Can I retire at 61 with 500k pension?

[haveienoughmoney]

There’s a bit of a back story involving the relocation of the company I work for meaning I’d have to commute for 3 hours a day 3 days a week - they will give an allowance to cover some costs for 2 years, after that you’re on your own. They have declined my request for a WFH contract, even though Occupational Health have recommended it, the team I’m in is all remote anyway so there’s little point in my commuting to sit with people who have nothing to do with my role.

So - do I suck it up for 2 years and then retire at 63 or do I go now? My pension pot (DC) is just under 500k which sounds like an awful lot of money, but it could have to last until I’m 90+!

My intention in retirement is to sell my house for about 370k - no mortgage - and move closer to my sons in North Yorkshire where I’d be looking to buy for about 300k. This would enable me to upsize! - I have a tiny but very pretty cottage in Hampshire, I’d be looking to buy a 3 bed town house up North.

I’d value some opinions as once I’ve made the decision there’s no turning back. For what it’s worth I don’t particularly enjoy the job now that we have new owners, both my sons are keen for me to move nearer to them. I really like the area where I’d be looking to buy so if my boys moved away (I don’t think they will, but who knows)? - I think I’d be happy there.

I’m not a big spender and am happy with a reasonably simple life, I need to maintain a decent 2nd hand car, I’d like a few European trips and some meals out.

All thoughts welcome and thank you!

What was your reasoning to retire anyway at 63?

61 vs 67 is a big financial decision, 61 vs 65 less so but still an impact.

But 2 years? You can cover that easily with the money you gain with the house move, not touching your pension.

For 2 years of 3 hours a day 3 times a week pointless commute? Screw that.

I’d be off to Yorkshire!

If your team is all remote, what reason have they given you for refusing you? It sounds crazy that you'd commute to sit with people who aren't working with you anyway.

@doublemonkey

Sounds like you're in a really good position OP. 300k will buy an amazing house. Two more years of work will not add anything significant to your pension pot in any case, would it?

I'd go for it if I were you. The property market might be about to change dramatically so if you're wanting to get a good price for your current home now might be the time.

I don’t think it’s so much what you add in 2 years - it’s what you take out!

So if OP wanted £20K per year, she’d be taking over 10% out of her pot in just 2 years.

Also, contributions in final years of working can be really high - really max out tax relief, get used to a trial run of living on less, often (as for OP) no mortgage.

So on a salary of say £40K, it wouldn’t be unusual to save £20K into pension for that final hit. So 2 years earlier to retire could in total be £80K less in your pension.

Which is a hell of a safety net for existing plans, or an amazing motorhome!

I’m just 61 and my state pension age is 66 and 6 months so 5 1/2 years until I get the state pension (which will be full). Prior to company takeover I’d have been happy, health permitting, to work as long as possible.

I do think the proposed commute would have a negative effect on my wellbeing at my age (yes, I know some people have longer commutes, I was on the 7.30 to Waterloo myself for some years in my 30s and hated it)!

I’m just not sure whether to bite the bullet now and take redundancy (about 15k, not a fortune but a nice bonus) or commit to the commute for 2 years and stuff more into the pension. Once the allowance stops I’m looking at £400 a month in train fares on a 32k salary and the job doesn’t really merit the outlay, so unless company policy changes I wouldn’t want to continue commuting for no valid reason.

Reason for making us travel into the office? New company have leased a fancy city centre office for a lot of money (in the middle of a pandemic)! and it’s purely presenteeism, ‘bums on seats’.

Obviously you need to take financial advice, but if you live to be 81, you'd have approx approx £25k a year so around £2k a month. But there are so many unknowns, however I would think it's very possible, and personally I'd go for it and enjoy an early retirement

You don’t enjoy the job and your boys would love you to be close to them. You can make it work!

You can use an online annuity predictor to show the projected annual income from that pension pot at your age.

You should also contact your bank to ask them for a free financial-management advice interview.

I would take the redundancy, move, and look for another job. You could afford to take something lower paid, and it would help you integrate into the new community.

