Advice on early retirement - who's done it? (1 Viewer)

[Parrot Face]

When i was considering retirement i had to have back surgery. Whilst I was recovering i got a letter from my employer offering me redundancy. The wife, a fanatical liverpool fc supporter, was at the gym so I sat down and worked out the figures. At 56 I had to consider the amount of lump sum i could invest, our annual spending and income and present interest rates. I diligently produced a detailed spread sheet about 3 pages long and was quite impressed with what i'd done . On her return from the Gym i sat my wife down and presented her with my all of my information, with a look of exasperation she looked at me and said " i've heard Torres has gone to Chelsea". Threw the spreadsheet in a bin , returned to work for another two years , got a better redundancy payoff but never involved my wife in the decision process.

 

[Carpmart]

When i was considering retirement i had to have back surgery. Whilst I was recovering i got a letter from my employer offering me redundancy. The wife, a fanatical liverpool fc supporter, was at the gym so I sat down and worked out the figures. At 56 I had to consider the amount of lump sum i could invest, our annual spending and income and present interest rates. I diligently produced a detailed spread sheet about 3 pages long and was quite impressed with what i'd done . On her return from the Gym i sat my wife down and presented her with my all of my information, with a look of exasperation she looked at me and said " i've heard Torres has gone to Chelsea". Threw the spreadsheet in a bin , returned to work for another two years , got a better redundancy payoff but never involved my wife in the decision process.

At least you learnt from your mistakes!

 

[cyberyacht]

Most importantly make out a list of everything you think you would like to do in retirement. include little things like bus trip or a train trip. Make the list as big as you can. The potential for boredom in retirement can be very high.

Are you serious? There's not enough hours in the day. I buy a Times on Saturday. Some weeks I don't even get to finish reading it.

 

[Tigger-Tim]

I created a spreadsheet, tracking our spending for ~3 years before retirement. This came straight from bank statements - so not some abstract 'budget' which falls apart when you forget to include things.

I then added new expenses - both one-off and recurring. Extra holidays, etc. And deducted commuting.

I also created a one-off budget for the big things - cars, house repairs, health. eg. new car and motorhome every six years.

I used this to forecast our financial position - when to take DB pensions, investments etc. And I included the risks. Some of which have materialised (eg. period of high inflation).

The one thing I could not have forecast was covid - but fortunately, that boosted our finances.

But as others have said. It's easy to focus on what you're escaping from (eg. bad job) and not enough on what the future looks like. I started volunteering on the local steam railway one day a week, joined some local history groups, etc.

Edited to add: We also downsized the house and moved to a new area. Wanted to do that whilst we were young enough to make a new start, Bought a new build with much lower running costs, low maintenance garden.

 

[DandJ]

I retired 9 years ago at 49. Never been a big spender and we had low outgoings. My wife retired 9 mths later than me at 48. We can survive on about 25% of our last earnings. We know this thru the months of covid lockdown. We actually receive c 75% of our working earnings but with no mortgage or other debt, we have no money worries. (We each earned just above 'average', weren't big spenders, don't tend to waste money on frivolous stuff, she loves gardening, I love cycling so we are not in each others pockets day in day out)
OP, as others have said, check the state pension forecast and add 'years' if necessary.
Provided you have a pretty normal life...gardening, a bit of DIY, travel, kids (and perhaps grandkids), hobbies etc...and you and your other half get on well; retirement will be great. You'll wonder how you managed to find the time to work.
There seems to be a mixed bag of people who retire early and love it, and others who miss work. If you think you may in be the latter camp, perhaps seek part time at work, or a move of job before taking the plunge into retirement?

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[DandJ]

I accept the difficulty for a lay person is finding an IFA who is prepared to give advice as many now have to impose a minimum value of savings and investments, this is not because they want to get their hands on your cash it’s simply as they have to charge fees , it has to be cost effective for both sides to take the work on, it has been proved in that an IFA can improve your wealth/income by at least 20%.

