Would I be mad to retire now?

[Cheeseandtomatotoastie]

Long time poster but have name changed to get as neutral a view as possible.

I am mid fifties, divorced, new partner and living together, no mortgage in a house I love and work full time in a job that doesn't particularly get my juices flowing. Child finishing masters but has a graduate job lined up.

I don't know if it's the current situation or my employment but I am struggling to drag myself into work everyday and considering a life change, not immediately but when things ease up.

If I retired at the moment I would be able to draw down an income the same as my salary from my SIPP (4% draw down of total fund) I also have a small final salary pension that I can access in less than five years. My SIPP is going great guns despite the economy and I expect my retirement income to be a deal larger than my salary. I realise I am very, very fortunate in circumstances.

My job is okay but my boss is a micromanager, very frugal with salaries for employees and late 70s with little hope of retiring any time to let us just get on with running the company. There is very little in the way of benefits, no sick pay, minimum pension contributions etc. He can be very kind in some ways but I find his drive to make more and more money a bit off putting, especially as he is a multi-millionaire and his children are not interested in taking over the company.

I am tempted to make the leap and would like to spend the remainder of my life pursuing the hobbies and interests that I struggle to have time for. I would also like to invest more time in friendships and take up some voluntary work. I feel that I have spent my life in the service of others ie marriage, childcare, family and would like to make the most of the 'go-go' years.

Ideally I would like to do a couple of days a week in a coffee shop or restaurant. I have a passion for cooking and catering. The rest of the week on my hobbies and interests. My partner is also heading for retirement but probably will wind down gradually as he has a career with lots of benefits. We would be able to travel together but he wouldn't be around all the time during the week.

Should I make the leap? Am I too 'young'?

Yanbu - go for it.
Yabu - you're mad, you'll get bored,

@BumblebeeBum, I had an IFA look over my pensions very recently regarding transfer of the final salary pension into my SIPP so I have gone through all the considerations you have mentioned. The assessment was based on me retiring at 60 on a higher income than my current salary.

If I was to retire now I would be able to draw the same income as my employment from my current role from my SIPP only. The final salary pension and later state pension is more than enough to cover my share of bills, food etc. So I suppose my risk is drawing 4% from my SIPP earlier than 60 if it doesn't perform at 5% and above. I am not sure anyone can guarantee either way, hence my reticence to just do it. I am starting to think a 2-3 year buffer of cash could be the solution?

@saraclara, with you on most of your points! Couple of days work a week will still be a tie but not quite the same responsibility as my current role. What got me thinking is a friend of mine who is younger has just retired early with her husband and, bam, he's just been diagnosed with a serious, progressively debilitating illness. I get that some people love their jobs and get a sense of achievement from what they do. I don't. I turn up for the money but at the same time put myself under a lot of pressure to do the best I can. Seems a bit skewed to me.

Can you ease out of your current job? Decrease to 3 days a week, or 2 days?
Decrease the fear and Increase the fun?

@notalwaysalondoner

I'd do it! But with the caveat that I'd put a clear routine and plan in place for your time, which it sounds like you will.

My parents retired at 55-ish (DM, early retirement due to a health claim) and 65-ish. I think one of the big regrets I have for them is they didn't have a clear enough structure to their retirement years so wasted much of their remaining healthy years doing chores around the house, admin on the computer etc. And because they had endless time on their hands, these tasks took them all day rather than being efficient and boxing them into a few hours a week. Their only real hobby was bridge once a week. By contrast, my in-laws had loads of hobbies having retired around 60-65 - charity work out of the house, golf, cycling, sailing club committee etc. - that gave a real structure to their time and meant they felt they had 'permission' in their downtime to actually relax and do the things they enjoyed like hobbies, reading, etc. I felt they made use of these years so much more pleasurably despite being more 'productive' and busier.

But if they were happy doing that, then what's the problem?!

@JinglingHellsBells

I think most of the replies here are from people who never actually enjoyed work

Not true

I loved my job, and I especially loved the people I worked with. I just realised one day that I'd come to the point of having enough of doing it.

@JinglingHellsBells

I think most of the replies here are from people who never actually enjoyed work :)

If someone loves their work, or can find other work they enjoy, that for them is as good as retirement. Many professional people can't bear the idea of being retired - look at Judi Dench and a lot of other actors, still going strong in their 80s and the work keeps their brains active.

