Bold leap into retirement

Karen's_girl

In a recent 18 month period, my family experienced serious illnesses (including me: cancer), degenerative conditons and 3 bereavements. I had originally planned to retire at age 60 but am now aiming for 54 - 55 (I'm 47) so have been planning for how to achieve that. I had been one of those career-driven folks, often working long hours, always trying to achieve. But ill health, the subsequent diagnosis last year and the prolonged sick absence from work forced me to stop and take stock for the first time ever. And I realised that the thing we can't get back is time, and our health should always come first. So, in addition to the financial planning, I also changed my attitude to work so that I no longer work more than my standard hours, and I relax more. I would say that another reason for aiming to retire at age 54 -55 is the feeling that I am at least trying to have some control over my retirement age; if there's one thing I've learnt from reading these forums and the FIRE forums on social media, it's that although the Govt move the SPA to later ages, people need to get out of that mindset that they can only retire at age 67, 68 or whatever. I realise that we all have different salaries and priorities but with good planning, it is possible to aim to retire earlier. 

Smudgeismydog

I’m so sorry to hear about everything you and your family have been through recently @Karen’s_girl.

I have (in the main), loved my career, and worked hard (juggling childcare) to achieve senior positions, like you frequently working long hours and often prioritising work about my health, family and friends. I’m not going to waste energy regretting this, as it’s done, but I now feel very strongly about focusing on what I want to do, how I want to spend my time, and who with.

I have gone over and over my figures, and I will take early retirement feeling very comfortable about my finances, and I’ve said before, I have no qualms about doing something part-time/short-term at some point should I want or feel I need to, to provide additional money or social/structure, but completely on my terms.

It’s very empowering taking control, best of luck to you x

Daffodil1234

What a brilliant post, @Smudgeismydog , thank you, that was just what I needed to read today !  And best wishes to @karensgirl.

I really like the comment about the empowerment of taking control by FIRE/ savings / planning etc

bluenose1

Daffodil1234 said:

What a brilliant post, @Smudgeismydog , thank you, that was just what I needed to read today !  And best wishes to @karensgirl.

I really like the comment about the empowerment of taking control by FIRE/ savings / planning etc

Definitely great to have financial control and enough money so it is your decision whether to retire early and also an added bonus is not having to worry about being made redundant etc, which I know concerned a lot of my colleagues.

They call it FU money, basically if work gets too stressful / toxic etc you can say FU and walk out the door.
Or in my case as could never do that, you can politely give 3 months notice and finish all your work off before you leave.  

Definitely gave me a level of comfort when I realised that financially I did not need my job, unfortunately that did not stop me being stressed and burnt out from it. Was such a relief to be able to hand my notice in when things got so bad it was affecting my health and have definitely not regretted it for a single second. In fact retiring has made me now realise there is no way I would ever work again, my “time” is far too precious and I don’t ever want to give any of my “time” to an employer ever again. 

Smudgeismydog

Thanks @bluenose1, even though I am now nearing the end of my notice period, and had reached a place where I feel I’m trialling my new retirement lifestyle, I was dragged into the toxic negativity by 3 work colleagues this morning.

I honestly feel it’s so bad, they reached out to me for an ear. I’m still happy to chat and help in any way I can, but I could feel myself getting sucked back in to a place I realise I have finally emerged from. That was a real moment for me, as it has once again reinforced why I’m doing what I am.

Instead I’m going to focus on the lovely things I have planned for the rest of this week (community based Balsam bashing, back massage and a dog walk with a friend). 

I have also decided I want to pay my daughter’s University tuition costs, as the level of debt they graduate with scares me. Yes this will squeeze my pre 57 pots, but I’ll make it work. 

Current figures;
Cash £33,500
ISA £145,586
SIPP £800,138

I’m going to pay £25,000 in August for the house move, and £9,250 in Sept 25, 26 and 27.

I’ll put £1,250 into the joint account from July, (my partner will contribute £750), from where we will pay all the household bills, and this will also cover coffee shop trips, lunches, day trips and short UK based holidays. 
My dependents pension is £15,500 pa gross.

Pat38493

Smudgeismydog said:

Thanks @bluenose1, even though I am now nearing the end of my notice period, and had reached a place where I feel I’m trialling my new retirement lifestyle, I was dragged into the toxic negativity by 3 work colleagues this morning.

I honestly feel it’s so bad, they reached out to me for an ear. I’m still happy to chat and help in any way I can, but I could feel myself getting sucked back in to a place I realise I have finally emerged from. That was a real moment for me, as it has once again reinforced why I’m doing what I am.

Instead I’m going to focus on the lovely things I have planned for the rest of this week (community based Balsam bashing, back massage and a dog walk with a friend). 

I have also decided I want to pay my daughter’s University tuition costs, as the level of debt they graduate with scares me. Yes this will squeeze my pre 57 pots, but I’ll make it work. 

Current figures;
Cash £33,500
ISA £145,586
SIPP £800,138

I’m going to pay £25,000 in August for the house move, and £9,250 in Sept 25, 26 and 27.

I’ll put £1,250 into the joint account from July, (my partner will contribute £750), from where we will pay all the household bills, and this will also cover coffee shop trips, lunches, day trips and short UK based holidays. 
My dependents pension is £15,500 pa gross.

Just one small comment - paying out of your retirement assets for your daughter's university costs at the time they are incurred is a lovely thing to do, but it often does not make sense because the interest rates on those tuition loans are pretty low.  There's a good chance that your investments will grow faster than your daughter's loan.

The second reason is that your daughter would only start paying for that at the time her salary exceeds a certain level, so in many cases it might be more cost effective in the long run to only pay them off at the time she has to start paying them off herself, and/or pay ongoing contributions to help her with the additional amounts.

This also avoids the risk that your daughter decides to take up a relatively lowe paid career and actually never has to pay it off.   Better to see it more as a kind of graduate tax than a loan.

MPLMPL

Pat38493 said:

Just one small comment - paying out of your retirement assets for your daughter's university costs at the time they are incurred is a lovely thing to do, but it often does not make sense because the interest rates on those tuition loans are pretty low.  There's a good chance that your investments will grow faster than your daughter's loan.

Whilst I agree with the rest, I wouldn't call the interest rates on the loans low. From this very site: "While studying, until the April following graduation, you're charged RPI + 3%. After that it depends on your annual earnings...

- Earn under £27,295/year. Interest rate = RPI

- Earn over £49,130/year. Interest rate = RPI + 3%

- Earn from £27,296 to £49,130. It rises gradually from RPI to RPI + 3%. For example, earn midway, so £38,213, and your rate'll be RPI + 1.5%"

Phossy

Just to reinforce to the 'Student loan' comment, it is not a loan it is tax. Nothing is payable until they earn over a certain threshold (£25 K I think at the moment) and then anything earned over that threshold is taxed at 9% and it is taken through the tax system until the loan is paid off (or until the write-off date is reached).

captain_jep

Yes I think if you can pay the tuition fees then you should. Anyway I am planning to…

(I’m not going to derail the thread by going into the whys. But to me it’s a no brainer!)

barnstar2077

I don't have children, but if I did and had a spare thirty or forty grand to help them out, I would give a lot of consideration to giving them a house deposit over paying their university fees.

It would definitely give me some sleepless nights trying to decide which would be the best option!