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  • FIRST POST
    • scotty_does
    • By scotty_does 13th Apr 18, 5:16 PM
    • 12Posts
    • 36Thanks
    scotty_does
    Can I retire at 55?
    • #1
    • 13th Apr 18, 5:16 PM
    Can I retire at 55? 13th Apr 18 at 5:16 PM
    Hi,

    I have 3 pension pots that total roughly £520,000. I will be 55 in a few months. Its only recently dawned on me that I MIGHT be in a position to retire much sooner than I had always thought. I.E. at age 55. However...
    £350,000 of the pot is in a Fidelity pension that I can keep an eye on daily. Iíve been alarmed that in the last 12 months it has hardly grown (less than 1% growth). I know that things go up and down, but its making me depressed!

    I have no mortgage or any other debts and live a fairly frugal life. Iím a couple of years short of full state pension, but I can easily top that up.

    So my plan is to drawdown £20,000 a year (inflation adjusted) and then reduce that accordingly when my state pension kicks in, and probably reduce it gradually sometime after that as I get Ďproperí old. In my spreadsheets I'm putting in an inflation figure of 2.5% and a growth rate of 2%.

    Can I ask if this seems like a do-able plan, or am I just dreaming and need to keep on working for a few years yet. After working continually since I was a teenager I am REALLY REALLY wanting to be done!

    Thanks a lot in advance.
Page 2
    • justme111
    • By justme111 13th Apr 18, 7:06 PM
    • 3,067 Posts
    • 2,976 Thanks
    justme111
    I do not see why not. Time is precious . The purpose of money is to enjoy those years you have and at the moment it is wasted as it does not fulfil that purpose. You have an excellent combination of low expense and high funds but you are deriving no benefit of it which is a shame. I would quit your present job in a heartbeat at this combination .
    • wary
    • By wary 13th Apr 18, 7:19 PM
    • 707 Posts
    • 315 Thanks
    wary
    I'd say that you have plenty to retire on, especially if you're planning on maintaining a frugal lifestyle. I have a slightly smaller pot than you (although do have a S32), and I'm hoping to retire soon on a higher projected annual expenditure.

    Are you likely to get an inheritance at some point? ... another factor to consider.
    • JoeCrystal
    • By JoeCrystal 13th Apr 18, 7:20 PM
    • 1,490 Posts
    • 941 Thanks
    JoeCrystal
    £20k per year sounds like a very small amount to live on.
    Originally posted by John-K
    £20k is actually pretty good income for a retired household, even more so if it is a single person. Bear in mind that median retired household income is £22,300 according to ONS. If I had £520,000 in pension pot and I only need £16,000 per year t spend along with £8,000 or so from state pension when reaching there, I would retire straight away. 55 is nice and early.
    Last edited by JoeCrystal; 13-04-2018 at 7:23 PM.
    • wary
    • By wary 13th Apr 18, 7:21 PM
    • 707 Posts
    • 315 Thanks
    wary
    I do not see why not. Time is precious . The purpose of money is to enjoy those years you have and at the moment it is wasted as it does not fulfil that purpose. You have an excellent combination of low expense and high funds but you are deriving no benefit of it which is a shame. I would quit your present job in a heartbeat at this combination .
    Originally posted by justme111
    Couldn't have put it better myself!
    • scotty_does
    • By scotty_does 13th Apr 18, 7:27 PM
    • 12 Posts
    • 36 Thanks
    scotty_does
    Thanks everyone for all the advice. I really appreciate it.
    • westv
    • By westv 13th Apr 18, 7:29 PM
    • 4,649 Posts
    • 2,242 Thanks
    westv
    I do not see why not. Time is precious . The purpose of money is to enjoy those years you have and at the moment it is wasted as it does not fulfil that purpose. You have an excellent combination of low expense and high funds but you are deriving no benefit of it which is a shame. I would quit your present job in a heartbeat at this combination .
    Originally posted by justme111
    Not just me that thinks that then.
    • GSP
    • By GSP 13th Apr 18, 7:34 PM
    • 205 Posts
    • 54 Thanks
    GSP
    Really Sorry to hear of your loss.
    My advice would be go for it, enjoy yourself.
    Some on here think they can take the money with them.
    • zolablue25
    • By zolablue25 13th Apr 18, 7:38 PM
    • 1,601 Posts
    • 469 Thanks
    zolablue25
    Really Sorry to hear of your loss.
    My advice would be go for it, enjoy yourself.
    Some on here think they can take the money with them.
    Originally posted by GSP
    In addition, I think there are many on here that live a much more extravagant lifestyle than others and assume everyone needs the same amount of money to live as they do.

    Personally, I reckon £20K as a single person with little overhead will be plenty, especially if you are not enjoying your life at the moment. Add in the SP when you get there and I can't honestly see why you can't do it.

    Why prolong the hell now on the off-chance you might live to 110!
    • tacpot12
    • By tacpot12 13th Apr 18, 7:39 PM
    • 1,691 Posts
    • 1,432 Thanks
    tacpot12
    Yes, quit asap. I did, at age 53. I now have a pension portfolio worth £345K and expect to be able to take £14K pa (adjusted for inflation) more or indefinitely. The portfolio was worth £360K about eight weeks ago, but I'm investing for the next 40 years so I'm not bothered about short term volatility.

    My plan is the same as yours; take out more before the state pension kicks in and then reduce the amount withdrawn. I'm a few years shy of the full state pension, but will be topping it up in the next year or so. My current outgoings are £14K pa, but I also have about £6k of income from two rental properties, so I don't need to take all £14K from the pension if the market is low. The portfolio is invested mainly in investment trusts and other income producing assets. The natural yield is about £12K pa and should rise every year (but not perhaps at the rate of inflation).

