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 😊

@Scbchl

If you could live off 4% of it a year - 40k, then youd be roughly living off the interest.

You can’t get 4% interest in a bank account. It’s more like 0.15% So that’s £15k minus tax( if it’s all in her name).

So they can’t live off the interest, they will need to use the capital.

And they won’t get a full state pension if they retire at 50 - they won’t have enough years.

If they have children, surely they will want to give some to them, for their education or as a house deposit ? So that will eat into their capital even more.

If he divorces her she will lose half ( unless they live in Scotland ) .

When one of them dies, they will have to pay 40% back in inheritance tax (again) on about half of their capital.

I know £1million is a lot of money but sadly it’s not enough for two people to live off for 40 years.

I can't imagine thinking I'd be bored if I retired and the best way to remedy that boredom would be to... work? Fuck that. Talk about lack of imagination! I can think of loads of fun ways to alleviate boredom that don't involve work!

It's certainly enough of a financial cushion to enable her to leave a job she dislikes, instead of waiting for the right job to come along first. Whether it's enough for both her and her husband to retire on is another matter, but it's her inheritance, not his, so she can use it to take a nice long break from work while she finds something that suits her better.

50 is quite young to fully retire, but if she wants to use the money to do that, I don't think her husband should try to stop her, just because he can't afford to retire at the same time. If the marriage is solid she will probably be happy to share some of her inheritance with him, but really it has to be her choice. Or perhaps they could both go part time?

I would continue to work part time . 50 is too early to retire. Statistically the chances of them both living for 40 years post retirement is minimal. They should both work part time in jobs they enjoy .

I would spend some and give to charity, invest the rest, live very nicely off the investment income and still work.

It's not going to buy them a millionaire lifestyle and of course they could piss through it in no time on expensive houses, cars, travel when it is allowed etc, but it would definitely cover their living expenses for a reasonable standard of living without working.

They need to see an IFA to make the best of the money to provide an income for the rest of their lives.

Then consider the possibility of working part time in a job they like. That's what I'd do. I wouldn't trap myself in continuing to work full time in a job I didn't like, to maintain an expensive lifestyle, that's for sure.

This thread is so funny, like there’s only two ways work, work, work or retire and you’ll be bored, do people think retired people do nothing but sit around a swimming pool or go on cruises?
So many other things you can do with your life....

No chance, a million isn't that much if they live another 40-50 years. I can't imagine sitting around with nothing to do at 50 anyway. Isn't there anything she wants to do? I'd leave the job and maybe take a year off to decide what I wanted, and then train for something I really wanted to do or start a business.

in a heartbeat. but I would then do volunteering somewhere

No, I don't think a million would be enough. If you live another 40 years that's a budget of £2000pm and then you might need to pay for care when you're elderly.

Not sure why he is making the decisions it’s her mum’s money!

I say she quits her current job and finds something she enjoys, part time, none stress etc. A million is a lot of money, if she got a decent accountant who did investments she could set it up in a trust and would get a nice amount of interest on it which surely would help in tiding them over.

If the husband is worried about being unable to afford retirement surely he should just... keep working?

It’s sad that her mum passed away. With a million left of the inheritance, she should definitely quit the job she hates. Having said that, I think she should invest wisely, maybe treat herself and her loved ones a lot if she wants, set some money aside for a rainy day and find a job that she truly loves so she can take that time to find it and she can look for part time or full time options with no added pressure to find something suitable quickly. That way she had the best of both worlds and can use her income for day to day costs and her profits from investments can be used to save and invest more and splurge a little here and there on nice treats. By the time they hit retirement age, they can retire very comfortably and won’t have to worry about care costs, not to mention leaving a substantial inheritance for whoever is in their will.

I would leave me current job and go for the jobs that I’d love to do but pay too little for me to change to. I couldn’t retire at 50 with nothing to do.

