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?

Don’t spend your capital! Invested, in 10 years it will be 400k+ They can take 9k a year from it and still grow the fund.

Originally I could retire at 60, it changed to 63 I think, then 65. I actually worked tll. 70 but gradually reduced my hours, 3 full days, then 3 half days, then two half days. Always ended up doing extra on a fairly regular basis. At 72 I still get the occasional call to go in. I found it a great way to retire, I think I'd have found going from full-time to fully retired quite a change.

Maybe think about part time, I recommend it.

I think the bottom line is that you're not comfortable with this?

So the answer is probably a no, or at least not right now!

Youre lovely to consider your kids but don't base your decision solely on them. They are just a factor.

I'd wait and see what happens.

Part time could be a good compromise in time but doesn't sound like you want that right now.

Not quite the same scenario OP but..
I decided to go PT 2 days a week 3 years ago; I’d fully costed everything and my two days would cover all bills and everything else would come out of savings and I was very happy with that plan.
Roll on three years; both my parents died and I inherited a very large sum of money and two properties.
I’m three years closer to state retirement (18 months to go) and may not continue until the bitter end, but those two days a week are important to me.
Maybe see if/what your redundancy looks like and then take and invest it and find something rewarding and part time?
And definitely consult a financial advisor/wealth manager; they will give you good ideas about how to pass some on to your children tax efficiently.

@AnnaQuayInTheUk Hmmm... It is important to get it right financially and emotionally.

We were in a smilar and opposite situation. My dparents died and left me an inheritance. I was in no doubt, and we gave significant sums to our dc. (I say this because there were times in my life when a couple of thousand from my dparents would have made the world of difference to my single parent life - it was lovely to benefit from the inheritance in my 50's but bloody hell it would have been better to get a small amount earlier).

I also went to a reputable financial advisor to discuss how to deal with the remainder of the money. Despite their fees they have been well worth the investment. They have plans and charts and best/worst models of financial scenarios. They have given us confidence that dh and I would not have had on our own, to know that essentially, we will be OK. We have some savings, and they plot that against our income and expenditure and pensions (in various forms).

In addition I did my own work on our income / expenditure. 3 years before we planned to retire I scrutinised all our outgoings and commitments - absoloutely everything. Council tax, insurances, utility bills, cars, household repairs and maintenance, food and drink, memberships of clubs, charity donations. I didn't try to cut down, just lived as we normally wanted to. 2 years before we retired we sorted our finances and bank accounts into different pots: one that all the essentials would come from; one that was for holidays and luxuries; and then individual accounts for me and dh (the 'red card', the 'blue card' and our own cards - according to the different banks :) )

dh's pension and my various pensions are different. So whereas when working we both put the same amount into the 'red account' for bills, now all our various pensions and incomes go into the 'red account' and we both get equal spending money into our own accounts. As long as the red account has a relatively stable amount in it, we know we are living within our means (it goes up and down if we have roof repairs or other essential expenditure).

The 'blue account' for luxuries and fun is funded from our shared savings, my continued part-time work, and a small inheritance that dh got. Once that money is spent, it is spent.

Emotionally it is different. Like you I had always worked and paid my own way. When covid hit I suddenly lost all my income. dh is loveing and generous and kindand understanding, but my self esteem took a hit having to ask him for money and to feel dependent on him.

I am mid 60s and continue to work very part-time. I like it. It gives me my own space, my sense of being valued professionaly and I am fortunate in that it is flexible enough that dh and I can plan long holidays together. Your dh envisages a 'retirement' where you are both together all the time, but you may not be ready for that. Or perhaps he is hoping that you will be around everyday to make him a sandwich for lunch, to keep him company or to facilitate some of his other retirement plans. I think that your dh retiring for a couple of years on his own (even if you reduce to part time) is a good discipline for him: - he has to work out how to fill his time; he may have to take on more of the domestic load; he has to respect you as a working contributor to your finances. Importantly, he doesn't get to say that he's funded your early retirement and that therefore you are beholden to him.

Definitely would not give up work.my uncle (early 60s) took early retirement due to health and his partner did also ( no health issues she's just bit clingy) anyway less than 5 yrs later my uncle went back to work and so did she! I think it was a mixture of money running out and boredom tbh.

Not saying this would be your case. As a woman who has always worked and not lives out of someone else's pocket thats part of your identity. Yes life can be short but consider what you would do all day and how satisfying it would be... 9 years or so earlier than your due date that's a mighty long time

I definitely would not take your pension early - this nest egg gives you the opportunity to potentially work a bit less in those last 9 years or be pickier about your next role but I wouldn’t retire fully in my 50s or even early 60s (frankly I’m more likely to voluntarily keeping going into my 70s). I do think there are lots of benefits to working (at least in a nice job).

£300k won't fund a very long retirement for two people, unless you're really clever and careful. I'm with you, I'd rather help the kids and carry on working. You can still put aside a decent chunk to use if one of you needs to retire early.

