To give up working at 52?

[caniquitwork]

I am a teacher, but I've had enough.
I have a small teacher's pension- small because only paid in 15 years and even then mostly only part time. Have some other private pensions which will eventually pay out about £1000 a month, but not till I'm 60. Would not touch teacher's pension until then either.
So here's the aibu part - I have a house I own outright so no mortgage, but to live on until 60 I have about £250000 I inherited. Would obviously invest but don't think interest would be enough to live on, so would also just withdraw from the pot iyswim.
Would that work? Would it be selfish- should I keep this money safe for my children?
No dh in the picture. Keep
going round in circles. Wouldn't mind working in another job to supplement but worried if I could even find anything.

I wasn't having a go at you - but the very poor advice that your IFA seems to be giving.

I probably couldn't have retired early if I trusted them that I needed to build up such a pension fund. I would have wasted many years of unnecessary work and probably ended up with far too much money outlasting me on my death.

Get an IFA if you feel you need one or would benefit from one, but if you educate yourself about finances then you may save yourself a lot of error.

You could live another 40 years, OP. It seems imprudent to give up a good income and burn through your small inheritance at such a young age.

Yet thats the national average wage, if you take into account rent or mortgage costing £1000

If I started a thread stating I didn't think I could live on £32k a year as a single person with rent of £1000 a month - people would come out in their droves to say its fine as id have £1470 left over for the bills, savings and food

I was thinking the same thing

I am all confused now 😂
But I liked the bit about separating the pot and leaving some untouched etc.

I wouldn't mind working in an education environment, just sick of teaching a subject that very few people care about and also sick of the pressure that comes with having a TLR

It's not poor advice.

You seem to be the odd one out here.

The only friends I know who have cashed in their final salary pensions had 4 or 5 x your money and are drawing down from its investment (managed for them.)

I don't know anyone with £500K who's done what you have- and they've had advice too.

You're entitled to your opinion and experiences but you're not an expert nor do you know our full circumstances.

https://frazerjames.co.uk/1m-pension-income-retirement-2/

OP and others- this is worth looking at.

The drawdown value of £1m pot is around £40Kpa.

But that would mean that the £1M pot is left untouched, and will likely grow, however long a person lives. Totally unnecessary unless that's actually what you want.

Spend some time listening to Pete Matthew's Meaningful Money podcast. He advocates 'dying with nothing'. An IFA and financial planner will give advice on a variety of situations such as making the OPs £250k provide her an income over the next 10-15 years, rather than make her DC millionaires, at the expense of her health, which is what you're suggesting she needs to do.

Investing is not the same as cash savings account though. You would be daft to have that amount of money sat in cash savings. Investing cam easily bring returns of 8 to 10%

Depending on area you live in, but in our area you could buy 2-3 bed house for 250k a rent it out for cca £1300 a months. Better than any interest you would get. Plus properties will grow in value so at 60 you could sell it likely for 300k the way it's been going in our area.

Age 71 for SP is not going to happen for OP. She will be max 68 due to her age now. It is silly to suggest otherwise and try to use that as part of the argument. Any changes to SP age have a huge lead in time. Even going up to age 68 may not happen before OP gets to that age.

You've not taken tax into account. It's £2600 pre tax.

This isn't correct. The OP is 52. There is a ten year notice period for changes to state pension age and so she its still very firmly in the group of people who could be affected by a further increase to 71 (or another age)

Again, if her only income is from savings or investments then she would pay no tax until she had used up her personal allowance, starter rate savings allowance and savings allowance so a total of £18670.00 per year before a penny of income tax is paid.

The way the teachers pension accrued means that it is probably correct. When you take into account increases every year 15 years even part time as a teacher could easily attain £7000 a year.

You definitely are well off and privileged! What you might not be is well enough off to completely give up work at 52 and have no other source of income.

You're still in a vastly, vastly more secure position than the majority of the country.

It's also really worth analysing what you actually spend at the moment. I could live frugally on about 12k per year after tax, and very comfortably on 24k per year after tax. In fact that's about what I spend after tax currently and that pays for a cleaner, a gardener in the summer, an expensive gym membership and 4 or so holidays.

So actually, if you have low living costs and plenty of time, you may find you could live quite comfortably on the £1500 per month that others have been saying would be too painful.

Would it be worth trying out a frugal few months and seeing how it goes? There might be things you miss and things you don't.

Between that, a bit of part time work and drawing down just 4% of the 250k (put somewhere sensible like index funds or bonds depending how risk averse you are) you should have plenty to totally change your lifestyle, which is a massive achievement, even if it isn't full retirement. If you think that you've been working full time since the age of (say) 21, and you're now 52. That's only 31 years. Your life expectancy as a woman of 52 is 87 years, with a 25% chance you make it to 95. That's another 35 years - longer than you've worked! It's always gonna be tough to support a retirement longer than your whole career. It would be the same length as your career even if you had started full time work at 16.

Considering the rise to 68 wont affect anyone born before 1978 it is extremely unlikely that OP will be affected. At the mist it will be 67 years and a few months depending on actual birth date.
This is after taking into account that the changes have been brought forward. She is not going to very firmly in the age 71 group. She will be 67 and some months.

I've got 7 and a half years to go until I can retire at 67 - I would be beyond devastated if they changed my retirement age before then. I have a manual labouring job at minimum wage and on a zero hours contract.

Believe me, any employer, should there be no highly specified technical skills required, would be foolish not to hire a teacher. If you can teach, you can do anything! p.s. are you a primary or secondary teacher? Is it a 'good' school (well mannered children etc), or a 'bad' school? (Both words used for wont of better words)

Don't worry, it won't happen. The replies from people saying that it could rise that quickly are just nonsense. It happens all the time on here as people reply without really knowing what they are taking about. Mumsnet is probably the last place I would come for financial advice.

Nobody is saying it will affect the OP simply that it could. Until each change is implemented nobody knows for sure. The government's rules say they have to give ten years notice of changes to state pension age and so whilst they generally do give longer and generally then have a tapered system in terms of which group is affected, they don't have to. Given the state of the country's finances and the general mess the world is in, who knows.

Secondary- a grammar school. Does that make me more or less employable? 😅

Totally agree with this, adult ‘children’ will never stop using the bank of mum and/or dad if we don’t teach them how to stand on their own two feet. Ours have never fed off us, they are both homeowners and are completely self sufficient.

Perhaps this is where we have disagreed. I think that with a better asset allocation, a safe withdrawal rate of 6% can be used. That would immediately lower the fund required to c.£670K to generate £40k pa. Then, taking into account a state pension kicking in, and perhaps needing less income beyond the age of, say, 75, we can start feeling more comfortable at the £500K level. Many people won't even need that and can happily live on much less assuming they own their own home.

Being able to operate a portfolio yourself can save many £K in IFA fees that would be unnecesssary. You should maniacally focus on reducing all fees. Once you get your head around it, it isn't difficult, and a well diversified portfolio (other than the simple stocks and bonds suggested by most IFA's) improves the ulcer index no end by reducing overall volatility. It's worked for me for over 10 years.

Read here for further details.

portfoliocharts.com/2015/11/17/how-safe-withdrawal-rates-work/

The inheritance alone gives you £31k pa until you are 60 - that’s without any interest, it’s a no brainier