Retiring is not necessarily a good goal, IMO, what IS a good goal is finding something to do you love and if you can find that and it pays you an income too, that's all to the good.

I could just as easily say that people who are anti retiring are peop,e who define themselves by their work or have no interests outside of it.

Go for it

I’m not sure that the posters urging the OP to ‘go for it!’ are necessarily people who dislike work, but I do think that there’s a degree of naivety.

The OP clearly signposts that one of her misgivings is future financial security. Nevertheless, the same replies keep coming: “if you can afford it, go for it!” “Retirement is never a bad thing!” “I retired at 43 and never regretted it!”

Good job she had the sense to take financial advice!

[quote BIWI]@JinglingHellsBells

I think most of the replies here are from people who never actually enjoyed work

Not true

I loved my job, and I especially loved the people I worked with. I just realised one day that I'd come to the point of having enough of doing it.[/quote]
Basically what BIWI said, I love my work, but due to having not enjoyed great health over the last five years and retirement funds all present,correct and healthy I am looking to ease out of work over the next two years.

I would wait until Easter to make a decision, there's nothing to do at the moment! And then consider finding some work so you don't have to draw down much.

Do it.
I have never met anyone of any age who regretted retiring.
I did it. I was working in a well paid but demanding job which I loathed, we had good pension provision both work and private, no mortgage and decent savings. My DC were teenagers.
I retired at 50 and did a variety of voluntary roles. I got a part time job in a gift shop at a tourist centre. Not very well paid but undemanding and pleasant. My health went downhill at 60 so I am glad I did this.

Someone said you can't put more in once you start drawdown. You can in my SIPP because I've done it.

I loved my job. But I worked with physically unpredictable people with severe learning difficulties. I got injured quite often. And with age I wasn't bouncing back from them as quickly or fully.

As I was planning to spend my retirement travelling/backpacking, I was aware that the next injury could rule that out. I decided to retire about five seconds after being hurt yet again.

And yep, having my husband die aged 59, had made me realise that putting off one's plans until later isn't always a good idea.

It's been shown time and time again that working is good for your mental and physical health and people who retire younger tend to have worse health. (unless you are doing a very tough manual job.)

There are also studies indicating the opposite. I retired early. The freedom is wonderful and much as I enjoyed my job, I haven't regretted it for a second. We are travelling, have improved our foreign language skills, planning to move house and I have time to do all the hobbies I want. It's fantastic. Both DH and I consider ourselves really lucky.

My dad died just as he retired, so I was determined to have the wherewithal to have the choice.

Have a break from your current job, you can always go back to work or volunteer if you get bored. There's always something to do. 😁

Ps plans are for me to retire at a similar age as dp is older than me, but I admit I'm relying on his pension and the final salary pension I will get monthly from exh

If you are truly not happy in your current role and as you have explored the financial circumstances of your choices then yes I would go for it. You are very fortunate to have this choice and I would do it in a heartbeat in your shoes. I am a financial adviser and it sounds like you’ve taken advice and explored all the options. Do also keep in mind if you find alternative part time work in the future you can reduce your withdrawals on your SIPP, that’s one of the great benefits of the flexibility of a SIPP, you can switch on or off the income tap. You’ve then got your guaranteed income from your final salary pot and state pension in the years to come.

What a great dilemma to have, OP.

Can you use your skills to do something else, in a related industry? Just whilst you build that 2/3 year cash buffer?

Can you be candid with the current boss and name your tasks and Part -time hours with a view to stepping back again in a couple of years?
I’m only saying this because

My god, why wouldn’t you!

@JavaQ, that's an option although I am having a bit of 'job fatigue' at the moment and not sure it would decrease the stress of dealing with client problems. My fantasy is to leave the hassle behind when I go home!

@CloningIsTheOnlyAnswer, not sure if moving jobs would be the solution or even possible in the current climate but thank you for the suggestion.

@123sunshine, yes ideally I would like to keep my hand in some form of work to draw less on the SIPP. Could potentially reduce % of the draw down as another poster suggested.