We were in almost exactly the same position and did this. When DP did need to semi-retire 2 years early due to his department completely reorganising, we could afford it. I'm still working ft as i enjoy it and i want a good pension and comfortable retirement. The 3 kids all have a decent house deposit in trust accounts, and it's such a huge relief to know i can support them and get them started. I would hate to stop work and then not be able to help them out.

This advice OP

Life is short, retire as soon as you can. Who knows how many years you'll have to enjoy it together. Many people get to the end of their lives and their only regret is working to much and living too little.

This- wait for your redundancy money and help your DC.

Exacty this. Tomorrow isnt promised. Unless you cant bear the idea of being with your DH 24/7. Take your redundancy and make wonderful memories while you and DH are healthy enough to enjoy life to the full. After 60 the years fly by and you wonder how you ever managed to fit full time working into your busy life. Enjoy 😊

if you give your kids money towards a house make sure there is a charge against the property. Get legal advice. Just in case there is a marriage and some corrupt partner takes a large share. I didn’t know how scheming they could become …. Particularly with solicitors grooming the grievances and producing abuse allegation against the children ……. 4 years of legal hell. 50k solicitor fees.

Perhaps...
I also retired a bit earlier than I originally expected but I used a lump sum to pay off debts and credit cards. I thought I would really miss the money but not having to pay for those things made a huge difference.

@TheGander no, local government. Sadly our redundancy offer is far less generous than NHS.

Yes, DS had a girlfriend who wanted to take part of the value when she left. She's made no contribution (unemployable actress) and fortunately she'd signed an agreement when she moved in. He'd have had to sell otherwise.

I appreciate your input, but I won't have any income whatsoever if I retire now.

@AnnaQuayInTheUk "We've always been cautious with money, never bought shares etc, never used a financial advisor. So we are a bit clueless."
I've only read your posts OP, so forgive me if you've already received this advice, but the first thing you need to do is organise a Pension Wise appointment in preparation for your DH's retirement: https://www.citizensadvice.org.uk/about-us/information/pension-wise/
Then find a good Independent Financial Adviser (IFA) in your area to give you ongoing advice and help you invest your money in a tax-efficient way and to help it grow: https://www.moneyhelper.org.uk/en/getting-help-and-advice/financial-advisers/choosing-a-financial-adviser
Both of these links are reliable, government-backed resources so you can safely use them.
My DH and I were in the same position as you and your DH six years ago (when he was due to retire and inherited less than a third of what your DH will). I'd drawn up a rough plan on a spreadsheet of how we would get through to state pension age and we took that to my DH's Pension Wise appointment - they can't give you financial advice, but they help you think about what you want to do and what your priorities are. The real game changer for us, though, was finding an excellent local IFA after the PW appointment (via the link above) who helped us realise our plans. Like you, we'd never used an IFA before and we could absolutely kick ourselves for not doing so sooner as he and his firm have managed and grown our investments very well. We joke that for the first three years we were living on "free" money because we had more money after that period even though I'd been taking a regular monthly withdrawal - and we had a new kitchen! - and we are medium risk investors so there's nothing flashy going on with our investments. DH has now reached SRA and I will in two years' time and we've been on holiday twice this year (Madeira and Malta).
Seriously OP, please don't think this is some sort of (not so)humble brag as I'm simply urging you to get professional advice - it really was one of the best decisions we ever made.

I’m sorry to hear that. Fingers crossed you get a settlement ( if that’s what you want).

It is often said that if you have a wedge of money invested (this does not include cash in a savings account, where it will be eroded by inflation) you can take 4% a year and it will probably maintain its value, thanks to growth. When you get older, you can divide the value by the number of years you think you have left, and take that.

£12k a year before tax is a useful amount, until such time as you need to do something else.

If you are made redundant, the first 30k is tax free

If you do not find another job immediately, you can apply for "contributions based job seekers allowance" which is about £90 a week. It is not means tested until a certain time limit.

There are lots of volunteer opportunities too

Not to sound too direct…but you do not sound like you’re in a financially secure enough position (never mind the risk of redundancy) to give your two DC deposits for their homes.

While it’s a lovely thing to do, anyone I know who has received deposits for homes had parents who were VERY comfortable and could release £20K+ a child in their 50s. You’re not in that category and that’s fine, neither were my parents. Your kids will work it out in time and be fine - you’re doing them no favours giving them help now and a decade from now you’re struggling financially as a result.

Get your kitchen done and put the rest into savings. Don’t reduce your hours or jump ship before you know the outcome of the redundancy’s, that would be silly financially for anyone. (Speaking as in-house counsel!)

https://www.gov.uk/jobseekers-allowance

I am retired, the 20k is my combined state and work pension

I think you need to have a proper conversation with Dh.
You are 5 years younger and don't want to stop working yet.
You have no issue with him doing so.
Before you make plans you would love to see the dc set up. Would he consider it? 50k each.
He likely is being lovely and wants to spend time with you