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  • FIRST POST
    • c'est moi
    • By c'est moi 16th May 19, 6:06 AM
    • 44Posts
    • 18Thanks
    c'est moi
    Stopping at 48 - is it possible?
    • #1
    • 16th May 19, 6:06 AM
    Stopping at 48 - is it possible? 16th May 19 at 6:06 AM
    I know I need to get professional advice, but if anyone is willing to help me run a through things past them I would be greatful. I want to know if my plan is at all possible please!!!

    I am considering leaving work for multiple reasons. I am 48. I can draw on my work pension in 7 years time - I calculate that will bring in one thousand a month after tax = I assume that I will no longer pay NI. My wife (4 years younger than me) plans to continue to work and her salary is 1500 per month. We have no mortgage and can easily cover all regular bills, food etc on her salary. We have 120 000 in savings making next to no interest but I have had my fingers burnt on investments in the past so do not want to move any savings into any shares etc. I would also get a lump sum of about 35k in seven years time to replenish the savings a little.

    I think the savings should bridge the gap between now and pension paying out in 7 years time. We currently spend about 1000 of my wages per month and save the rest.

    I am confused about my state pension. I have read that I need to pay NI for 35 years to have full pension at 67. I have paid in 29 years so far. Can i/ should I continue to pay in the remaining 6 years of contributions? Again I think I have read that these cost about 700 per year.

    I know that seems a bit vague but I am at a crossroads and not sure what to do. I like the security of savings in the bank and know this will mean they will take a significant hit, though it is possible I could look for a pt job to avoid spending so much of them. I do know that I can't carry on in my current job for much longer.

    Thanks in advance if anyone has any wise words for me.
Page 2
    • FatherAbraham
    • By FatherAbraham 16th May 19, 7:15 PM
    • 982 Posts
    • 745 Thanks
    FatherAbraham
    Thanks for the suggestion to look up my NI contributions - have done that. It seems that my time studying for A Levels where I had no income has given me full NI contributions, but the years in university when I had summer jobs did not - seems a bit odd. This year's has not been added yet, but the gap between what I will receive with no further contributions and the full pension is not as much as I feared it would be.
    Originally posted by c'est moi
    It might seem odd, but it's correct.

    NI credits for youngsters who stayed on at school were introduced to encourage better qualifications. Loss of three years of contributions was particularly damaging when men needed 44 years of contributions to qualify for full state pension.

    However, no such incentive for university study was ever introduced.
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
    • Paul_Herring
    • By Paul_Herring 17th May 19, 8:20 AM
    • 6,799 Posts
    • 3,436 Thanks
    Paul_Herring
    NI credits for youngsters who stayed on at school were introduced to encourage better qualifications. Loss of three years of contributions was particularly damaging when men needed 44 years of contributions to qualify for full state pension.

    However, no such incentive for university study was ever introduced.
    Originally posted by FatherAbraham
    Record (from https://www.tax.service.gov.uk/check-your-state-pension/account/nirecord after logging in) for someone born May '72 (88/89 is the first entry):

    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • The_Economist
    • By The_Economist 17th May 19, 11:16 AM
    • 602 Posts
    • 325 Thanks
    The_Economist
    Loving this thread.
    Ive been number crunching for years looking for a way to retire early.
    Conclusion it ain't easy.
    Not gonna give up though.
    A couple of websites to look at that might help you on your journey.
    http://meanqueen-lifeaftermoney.blogspot.com
    https://cookingonabootstrap.com
    If i could i would, but i cannot so i wont, but maybe one day i will.
    • c'est moi
    • By c'est moi 17th May 19, 2:05 PM
    • 44 Posts
    • 18 Thanks
    c'est moi
    Interesting website thanks. I think I am slowly mastering the art of spending as little as possible. Switched supermarkets a few years ago and try to plan for meals a week ahead. Making better use of the freezer. Not buying lots of clothes I don't need - better for the environment too. Do all of the Quidco, energy switch type savers as well. Our biggest extravengence is holidays and its probably that more than anything else that makes me nervous about a big loss in income.

    I am into my third week off sick - first time ever in my working life. I think the great weather has helped me adjust. I am still going backwards and forwards in my head about where to go from here. I have had a bit of a halfhearted look at other jobs but nothing that appeals to me - I really don't know what sort of job I could do (other than not what I am doing now!)

    I have also started to think again about pension options - I could take more in annual pension and less in lump sum - had not considered that up until now. I could also wait a couple of years till I'm say 57 to draw on pension (and use up some of the savings instead)- would then only take a 12% reduction. This might be better in the long term as the pension is index linked whereas the interest on savings does not seem to be moving up any time soon. I think this might also mean that my wife would get a bigger portion of the pension if I die.

    I have also taken another look at where our savings currently are - I am going to move my 50000 ISA to a 2 year fixed rate ISA paying 1.8% which is better than where the money is currently.