    Your pot of £520K should be able to produce a natural yeild of £19K without withdrawing any capital, and the capital can remain invested in assets that will grow in line with stock market growth. Yes, it is a bit of a risk, but I felt I could manage this risk down to a comfortable level.
    • scotty_does
    • By scotty_does 13th Apr 18, 7:43 PM
    • 12 Posts
    • 36 Thanks
    scotty_does
    Why prolong the hell now on the off-chance you might live to 110!
    Originally posted by zolablue25
    Cheers. Everyone I speak to is telling me to go for it. My daughters are all for it, although I should probably bear in mind that their enthusiasm might partly be due to the thought of a full-time baby sitter on tap!
    • runninglea
    • By runninglea 13th Apr 18, 7:44 PM
    • 882 Posts
    • 1,339 Thanks
    runninglea
    What do you plan on doing with all your time when you retire?

    Having all that time on your hands especially whilst you are so young could become expensive or dare I say it boring. Finding new things to do often costs money - petrol, entrance fees, holidays
    Year 2018 (13,600/£17000mortgage repayment)Overall mortgage (69,700/165568) (43
    .0%) (41/100) payments made. Total paid 2018 year £13,600

    Total paid 2017 year £15,300Total paid 2018 year £13,600
    • zolablue25
    • By zolablue25 13th Apr 18, 7:46 PM
    • 1,601 Posts
    • 469 Thanks
    zolablue25
    The other thing to bare in mind is that, whilst much is made of an increase in costs due to extra heating and filling your time etc, there are also savings to be made. No commute to work every day, more opportunity to do your own repairs and maintenance etc.

    Plus all the baby sitting cash!
    • scotty_does
    • By scotty_does 13th Apr 18, 7:48 PM
    • 12 Posts
    • 36 Thanks
    scotty_does
    What do you plan on doing with all your time when you retire?

    Having all that time on your hands especially whilst you are so young could become expensive or dare I say it boring. Finding new things to do often costs money - petrol, entrance fees, holidays
    Originally posted by runninglea
    Its a good question and something I've thought about. However, as I hate my job so much anything will be better than that. Maybe doing charity work or helping out on open-source software.
    • BLB53
    • By BLB53 13th Apr 18, 7:50 PM
    • 1,445 Posts
    • 1,273 Thanks
    BLB53
    Should not be a problem. £520K will provide over £20K assuming a 4% drawdown so I would say go for it.

    here's an article on sustainable drawdown from the DIY site which may help?
    http://diyinvestoruk.blogspot.co.uk/2016/08/a-look-at-sustainable-drawdown.html
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • doingitanyway
    • By doingitanyway 13th Apr 18, 7:52 PM
    • 3,728 Posts
    • 20,958 Thanks
    doingitanyway
    Good luck. I think you should go too but I also think (for what it is worth) that you should think of what you are going to as well as what you are going from.
    Emergency fund 127/1000
    NSD December 5/31 AFD 2/10, SFD 0/10
    IF NOT NOW THEN WHEN
    • PeacefulWaters
    • By PeacefulWaters 13th Apr 18, 7:57 PM
    • 8,318 Posts
    • 10,672 Thanks
    PeacefulWaters
    I gave up work at 49. Terminal lung cancer. Unlikely I'll make it to 51. Never smoked.

    In that short time I've travelled, holidayed, fallen in love and helped out the kids.

    Make the most of what you've got now. Keep an eye on tomorrow, but make today the best.
    Last edited by PeacefulWaters; 13-04-2018 at 8:24 PM.
    • scotty_does
    • By scotty_does 13th Apr 18, 8:04 PM
    • 12 Posts
    • 36 Thanks
    scotty_does
    I gave up work at 49. Terminal cancer. Unlikely I'll make it to 51.

    In that short time I've travelled, holidayed, fallen in love and helped out the kids.

    Make the most of what you've got now. Keep an eye on tomorrow, but make today the best.
    Originally posted by PeacefulWaters
    Thanks a lot for that. Puts things in perspective.
    • justme111
    • By justme111 13th Apr 18, 8:13 PM
    • 3,067 Posts
    • 2,976 Thanks
    justme111
    being able to help out with babysitting making life nicer for your children and have some impact on how your descendants are brought up is arguably one of the main missions as they are the only thing that stays in this world after we are gone
    • PeacefulWaters
    • By PeacefulWaters 13th Apr 18, 8:20 PM
    • 8,318 Posts
    • 10,672 Thanks
    PeacefulWaters
    Thanks a lot for that. Puts things in perspective.
    Originally posted by scotty_does
    I've got a similar pension pot to you. That'll go to the kids.

    A mix of benefit and a PHI policy gives me just over £1,000 a month to live on now. There's also money left from a redundancy pot that paid for travel until I was unable to get overseas again.

    If a cure comes along I assume the benefits and PHI stop. I'm happy to run the redundancy money down and then take the pension at 55. I'm a frugal type and reckon £16k-£20k a year is more than enough, even allowing for a new car at some point every decade. I'd certainly want to resume travelling again given the chance and reckon I could afford to.

    In other words, I think your numbers are reasonable and doable. As you get older you can consider not indexing your income some years as you become less active.

    But quitting what you dislike, enjoying life a little and making the most of good health seems like a stunningly good idea to me.
    • marlot
    • By marlot 13th Apr 18, 8:38 PM
    • 3,723 Posts
    • 2,853 Thanks
    marlot
    I went part-time at 53, and will fully retire before I'm 55. I've used the transition time volunteering on a local steam railway and in the foodbank.

    An unexpected bonus is that I've found the job easier to handle since I've been spending less time there! Though I've become much less tolerant of the management rubbish.
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