DH retiring and how to sort money

[Moneyponders]

Posting here for traffic! My DH is going to retire at 55. I totally agree with this decision as his job is extremely stressful.

He will get a lump sum of £60k and £900pm.

I am self employed and he has said he will help me run my business. In my busy periods this will be a good thing. But not necessary as I’ve managed alone for 15 years!

I don’t know how to sort the money though? He currently sends me £1k a month which covers his half of the bills. When he retires (in 2 years) the bills will be lower because the mortgage will be finished. His half of the bills without food will be £300. With food probably £500/£600. I’d feel bad taking £500 of his £900 if he’s helping me. But a lot of the time I actually don’t need help and I’m going to be £1k a month down.

Can’t see the wood for the trees! What do you think? Should I just pay for everything?

but you married him @Moneyponders so it legally is all joint etc nothing is separate

Not in Scotland at least. I appreciate it may be different elsewhere. In Scotland it is only assets accrued during the marriage that are split upon divorce.

It’s absolutely baffling why you chose to marry this man. You can talk about keeping things separate and wanting no part of it all you like - but you married him! Legally your assets became marital assets and you simply cannot say that this is mine and this is his. Well you can as long as he is willing to go along with that but I wouldn’t be surprised if things take a significant turn if you make it clear to him you don’t intend to find his retirement….

I wonder what you were thinking of OP when you enthusiastically agreed to DH retiring? Did you simply think that he'd enjoy himself more not working than working, and wanted him to be happy? It seems likely that having more spare time will lead to him spending even more money on things to do while he's at home all day, and it is strange that you didn't worry about that.
Fifty-five is very young to retire nowadays. He won't get his state pension for more than 10 years.

Husband sold our business when he was 55. But we invested in property so have a good return on that. I carried on working because I was younger and enjoyed it for another decade.

No way can @Moneyponders husband retire. He'll blow the £60k. Then be very poor until state pension kicks in. It will damage their relationship.

He can retire from his very stressful job but that doesn't mean his choices are to do nothing or work for your business. He could find a less stressful job or a part time job or set up his own business - and if he can't afford to pay his way then that is what he will have to do.

My guess is he will have a break from working while he burns through his lump sum then he will have to find something.

I didn't ask what's legal, I asked how that pp would feel about the fairness of it all if her second husband bailed with half of the wealth she'd mostly built herself, leaving her with less for her retirement and supporting her adult child/grandchildren than she would have had if she'd stayed single.

Only employ him when you would employ another person and pay him the same as any other employee.

Tell him that, right now, in advance.

He might want to skill up in another area before he retires - say obtain his RSA so he can work casual for a wedding caterer or local bar etc.
Keep the finances the same; it has worked well for you both.

OP you sound very sensible, stick to your guns! It sounds like pooling your finances would be a disaster and lead to almost certain divorce. Your DH sounds lovely but highly financially irresponsible - he needs to stand (or fall) on his own two feet.

He can’t afford to retire. If his job is awful he needs to find another one. Its ridiculous to think about any inheritance, anything could happen - care home fees , he dies first.

I'm not aware OP lives in Scotland, and I admit I don't know Scottish law, so happy to stand corrected if she is indeed in Scotland. But in England and Wales, it's all marital assets (potentially with the exception of inheritance if you keep it proveably separate).

If you don't want to share your assets, you don't get married.

Sorry but he cannot afford to retire yet!

He needs to get a part time job some where - he will burn through that lump sum!

I don't really understand your point. If you aren't OK for your partner to have half your assets upon divorce, you don't marry them. Given OP got married, I can only presume she would be OK with that and feels it fair enough. Otherwise it would have been idiocy to have given him a legal entitlement to half her assets.

The main issue here appears to be the proposal that he works for you, and you pay him to do so. Consider that part from a business perspective. Will employing someone increase your revenues or profit in the short to medium term? If not , and inf act its likely to make the business less profitable, then there is no sense to it at all, it won't make you individually or as a couple better off. So I'd just say an outright no to that idea for that reason. He can continue to pay half of your new lower outgoings and if he's not left with enough for himself at the end of each month then he needs to find a way to earn some income to meet his non essential expenditure needs.

Exactly this. Why on earth did you get married?
I can’t believe he thinks he can retire at 55 on £900 a month. It’s simply not enough- he’s expecting you to fund him while he sits and relax. You need to nip this in the bud quickly.
Stop ‘treating’ him to holidays etc. Make it clear you will not be paying for his early retirement.
Also, he may never see a penny of the supposed 2 million inheritance as his parents may both need care that will eat any inheritance, so tell him not to factor that in to his plans.