Hopefully I'm not diverting the course of the thread but.....this 20% what does that actually mean? Is it over the life of the 'investment' as it surely can't be an annual thing. So how long is it over? Genuinely interested as we have not used an IFA at all.

 

[Coolcats]

your 60s can be when health issues start.

the 60’s decade is also known as sniper alley if you can transit this decade without too much of an issue you should be reasonably ok for the next few

 

[Coolcats]

Tired, really just tired of life at the moment and looking at early retirement but only 54 (at end of June) and wife is 56.

For those of you that have done it, Im wondering if you went to an independent financial advisor as part of your research or how did you work out what you could afford?

You can be retired a long time, whatever you do seek purpose, do place focus on fitness and health. It may be you volunteer, have a part time job etc it’s your one and only beautiful life spend the time wisely.

 

[Andy Norfolk]

I retired at 56. My wife was not working. We moved from Berkshire to Norfolk. Converted the double garage into a holiday let. Really enjoyed running it and cleared about £1000 a month. We look a chunk out of the house in Berkshire and also purchased a flat in Cardiff for our daughter, a medical student, to live in, to save paying rent for 5 years. That's now sold. Never used an IFA.

Now 64, the house, holiday let and 2 acre garden are getting too much. We've never been attached to houses or locations. Always knew when it's time for change. So house is on market with the holiday let and we will move closer to the kids now they seem settled.

I don't have any regrets. Use 2 spreadsheets, one a budget, the other the actuals. I worked for banks for 20 years so maybe that's a bit excessive . Good luck with whatever you decide.

 

[Hedgewitch]

I am also an early retiree, have been for years. Not enough hours in the day for me and I do not know the meaning of the word bored, which is the point of this post.
It is not JUST about having enough money.

Friend #1: Retired at 61. Enough money, lots of home-centred hobbies which are not weather dependent. However, he did not anticipate/realise how much his identity and self-worth were tied up in his successful career. Now he is not in charge and doesn't have people to order around he finds himself completely lost, spends most of every day just scrolling around YouTube & FaceAche. Friends can see he is very depressed, has put on a dreadful amount of weight, is developing health issues, but we can't get through to him.

Friend #2: Retired early 60's, more than enough money. No hobbies other than sewing. So bored that she is scrabbling around trying to fill her days with volunteering. She has done the holidays & travel thing, and is becoming increasingly unhappy . . .

So if you are in a financial position to quit your career/job do think about what you are going to do with the rest of your life, which could be quite a few decades.

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[carolyn]

I am also an early retiree, have been for years. Not enough hours in the day for me and I do not know the meaning of the word bored, which is the point of this post.
It is not JUST about having enough money.

Friend #1: Retired at 61. Enough money, lots of home-centred hobbies which are not weather dependent. However, he did not anticipate/realise how much his identity and self-worth were tied up in his successful career. Now he is not in charge and doesn't have people to order around he finds himself completely lost, spends most of every day just scrolling around YouTube & FaceAche. Friends can see he is very depressed, has put on a dreadful amount of weight, is developing health issues, but we can't get through to him.

Friend #2: Retired early 60's, more than enough money. No hobbies other than sewing. So bored that she is scrabbling around trying to fill her days with volunteering. She has done the holidays & travel thing, and is becoming increasingly unhappy . . .

So if you are in a financial position to quit your career/job do think about what you are going to do with the rest of your life, which could be quite a few decades.

How can you “do the travel ,holiday thing” ? That’s so sad. I am not criticising what you’ve written I hasten to add. How can the world be “done” in a few short years.

Some places we can go to many times and find something new. Other places we go to and they’re not our cup of tea but others love them. Don’t knock it til you’ve tried it.