    So - still no firm plans yet but having a bit of a spring clean of our finances can't be a bad thing.
    • downshifted
    • By downshifted 17th May 19, 2:18 PM
    • 946 Posts
    • 1,989 Thanks
    downshifted
    I think you’re being very sensible to take your time, explore all options and give yourself chance to feel better before making any big decisions.
    Downshifted

    September GC 251.21/250 October 248.82/250 January 159.53/200
    • atush
    • By atush 17th May 19, 2:26 PM
    • 17,626 Posts
    • 11,150 Thanks
    atush
    We have 120 000 in savings making next to no interest but I have had my fingers burnt on investments in the past so do not want to move any savings into any shares etc.
    This sounds like you investd in single shares or non standard investments. The only money i hae lost is in Single shares. Any and all trusts ad funds I have, have made me money as I invest for the long term. Some investment trusts have paid increasing dividends every year for Decades, incl during the financial crisis. So do look into collective funds for part of the money.

    Happy Me had some good ideas in their post. Quit your current job, take a break and look for something new.

    Do consider this over taking your DB pension reduced at 55.
    • justme111
    • By justme111 18th May 19, 8:25 AM
    • 3,279 Posts
    • 3,146 Thanks
    justme111
    I do regret that our life savings will be spent on bridging the gap rather than all the luxury holidays I would have liked, but I am now beginning to wonder if my health will hold out long enough to be able to enjoy them in 10 years time anyway!

    Once again, thanks for all the feedback so far.
    Originally posted by c'est moi
    A couple of considerations:
    -If you did not have all those luxury holidays during your working life you are unlikely to enjoy them when you retired - you will begrudge spending money that you never used to be able to spend and likely to be disappointed at what you get for that money. If you had already holidays that you describe as luxury then they are included in your expenses and you will be able to afford them anyway.
    - money that you have is not all going to be spent on covering that gap - it would be about half of it . I reckon for someone who spends no more than 1 k a month 50 k is plenty for luxury holidays.
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers to difficult choice between two undesirable options.
    I came across so many occasions when people use the word without understanding what it means I decided to use the definition above as a signature.
    • The_Economist
    • By The_Economist 18th May 19, 9:16 AM
    • 602 Posts
    • 325 Thanks
    The_Economist
    I think you are doing the right thing not rushing in to anything.
    I would say there is plenty of home work to do first.
    I'm going to keep looking at ways to reduce my out goings. I need to review savings & how best to get the best return on them. I'm like you risk cautious and don't really like tying monies up for a longtime.
    Moving forward I think its not about giving everything up but doing things a different way.
    If i could i would, but i cannot so i wont, but maybe one day i will.
    • Triumph13
    • By Triumph13 18th May 19, 10:34 AM
    • 1,460 Posts
    • 1,994 Thanks
    Triumph13
    How is your wife's pension provision looking? That's the one piece of the jigsaw missing at the moment.
    I agree with the other posters about not rushing into anything and looking at part time work, but you are in a good position financially and clearly not enjoying work so it does look like time for a change.
    Even if your wife has no personal or work pension you will eventually be able to cover more than your current spending from your DB plus 2 lots of SP. The challenge is to work out how to get there as DW's SP won't kick in for 24 years and I doubt she'll want to keep working all that time.
    You need to look at her pension savings to work out when she would be able to retire too and make sure that's an answer that's acceptable to both of you.
    • c'est moi
    • By c'est moi 18th May 19, 1:15 PM
    • 44 Posts
    • 18 Thanks
    c'est moi
    Thanks again for all of the responses.

    My wife's pension is more complicated than mine as its in more than one pot, but I think it would be around about 8K per year if she draws it at 60. Ideally she would not work until then though!

    Interesting thought regarding the holidays - yes you are right I like to get value for money so I would never be able to totally spludge on them. I guess what I mean by 'luxury' is 'bigger' - the 4 week week road trip to Canada w had always planned, rather than the 2 weeks SC in Spain we do now. We have 3 or 4 holidays a year but we also shop around. I guess we spend about 5K a year, but you are right when I have looked at what we would need to live on I have taken into account some holiday costs.
    • andy001
    • By andy001 19th May 19, 9:18 AM
    • 80 Posts
    • 33 Thanks
    andy001
    Hi

    The best solution is.. change jobs.. It does the trick for most..
    You can always retire in few years...

    Best wishes and look after yourself

    Andy
    I'm not a Financial advisor.
    Please seek independent financial advice.
    • Makethedayscount
    • By Makethedayscount 19th May 19, 9:41 AM
    • 69 Posts
    • 382 Thanks
    Makethedayscount
    Really enjoying this thread and it strikes a chord with me. Would really like to retire by 55. (Unlike you I need to pay off mortgage first )Great to see you have done lots of research and are well on the way to seeing it through. Beauty about being in your situation is that you have choice. Definitely worth looking at change in working though. Was full-time in stressful job that sucked the life out of me. Went part-time (two days) and took a second job in a field I had always wanted to do, but hadn't done because the pay wasn't great. Love doing it and it's given me the perspective to see what I actually loved in my first job. If your partner isn't contemplating giving up work, it is definitely worth considering how you would spend your time after retiring, as well as the financial side, so that you actually enjoy your well earned free time. Good luck! I shall follow with interest

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