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?

You both need to sit down and really think this through, separately and together

If it was me, I'd retire. But I do have a small creative/craft business that would keep me engaged, earning some money

With 300k you can put that into a personal pension, and the government will add in 20% making it 360k. You can then take out 25% tax free immediately, which is 90k. If you wanted a part time job after redundancy, you can easily use that tax free amount to either top up your part time salary, or give to the kids to help out - and still have 270k in the pension.

I love my children but my financial security in old age comes before a house deposit for them. If this means they don't ever buy a house, or only buy one when I die, that's sad but not my responsibility.

Depends what other retirement savings you have. The interest and returns on £300k will add up so take that into account too - dh retired and his investments (outside of pension) which is a similar amount to what you are describing has grown by more than he spent this year. Im planning on retiring at 54 and I’ve done the maths, it’s fine. But I have a final salary pension kicking in at 65, 2 defined contribution schemes at 60 and one at 67 on top of state pension, none big but enough. Our house is paid off though, makes a big difference

I wouldn't be retiring in this situation, its far too soon.
Could he put money in your pension to compensate you for those lost contributions?

Retiring with a much tighter belt is not fun.
Many retirees are trying to get back to work as the CoL crisis hits.
Be prudent.
Hang on in there and say you will revisit the issue in a few years.

9 years of your current income is £324K. So more than his inheritance.

(I know you mentioned reducing hours and redundancy is a possibility but looking at the basic numbers it doesn't seem feasible?)

Oh dear. Inflation.

And this type of advice is why you should always ask a professional.

Do not follow this advice.

OP, I too have been married for over 30 years, and I agree that the inheritance is your husband's money, not yours.
(When my husband received an inheritance, I never questioned how much, nor what he did with it - it was left to him, not to me).
But there are two truths here - just as you can't tell your husband how to spend his money, neither can he force you to give up your job.
If you want to keep working, just do so - your job, your decision.

i know so many people who sadly never made it to 70, including my own mum who died suddenly at 67. My husband retired on his work pension at 55, and now works a couple of days a week, I don’t work at all, but keep busy volunteering. If you don’t have housing costs I’d go for it. Your husbands work pension, a minimum of £10k a year in interest on the £300k without using the capital, you go part time and enjoy life. We’ve had to cut back a bit, but time is more important than money to us, as long as you have enough to pay the bills and live a bit, with that £300k nest egg you should be ok until state pension kicks in with another 20k plus a year between you.

Don’t rush into any decisions. There is a lot still up in the air. Wait until you know: how much he inherits, whether you are made redundant, if you get a nice redundancy payment, if there’s another suitable Jon to apply for… In six months you will have a much clearer picture.

I know I’d want to give my children a helping hand with a deposit, but I’d want to know that I could afford to do it before musing any promises.

A few typos:
job you can apply for
making any promises.

How’s your relationship? Finances aside, do you want to retire early to spend time with him?

Thanks everyone especially @MBL and @Splattsagain as I wasn't aware of the things you're suggesting.

We've always known that, at the point we both draw our work pensions, we will have enough to live on, my worry is about the potential 9 years before I get my pension.

DH is in his 60s and this is the first time he's inherited anything. His Mum was 93 when she died, his dad (divorced and remarried) is also 93, but very unlikely to leave DH anything in his will. My mum is in her 80s and so far fit and well, but may of course need a care home in future and I might not inherit anything so this might be it in terms of any sums of money we are fortunate enough to be gifted.

We were lucky in that we bought our first house in the 1990s when property prices weren't as insane as now. Our DC are facing much higher prices in relation to income. So we definitely want to give them some. When we bought our current house 3 years ago we agreed it needed a new kitchen when we could afford it, so we will replace that. But that means the "pot" shrinks down a lot.

We've always been cautious with money, never bought shares etc, never used a financial advisor. So we are a bit clueless.

If the threat of redundancy hadn't come at roughly the same time, then I wouldn't be remotely considering stopping work. Which says to me that I'm not ready to stop working, although I might be ok about not continuing in my current role.

Mmm, I wouldn’t want to be financially dependent on anyone so I can see your dilemma. What is your redundancy payment likely to be? What is your pension likely to pay out at say, 60? Do you want to find another job and carry on working?
What is your dh’s pension like and will you get a widows pension from it should the worst happen? These are all things to consider.

I’d also want to set aside a large sum for dc deposits plus money for any replacement white goods, car in the future.

I would (did!) Cut back on hours you work.
I do 3 days a week, OH does 3 on 3 off shifts.
Were both 55
We'll never be wealthy, but own our house and have enough for holidays and weekends away.
Life is very very short, and I would rather enjoy it now when were both in good health.

Your standard of living will be worse if you are planning to give away money you clearly can’t afford to your children. I agree you need to keep working and full time if your health permits.

I don’t really understand your title when you say you don’t want to use your DH’s inheritance and then talk about funding property for your children. Is the inheritance family money or is it your DH’s?

I take home about £3k per month after tax, pension contribution etc.

So if you used the inheritance to replace that income, it would run out in 100 months which is just over 8 years. You could tighten your belts and therefore use less of the inheritance but it would still be used up quickly.
I think 9 years is too long to be dipping into the inheritance and at the same time, not paying into a pension pot and therefore your pension will be less when you can eventually take it.
I think you should keep working, see what happens with the redundancy and then look for another job if necessary. You should get the kitchen done as a priority. Reassess in 2 years when DH retires. Maybe you can work part-time.
I'd also be careful with how much you give to your children. 300K sounds like a lot of money but it isn't if you're going to give deposits to two children and put a new kitchen in and do whatever other repairs the house needs.

I am taking redundancy in a few months, and this advice was from my financial advisor, who is a professional.

My DH has inherited. He cannot obtain his inheritance because of a related difficulty. He talks about our inheritance but I keep telling him it’s his and that’s that.

Life is short for many people & it often happens that way with a bang.
id spend your money & life your life. You’ve worked enough.

Thanks, I think that's what I'm conflicted about. It will be our money, DH is keen for me to spend time with him - but I don't want to rely on the inherited money and not earn anything myself.

So I'm onboard about giving some to the DC, replacing the kitchen etc as we have always said we want to do those things if at all possible. But I'm not ready to have no income, or even for our combined income to drop significantly because we won't be able to afford holidays etc.

DH went part time last year and loves it. He works three days PW, volunteers one day and has the 5th day for himself. I think he worries that, once he retires, if I'm still working FT he will get fed up.

You need to go back and double check on your understanding of their advice.

The amount you said here is £300k.

The max annual allowance is £60k in a tax year.

You can carry over for 3 years... But even so, not possible that adds up to £300k. If your FA told you you could do this, I'd ask again to confirm you understanding.

I'm not a financial advisor.

Ask your DH exactly why he wants you to retire early.
Is it for going on a fabulous long holiday or big 'travelling' trip?
Or is it to spend more time together every week?
If he says both, ask him which is more important.

If it is to go on a big trip, then leave your job (or get redundant), take a year or six months out for the big trip, then go back to work full time. You may not get as good a job as you have now, but that is okay.

If it is to have more long weekends together, you could go part time but stay in work.
You could of course take the year out and then go back part time, but that would be far more expensive.

Thats 11 years of my wages paid right there