AIBU to think I'd like to retire at 55?

[Petals23]

I'm 45 now, been working in the same job as self employed since 19. I've been paying into pension since 25 and at the moment have about 120,000 pounds saved. Ideally I'd like to retire at 55. I'd appreciate anyone's view.

Is that £120,000 as well as a private pension?

Do you know what your pension pot is likely to be at that time? You could use a pension calculator to see what lump sum and monthly payment you could expect and then you can add the state pension when you reach retirement age. Bare in mind you may need to make it stretch 30+ years. Will you have any other source of income? What will your outgoings be at that time. Lots to consider really.

Is your 120k pension pot all you have saved? Ideally you should have a minimum investment of 120k on top to have any hope of retiring before 60.

Isn't there a rough rule of thumb that you need £200,000 pot for each £10,000 of index linked pension taken at 60? So £120,000 at 45 isn't likely to go very far. You can't access pension till 55 anyway.

Is it pension or savings you have? Go to the pensions thread on Money Savings Expert - there's some great advice to be got on there.

I’ve 3 million, should I retire, what does everyone think

Can you afford it? If you live for another 30 years your savings give you £4K p.a.

What would you do with your time in your retirement?

Oh sorry, I see you were thinking of accessing it at 55.

I'm 50, I want to retire at 55. But I'd have to survive until 67 before state pension kicks in, so I'll probably need at least to do part time work. £120,000 pension is not enough to retire at 55.

120k pension pot is nothing. If you retire at 55 you're going to have along and poor old age, sorry.

My parents both retired at 54 they both worked for the Gas Board( as it was than)and got made redundant with a very good deal ,they were also able to take their full pension from 55 and they do realise how lucky they were .

Speak to a financial adviser, but I think that would be a really skint retirement.

Everyone would like to retire early. I'm 61 and I'll have to work another 4 or years and we have a much bigger pot saved.

To clarify, I've 120,000 in savings and approx 150,000 in pension right now, so 10 years until I'm 55

Presumably you'll be able to save at the same rate so you can expect to have £180k by the time you get to 55. That gives you £14k a year till you can access the state pension, so if you can live off that, then the state pension happily, then yes go for it.

Is the £120k the only pension or is this savings and you have a pension pot? What other assets do you have? For example, if you own your own home and a second property outright you're in a very different position to if you're still paying off a mortgage on your main home? What financial commitments do you have - mortgage? dependents? What sort of lifestyle do you want to live when you're retired?

My mortgage will be paid off when I'm 49

Nowhere near enough OP

Why do you want to retire so early ? What can you do in retirement that you can’t do to a lesser extent now ? Are the members of your family particularly long lived ?
I’d aim for working part time tbh . It’s better for the mind and body to stay active .

What’s your projected pension at 55? Surely dependent on that.

If you plough the whole thing into your pension, assuming you get it up to £400k total and a 4% drawdown, that’s only 12k a year, unless you can up your contributions?

All depends on your spending habits and how much more you can scrape together!

Not unreasonable. Get saving hard. I'm retiring at 55. Can't wait.

You really need to get some professional advice.
The amounts you have described sound quite meagre. You’d probably be advised to sink the majority of your savings into your pension pot and , even then, you’re not going to get a generous pension. Quite meagre I think.

Going against the grain here OP. If you have £150k in a pension and £120k of savings and continue to save say £500 a month into a pension (combined you + employer + tax relief) for 10 years, that should give you a total saving/pension pot in excess of £500k which could get you £24k pa on drawdown plus state pension to kick in at 67.

If you are able to continue working part time beyond 55 or to save more once you have paid off the mortgage, that wouldn't hurt, but I don't think it is completely unrealistic assuming a modest lifestyle.

probably best to speak to a financial advisor about all the options and numbers rather than randoms on the web about it - it’s a pretty significant decision after all

@Schoolchoicesucks a total saving/pension pot in excess of £500k which could get you £24k pa on drawdown plus state pension to kick in at 67.

Oh that is encouraging. I am 57, seriously thinking about retirement since DH is 62 and is getting ready to quit. I have been wondering if I can afford I but my pension fund is approaching £500k so maybe I can! Obviously intend to get financial advice first. DH as his own provision in addition to my funds and is obviously closer to state pension age

I’d say yes, similar here, live cheaply.

But do you have children? I don’t but potential issues there maybe?