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.

Don’t forget that you will still be paying income tax on most of your pension, quite a lot of people find that’s a bit of a shock. Pension money isn’t free!

Having said that you should be fine, assuming that all Covid restrictions have been relegated to distant memories when you retire then remember that after about a month you stop being embarrassed when you go to places for asking for a senior discount! Also use things like a senior rail card (if you have Tesco vouchers you can exchange them for a railcard) and your bus pass. If you like going to museums/ gardens/ galleries check out Art Fund and National Trust membership, you can cover membership with surprisingly few visits. You will be able to book travel trips outside peak times which will save money too.

Have you considered moving to part time and sticking it out for another couple of years - might be more bearable if you know you don't have to do it every day? That would allow you to build up a little more so you could comfortably plan for a bit of "luxury"..

That’s a fabulous pension and more than enough.
Make sure you contribute £2880 into a SIPP every year as a non tax payer when you retire , that gives you £750 of free money every year in tax relief uplift. Ideally you want a low risk fund but it should earn 3 or 4 percent.
Start feeding that £100k into a pension NOW, even if it’s in a cash fund, you get the tax relief added, if your savings aren’t paying any interest then it’s losing value year on year. You want min 4% income, doable in a pretty ‘safe’ fund.

DH and I retired recently and our total occupational pension is £25k and we are doing fine. State pension won’t kick in for a few years.
For reference we live in a four bedroom detached property and our mortgage is paid off. It’s surprising how little you spend when you are retired even pre Covid-19.

So I think £25k for one person is loads.

It depends on your lifestyle choices, that would be a huge income for us
currently on about 14k and not doing so bad.
I suppose it depends on how much travel you'll want to do, how much you consume/ buy.

This is a great site to help you understand ‘how much you need to retire www.retirementlivingstandards.org.uk/

• do a budget
• is downsizing an optIon in future?
• have you taken state pension into account?
• might you receive any inheritances?
• allow yourself to spend some of the £100k, say £5-8kper year, otherwise you never will
• your outgoings may go down further after 75 when you may expect to slow down in terms of holidays/entertainment etc
• would you consider a no stress PT job until state pension comes in?

Sounds amazing. I wish I was in that position. Count your blessings OP.

Two years before we retired my DH and I started to make a note of everything we spent day to day, the idea was that we knew exactly what we were spending and what it was on. Bit of a chore at first, but ten years later we still do it. Initially it enabled us to look at our lifestyle, work out if there was anything that we wanted to do, but couldn't afford. I would recommend anyone to do this, as it was so useful. Now we have records going back ten years it's also interesting to look back and see how things have changed.

I’m slightly older on slightly less. It’s easily doable, I have my nights out and 2 holidays a year, and it covers the home maintenance - which I was expecting to pay from savings. I don’t run a car but probably could.

Remember, state pension will kick in eventually.

Eh?
If you are mortgage free, with £100k savings and a pension that you know will give you £25k per annum, you should be financially savvy enough to already know the answer.
It won't be frugal either, far from it.
We're retiring in two years (we'll be mid 50s). We've done our sums and budget and roughly what we would like to do including far flung travel for the first 15 years.
We could go on and amass more and more but it would be giving into a fear and panic of not having enough rather than a sensible, rational and realistic decision.

It would be for me🤷

We have gone from a combined income of £70k a year down to £35k a year. That will rise when I get state pension. Our savings are about half yours, we are mortgage free and run two new cars. We live comfortably on our income.

I think that I understand how you're feeling OP - it's the fear of not being able to earn if you need to - or certainly at a decent level.

We are in the process of winding up our business, and I have middle of the night thoughts about 'needing' money for something 'urgent', and not being able to go and earn it. Stupid - I know our pension pot it more than adequate - I suppose it's just changing the way you think about it.

Several things helped me -
i. Finding out that you don't have to pay NIC on pension earnings - that's quite a saving, ii. State pension is a decent amount iii. I spent a long time working out our cashflow - ie. income vs. expenditure, until I'm 85 (!) and also an annual budget - more in the years when we're younger and more active, but reducing as we get older.

From the outside, your figures look perfectly healthy, but I think it's an emotional situation as much as practical/financial.

That sounds enough to me.

Imagine you are on your deathbed. Would you wish that you had retired at 60 on a lesser amount and had time and hopefully good health to enjoy your retirement but perhaps have to watch the pennies or waited to later (67?) to have a really decent pension and be able to afford the odd round the world trip.

Op a lot of these Answers aren’t overly helpful.

Only you know what lifestyle you want and what your outgoings are. I will take a kicking for this but it wouldnt be enough for me snd therefore I would choose to work on for a few years - so I know exactly where you are coming from. It is all relative - and really depends on what lifestyle you are used to and what you want from life.

Why not try living on it for six months? See how you cope with cutting back at Christmas etc. Pull together a list of your key costs, and what you want to do on top of that.

Your savings are great - but if you use them to say but a new cat every few years, or Pay fir a wedding or deposit fir your daughter they could dwindle pretty fast.

New car - but cats can also be pricey😂

I will take a kicking for this but it wouldnt be enough for me snd therefore I would choose to work on for a few years

Why would you expect a kicking? You're very clear- it wouldn't be enough for you and you would prioritise a higher retirement income enough that you would remain in paid employment for longer to get one.

Blimey, that's an amazing pension. I'm probably 30 years off retirement but my pension estimate is currently only £13k pa (medium projection) and Ithought I was doing reasonably well

Just seen John Sessions has died at 67. Frightening that you get no chance to enjoy retirement if you work on.

Yes, 25k is enough and I'm going for 60. For sure.

@Ideasplease322

New car - but cats can also be pricey😂

Absolutely

OP, is that a defined benefit pension which pays an annual 'salary' rather than defined contribution which is invested and pays a lump? If so does it increase with inflation? A defined benefit pension on £25k is the equivalent of £500k pension pot, so really rather a good amount, and an increase to £35k+ by 66 would be an excellent pension.

If you add to this state pension at 67 you should have plenty, although of course you will pay tax (but no NI after state retirement age). That £100k would be a useful 'cushion' for long term needs, such as replacing a car, major household repairs or renovations, helping out children with weddings, etc. and be worth investing wisely in a tax efficient wrapper.

I retired last year mid 60s and although my occupational pension is just under half of my salary my net 'pay' is similar to my previous earnings. This is partially because I contributed to a large amount AVCs (pension top up) in my last few working years with the money that I previously would have been paying off my mortgage. This was a wise decision as it grew a considerable lump sum that is very welcome.

It's worth looking at your life expectancy before making decisions too. The average for a woman my age is 87 years. I'm doing my best to stay fit and healthy (and not just for financial reasons!)

www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07

I’m younger but just started working in the private sector and starting to really think about my retirement, threads like these make me weirdly anxious.

According to my insurance they expect me to live to 84 and be able to work to 76 (male so above average)

@pandora206 that link is so inaccurate! It just asks for your age and nothing about your health.