Retiring at 50?

gadget88

I am mid 30’s and want to retire at 50 but not sure what I need to know? 

Do you need to sign on? What age do you get a work pension? I guess being mortgage free would help by 50?

molerat

You will not be able to access work pension income until 58, maybe later, so will need to build up sufficient savings to live on in the interim alongside building up a work and / or personal pension pot.  What provision have you made so far ?

What do you mean by sign on ?

elsien

What is your income now? And what do you need your income in retirement to be?

gadget88

elsien said:

What is your income now? And what do you need your income in retirement to be?

I am part time at the moment I pay into a savings pot at work but I assume I won’t be able to access this for a while. My apologies I mean sign on as do you need sign on for job seekers if you retire at 50? 

elsien

You can’t sign on for jobseekers when you’re retired because jobseekers is for people actively seeking work. 

You cannot expect the benefits system to maintain you if you wish to take early retirement, you need to have enough money in savings, ISAs etc and your pension to be able to maintain yourself.

State pension age is 67. Not all company pension schemes allow for early retirement unless through illhealth – mine doesn’t. So retiring at 50 means you need to have enough assets behind you to bridge that 17 year gap until your pensions kick in. 

If you are only working part time unless you’re a very high earning part-time worker, your plan seems unlikely as things stand. You need to be throwing money at your pension and equities (cash savings won’t do it as their value is reduced over time by inflation) and probably working full-time in order to do so. 

molerat

do you need sign on for job seekers if you retire at 50

If you retire you are removing yourself from the workforce, job seekers is for those actively seeking work.  You may also need to make voluntary NI contributions if you have not already achieved the full state pension amount before leaving the workforce.

elsien

And if you’ve got a mortgage, you also need to think about what’s going to happen with that. Because not many people are mortgage free by 50 so you need to factor that into your calculations as well. 

kimwp

Fundamentally to retire at 50, you need to have saved enough to give you your required income for the remainder of your lifetime. There are numerous ways to do this:
- save into pension (various pension options, workplace pension often has the advantage of an employer contribution). Often helps to reduce the tax you pay (depending on the circumstances), but you won't be able to access the money til 57 at the earliest.
- save into a LISA - topped up by 25% up to a threshold, but the money cant be accessed unless you pay penalties until 60.
-save cash or invest in stocks and shares. You won't need to wait until a certain age to access this, but you'll have paid tax and NI.

The state pension currently provides £221 a week after 67, as long as you've got enough NI credits by either having paid enough NI or received credits by some other route.

Do you know how much you will spend in retirement?

swindiff

Sorry but you are living in cloud cuckoo land if you think you will be able to retire at 50 whilst working part time. Unless you are a very very high earner who is saving a considerable amount each month to bridge the 17-20 year gap between 50 and state pension age.

Bostonerimus1

gadget88 said:

I am mid 30’s and want to retire at 50 but not sure what I need to know? 

Do you need to sign on? What age do you get a work pension? I guess being mortgage free would help by 50?

You need to educate yourself about pensions and personal finances. I suggest you start by reading the useful pages about those topics on this website. But if I had to give some advice it would be to

Never spend more than you make.
Never borrow money (apart from a mortgage). That includes car loans or failing to pay any credit card bills in full every month.
Contribute to your works pension and fund an ISA, you should be investing at least 10% of your gross wages into those...15% or 20% would be better.
Pay down your mortgage.
Make sure your NI record will give you a full state pension at retirement age.

friolento

elsien said:

And if you’ve got a mortgage, you also need to think about what’s going to happen with that. Because not many people are mortgage free by 50 so you need to factor that into your calculations as well. 

Being mortgage free also doesn’t mean there are no more housing costs. There can always be repair/refurbishment/improvement costs