Advice on early retirement planning

[Rockbus]

Me and my wife are early fifties and have reached the conclusion we want to try and aim for an early retirement (who doesn’t?!?). Ideally we are thinking in about 3 years time, by which time the kids should all be self sufficient.

We both have pensions, some savings, mortgage free and are comfortable with downsizing the house to release equity.
I expect inevitably we may need to pay for some financial advice, especially as we both have a couple of pensions. But I’m wary of the private financial advisers market which i fear is full of sharks (probably doesn’t help that I used to work in banking!)

Im sure that there must be loads of tools out there that would help us to at least increase our understanding of what we need to consider .
Can anyone recommend any books, videos, retirement forecasting tools etc that would help?

Any personal experiences would be interesting as well.
Thanks

[Dave Barter]

Does anyone on here know someone who retired recently?

[JohnClimber]

Does anyone on here know someone who retired recently?

You looking at me?

Do it. it's bloody amazing.

We have a local financial advisor who works for an investment company called St James Place, this company takes a commission on the interest as their charge to us.
He put all of my pensions into one large pot and this is paying me out a below paying income tax "salary"
The wife has a long service civil service pension even though she retired early..
So we just top up our pensions from savings to the value of what we were getting as our monthly wages and this is mainly coming from the interest on our savings and a couple of bank accounts.
I couldn't go back to work again, plus I don't need to

[whitestone]

Does anyone on here know someone who retired recently?

I'm sure someone's mentioned it a time or two but I can't remember who (must be the onset of senility )

There's a few YouTube channels I've watched - just search for "UK pension advice" - but opinions are like arseholes: in a room of five people there'll be six of them! James Shack is one I've watched a bit.

The sister of a friend whom Cath and I ride with is a financial adviser so I went with her. I did go to the government backed PensionWise for some general guidance first. They did a pretty full financial audit plus assessment of my attitude to risk which can have an effect on what your returns will be.

Generally my attitude to finance is "why make it so f***ing complicated?" so was surprised to discover that the pension pot(s) you contribute to aren't the same as the one you draw your pension from. I had intended to take my pension as annuities but it seems that currently drawdown is slightly better in that it will make your pot last longer. Also the 25% lump sum allowance that you can take tax free doesn't have to be taken all in one go so taking 5% a year is very roughly equivalent to what the drawdown would be but with no tax plus your pot is attracting interest at the same time so that 5% might only be an effective 2% a year down the line depending on how the investments work out. But you also need to work out what your overall tax liability will be over the course of your retirement - not easy when the rules change almost yearly.

If you have ISAs or similar you can take from those and transfer them to your pension and get 20% tax relief from the government, i.e £10K out of your ISA becomes £12K into your pension

[RIP]

Pensions, beware: if you have no 'pensionable earnings' you can only continue to chip in a maximum of £3600 a year to get the tax relief on that. And no, savings interest does not count as pensionable earnings, only PAYE or self-employed income. As someone with quite a complex work history I've been through all this with a fine toothcomb (*). I retired at 49. After that I enjoyed the longest job I ever had, which paid the bills until 59. Since then, I've simply enjoyed just working.... My retirement pub bore qualifications are impeccable - I had an 'advisor' once but stopped after realising I was advising him more than he was advising me and I wasn't charging . So long and thanks for all the fish. Tinternet is your friend.

The largest elephant in the room is your future care costs. If you don't care about those, planning is pretty straightforward. Instead of being cared for, or impinging on the family, I might consider walking outside into the snow... I may be some time....

(*) does anybody comb their teeth? If so, why?

[Dave Barter]

I sacked off our financial advisor after a bit of reading and finding out that he was employed by the ministry of the bleeding obvious. If you can put the work into a bit of research it’s not too hard. It’s seems like the maths you need to do is to work out your pensionable income post 55.

Does that income work for you?

Then those savings .. put 4 months of them aside and then decide your attitude to risk. ISAs are magical things if the markets go well which they tend to over longer periods. Could you invest some of it and also some of the money you’d get from downsizing? Because between the two of you there’s £40k of Isa allowance each year.

My financial advisor simply stuck our cash in a tracker fund and took 1.5% per annum for doing next to nothing. Over 30 years that 1.5% means a LOT.

