To think it's perfectly understandable that a high-paid, child-free couple could retire at 50?

[LoomyDee]

Someone I work with is retiring in a couple of years aged 50.

I have the same plan but I'm only just 40.

We were chatting about it the other day at work, and a couple of people were or acted completely befuddled by the situation. When the lady in question went to the toilet, a couple of people starting up with "But how on earth will she afford it?"

I don't get it.

Surely it's not extraordinarily strange and incomprehensible to realise that a couple with high-paid jobs, a fairly normal lifestyle and no children will be able to retire very early?!

Am I missing something? I've run my own numbers and 50 seems very comfortable but I worry I've completely overlooked something with how incredulous these other colleagues were!

Im 46 and was made redundant this year and own my house outright - no mortgage and have an adult child still living at home with me.

I can afford to ‘retire’ from my previous career which was high stress and long hours and now just need to earn spending money for myself and doing something I love - so I consider I’ve sort of retired!!

Of course! Child free is the key. No mat leaves, no paying premiums for holidays, no paying for childcare or University, no school uniform, toys etc. It all adds up.

Yes I think it’s understandable. They will presumably have been planning and saving for this.

No helping them on to the housing ladder either.

I’m childless not by choice and retired shortly before my 58th birthday.

Yup I’d have a lot more money if I didn’t have DC

I think it probably seems very far away for a lot of people now - when the average first time buyer is 33-34 years old, student loan repayments are very high, cost of living is very high. I would imagine the number of people currently in their 20s and early 30s retiring at 50 will be a good bit lower than the proportion of current 50 year olds retiring, for example. So people just can't picture it, because it seems so unlikely or impossible - especially if they're not very high earners themselves, or haven't been for very long!

Without the expense or earnings loss of having children then retirement at 50 is very financially realistic.

However, I'd struggle with not having some work or structure to my day at that age. Part time enjoyable work would have been my dream. They won't be able to draw pensions at that age.

I have 2 money draining teens so not an option for me.

Of course it's possible. Especially if they've invested over the last couple of decades instead of spending every penny they earn on overpriced non essentials. They could now be in the situation where they have a passive income so can afford not to work.

They can live in a smaller house and have probably paid off their mortgage. Plus getting good deals on everything you spend can shave hundreds a month off the cost. And having a modest lifestyle has the double benefit of it costing less, so you need less money to be able to afford it.

The difference in cost between child free, small house, lower bills, basic but sufficient leisure costs, holidays, possessions, hobbies etc and the typical MN lifestyle of a large house near to good schools, £1000+ a month on salmon and blueberries, childcare, music lessons, tutoring, leased electric cars, Ikos holiday, salon colour and treatments, etc etc is thousands a month. Invest even some of that and it could easily build up into a lump sum that will provide a decent basic monthly income by age 50. It's what the FIRE movement is all about.

Yes friends of ours did it at 55, chiild free and high earners. Good for them I say.

I think it’s unusual to go from a high paid job to nothing so young. More usual to perhaps step into a different role or consultancy and step back a bit but still enjoy challenge of work. If they’ve been to university they haven’t even worked 30 years. 50 is very young to be fully retired.

Absolutely - all these things make a massive difference.
I would love to be able to retire at 60 but we absolutely couldn’t afford to do this! But if we could then I absolutely would.
My parents both retired at 60 but they were of the era of the final salary pension schemes and they were both very careful with their money and had savings etc. They could both take occupational pensions at 55/60 (including tax free lump sums)
And my mum got her state pension at 60
before they changed it for her women.

I have a step daughter who we helped through university and yet I retired at 53.

I did side hustles, I saved, I owned no fancy handbags or shoes, holidays were modest and we overpaid our mortgage in order to do so.

We didn't just fall into being able to cover our costs, it was 20 years of hard graft from making my own soap and growing my own food and working many long hours to get into a job that gained me a decent income, putting myself through 4 degrees at different levels to get more qualifications and these were not high paying jobs, just mid level paying.

The two people who were saying all this are themselves mid-40s on the same sort of wages. So not young ones just starting out there 50 feels like miles away!

This is a valid point! At a guess, we have given our adult DDs upwards of £75K over the last few years - since starting Uni really - which, had we invested that money, could have facilitated an earlier retirement. I must remind them of that next time I see them 🤣

You can’t access pension until 57 so that’s 7 years bridging required, could be feasible for some high earners.

And if they invested all that money they didn’t spend on kids in compound interest pensions and ISAs

yep easy at 50 in well paid careers, especially x2

We could if we didn’t have x2 teens but we do and they are totally worth all the expense and additional work - our choice we know

when I was in my 30s the idea of retiring early wasn’t thinkable - childcare, mortgage , unemployment spells , but I just kept saving what and when I could. It’s amazing what 20 plus years of patience does

housing costs are crazier than ever but they won’t come down much if we refuse to tax the inheritance that is propping the market up meaning an increasingly two tier society - those who get decent inheritance will still get to retire early

I know three people who retired at 50 - including me!

One had a well-paid job but hated it and saved every penny to retire at 50 which he did. The other sold his successful company for millions and retired to France. The other one, me, was made redundant at 50 with a payout and also divorced at the same age with equity from the sale of the family home and I downsized with no mortgage. I inadvertently retired as wanted to go back to work but never managed it through life circumstances.

I think it would be easy for a childless couple to retire if they have always been sensible with money.

Years of ISAs and a robust share portfolio should cover it though

It’s possible if you earn a lot and are focused on saving.

I’ve got kids, full fat nursery fees and a hefty mortgage - and I intend to if not have retired at 50, be certainly in the position I’m working because I want to rather than because I need the money for living expenses.

This requires maxing out both of our ISAs annually, big pension contributions etc.

And having a modest lifestyle has the "double benefit" of it costing less, so you need less money to be able to afford it.

It's definitely cheaper, but what is the second benefit?

The official estimate of bringing up 2 children in UK in a 2 parent household with child care or reduced income to cover child care, and impact on one of parent's progression (usually mother) income, plus needing a bigger house, plus everything else day to day up to 18 years is around 490k. It does seem high to me but it's the lost income and lost income opportunities and need to have a bigger house that are the big factors. Then we have university and any other supports for young adult children(Ouch). So if you don't have children then you have up half a million to invest before you are 50, even without all that free time to make more investment money.
The real question is why more aren't doing it.

I absolutely would think they can.

I am 56 and DH is 53. We could retire tomorrow if we wanted to. Things would be tight, but it would be doable. And I have a divorce behind me, where we had a 50/50 split, and I have also raised 2 children to adulthood, including support thru Uni, help onto the housing ladder and help with weddings.

That said, I have had 2 inheritances and a good redundancy pay out. And I think this is absolutely a factor.

I have 2 friends who retired comfortably at 55.

I reality, DH is retiring at 55, and I will probably work part time until early 60's and then pack it in.

I want to join Bannatynes and go each morning for a class, swim and sauna. Followed by a film at the cinema a few times a week, and long walks. And long holidays over the winter.

I’m well paid and will be sorely disappointed if I’m still working at 55. I’m in my mid 30s at the moment and aiming to have my mortgage paid and £1m in savings and investments by the time I’m 55 which will be plenty for me to retire on.

Completely achievable if you have planned for it. I will be retiring by 55, in spite of having 2 kids who we have privately educated. Because I started saving for it when I first graduated and married a similarly minded man. He is a bit younger so will keep working for another couple of years and his salary will support us both comfortably, meaning I won't need to draw on my savings until I am close to 60.
If we hadn't had kids, I could easily have retired a decade earlier.