You need to get him to do some cash flow modelling. Get a spreadsheet going of all your joint and his individual outgoings for the past year, show him how much is REALLY spent. In reality you also need to forecast that the costs will go up with inflation each year (food bills in my house have doubled in recent years!) so a fixed £500 won’t stay like that for long for the joint costs. Wade through his bank and credit cards and see how much he spends. Work out what he needs for “retirement” including any additional costs for more hobbies or holidays! It will demonstrate to him he needs much more. The rule of thumb is your pension pot needs to be 25x annual outgoings! (Spend 4% a year and the investment keeps growing above inflation).

sounds like he needs a part time retirement job as £900pm won’t go very far for long. Or keep working and saving and retire together!

Agree not to pay him a wage from your business unless it is that he can increase your turnover/profit and you both share that growth. You should not be deprived of your hard earned income.

I wouldn’t be happy with my DP retiring at 55 - not just because of the money but because abuse he’d likely be bored in 2 months and he’d start to get hacked off that he couldn’t afford the latest iPhone/car/gadget etc. OP, would his skill set be useful to your business? So instead of ‘helping out’ could he do business development, sales, marketing, financial planning - something that could grow the business? That way he could grow his own role. If not, I’d suggest that he gets a job doing something he enjoys. My DP’s dream is to retire and become one of those people that drives new cars to their owners!

£60k and £900 a month to retire at 55 is not going to go very far. His expectations are unrealistic and you will end up supporting him until his inheritance rolls in, which could end up getting decimated by care costs. What if something happens to you?

If he does this, he's going to have to look at getting another job and we'll, he's in his 50s and there is ageism in hiring.

It is his decision to retire early. It’s not your job to supplement his pension. Don’t let him work in your business. If he needs more money after giving you £500+ then he needs to get a part time job.

Why did you marry him?! Protect your financial independence at all costs. I wish someone had given me this advice 40 years ago.

You need to knock this idea of his early retirement on the head now. He can't afford it.

You paint a picture of a man who is useless with money and always has been, he's not going to hange now, so he has no idea what his living costs actually are and how little money he really has.

I get you @Moneyponders

My DH is amazing, he does his fair share around the house, probably more cos he does all my dd's ironing.

But he pays nothing towards my house in terms of mortgage or repairs. It was my house before we met and it is tied up in trust for dd with wills and an iron clad prenup that he happily signed.

He came to the table with nothing.

Inhave savings. Inheritance and my house. That is there for dd should anything happen to me.

By the sounds of it your dh can't afford the luxury of retiring so early.

He needs to wither work part / full time on a lower stress job and cut his cloth accordingly. He cannot afford to retire.

He sounds financially irresponsible and woefully unprepared to retire at 55.
I think it’s time for some straight talking between the two of you.

I understand how you feel and your concerns. It wasn’t sensible to marry him to be honest, but you are where you are.

He can’t afford to retire and maintain his lifestyle, and so unless he has spoken strongly about changing his lifestyle (sell the cars, drop the holidays) he is absolutely assuming you will subsidise him, quite heavily I would think. Spenders don’t suddenly change when the money changes, hence why he was bankrupt before.

You need to sit down and have a very clear conversation with him about how he is planning to fund his retirement. Don’t leave it loose, really tie him down. Then go from there. You are absolutely going to find out that either he has no plan at all, or he is totally unrealistic in his plan, or his plan is you.

Now he has £3k pcm and joint expenses of £1k leaving him disposable income of £2k which he spends on tat and cars, which is fine as you are only cross subsidising holidays and other treats.

Assuming he draws down his savings over the 12 years til SPA he’ll have £1300 pcm and joint expenses of £500 leafing disposable income of £800. He is short of £1200pcm and is unlikely to reduce his spending correspondingly given his current spending habits.

So he needs to find another job earning £1200pcm. This should be doable - though hopefully he shouldn’t work for you as that will change your relationship dynamic in weird ways and you don’t need the help. It’s less than half he previously needed to bring home and he’ll be paying less tax too. So he probably needs to carry on working approx 15 hours a week, if he can get pt work at his same previous wage.

If he doesn’t earn that he’ll burn through the savings in no time at all, be really financially dependent on you, and find it way harder to then get that part time job as he’ll have been out of work for around four years plus will need to earn more than the £1200 as he’ll have no savings left. He’d likely need to return to lower paid nearly full time work and not be a happy bunny.