To not want to use DH's inheritance?

[AnnaQuayInTheUk]

Hi, I know this is a first world dilemma and we are in a very fortunate position.

DH is 63, work pension kicks in in just under 2 years time. He is 5 years older than me. For a while he's been suggesting that, when he retires, I should drop to PT or even give up work altogether. I've resisted this idea. My work pension doesn't kick in until I'm at state pension age, so 67 for me. I was thinking that maybe I'd go PT for the last 5 years of my working life.

However, two things have now happened. DH's mum died a couple of months ago, and my team at work are undergoing a consultation which will result in 50% of us being made redundant.

DH will inherit all his Mum's savings plus half the value of her house. It's just all been valued for Probate and he will inherit around £300k, maybe slightly more if house sells at more than expected

DH is talking again about me giving up work as, once the house sells, we will have a nest egg, but I'm really worried that (a) there are other things we could use the money for and (b) our standard of living will be much worse. DH thinks we will have much better quality of life as we won't have the stress/pressure of working.

I had thought that we could use some of the inheritance money to give to the DC for house deposits - they are in their late 20s and DS1 Iin particular is very unlikely to ever earn enough for a deposit. If we do that, what's left won't be enough to replace my salary for more than a few years.

So, AIBU to think that it would be better to keep on working - even if I'm made redundant I look for another FT job at a similar salary? Or should I be grateful that we will have some savings behind us, tighten our belts and - if I'm made redundant - accept that my career is over much sooner than anticipated?

Everything you have written OP indicates that you want to keep working. The decision about your current role may be made for you but there are many other opportunities out there, full time or part time, in which you can use your skills and qualifications.

In your situation, I wouldn’t be promising to give away any money just now. Wait to see what happens with the consultation as that will determine whether you are being made redundant. The job situation out there really isn’t great in public services unless you can get redeployed somewhere so finding an alternative role isn’t necessarily straightforward and you may not find a role similar to your current one or on similar pay. Keep the money in the bank until things are settled.

However, no, in your situation I wouldn’t be giving up work just yet but open to a pay reduction or part time working if the opportunity arose.

Another vote for the book ‘Die with Zero’. I watched a YouTube video about the book, it changed my thoughts about retirement and giving money to children:

I inherited nothing until I was 50 and, like you, had the mortgage paid off. I did not need the money. I needed it in my 30s when we had a mortgage, 2 lots of nursery fees and an extension being built. I lost both my grandparents that year (a week apart) and my dad inherited everything (only child). He never passed it down and I then inherited 15 years later when both mum and dad passed (70 and 73) and I did not need the money. I have given my children help and that has given me immense pleasure. We still have lovely holidays - went to 6 new countries last year, but we have enough for us.

I’m on “team deposit” for your DC. I retired on 2023 having worked longer than I needed but built up a few more contributions to my work pension. DH who is two years older than me had a full work pension and had retired a few years earlier.

I had thought that I would travel once retired - having done some exciting trips in the previous 15 years but I have got caught up with having to make regular trips to care for my elderly mother and I have just had grandchildren who need care (absolutely what I love doing). I have also been enticed back to two sessions of work a week. Just work none of the politics.

Travel seemed more appealing when I was working because it was time off work. I do however now live in a warmer climate than UK so maybe that helps.

Like the OP I always worked. As a sixth former I was a Saturday girl at Boots. I waitressed throughout uni. This was even though I was fortunate enough to have had a decent inheritance myself when I was about 19 yrs. I didn’t spend it immediately but it was good to know I had it. I was able to make some travel decisions that I wouldn’t have done without it. I used it for a house deposit in my early twenties. I think it must have paid nearly half my two bed flat.

I have gone on to give my own DC generous contributions to their deposits. I felt I had to ‘pass it on’. They are unlikely to inherit much from their grandparents because it will all go in care home fees.

That is a lengthy intro but trying to tell OP that I have lived parts of the decision.

