Is this enough to retire on?

[zippitydooda]

Name changed.

Hating my job. Stressful but grateful I'm working. I can retire early age 60 in 2026 on an annual pension of 25k. I'm mortgage free and have 100k savings.

Doesn't feel like a lot for a lifetime working but I so need to stop as I'm just so worn out.

Do you think this is enough to retire on given that I may never earn again? Would it be enough for you?

No partner and my DD is grown up and working so ok.

I absolutely understand your concerns. You've been amazing, worked all these years and raised a child yourself. It is hard to look at this being the sum total of all this slog. Its because in part we've fallen for the lie that if you work hard you will be financially rewarded. I'd love to retire at 60 but it wont happen as I've still got a mortgage. If you truly cant face more years for the extra money then don't do it. Your pension is enough to live on without a mortgage and you've got savings just in case stuff goes wrong

A PP mentioned buy-to-let. No, don't even think about it, OP. My work brings me into contact with a lot of 'amateur' landlords and most are getting out of it. The government has changed legislation which made it an attractive proposition and tenants' rights are being strengthened. The days of being able to claim the interest on a btl against tax are long gone. The person who said you can always sell it when you need your money has no idea. It's been virtually impossible to evict tenants — even tenants who aren't paying rent or are damaging the property — since March. Far better to invest the money in something like Vanguard funds, with very low costs and a good track record.

This Which? Pension calculator might be helpful for the OP.

www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

If you're a bit short of paid-up NI to achieve a full state pension, OP, you can buy up to 10 years' worth at a low rate. That would almost certainly be a good investment.

Do not chuck your money in to letting a flat, it can have amazing returns but If anything goes wrong you could lose the income from it for months. I am neither pro nor anti landlord but honestly if you really needed to sell for instance could you evict someone? How would you feel about that. I considered it a few years ago but it’s a minefield.

On 25k and mortgage free you will still be able to save without living a life on gruel. Plus cruises if you did want to ever do one would be very doable on that income. We have done a couple. Norway which is a crazily expensive place to visit on a weeks cruise was 1.5k each.

My costs for my last job were about £50 a week due to mainly commute but also clothes and works outings. I used to take my own lunch but DH was sometimes spending £25 a week on lunch. Work out how much you will save.

Women tend to live in to their nineties in my family. DH family seem to die in their seventies. There will always be outliers but it is honestly worth considering retiring early if you can after what you have written about expected longevity.

Volunteering is amazing, that’s where true satisfaction comes from if you have a passsion. I worked as an academic librarian for many years but my best achievement has been setting up a food bank before they were well known and there were not so many about. It also bought me decade long friendships though we have all now stepped down from being trustees. Work out your skill set to offer for volunteering. The committee we set up had a perfect skill set for everything we needed, we were exceptionally lucky.

More than £2000 is more than a lot of families have. You've paid off your mortgage. What would you need more than that for? Presumably you'll get the state pension on top of that in a few years. Then you will have more than even more families, no mortgage and 100k in the bank. Richer than so many and not sure it's enough.

I don't understand how it can't be enough. That's plenty to pay your basic expenses and have quite a lot left over that could be saved for bigger costs.

That's in addition to the £100k, which would fund quite a lot of property repair/improvement plus a few expensive holidays or hobbies if that's what you might want.

Would there be an option to downsize or move area and release more money that way?

The only way it wouldn't be enough would be if you wanted a much more extravagent lifestyle than you currently lead.

I earn less than that working full time. You have no mortgage and said yourself you live frugally. Grab it with both hands. I’m jealous...just 27 more years to go!

I'm in a one bedroom flat so no option to downsize. I'll probably have to move to something more suitable longer term and might need the 100k for that.

No keen on buying a property for rent. Too risky for me.

Apparently the comfortable retirement income for a single person is 33k! That would allow for one European holiday a year, one longer haul and car upgrade every few years.

For those saying about what families live off, I get that. Been there and done that. But after being that struggling person my whole life I would like a retirement that is more than just getting by until the grave. Old age isn't fun as it is.

An annual pension of £25k is really good!! Most of the population will be retiring with nothing like that kind of income.

Apparently the comfortable retirement income for a single person is 33k! That would allow for one European holiday a year, one longer haul and car upgrade every few years

But based on what assumptions? New largish car every few years? Staying in the family home with associated utility and council tax bills? Going out for cocktails every week? Shopping in John Lewis?