Nick plays golf when we’re at home (a lot!) . He has two groups. All old Westland chaps. The “younger” more recently retired group are from his football days and they were talking about a couple of their colleagues who’d retired but then gone back part time as they were bored. They hadn’t considered that their wives were both committed to regular childminding duties with grandchildren for another few years. How about that for a lack of communication.

 

[The joker]

Tired, really just tired of life at the moment and looking at early retirement but only 54 (at end of June) and wife is 56.

For those of you that have done it, Im wondering if you went to an independent financial advisor as part of your research or how did you work out what you could afford?

Do the sums....cut the cloth to suit, As sometimes you lose sight of what you need and sometimes focus on what you want....We down sized moved to a different area then bought a motorhome the quality of life is so much better and is helping with my recovery. As you never know whats round the corner......I know my situation is completely different just want everyone to think on. Enjoy yourself its later than you think! https://gutscharity.org.uk/advice-a...ky/personal-stories/2021-stories/marks-story/

 

[steve69]

Seems to me there are two types of people.
The live -to-work, or the work-to-live.
Those I knew who were the former died shortly after retiring. The latter ones did tend to live longer.

 

[Otter Spotter]

Hopefully I'm not diverting the course of the thread but.....this 20% what does that actually mean? Is it over the life of the 'investment' as it surely can't be an annual thing. So how long is it over? Genuinely interested as we have not used an IFA at all.

The 20% figure came from an life Office I think LV undertaking a study of investors and it relates to the amount of increase in portfolios/ wealth if IFA clients compared to DIY investors over time, though I cannot recall how long.
Generally an IFA worth his salt will provide value by ensuring you are invested in the best funds to suit your attitude to risk, the position you are are in your timeline, making sure that you are not wasting money in costs, or failing to use tax breaks, an actually being in a flexible arrangement that will work for instead of against you.
I am sure there are Funsters who will confirm that when they have tried to do something with their pensions be they ‘ Company’ or personal, they have been told either they cannot do what they want or worse still we cannot tell you go and get advice leaving you in a quandary.

The best sort of IFA practice to consider in my view is one where they have between 4 and 10 advisers, they are happy to provide full costings and are reasonably local to you. Any smaller and there could be a danger if breakup if one adviser falls out with the other, or worse there isn’t enough adviser oversight and if an adviser goes rogue it coukd be ages before he is found out.
A medium sized firm will be able to afford the proper management systems and experienced staff to get the work done and have sufficient supervision of advisers.
Larger firms tend to shoe horn clients into their own pet investment funds costing money on switching) they tend to have a more sales oriented ethos and a higher turnover of staff/advisers so you as a client become a ‘profit centre’ for the firm not a client for whom an adviser feels responsible for.

In respect of investing in general, there are many Funsters who have their own skills in investing, Chaser with his tractors, others in their business but many are not professional investors and would not know a building Society Bond from a Premium bond or Corporate Bond, all are called ‘bonds’ but they do different things, have different risks and returns. If you then consider the number of different investment funds that are available in just this country at least 5000 then without experience of researching using industry tech I defy anyone to get it right more than occasionally. I was an adviser for over 40 years and I still get it wrong, the skill is reducing the risks of getting it wrong by not ‘putting all your eggs in one basket’ and thus if you make a mistake you don’t wipe your funds out.
Hope that helps a little.

 

[Otter Spotter]

Seems to me there are two types of people.
The live -to-work, or the work-to-live.
Those I knew who were the former died shortly after retiring. The latter ones did tend to live longer.

Spot on

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[Hedgewitch]

How can you “do the travel ,holiday thing” ? That’s so sad. I am not criticising what you’ve written I hasten to add. How can the world be “done” in a few short years.

carolyn - I completely agree with you.

We are all different, and this friend has declared she's seen enough, done enough. To put some context into this, she recently flew first class to Australia for a month, came back and when I asked "was it worth it, were your flights as lovely as you hoped" the reply was "bleeuuurgh, it's still a bluddy long way".

My point was that I (sadly) know two people who are very comfortably off, both retired early, and neither are happy.

