Take VR and retire early?

Triumph13

I agree it's a no brainer, but then I retired at 52 myself, so I would

The real question then becomes what's your number as a couple, ie how much do you want to be able to spend, and what does that then mean in terms of how much longer YOU work.  That means it's time for the trusty back-of-a-fag-packet to work out how much you'd have under different retirement dates

If DH's DB comes with 50% spousal benefit, then you already have enough in your DB that it should more than offset the reduction in that income if and when he passes first. My starting point would probably be the income he'll have when his state pension comes on line - roughly £43k pa post tax.  If you sell the BTL's, pay off the mortgage and the inheritance is the middle of your range, then that leaves you with £240k of cash, of which £160k would fill in for his (post tax) state pension until he gets to 68.  £80k seems a reasonable number to keep in your back pocket for emergencies.

If £43k (plus child benefit) is enough for your number, then you can retire tomorrow too   If you feel it's worth it for you to work longer so as to have more, then I'd suggest you pay enough into your pension to keep full child benefit, so you'd  bring home £45k a year. Dividing that over an assumed 18 years until you can access your pension, adds £2.5k pa to your potential spend.  So if you want to be able to spend £53k pa you need to work around another four years.  Eight years gets you to £63k.

Definitely food for thought.

BrilliantButScary

I don't agree that it is a 'no brainer'. Unfortunately, without a crystal ball, no one knows what the future holds.

I am surprised at the low amount of accessable savings you have atm (£4,000), given your combined income.

Childcare costs won't remain the same, and I presume were much higher prior to them starting school. Are you likely to have any more children? Have you thought about the costs of getting your youngest potentially through university, driving lessons, buying a car? You also mentioned an adult child, they can also be expensive, think house deposits, weddings etc.

How employable will your husband be, after 30+ years working for the same company, earning £70,000? If he is a 'house husband' for the next 3 years, then decides he wants/needs to return to work, he will be 55 years old and been unemployed for the previous 3 years. If at that point he needs to earn £32,000, he won't be stacking shelves in a supermarket, as it won't pay enough. Will he want to go back to work? Does he have a company car or any other employment benefits you need to take into account?

Are you planning to go for a promotion, when you have a 'house husband', as you have a lot more earning potential on paper than your husband. Do you want to be retired at an early age, or are you happy to work long after your husband is 'retired'.

Have you had a discussion about how things might change, if your husband becomes a 'house husband', as regards roles/responsibilities etc. Will you being the 'higher earner' be a problem? Is his self-esteem based on his job?

What is your and your husband's health like, have you both got life insurance? What if you predecease your husband? Health issues, ageing and the menopause are all things to consider, that may affect you. Stay well informed about any changes to pensions, as my State Pension age changed from 60 to 67 years, although this didn't necessitate me working any longer than I chose to.

We have a 10 year age gap, I continued to work 10 years after my husband retired. I wasn't ready to retire, as I went to university and changed careers, in my 40's.


Good luck, with making the decision that is right for you as a family.






 

devildolly

BrilliantButScary said:

I don't agree that it is a 'no brainer'. Unfortunately, without a crystal ball, no one knows what the future holds.

I am surprised at the low amount of accessable savings you have atm (£4,000), given your combined income.

On paper this looks terrible, but can be explained by myriad reasons I wont bore you but involve a huge house renovation, unexpectedly supporting family members in the last few years and mortgage doubling when last renewed (thanks Liz!) . This is a temporary situation and will quickly improve with no change to current situation. 

Childcare costs won't remain the same, and I presume were much higher prior to them starting school. Are you likely to have any more children? Have you thought about the costs of getting your youngest potentially through university, driving lessons, buying a car? You also mentioned an adult child, they can also be expensive, think house deposits, weddings etc.

No more kids, sale of the BTL earmarked for the kids, some inheritance will be passed to them directly in the short term too (or earmarked and invested in the case of the younger one). This part will be taken care of. 

How employable will your husband be, after 30+ years working for the same company, earning £70,000? If he is a 'house husband' for the next 3 years, then decides he wants/needs to return to work, he will be 55 years old and been unemployed for the previous 3 years. If at that point he needs to earn £32,000, he won't be stacking shelves in a supermarket, as it won't pay enough. Will he want to go back to work? Does he have a company car or any other employment benefits you need to take into account?

This only works for us if he doesn't HAVE to get another job. Additional income would be a bonus, and I honestly don't know how he would feel in a few years time about going back to work. We wont need his current income once the mortgage and childcare are sorted. 

Are you planning to go for a promotion, when you have a 'house husband', as you have a lot more earning potential on paper than your husband. Do you want to be retired at an early age, or are you happy to work long after your husband is 'retired'.

Have you had a discussion about how things might change, if your husband becomes a 'house husband', as regards roles/responsibilities etc. Will you being the 'higher earner' be a problem? Is his self-esteem based on his job?

I am the 'higher earner' now, I didn't add my bonus to the initial post, but these are handy (usually ~14% salary but not guaranteed). He is the 'default' parent already, does most of the house stuff already so not a huge change in term of our 'roles' which helps. I am happy doing what I am doing for now, its been a busy few years for us (home and work) so in consolidation phase at the moment, but considering part time in a couple of years so I can spend more time with him in his retirement. I am not ready to throw it all in yet but getting a more healthy work/life balance is the priority for me for the next 10-15 years

What is your and your husband's health like, have you both got life insurance? What if you predecease your husband? Health issues, ageing and the menopause are all things to consider, that may affect you. Stay well informed about any changes to pensions, as my State Pension age changed from 60 to 67 years, although this didn't necessitate me working any longer than I chose to.

Life insurance all covered (losing all your parents before 40 focuses the mind somewhat!), wills sorted, health OK for both of us at the moment but we know this can change at a flip of a coin. 

We have a 10 year age gap, I continued to work 10 years after my husband retired. I wasn't ready to retire, as I went to university and changed careers, in my 40's.


Good luck, with making the decision that is right for you as a family.








 

Thanks, good to hear from a similar age-gapper. How did your husband find it with you at work and him not (if you don't mind me asking)

HedgehogRulez

Seems like an easy decision tbh. Take the VR

BrilliantButScary

I think it is really important to plan and discuss, when you are in an age gap relationship, as having an age gap is not a surprise! In some ways our circumstances were similar to yours and in others entirely different. Both my parents had died by the time I was 37 and my husband's Mum died when he was 17.

In answer to your question, my husband got frustrated at times, as I worked alot of unsocial hours, and due to the nature of the work I did, it was not always possible to leave on time. I also worked more latterly in a small team and only one team member could be on annual leave at any one time. It was probably partly this last point that made me decide to retire. 

devildolly

Just an update if anyone is interested. He went for it and got VR! We put a chunk into the remaining DC he has to avoid paying tax over the £30K on the redundancy. The DB pension finalised numbers were better than I estimated above so feeling very fortunate. Next phase is to now work out when I can go

QrizB

Thank you for the update! Hope you can find your escape plan too