The inheritance is not life-changing, except perhaps for the children when they need to buy a property. I would not give the money yet, just tell them that when they need it they have enough for a house deposit.

I would for sure get a new kitchen. It can be done on a reasonable budget - depends on how much electric goods you need to buy. Do it while you have the energy. Plan for it to work for you in the future.

In your position I would keep on working for as long as you enjoy it full or part time. I was never in the position of dreading Monday morning. If that is you I would definitely stop.

Remember that you can still travel even when you are working. It is much easier to travel if you know you have a buffer in the bank should something go wrong. You will be in that position.

Good luck with your decision.

But maybe has the chance not to retire at 65?

Many people don't now and there are people who retire from their main job and find something part time- our local supermarkets have lots of 'retirees' working there. OR they do mentoring, volunteering, get into some kind of groups (rambling!).
I think it's wrong to be joined at the hip and he should be able to enjoy life without being together 24/7.

Posters are saying the inheritance is not life changing, but the point is it can fill the gap in income if OP were to retire early.

So unless she was to earn the same money - £300K- NET income, in the coming years, it's a decent amount of cash.

I think she said she earned £3K net a month. So the inheritance is 100 months' income.

I'd say decide how much you want to give to your kids.
If you split is 3 ways (which is what we did with an inheritance, smaller than this one) you'd be left with £100K.
If that's too much you could give the kids £50K each and keep £200K.

That is still a good chunk of money and more than you would earn by working for a few more years.

And it depends what you want to use the IH for- every day living, new cars, holidays, updates to the house?

I think this is less about the money and more about you wanting to keep your independence and your H thinking he's going to be lonely.

These threads with age-gap retirements come up quite often. Ideally the answer is to decide years ahead what you each want to do and plan for it.

Out of interest, why is he inheriting all the cash but only 50% of the house sale? Does his sibling not get half the cash too?

Sorry to keep bombarding you OP but having read ALL by you I can't help think that you and your H need to sit down and work out the facts.

How much would you need to live on as retirees?
We did this and came up with £25K based on a detailed spread sheet of all our outgoings based on years of credit card statements. Almost everything goes onto the card and is paid off in full each month. This in effect is 2 x the full state pension. It would give a very basic standard of living.

To be more comfortable we would need £40K and indeed will have more than that because of work and state pensions.

I think you need to do the maths as they say and also consider how you want to spend retirement, and the amount needed to enjoy that.

Factor in things like car replacements, holidays, regular and unexpected house repairs.

Have you crunched the numbers yet and done a detailed account of if you retire early, at 67, or whatever age is possible?

To be honest I think anyone who works fulltime is better going part time before completely retiring - it's such as huge shock otherwise

Reducing your hours so you can spend more time together but still have that personal income and 'you' remain - may be a good compromise

I would be the same as you and want to use most of the money to help out the kids. It's so hard for young people with property prices these days - I wouldn't want to spend most of it on retiring early.

Could you meet halfway. Work till say age 62 and draw your pension slightly early. You can save/earn a bit more and your pension will be slightly higher when you draw it.

what would your redundancy money be op?

why does he want you to quit - because he sees you stressed from work and wants you to have the freedom to enjoy life, or because he doesn't want to be at home bored alone and making his own lunch?

if he's just looking for company, i wouldn't even consider it.

if it's the former, and you are exhausted/ stressed from work then I'd look at a mid way option. Do you currently split bills 50/50? could you tip the balance his way to free up some of your cash to say hard for a few years to give yourself money to retire early on? can you look for a similar role part time?

ultimately tho, if you want to work, work. your happiness matters too

Christ, if that was me I would retire in a heartbeat. £300k is loads when you're in your 60s, assuming you don't have a mortgage. You will both also get your pensions (state and company).

People saying it isn't much need to give their heads a wobble.

I think you're being a bit daft here.
It's a marriage.

Work if you want to for fulfillment and so you can spend your money on whatever you want, but not because you don't want to 'rely' on your H.

