Would you retire At 50 if you came into money?

[Quarks69]

My Work colleague is not enjoying her job at the moment. Sadly her mum died and so she has come into an inheritance which has paid off her mortgage and leaves her and hubby with a clear million. They have no real work pension so this is it. He wants to retire early but he says it’s not enough. As someone who also dislikes her job, I think she should jump at it, life’s too short etc, but she’s not sure. Thought I’d see if you think this is enough to stop work with? Not that I’m jealous or anything 😊

I have a defined benefit pension that kicks in at 56.
You won't see me for dust.

I am 50. I have the same sort of financial standing and mortgage free. I don't have to work, but if I live another 30/40 years then I could easily blow the million, paying for the kids University, drawing down an income for myself and then leave nothing for my kids inheritance. I would prefer to work part-time for myself. I feel purpose in doing that, and meet lots of interesting people. If I retired, I would be bored and quite depressed rather quickly. You cannot travel far at the moment, and it is easy to stay home making a hole in the money pot boredom buying on the internet. If I had a job that I hated, then perhaps I would feel differently about this. I know a couple who came into money from absolute poverty through a compensation payment. It was around 3/4 of a million. They blew the lot in 5 years of impulse buys, a flash wedding, new cars, bad business investments, eating out everyday and night, casino nights, going on holidays a lot and buying lots of stuff they didn't need. They have ended up having to sell the family home this year for below market value (bought with the money) just to carry on living.

Both DH and I are past retirement age, still working and enjoying at least 80% of our work. There are two questions to which we don't really know the answer

1. How much do we need to life comfortably got the rest of our lives?

1. How will we replace the highs that come when things go well at work, the "yes" feeling of being invincible.

Absolutely! Or at least both OH and I would cut right down to part time work.

Not enough to retire on for two people for that potential length of time. Would continue working.

He's right, it's really not enough to live on comfortably.

I would urge her not to make a knee-jerk reaction till covid is over.

Yes because I’m not yet 50 and my arthritis is already crippling me. Having to work until 68 seems impossible.

I would like a shot as it's more annual income than I get from working.

No. A £1 million pound pot sounds like loads, but between two people to last 30-40 years is only £14k a year each if I’ve done my maths correctly.

Your friend - like all of us - needs to have worked or claimed benefits for 35 years to get a full state pension, as does her DH, so that’s another £9k a year each from age 66/68 or thereabouts. It’s not loads.

She should save some, invest some (others can better recommend good stocks and shares ISAs), and maybe open a private pension eg a SIPP or stakeholder. If she kept working to 65 and stuck £300k in there, say, she’d have 15 years of investments and govt tax relief to let it grow.

In her position I’d maybe look for a part time job that’s less stress, but a buy to let in a trendy place or holiday location, go on a fab holiday, then put the rest in ISAs and private pension, and plan to retire properly at 60 or 65.

I wouldn't retire but I wouldn't force myself to go to a job I hated if I had a million quid in the bank!

I'm in my fifties and I wouldn't. I'd find a job I liked.

I'd retire in my thirties if money allowed.

Yes. Yes. Yes. they could find some part time thing they like if they need some extra cash to make themselves feel more secure, but yep, i would be out of work like a shot.

@switswoo81

I have a defined benefit pension that kicks in at 56. You won't see me for dust.

Defined benefit, you lucky sod! 🍸

Well I would work but Part Time doing something relatively stress free & aim to earn enough to live off without having to use too much of my inheritance.

Like a shot!

People are doing sums that forget this couple will presumably get state pension in their late 60s. Let's assume they get state pension at 67 and have made enough contributions to get the full amount, about £9k I think. So £25k a year to live on sounds a bit of a tight budget but what about a slightly more generous £36k?. For 17 years they would have to find all that, which would cost £612k leaving £388k of their capital. But then at 67 they would be getting £9k each in state pension so would now only need to find another £18k. I think that means their capital would last another 21 years, taking them to 88.

Then what? Well they have a house don't they? They could downsize, take equity release or just sell it to cover care home costs.

No but then I like a nice standard of living: holidays meals out nice clothes trips to theatres and art galleries (hollow laugh).

What would you do for another 2 3, 4 decades? Charity work? You can't just sit about. Life costs money, cost of living is going up. I've read you need a bigger pot than that to retire at 50.

I think I'd semi retire.

If I didn't have a mortgage my costs would only be about £650 including everything like food, gym, car repairs and saving for a new car etc. So another couple of hundred for fun and holidays etc, I'd only need 12k a year and I'd get my state pension in 17 years.

But if I were to do a two or three day a week job paying maybe £12k a year, I'd then have Plenty of money instead of just enough. So I'd probably do that.

I wouldn't stop entirely. You could live a good 50 years more.
I'd go very part time, though.

Absolutely not! For one thing, I enjoy my job, and it's half time so I've got a good work-life balance. And as others have said, a million between 2 people from the age of 50 isn't as much as it sounds, especially if you want to have nice holidays.

In my experience, spending diminishes markedly from 70 and by the time you get to 80, you spend comparatively little.

I’m have no intention of saving for my nursing home fees and intend to blow my pension pot by age 75. I’ve seen the reality of the person in the next room in a nursing home having everything paid by the state whereas someone else will be having to use their savings to pay for their fees.

If they are both 50

They have no mortgage and can live on 30k per year, then by the time they are 83 they will no longer have any money left

But will get state pension

I like my job and feel that I'm doing important work, so I wouldn't retire but I'd certainly be looking to reduce hours/work flexibly.

If I didn't enjoy my job, I'd take the opportunity to do something else, without needing to maintain my current salary.

Yes. We have savings and investments, although not a million, and I retired 3 years ago at 52, mainly due to ill health

There’s still not enough hours in the day

They would also have state pension and can downsize their house if the cash runs out.. I'd do it like a shot its plenty to live on where I'm from and go a few holidays and you would make decent interest in one million.