Can I retire now? (age 40)

ent_moot

I'm planning to retire in the next few months, and wanted to sanity-check that it sounds reasonable, given my situation: 

Equity: 
- house worth ~500k 
- ISA & cash, and shares  ~500k
- private pension ~600k (not accessible for 17 years)
- state pension (not accessible for 28 years)

(not guaranteed)
- mum owes me 50k
- inheritance of ~60k 
- wife might work part-time for ~min wage for a few years

Debt:
- nothing, but we are planning to buy a house worth ~700k - so would spend £200k from ISA & cash to close the game between the value of our current house.

Lifestyle: 
- We live a relatively frugal lifestyle. We have 1 child.  We plan to live on a little below the average UK household income , at about 32k (obviously will adjust for inflation in the future).  I'm assuming this should be comfortable since we have no mortgage to pay.

I have modelled it all in a very sophisticated spreadsheet, but would appreciate someone sanity checking that I've not 

Thanks in advance,

itsthelittlethings

No. I only had to look at your figures.

itsthelittlethings

Actually maybe yes. If you’re frugal and don’t buy a more expensive house.

itsthelittlethings

Not on 32k tho.

barnstar2077

What are your thoughts on not being eligible for a full state pension?

Isthisforreal99

You cannot bank on getting access to your private pension and state pension in 17/28 years respectively. Chances are they will both increase.

Children are expensive, uni costs etc. Is the plan to have no more children?

Without seeing what your model is based on it's impossible to say but on the face of it seems very optimistic.

El_Torro

I’m guessing that you haven’t qualified for the full state pension yet. Have you factored in buying additional years in your budgeting? 

I haven’t crunched the numbers but on the face of it I would say your finances are pretty tight. You have £300k after the house purchase to see you to when your can access your pension. 

Retiring at 40 is a very ambitious goal. If I were to consider it (not that I would, I m already well over 40 years old) I would want to be very sure that my finances don’t unravel a few decades later. Assuming you’re healthy now you might be retired for 50 years, or more. 

HedgehogRulez

ask again in 10 years

QrizB

Another "no" from me.

You might get away with it if investment yields for the next few decades are well above the long-term average, but that's hoping for luck rather than having a plan.

Brie

So you're going to be the stay at home parent while your wife continues to work?  

Leaving her salary out of the equation and assuming you buy a new place for £700k all in that leaves you with £300k to live on until you can access your pension.  At a constant of £32k a year that £300k won't last 10 years, assuming it doesn't change in value.  Add 110k assuming your mom pays back what she owes and you get the inheritance you are still about 4 years short.  

And if you're not working will you be able to buy NI credits to ensure you get full SP? Or will you be claiming child benefit or whatever to get those credits paid for you?  Will your wife get the full SP?

And once you hit retirement ages what will you be living on then??  You have £600k currently to get you from 57 to whatever the SP age will be.  

As an additional issue - will your child be needing support for uni or buying a home?  Or turn out to be a brilliant athlete or musician and need money to ensure they make the most of their talents?  What if you have another child??  

Sorry to be negative but I can't see how it will add up.

ent_moot

>What are your thoughts on not being eligible for a full state pension?

That's a good point - I assumed I would do the "top-up" thing, so that I can get the full state pension. IIRC, if I register as self-employed and do very minimal (cut a few neighbours hedges perhaps :P) , then I pay the top-up at class 2, which is practically a negligible cost? Not looked into this in much detail though.

We plan to have no more children.

>Without seeing what your model is based on it's impossible to say but on the face of it seems very optimistic.

Aside from the originally stated assumptions, I also assume that my pension and S&S ISA grow at 5% per year, which seems reasonably conservative.

I also assume that I may need to remortgage the house to release ~£100-200k at about age 53 , to essentially get early access to some of my private pension. I would then pay this back when I get my private pension lump sum.