Bold leap into retirement

mrs_slapshot

mrs_slapshot said:

I don’t think I’ve posted on this thread before but I’m a long time lurker! 

I’ve been checking my numbers for a couple of years and I know I will have enough to cover my day to day costs, but I’ll need to do a bit of work to cover any travel costs (I like going on cruises!). My job is well paid but very stressful, and we have holiday embargoes twice a year plus the requirement to work evenings and weekends during those times.  Quite frankly I’ve had enough and I’m ready to leave my job now. I’d like a few months off (I feel exhausted) and then look to pick up part time or contract work over the winter period. 

The problem I have is I just feel scared to take the leap. I’m worried about whether I’ll find work if I need to (I’m the ripe old age of 59!). This is such a different ‘me’ to the single parent of a young teen 15 years ago that took voluntary redundancy to change career, without a job to go to!! 

I’m not worried at all how I’ll spend my time as I have lots of hobbies and a side hustle, and I’ll have lots of social contact. Like others have said, I’ve known too many people recently that didn’t get the chance to use their retirement savings and I want to enjoy my money and my life before it’s too late. 

So for me the thread title is exactly right - a bold leap!! 

Well I don’t quite know how I got the courage but I ended up handing in my resignation yesterday. Leaving at the end of April. 

Plan is to have the summer off (off work, there are lots of things I’d like to get done in the house!) and then see how my budget looks to see when I need to work again. I’ll live on savings until September. 

My personal pension is moving to vanguard so I have full control of it. I can withdraw from two DB pensions early (albeit with big reductions) and my basic living costs and expenses will be covered by those and taking 4% from my personal pension. Extra money will be needed for travel and big expenses. 

I didn’t hate my job and I really like my boss and colleagues - I just hated my holiday embargoes and weekend/evening working. It didn’t work for me any more. I had real mixed feelings but I’m sure I’ve done the right thing. 

Too many people I know around my age are being diagnosed with serious illness - we just don’t know how long we have and I don’t want to regret not jumping sooner. 

With that in mind, any thoughts on what I should do in my last few months of work (apart from save as much as possible!)?

Smudgeismydog

Huge congrats @mrs_slapshot,

In my last few months, I heavily utilised my pension salary sacrifice, to be as tax efficient as possible, but in effect practise living on my retirement income. Are you confident you know your number? (how much you need to cover fixed and discretionary costs?)

You might also want to think about any large purchases you need e.g. home laptop if you have a company pc, or company car replacement.

Have you considered accessing a higher withdrawal rate from your DC pot to allow you to delay the DB and avoid the early retirement reductions? or they might even have different reductions, so just take one early? If you post your numbers, I’m sure there will be some helpful insights. 

Keep posting and letting us know how you are, I certainly found it a rollercoaster of emotions after I handed in my notice. Absolutely zero regrets after my bold leap though
x

AlanP_2

@mrs_slap

No particular advice for the last few months at work over and above filling your pot as efficiently as you can.


Once retired don't overlook the opportunity to contribute to your VG pension the higher of either £2880 Net / £3600 gross or what you earn in April.

In following year with no eared income you will be limited to 2880/3600 until age 75.


Also, make sure you withdraw taxable income from your SIPP to use your personal allowance up and reduce the draw from savings. Once you are taking DB and getting SP your withdrawals will be taxed.

Final point, check your SP forecast carefully and see if any additional NI years need to be purchased to get the maximum you can.

cloud_dog

@mrs_slapshot, just remember, we can always get more money but we can never get more time.

Not for now per se, but make sure you have a decent cash buffer when it approaches time for the DB to kick in just in case the processing of it gets delayed.

Taking the DB early but for longer is something where you need to run the numbers to see what might be optimal for you.  When I worked through the process I think taking the DB early worked out slightly better for me, but in the end I have decided not to and to take it/them at NRA. Primarily this is to help ensure we have as large an income as possible from guaranteed sources for when we are in our later stages and managing drawdown might (who knows) be more of a challenge for us.  But, there is no right or wrong, it is what works for you.

Pat38493

I am on the verge of telling my employer verbally that I plan to leave in the Summer (probably June / July) but I won't put it in writing yet due to pending bonus.

Based on all the research and hints I got here on these boards and in other places, I got myself to the position that I have taken several actions:
- I have recuced my work days per week to 3 from this month.
- Putting my DB pension into payment with PCLS to cover higher spending first 2 years and part time (kids still in Uni).
- House is on the market for downsize and we have just received an credible offer which we are considering.  Budget for new house is £230K less than existing.  Mortgage will be paid off and after expenses at least £120K of capital will be freed up (if I had known this would happen so quickly I might not have put the DB into payment, but I was being cautious and very keen to have a cushion for part time working).
- Ordered a caravan and bought a tow car.  Delivery March.  Option to live in caravan for a month or two if the old and new houses don't line up (also backup option my cousin has an empty house that we can probably rent for a while if needed).

Long term spending is conservatively based on current annual spend rate throughout, and I included about £4.5K per year average for non annual expenditure on my side, plus spouse contribution TBC.  Spouse has a full NHS DB pension already in payment (MHO status).

I have already mainly configured the existing investments to have a 2 year cash buffer, and then roughly 80/20 beyond that.

Stress testing - probability of success without the downsizing - 85%.  Probability of success with downsize 99.9%.  Probability with no downsize but gradual reduction in spend after age 70 - 95%.  

Biggest risks - high spending in first 2 years, and bridging to state pension age, means that for the most part, my plan works till age 100, or it fails at age 66, so as usual the first 10-12 years has to be managed carefully.

Unless we get the worst possible SORR, we will be gifting money to 3 kids at some stage in first 10-15  years to help them with house deposit or other important needs.

WYSPECIAL

bjorn_toby_wilde said:

The two most feared words in the workplace - development opportunity.

In my workplace they always meant something that nobody else wanted to do.

It also usually means doing something extra for no extra reward, and, you should feel grateful for the "opportunity".

kipsterno1

mrs_slapshot said:

mrs_slapshot said:

With that in mind, any thoughts on what I should do in my last few months of work (apart from save as much as possible!)?

Stock up on post-it notes and printer paper.

AlwaysLearnin

mrs_slapshot said:

[Snip]
With that in mind, any thoughts on what I should do in my last few months of work (apart from save as much as possible!)?

Might be worth considering whether there are any credit application(s) that you may need/want to arrange, before your income drops?

SarahB16

WYSPECIAL said:

bjorn_toby_wilde said:

The two most feared words in the workplace - development opportunity.

In my workplace they always meant something that nobody else wanted to do.

It also usually means doing something extra for no extra reward, and, you should feel grateful for the "opportunity".

I agree with both comments as it means exactly the same in my workplace.

If I ever hear the word 'opportunity' it is never something positive to look forward to doing and yes I agree something that nobody else wants to do, it's not an enjoyable task and for no extra money and yes you've still got to do all your usual work too.    

cloud_dog

Just heard some sad news at work.  A younger colleague I've worked with on/off for 20 years passed away at the weekend.

Puts it all in context really.