 

[Hawkstone]

I retired last July, age 59 after 20 years in education and 15 NHS, albeit all part time ish. Enjoyed August as it was school holidays, got very bored in September so returned to social care on a bank contract so can pick and choose my hours. I do approximately 2 shifts a week and no weekends. Last November aged 60 I had two pensions kick in, (civil service and NHS) not dissimilar to my previous school earnings when combined. Still paying some tax which is frustrating but that’s life. We have no mortgage and inherited a fair sum from my father in law of which most is invested. We gave some to the kids and kept a biggish amount for replacing cars etc.

My husband still works full time but over 4 days as he loves his job but is considering dropping to 3 days shortly. He has also had 2 private pensions kick in from previous employments. We have some expensive hobbies, skiing, cruising, motorcycles motocross so had to take this into consideration.

He has worked out that we could actually both retire fully and still partake in hobbies and use savings if we needed to but at the moment it all works well with part time work.
I thinks it’s a balance and everyone’s situation is different. But at the end of the day there are no pockets in a shroud so blooming enjoy yourselves while you can.

 

[Bailey58]

We retired at 56 on the proceeds of the sale of the business. Tired of the beuracracy and constantly changing demands of successive Health Ministers with grand ideas for the care "industry" as they referred to it. We had a very good accountant who ensured we paid nothing to the IR and an equally good IFA who we knew over many years and had set up a staff pension fund when that became obligatory. The funds were invested in Investment Bonds/Maxi ISA's.

We had one or two small investments that matured around the same time and the proceeds of my mother's cottage in Norfolk who passed away later the same year. We had bought that twenty years earlier and she occupied it as a dependent relative so we had no CGT to pay on the sale. I don't think that is an option now.

Our private pensions we took at aged 60 and the retirement pension was a bonus 5 years later.

Twenty one years later our original investments are around the same on paper and still paying income of 5% pa less of course the effects of inflation.

As a couple we have worked together for over fifty years and retirement has changed nothing so we continue to holiday and travel and do our own thing at home and we're never bored.

 

[Otter Spotter]

I retired last July, age 59 after 20 years in education and 15 NHS, albeit all part time ish. Enjoyed August as it was school holidays, got very bored in September so returned to social care on a bank contract so can pick and choose my hours. I do approximately 2 shifts a week and no weekends. Last November aged 60 I had two pensions kick in, (civil service and NHS) not dissimilar to my previous school earnings when combined. Still paying some tax which is frustrating but that’s life. We have no mortgage and inherited a fair sum from my father in law of which most is invested. We gave some to the kids and kept a biggish amount for replacing cars etc.

My husband still works full time but over 4 days as he loves his job but is considering dropping to 3 days shortly. He has also had 2 private pensions kick in from previous employments. We have some expensive hobbies, skiing, cruising, motorcycles motocross so had to take this into consideration.

He has worked out that we could actually both retire fully and still partake in hobbies and use savings if we needed to but at the moment it all works well with part time work.
I thinks it’s a balance and everyone’s situation is different. But at the end of the day there are no pockets in a shroud so blooming enjoy yourselves while you can.

If you are still paying tax and have surplus income you can still pay into personal pensions to save tax, an additional benefit of pensions is that currently if you do not draw benefits (Crystalise) then on death that fund can be past to anyone free of Inheritance tax and if passed to a charity then further reduces IHT from your whole estate.

 

[Holly's mum]

Do the sums....cut the cloth to suit, As sometimes you lose sight of what you need and sometimes focus on what you want....We down sized moved to a different area then bought a motorhome the quality of life is so much better and is helping with my recovery. As you never know whats round the corner......I know my situation is completely different just want everyone to think on. Enjoy yourself its later than you think! https://gutscharity.org.uk/advice-a...ky/personal-stories/2021-stories/marks-story/

That is a very powerful story. I hope that you are now well recovered and living a good life.