We downsized and invested the proceeds using our ISA allowance every year. We are less risk averse than others because I’m an idiot but luckily it’s worked way better than any pension would. I could retire but that’s boring to
me as I’m not that into packrafting.

That was a lot of waffle to simply say you don’t always need a financial advisor

[fatbikephil]

Next year for me, will keep watching this thread
Re future care, I'm seeing first hand what happens if you have a large savings pot which will be your pension, but then end up in permanent care. It's really not pretty.

[ton]

both me and the wife retired at 55. now 59 and 60.
we both finished early to look after grandkids so it was a ideal situation.
wife worked for leeds council for 40 years. she got a cracking pension plus a early leaving bonus.
i had a crap pension from years ago that was frozen. got a annuity. paid me a nice 25% lump when i finished, and a payment once a year until i am 61.
we spend very little to be honest. ride our bikes more, relax more, life is pretty cool.

my one bit of advice when retiring.......... ignore all the pension bolloxs telling you that you need x amount. you dont. as you age you need less. and very few people change to a champagne lifestyle when they retire.
people are creatures of habit, and mostly just keep doing the same as always.

[Oxoman]

I was looking at semi retirement at 57 sadly saving interest rates have gone up so my CETV figure has dropped just over 100k in 2yrs. Also my pensions are DB defined benefit aka final salary and most pension advisors / companies won't touch them because it's potentially the next biggest missold or misguided advice thing to hit the . DC pensions aka money purchase most companies will deal with them. I want to transfer my DB one into an annuity as I would get higher rates due to suffering from hypertension, but struggling to find anyone to do so. Aviva do some but charge 4k up front and still might not do it. My issue is I want to leave as much as I can to my wife and grown up kids and in a DB scheme the wife would only get 25% of it should die. . Hopefully the industry will get shaken up. Spotted st james place in previous posts above, be aware they got thrashed for various offences. They also screwed my wife's work pension up to the extent it cost her employer and SJP to reimburse a few sheckles plus interest.

[boxelder]

i.e £10K out of your ISA becomes £12K into your pension

But you'll obviously potentially pay marginal rate (20%) income tax on it as pension income

(*) does anybody comb their teeth? If so, why?

Not if they use the correct spelling of fine-tooth comb.

[RIP]

i.e £10K out of your ISA becomes £12K into your pension

But you'll obviously potentially pay marginal rate (20%) income tax on it as pension income

Tis true. Potentially. Although you could partake of a 25% lump tax free. And just another reminder that you can only do that ISA > pension wheeze if you have enough pensionable income to cover it or they'll have the relief back off you later. And I believe it's £12.5k into the pension if you're lucky enough to have the £10k ISA . What a rivetting conversation we're having

(*) does anybody comb their teeth? If so, why?

Not if they use the correct spelling of fine-tooth comb.

Good point . Sadly I have no requirement for, and therefore do not possess, a comb, fine or coarse .

[RobLyon]

As mentioned above but pension craft and james shack on youtube are both qualified financial advisors with some great videos.

I think in truth that i will try to find seasonal/part time work and only semi retire but earlier. I think the social aspects and routine are probably beneficial to keeping healthy and having the option to choose work makes it less grim.

[whitestone]

In general, work out what your ongoing costs are: council tax; home and car insurance; utilities; etc. There tend to be a lot of "little things" that add up - subscription to this, that, t'other. The "you need a pot of X to have Y" calculators seem to assume that you'll be carrying on the same lifestyle which is rarely the case - do you need two cars now? and so on. Cover your costs plus a bit.

I start to draw my state pension in a month or so but I'll carry on working part time for a few years - with state and private pension I've no pressing need to but the "getting out" aspect is beneficial.

[frogatthefarriers]

……I'll carry on working part time for a few years - with state and private pension I've no pressing need to but the "getting out" aspect is beneficial.

This is what I did and am still doing eleven years later. One thing I did notice was that knowing I didn’t have to be there (in work) made a huge difference, not to mention the extra cash that means I don’t have to fix the car myself, or paint the house.

