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.

I really don’t understand people saying they’d be bored retiring early. There’s just so much to do out there apart from working!

I completely agree with this. However, lots of things that interest me involve money - eg travelling, visiting new places, etc by the sounds of it, OP will be on a VERY tight budget and with that, I think I would be bored, yes. There are only so many free things you can do and without money your options are limited. Going to the gym, eating out, - all involve money

@AutumnRose1 It depends how that £500K is invested. It works out as £16K pa over 30 years. You forget that £500K now will be worth next to nothing in 30 years- think how inflation has changed things over the last 30 years. Whatever the pot dwindles to may be worth 10% of what it can buy now.

Our pensions are index linked. The OP doesn't say if hers is, or how she will access it, either as a monthly income or an annual draw down.

We worked out that as a couple we need between £25K-£30K pa to live in older age as we do now and that is not being extravagant. It does include things like medical cover, dental treatment and some holidays but only a small amount annually.

Our pensions will cover that and yes, people live on less but we've been used to a 6 figure income and we don't want to scrimp in retirement at least while we have our health.

There's some evidence that early retirees live longer and there are so many ways to fill your time, and also to maintain or increase fitness. I'm so much fitter now I'm not chained to a desk all day. There are things you can do which don't cost a huge amount, U3A for example.

Jingling "You forget that £500K now will be worth next to nothing in 30 years"

No, I haven't forgotten. But I've never been used to anything like a 6 figure income. Some people are seeing budgets as tight for personal use when I've got the same to cover mortgage.

Why do so many think retirement equals boredom unless you are minted?
Have people lost the ability to do anything that doesn't cost money?

I don't get why people think retirement is boring. Work is boring. I've been bored at work since I was 17. I can't wait to give it up

@JinglingHellsBells do you really need 25 - 30k? Genuine question. DP and I live off far less than that now and it doesn't feel like we are short of money.

do you really need 25 - 30k? Genuine question. DP and I live off far less than that now and it doesn't feel like we are short of money.

I've found, being semi-retired, that I spend a lot more than when I was working 5 days. Going away, meeting friends for lunch, just days out and about rather than being stuck in the office all add up. I never had to buy smart clothes or had commuting costs, so there's no off-setting saving.

Have people lost the ability to do anything that doesn't cost money?

I mean...yes. There are only so many times I can walk in the park, or go jogging or read. I dont want to do those things all day, every day.

Going to cinema
Eating out with friends
Gym
Netflix
shopping
Going out for the day in London (or wherever)
Travelling anywhere in car (petrol then parking)
Train travel
holidays
Going to the spa
meeting up with friends for coffee
Museums (they might be free entry but travel to get to them isn't)

All the above costs money. There are very few leisure pursuits which dont involve cost in some shape or form (even if the pursuit itself is free you still have to factor in travel to get there in the first place)

@Morgenrot That was a figure we drew up to enable us to live comfortably, and more or less as we do now. Where we live, the cost of living is high- council tax is over £2K a year, for example, water rates are quite high, all these fixed costs add up, plus basics like home insurance, car insurance, running two cars, etc. Even things like the hairdressers are more than in other parts of the UK (ie a cut and finish is £70 for me.)

We don't eat out, we rarely travel abroad, I don't spend a lot of clothes or personal grooming (never had a manicure in my life- things other woman take for granted!)

@AutumnRose1 I guess a lot depends on location. If you earn £25K for example you couldn't even rent where I live, not easily. The cheapest housing to buy is more or less £200K for a 1 bed flat. DH and I are both professionals, graduates, with 40+ years work under our belts.

Jingling I live in outer London. I just rented crappy rooms in my youth, but I'm 43 and now there's no way I could have afforded to rent or buy.

my salary has gone down though - I did make more but had several health issues so dropped back.

all my retirement things are based on the mortgage being paid off though.

Fair enough @jinglingHellsBells I suppose that's the whole point, and probably the answer to to op's post. It's all about working out what you need, not someone else's idea of what you might need

We're planning on retiring at 55 or so.
Mortgage paid off, savings, two rental properties (and a small holiday cottage that we want to keep to ourselves but could rent but don't want to) with income that will rise with inflation, plus pensions not fantastic but it all adds up.
But atm moment still need to work part-time to fund fab holidays/lifestyle until we have enough savings.

Morgen " It's all about working out what you need, not someone else's idea of what you might need"

I don't have the stuff or use the services that a lot of retirement plans seem to think are important.

@AutumnRose1 You might also forget that the figure I quoted is for a couple not one person, so twice as many clothes, haircuts, food, dental appts, cars, gym subs, etc.

I know other retired people our age , one single, another a couple, and they spend around £16K pa and £20K-ish respectively.

One of them lives in a very cheap area of the UK, the others (couple) do not have holidays other than days out.

As I said before, our basic outgoing for utilities, council tax, and basic insurances come to quite a lot. I don't think that living off £25K as a couple in the SE is actually a lot of money.

It sounds great in theory, who wouldn't want to retire early. Just think though, by the time you get to 85 (having not worked for 30 years) and then needing a £1k per week for a care home or live in carers, possibly for a further 10 years, are you willing to save for that or do you expect the state to look after you?

Jingling no idea about couple finances.

sorry, I wasn't having a go, I'm in a muddle now, I thought you were one of the people saying to the OP that it wasn't realistic?

Bah I think most of us would just expect our home to be sold to pay for care.

There are plenty of people who don't want to retire early. Look at all the actors around- Judi Dench for example. If you enjoy work, it keeps you young. Most people wanting to retire early hate their jobs. That's their fault.

Part time work is the way to go, for intellectual stimulation if nothing else.

Jingling oh here it is - you said this "Our pensions will cover that and yes, people live on less but we've been used to a 6 figure income and we don't want to scrimp in retirement at least while we have our health."

I was just thinking, what you and I are used to and would need in retirement are vastly different that's all.

@AutumnRose1 I am saying it's unrealistic on that amount of savings pot/ pension pot. The people I quoted may be drawing down on those sums but they have in excess of £1M in the bank either in cash / investments or pensions, plus property worth something, and they are in their 60s now.

I'm not sure what the OP earns- sounds a lot- because if she thinks she can save £380K in the next 10 years, (to make her pension pot £500K) that means she is going to put £38K a year into her pension.

How much do you have to earn in order to live a decent life at 45 and be able to save £38K a year? (after tax?)

What work do you do @Petals23?

@AutumnRose1 A lot of our income over the years has supported children through university , and paid a mortgage, and it's only in the latter years of our careers that we have had 6 figures.

Many people enjoy their jobs but want to do other things whilst they are still young enough. Travel for example, we are loving the freedom to do that. As for it being people's own faults if they hate their job, it isn't always so black and white. Sometimes there are limited opportunities due to where someone lives, or flexibility is needed to care for others that is hard to find in some jobs, there can be myriad reasons.

I enjoyed my job, but I enjoy retirement even more, and I don't need to work for intellectual stimulation, there's plenty of other ways to keep your brain active (see travel above for example). I'm happy and much healthier retired. It's bloody wonderful.

@jingling the OP hasn't said what they earn. They have said they have a £150k pension pot, £120k of savings and will be mortgage free in 4 years. They don't need to be able to save £38k a year to get a £500k pot.

You also seem to be saying that a £500k pot or £16k pa isn't enough for a single person to retire on whilst mentioning joint pension pots of £1m and joint requirements of £25-£30k pa.

There are so many variables here, the main one being what kind of lifestyle the OP is used to and is aiming for.

Insisting that everyone needs a £1m pension fund when that's just not feasible for probably 90% of us is a bit blinkered.