None of us know what the future holds for us, so enjoy today, as who knows what will happen tomorrow.

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[Hawkstone]

If you are still paying tax and have surplus income you can still pay into personal pensions to save tax, an additional benefit of pensions is that currently if you do not draw benefits (Crystalise) then on death that fund can be past to anyone free of Inheritance tax and if passed to a charity then further reduces IHT from your whole estate.

Thank you for that advice. I will definitely look into it. My tax varies so much from month to month depending on how many hours I work. My tax code has changed several times. It’s not a huge amount and there is a good chance I will retire fully at the end if this year as my father is unwell
and will probably require open heart surgery again.

 

[Fragle]

The 20% figure came from an life Office I think LV undertaking a study of investors and it relates to the amount of increase in portfolios/ wealth if IFA clients compared to DIY investors over time, though I cannot recall how long.
Generally an IFA worth his salt will provide value by ensuring you are invested in the best funds to suit your attitude to risk, the position you are are in your timeline, making sure that you are not wasting money in costs, or failing to use tax breaks, an actually being in a flexible arrangement that will work for instead of against you.
I am sure there are Funsters who will confirm that when they have tried to do something with their pensions be they ‘ Company’ or personal, they have been told either they cannot do what they want or worse still we cannot tell you go and get advice leaving you in a quandary.

The best sort of IFA practice to consider in my view is one where they have between 4 and 10 advisers, they are happy to provide full costings and are reasonably local to you. Any smaller and there could be a danger if breakup if one adviser falls out with the other, or worse there isn’t enough adviser oversight and if an adviser goes rogue it coukd be ages before he is found out.
A medium sized firm will be able to afford the proper management systems and experienced staff to get the work done and have sufficient supervision of advisers.
Larger firms tend to shoe horn clients into their own pet investment funds costing money on switching) they tend to have a more sales oriented ethos and a higher turnover of staff/advisers so you as a client become a ‘profit centre’ for the firm not a client for whom an adviser feels responsible for.

In respect of investing in general, there are many Funsters who have their own skills in investing, Chaser with his tractors, others in their business but many are not professional investors and would not know a building Society Bond from a Premium bond or Corporate Bond, all are called ‘bonds’ but they do different things, have different risks and returns. If you then consider the number of different investment funds that are available in just this country at least 5000 then without experience of researching using industry tech I defy anyone to get it right more than occasionally. I was an adviser for over 40 years and I still get it wrong, the skill is reducing the risks of getting it wrong by not ‘putting all your eggs in one basket’ and thus if you make a mistake you don’t wipe your funds out.
Hope that helps a little.

I'll be honest. I don't really trust financial advisers with my hard earned money.

Yes I like so many others was badly advised to take my money from a good company pension when I was made redundant in the early 90's. I was only there 6 years so not massive amounts but the benefits of being in the scheme Jaguar/ford outweighed the money in there.

I took them to task and they had to pay up a figure. I'm glad I did because over time invested that small amount is now over 100k. time being the big thing.

That decision has clouded my vision regarding financial advisers so I put in my own plans for saving etc but this is the question I now get asked most when we are off in our van touring Europe for months on end.
You can't be retired. How can you afford it?

The answer is simple really. planning, time and hard work.

I find it interesting that people get to there late 50's then think about retiring early. In my opinion it's probably too late to change much. you've got what you've got now.
I really started planning early retirement at 36 when my dad passed away at 59. He was all set to retire at 60. Put in the hard graft etc but never had a retirement.
From that point onwards I was always going to finish at 60. But that took 24 years of head down hard graft with a goal to pay mortgage off early to allow larger savings. Checking with future pensions department on years accrued to make sure I get a full state pension. I did 5 extra years just incase they moved the goal post a call again just to confirm before stepping off the roundabout.
All I can say is it worked for us not using a financial adviser before retiring.