I’m 40 and retired for this reason. I’ve packed my days with exercise and classes and hobbies for fun, and I don’t miss work at all. As long as you keep busy and active, I say go for it! Both my husband’s and my mothers worked so hard all their lives, they both died before retirement age. Life is not forever!

It's not enough for a 50 year old couple to retire.

Definitely.

Work doesn't have to define you.

You can still be plenty busy without it, I go to work for a rest.

Yes, I would 100 percent retire - and I know I could make that money last, especially if the house was paid off.

I know this because I have had a unintentional trial run :D

Many years ago, I had just started with a huge financial firm. I’ve been there about a week maybe two at the most when there was a massive financial malfeasance allegation made against the Department that I was due to start with. Because of this everybody in the department was suspended with basic pay while the matter was thoroughly investigated (6ppl inc me). I wasn’t overly concerned because there was no way I was caught up in any of it because I was brand-new, hadn’t met the team or even finished my induction. Regardless of this and much to my surprise I was suspended as well to ensure that everybody was treated the same.

The upshot of the whole affair I remained on paid suspension for nearly 2 years while the massive investigation was ongoing.

What I learned during this period is I would happily retire the drop of a hat (with a small income). Those two years I look back on with a great deal of fondness. Yes, it was basic pay without all the bonuses and additional extras I would have had if I was full time working - but my bills were paid, there was food on the table and I had a little bit of money left over.

I learned very very quickly you can fill your day to overflowing with volunteering, art, music and learning at very little cost. I regularly travelled into London on the coach for pennies and went round museums and art galleries. Travelled to see friends, took fantastic cheap trips abroad because I could go at short notice. I learned to container garden, knit and sew from books in the library (this was before YouTube was even a thing) I genuinely delighted in every single day.

It was incredibly freeing and I enjoyed the autonomy of just deciding was going to do something and having the time to invest in whatever interest occupied my attention at the time. All the free time also meant I was able to socialise in meet ups and interest groups where I met a lovely gentleman who I am still with now.

Ps. Obviously I was cleared - I was then free to leave without ‘left while under suspension’ being on my employment record so immediately moved on to a different company. I now overpay into my pension in the hope that I will be able to retire early and recreate that fabulous period in my life.

I agree with him. If they both reach average age, or need care, they’ll run out of funds (unless they both have healthy pension pots too).

Yes, indeed. I think it could be done on a million if you lived in a fairly frugal way. Not working would give you more time to do that and less temptation to treat yourself to things you don't really need to cheer yourself up because work is boring/stressful. & no need to buy new clothes until they wore out as you wouldn't have to look smart for work. Also, it wouldn't matter where you lived so you could potentially move to a cheaper area and release equity/save on rent that way.

Definitely!

Yes they 'could' live another 30/40 years but they could also become seriously ill/drop dead next week. I'd enjoy the money and freedom while I was fit and able to.

And at some point presumably some form of pension would kick in as a top-up even if it wasn't much.

I inherited a decent amount. We had little left on the mortgage anyway which we cleared, and DH is a high earner.
I have invested most of it so I can take my nurses pension at 55 and go.
I may get a part time job, but the plan is to travel whilst we are fit and well.
Neither of my parents made it to 70 and this pandemic has reinforced my plans.

A million quid? Around here that would buy you four properties yielding £900 pcm. Say £9,000 a year each after maintenance etc, so a profit of £36k. Split that between the two of you and you'll pay bugger all tax, and still be able to release capital.

And probably be able to afford to be nice to your tenants if they hit a crisis.

No brainer.

I always remember one of my first ever patients-him and his wife had spent all their working lives saving for a massive round the world trip when they retired. His wife had a massive stroke within a month of their retirement and he never did ever go anywhere as couldn’t face it without her...he always said don’t waste your life away, live it! See everything you can, experience everything-those memories would have been wonderful to have now😢

On a million? Yes, definitely. Because that gives her time and money to retrain and do something, maybe part-time, or on a lower income, that she really enjoys.