?

cobson

SouthCoastBoy said:

hartlepool_jono said:

I also currently have a hobby which could give me 1 to 1.5k net per month.

I'm interested in that hobby, what is it?

Making nets ?

hartlepool_jono

It's a combination of 2 hobby actually. Horology and numismatics, or watch collecting and coin collecting/ trading. 

p00hsticks

hartlepool_jono said:

Hi as per original post its only the eldest who's starting to be self sufficient now, no company pensions. Nor am I paying into any other than my sipp... my number I think per year would probably need to be around 40k per year gross. My wife isn't working though is thinking to go back part time so maybe her income be circa 12k or so... state pension contributions I'm virtually up to date  with

Realistically, I think you are probably going to need to seriously increase your pension contributions, be looking at a smaller 'number' and/or lowering your expectations of when you will realistically be able to retire in order to make the figures work. 

Retiring at 50 would leave you a 17 (?) year income gap to fill until you reach state pension age, and even when you do the SP is only going to meet around a quarter of the income you want [and you are probably going to need to continue making voluntary NI contributions for at least some future years to get to the maximum ] , . 

  

Albermarle

As already mentioned retiring at 50 is only really only for people with a very big war chest, and/or low expenditure. Even 55 would be a struggle for the large majority. The average retirement age is somewhere around 63.
Some very back of the fag packet figures could be as follows:
Expenditure £40K gross, rising with inflation every year.
Income OH and hobby £24 K pa.
Shortfall £16K pa for 17 years
IN 17 years two state pensions £21K , no other income.
Shortfall £19K for up to 25/30 years .

So basically you would need your money to provide around £18Kpa increasing with inflation each year for 45 years. 
I am going to make a stab of how much you would need to do that, and the very much ball park figure would be £750,000.

If you were happy to take a risk of running out/reducing expenditure when you were a lot older then you could reduce that figure but probably not realistically below half a Million.

Clearly every extra year you work you can add to your investments and not spend them. So a double advantage