Funny enough we now have a financial adviser. With a company mentioned earlier. I still don't risk everything but in the 2 years we have used them they have produced the goods, with good returns despite poor initial markets. I run my ideas past him on a yearly basis on what I'm planning/thinking and so far nothing I've proposed has drawn a sharp intake of breath.

We are both in the work to live camp and don't believe planning to have a large income at 100 years of age. You'll die working trying to achieve it.

 

[Hedgewitch]

Should have thought of this earlier: Back on the Road Again

Blog about a couple who retired early and are very transparent about their income and how they spend it.

https://backontheroadagainblog.com/2024/01/03/2023-spending-reviewed-the-only-way-is-up/

 

[bladerunner]

Stay married, stay healthy.

I retired at 57 ( 9 years ago) - for a number of reasons my pension could have been less had I stayed longer.
Was completely frustrated with hospital managers and feeling of NHS spending immense effort achieving very little.
No parents either side, so now no mortgage.
Haven't touched the lump sum which has to be a good sign.

A older surgeon told me "you can afford to retire and your don't know how much stress you are under until you do".
3 out of 10 surgeons don't make retirement.
Surgeons who retire at 65 live on average to 67 1/2, those who retire at 60 live on average to 76.

 

[bladerunner]

And then they asked me if I was missing work!

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[nicholsong]

I have come late to this thread and have not read all the responses, so apologies if my comments have been made before.

I think the decision to retire early should take into account what would happen if the investment income cannot keep up with one's expenditure.

If you have professional qualifications or skills, could you go back to work to make up the difference?

I had personal experience, in that I made my first retirement decision at 45, with £118,500 of capital, a boat but no house. Sailed down to Greece, thinking I could produce £5,000p.a. and live off that on the boat. That was 1987 when Stock Market crashed on Black Monday. I quickly realised 'Plan B' was needed. Flew back to UK, one phone call to an airline, interview next day, in 5 mins. I was offered a Captain's job. Not everyone can recoup so easily.

Over the next decade I worked on and off, Aviation and Law, slowly bought a house, continued later in small part-time driving and still enjoying semi-retirement on my boat.

The point of my example is whether, at point of making a decision on early retirement, one is burning one's boats about future earned income. If one is doing that one has to be doubly financially secure, i.e. not just on the edge of 'we can just live off the income'

There are lots of others , bookkeepers, plumbers, accountants, nurses, etc. who could take early retirement with the safety-net of going back to work.

Those who do not have that safety-net have to be more financially secure.

 

[Yorick]

We retired at 54 & 50

We decided a 3 star lifestyle then, was more important than a 5 star lifestyle after working to 65.

We sold the property in UK and bought our big villa for half the price and lived off the profits till pensions kick in.

And our villa has a huge apartment we rent out for a tidy monthly income.

Work? Nah

 

[VXman]

Reading this thread made me realise why the government/media are always going on about the UK having too many people not working!

More than a fifth of UK adults not looking for work

The UK's economic inactivity rate was 21.8% from November to January, official figures show.

www.bbc.co.uk

 

[Carpmart]

Reading this thread made me realise why the government/media are always going on about the UK having too many people not working!

More than a fifth of UK adults not looking for work

The UK's economic inactivity rate was 21.8% from November to January, official figures show.

www.bbc.co.uk

Was thinking exactly the same and that almost everyone who has posted would be classed in the ‘economic inactive’ group, none of which helps the countries tax take from PAYE!

 

[WillH]

I planned to retire at 57, my health made me retire at 51, happily my pension fund was able to give me a full pension. Engaged a PFA to sort out what investments I had and have never looked back. That was 20 years ago, he emails now and again to ask if I want to draw down more cash. As a couple of posts have stated after a lifetime of saving you must learn to spend. Our sons expect nothing, after 20 years we now have more than we started with. Only tip is to pay off the mortgage early, very early, something our boys are actively doing. Oh, and no childminding duties, we tour, a lot.

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