[godivatrailrider]

my one bit of advice when retiring.......... ignore all the pension bolloxs telling you that you need x amount. You don't. as you age you need less, and very few people change to a champagne lifestyle when they retire.
People are creatures of habit and mostly just keep doing the same as always.

This is my belief too.
I too am nearing that age when retirement is both desirable and feasible, so this is a timely thread. I'm 58, she's 60. Both still working.
House paid off, car & motorhome owned outright, zero debts, zero credit, and with what to me feels like quite a bit of savings, assets etc.
We're frugal. This doesn't change, it's how we are.
We've just done 9 nights away in the moho in Dumfries & Galloway ... under £300 all in, that's diesel, food, beer, entrance fees, pitches. We had one meal out as we're both veggie and frankly veggie pub grub is usually poor to non-existent, we can do better ourselves for a fraction of the cost, so we do.
We are financially fairly organised, we have pots for everything including eating out (which we seldom dip into but it's there should we want to), tickets for bands, etc ... we plan for annual expenses.
And we end up saving as we just don't eat out or go on long haul holidays and neither of us like beach holidays.
I don't see this changing when the income stops, we're more likely to be MORE frugal not less.
If we can get through to 67 we should be fine as the state pension should be about £24k between us.
I have a small LPGS pension, that'd be a 'reasonable' LGPS pension IF I worked till I'm 67 as I'd have about 15 years worth, which'd likely be about £15k pa... onto top of SP. If I stopped when I'm 60 I'd maybe get £8k pa.
Personally, I'd quit today and be damned. I think we'd be fine. She's more cautious and wants us to work another couple of years.
I look at my mum & stepdad. They're both well into their 80's, and do NOTHING. No holidays, neither drive anymore, decent pension rolls in every month ( his pension is more than our combined income ! ) they definitely spend less now ...
The problem is we don't know how long we've got, time is the most valuable asset we have, spend it wisely.

[MuddyPete]

"Have a purpose" in retirement is something I've heard and read often. What's the view on this?

[RIP]

I always thought they were saying "have a porpoise". Which probably explains why my 'retirement' hasn't panned out quite as I expected.

[Bearbonesnorm]

Despite some people thinking I retired at 34, I didn't, I've just never really gone to work in the normal sense. That's good because without a 'job', then I've no need to retire

Through the experience of people i know who retired early or otherwise, my sole piece of advice is, 'beware daytime TV'.

[godivatrailrider]

Despite some people thinking I retired at 34, I didn't, I've just never really gone to work in the normal sense. That's good because without a 'job', then I've no need to retire

Through the experience of people i know who retired early or otherwise, my sole piece of advice is, 'beware daytime TV'.

Agreed ... mum & stepdad just sit in front of the damn thing , looking around you if you're sat in front of the screen and not listening to what you're talking about. Rude !
They could afford to do pretty much anything, just turns out they don't want to do anything.

[Loki]

For medical reasons I am partially retired, I now only work three days a week, not enough to tax but enough for NI contributions, we are taking advantage of the married couples allowance to help a little.

[whitestone]

my sole piece of advice is, 'beware daytime TV'.

Haha! When I had my hip replaced and was discharged I managed less than a morning of daytime TV before my brain began to turn to mush Cue lots of walks perhaps somewhat longer (a lot longer) than the doctor might have ordered.

I worked for a few years for an American TV broadcaster- they had a saying: there are two kinds of people- those who walk into a room and turn the TV on and those who walk in and turn it off.

I’m one of the latter

[voodoo_simon]

Perfect timing

I’m just sorting through my pensions, I have four in total, so just in the process of putting them into one basket before it gets 20-25 years down the line and I totally forget about them

Managed to track down two this week and put them into my main one, just waiting on the third one to reply and then I’m done

[fatbikephil]

I don't own a telly so no probs for me. Will likely become a frequenter of charity shop book shelves though.

"Have a purpose" in retirement is something I've heard and read often. What's the view on this?

For sure. Dreaming up and executing eccentrically themed bivvies would seem an appropriate purpose

[ton]

4 years in for us, and not got into the daytime telly routine yet.
to be honest, not enough time. no idea where we found the time to work...........

[JohnClimber]

no idea where we found the time to work...........

10 months in and Yep, there is no way I could find 9 hours a day 5 days a week to do "work" any more