@saraclara and @wibblewombat, so sorry for your losses. That is something at the back of my mind as the older I get, the more illnesses and deaths I hear about from friends. I don't live to work and want to make the best of my 'go-go'. I just don't relate to my boss still working FT in his 70s despite all the advantages he has with his wealth but he doesn't have many hobbies or interests outside and hates travelling. Each to their own!

@movingonup20, I won't be doing anything without a viable plan in place. It's like an open prison at the moment in terms of making plans or doing nice stuff. We're planning a big holiday in 2022 as nothing is certain this year so far.

@JinglingHellsBells

"I think most of the replies here are from people who never actually enjoyed work"

I can see how you'd think that, but it was the opposite for me. Because I enjoyed my working life so much, it made me wonder what other lives I was missing that might be equally or more interesting.

OP, I agree with other posters that I spend so much less money now that I'm not working, both because there is much less that I need to spend on and because there's much less that I want to spend on. As much as I enjoyed my job, I used to buy myself so many "treats," I think to make up for being relatively time poor. Now that I have more time, I want so much less stuff.

Another reason to retire now if you can is that there are all sorts of interesting things that become less possible as you get older. I've learned a trade, taken up some hobbies, and have returned to a sport from my youth, all of which might be too physically demanding in my sixties. There are also types of travel which we can do now which I really wouldn't want to do in twenty years.

I also tell myself, if something extremely unexpected were to happen and I needed more cash, I have always been happy to work, so I could do that again. And one more thing is that I grew up without a lot of money then only started working full-time at 30, so I am very comfortable cutting my spending right down without feeling deprived.

You sound interested enough in all sorts of things that you wouldn't get bored.

@Cheeseandtomatotoastie So impressed with the situation you have got yourself into. I think you have done all the right things. Also once you retire, nothing is set in stone, you have flexibility so if you decide that actually, you can easily live on 3% rather than 4% then you can do that or you think you might need to find some paid work then nothing stops you from going out and finding some part-time work. Whatever you decide to do, well done and good luck!

@SofieGraabol2021, yes I totally agree about not being able to do some things as you get older which is why the 'go-go' years are crucial to a happy retirement. Working full time does curtail the ability to do a lot of things when and how you want. I don't want to look back with regret although rock climbing not on my to do list at any stage!

@whysotriggered, thank you. I would like to say it was all planned but a lot of it was due to luck.

I took redundancy from a high paid and high status job when I was about your age OP and then worked self employed for a while in an interesting but lower paid field.

Work has now dried up because of Covid and although I now have enough money to live comfortably, and I don't miss the stress of the original job which was killing me, I miss the buzz of work, the status of being employed rather than effectively retired and the social contact and team spirit.

Obviously, Covid has made this worse because it's almost impossible to cultivate new interests and travel.

Working out what makes you tick and what your sense of purpose will be will help you make the decision. Don't underestimate the non-financial benefits that work brings.

In your position I'd suggest dropping to part time for a while and maybe start some catering work alongside it, see how you feel.

And don't get sucked in by financial advisors. They have their place but ultimately they're salespeople who have their eyes on the commission from your investments. Once you've made your investments, you may want to remove the advisor from the investments and save on the commission - you can always pay an advice fee again if you need more help.

I would love to take early retirement. If you can afford it, you should do it. However, having spent my student years working in restaurant and cafe jobs, I'm wondering why a mature person would want to do that kind of work - it can be exhausting. Think carefully about what you really want from your retirement years.

I get the safety net from going part-time or slowly reducing your hours. But there is this total magic from not having to be anywhere, not having anything due, not needing to get anyone's feedback on anything that comes from a clean break. It's like falling down a cave and discovering this whole other world with creatures who live according to different rules - and liking it. It's just so relaxing.

Having my days completely free means I have met all sorts of interesting, alternative people with occupations I'd never heard of before, who keep non-standard hours, that I don't think I would have if I didn't have complete control over my time.

If you do want to have that safety net, perhaps think about, rather than reducing your hours every week, becoming a consultant and working full-time while on a project and then not at all in between. That's how I worked until I was thirty, and I quite enjoyed that. Was able to travel and completely forget about work for six months at a time then come back and knuckle down.

Of course, with all this remote working, you might be able to work out some clever balance that I never did.