I've spent my marriage earning a fraction of what DH does because I only worked p/t as we had no childcare if they were il, and I couldn't take time out of work to look after ill children.

He never resented that and we share all money equally.

OP is just 57 and won't get her pension for another 9/ 10 years.
And they want to give some money to the children.

I think they need to sit down and work on the figures, and separate out the emotional feelings from the hard cash choices.

It’s probably the latter. Op sounds happy with her job. Men often struggle to find their own entertainment when retired so need wives to provide it.

You don't know how lucky you are.
Your kids will be lucky to have anything to retire with.

How is that in any way helpful?

@OhNoMyLovely Thats what we did, crunched the numbers, we spent 28k last financial year for general expenses.

The op seems to have been quite passive and not made money ever do work for her. I would strongly advise you see an IFA.

You also need to consider that as 50% of the team will be gone, just how shit do you think working there will be after?

I don’t agree with children being given huge chunks of money, we will help DS but nowhere near as much as we could. I haven’t even told him that as I want him to keep momentum up in his career.

@ClairDeLaLune you say she could put 60k per year into her pension but that would only be the case if she were earning more than 60k per year.

Sorry, cant remember who asked, but someone asked why DH was inheriting all his mum's savings but only half her house.

House is split equally between DH and his step brother. DH inherits all his mum's savings, just as step brother inherited all his Dad's savings when his dad died a few years ago. There is a small amount of joint savings which will be split, but MIL and her second husband married when they were 57 and 62 and were very clear that they were keeping the savings they came into the marriage with separate.

It was me :)

It's a necessity to crunch the numbers.
There is also a guide online @AnnaQuayInTheUk about what amount of pension gives what level of lifestyle.
The minimum is around £25K for a couple and that is a basic lifestyle.

Work out what you spend now - annually- and how that may increase or decrease (fewer fares or less fuel etc for work) and see where you are.

@AnnaQuayInTheUk If you have not done it already, do it now.
Work out your outgoings for the last couple of years .
That's a start.

Add in your H's pension, both state pensions and see what that looks like. Then add your own pension based on retiring this month and at different intervals over the next 10 years.

Then work out what you could 'trim' if you wanted to live on less and retire sooner.

I'm a bit puzzled by the predicament over £300K.
That is worth roughly, 9 years of your income at £3k net a month.

But obviously in 9 years, there will be inflation and you may need £6K a month from savings to equate £3K now.

Even if you decide to keep working you need to invest the £300K and take advice from someone independent so you preserve the value over your lifetime.

You can also contribute to your own private pension (around £2800 pa if you are not working at all or a percentage of your income if you are.) At the moment the government adds 20% annually to that. If that is invested in a pension scheme, it can grow till you are 75. Mine's doing very well with Royal London.

I think you both really need to pay for advice as it's clear you're both quite inexperienced and your own choices are a mix of emotional and financial.

You will have 12K income from interest if in a 4% account. Currently you can get 4.5% interest fairly easy access. And it is tax free if you aren't using your personal allowance.

So I'd live off of the interest and a little capital. Or get a very part time job to top up (remember to put the money in the name of the non-working partner.)

Then consider giving some capital to the kids once you start to draw down your pensions.

But if she earns £3K net a month she will be a higher tax payer so some of that interest will be lost.

Also, the state pension is close to the limit for the personal allowance, so even a modest amount of interest earned is taxed.

Helping children is a major undertaking, especially if one wishes to see them settled reasonably. So, unless there are health reasons, keep working to help one's children is not unreasonable.

@OhNoMyLovely but I won't be a higher rate taxpayer if I don't have a job. Only if I keep on working.

But you're right, we really should pay for some financial advice. I think when probate comes through and when I find out if I'm going to be made redundant, both of which should be Feb/March time, then that is a good point to seek professional advice. Obviously DH won't get the bulk of the money until the house is sold, which might take months.