My DM is a single pensioner in a 3 bed house she owns outright with an income of around £12k and some savings, but probably a lot less than you OP.

She's not short of money, has pets, does a lot of her food shopping in M&S, always buying things for the house, puts the heating on whenever she wants, eats out a couple of times a week.

Admittedly she doesn't run a car or have foreign holidays but she'd be able to do those things on considerably less than £33k.

Apparently the comfortable retirement income for a single person is 33k! That would allow for one European holiday a year, one longer haul and car upgrade every few years

Not my opinion, sorry. From the pension website 'unbiased'. Surprised me!

It's all very individual but it sounds to me as if you are in a very good position, certainly much stronger than the vast majority of people. I am much further from retirement so it is all a bit less concrete but have used the numbers in this research www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p in thinking about what might be needed.
In any case it sounds as if you probably will have around the £33K you mentioned once your state pension kicks in, so you will already be at the top end of what you are looking at. If your pension is index linked it sounds as if you will be very secure.

How about a compromise?

Can you take a sabbatical from your job? (This obviously depends on what you do/who your employer is!).

If you can't, then leave and take a good 6 months off to rest, recharge your batteries and think about what you could do for the next 6 years that might earn you a bit more money. So some kind of part time role, or your own business, if you have any particular skills you could utilise.

That will give you some breathing space away from your current stresses.

I disagree that millennials won’t be able to retire on the same amount. Private pensions are all based on how much you and your employers put into the pot and the stock market. If you start contributing ASAP then depending on your career etc then I’m sure you too will have a pot if £650k. Anyone in teaching (full time), local government etc will have that.

In today’s money if I was mortgage free I could retire on 20k per year which isn’t much more than two pension age people taking full state pension

As long as you don’t plan on lots of luxury holidays I can’t see why you wouldn’t be able to survive happily in £25k mortgage free

£25k income, mortgage free and £100k savings? That would be a very comfortable life.

If you spent £10k of the £100k each year - that would last until you're 70. By which time your SP would have kicked in, and at 70 people do tend to be less able.

In addition to your income you could really enjoy your retirement with that pot.

I lost my lovely MIL aged 59 very suddenly so I'm firmly in the life is for living camp.

Definitely. Your annual pension is higher than my annual salary. I'm planning on retiring at 67 (15 years) and I consider myself to have an excellent pension provision

£25k income, mortgage free and £100k savings? That would be a very comfortable life.

Plus the state pension too. That could mean over £34k and the savings pot.

One thing I'd also recommend is to have a good think about what work you might need to have done on your house now, while you're still earning. Once you're retired, it's much harder to want to free up funds!

God help a majority of the population if £100k savings and £25k per year is not enough to retire with.

Exactly.

I don't know where the pension website unbiased gets its figures from. £33k is more than the average salary and younger people pay mortgage or rent, commuting costs and bring up children.

A quick google on pensioners income shows the website unbiased as the first result with pensioner income as £15k, which is contradictory. My pension is not high but with no mortgage, rent or fares that is fine. I have savings. I can have a cheap holiday, lunch with friends, help the children and grandchildren and buy things for the house or clothes when I need.

You are going to be better off than most single people. Retirement is great. Your health issues will probably improve when you are no longer stressed and exhausted. You can still do something part time.

My DH has worries like you have OP. I think it is knowing that once you retire that is the end of your income and it is just the money you have built up over a lifetime to live on for the rest of your life. You could live well into your 90's and would still need enough money for your needs. I suppose if you retired at 60 you could, if you wanted, get another part time job to give you some level of income so it doesn't seem so final. I know that is what my DH plans to do.

Your 'reward for working all your life' is your salary. You know - that money your employer put in your bank every month?

This thread has pissed me off. OP - your pension provision is excellent.

Haha... it's another world!!
I retired I the midst of this pandemic. My last job was23 years in a school support role. I was knackered.....
I am mortgage free and manage fine on my so and a small LGPS pension of £4,000 pa.
My interests don't involve spending much money,i if I can in the woods or by water, buy cheap books and eat delicious but cheap food then Icount myself lucky.
I have healthy children and grandchildren, a few extra years with the old boy who is8 years older and that's all good.
I guess it depends on your expectations?

Sounds reasonable since you have no mortgage, you could always look for a less stressful P/T job in future if you found it wasn't enough to meet your needs. My DF went and did a couple of supermarket shifts a week after he retired as he got bored, and really enjoyed it.