Throw in that £15K redundancy and I actually can’t find a reason to stay!
Quality of life vs money, when the quality of life side just gained £15K from the money side?

@2bazookas

You can use an online annuity predictor to show the projected annual income from that pension pot at your age.

You should also contact your bank to ask them for a free financial-management advice interview.

That’s interesting. It’s not something my banks (NatWest and Lloyds) have ever advertised to me, and frankly it’s not the place I’d ever expect decent financial advice from! My friend was a bank manager at Santander, and the people that she worked with had more of a background in sales than finance!

I’d be looking to buy a 3 bed town house up North.

AFTER you retire on a pension.annuity, you won't want to face the legal and tax expenses of any later house move. So, you should be considering a North property that will be your last move ever, suit you for the rest of your life, through old age/ infirmity and visiting carers etc/

A townhouse is not it.

I suggest you look for a bungalow all on one level, exterior door wheel-chair accessible. Space for a walk-in accessible shower with a seat, usable by a personal assistant helping you to shower. A manageable garden with sitting out space, where you can potter, keep a pet and dry laundry or park a car.

Or, a custom-built retirement flat ; either on the ground floor or with lift access.

If you buy a place where the only lavatory/ shower/ bedroom is up stairs, then a very small accident/fall/ illness causing immobility, can force you out of your home almost overnight. Being trapped upstairs (where the bed/lav/shower are) unable to access the kitchen, cooker, washing machine sitting room, open front door to visitors etc, is no better. I've seen this happen to older friends with awful results.

I would go for it. Don't worry about annuities, they are not worth it. And personally I wouldn't worry about keeping the capital either. Just draw it down at a steady rate. You own your home and have a full state pension. You may live to be 90+ or you might not make 70. Life is for the living.

@2bazookas that’s twice you’ve mentioned annuities! They’re not the only option, and for many they’re not even the best option.
I’d far rather have the life styling flexibility of drawdown.

I disagree about the “final” home at 61. Sure, it’s a valid consideration - but everyone I know in their 70s would roll their eyes at the idea that they can’t cope with a house move now!

I agree with others that you need to check the numbers with a financial advisor, but from my calculations of where you are financially, vs the job with the upcoming commute, I would take the redundancy and move.

I agree with others about the house - you want this to be a one only purchase (so you don’t have multiple costs from selling multiple homes), so you need a place that will last you as long as possible - no stairs, walking distance to shops etc.

Also, moving at a younger age is good, as you are still young enough to meet people in your new area. I would strongly recommend looking for a job (even part time or even volunteering) with the aim of using it to meet people, rather than earn money (although - a nice bonus). Time can seem very long with no friends and whilst of course your sons will be pleased to see you, they have full lives of their own and you don’t want to be the “needy Mum”, instead the Mum so full of stories they can’t wait to hear them.

Having a job (even part time) could also be a nice wind down into stopping to care for grandchildren, if that’s something that interests you, and your sons’ families.

I've been a bank customer long enough to have outlasted several bank managers (at two different banks) and during those decades have repeatedly had to have a polite calm conversation (by appointment with the new BM) that goes along these lines

  " I am the client, you are the service provider.  The money held in this bank belongs to me.  I like to operate my accounts to suit myself, thankyou.  

Sometimes I need advice and assistance from my bank. If you are unable to provide it, I will move my money to a bank which can. Here is what I want you to do/ help me with, please. ".

  It has never yet failed to produce an entirely satisfactory result.

That doesn’t sound then, like you’re getting financial advice from your bank - just using them to execute your instructions.

Just wanted to say that I completely disagree with @2bazookas about buying a bungalow. Just make sure you have a plan b and enough money saved in case you do need to move again. Don’t assume the worst case.

@2bazookas

I've been a bank customer long enough to have outlasted several bank managers (at two different banks) and during those decades have repeatedly had to have a polite calm conversation (by appointment with the new BM) that goes along these lines

  " I am the client, you are the service provider.  The money held in this bank belongs to me.  I like to operate my accounts to suit myself, thankyou.  

Sometimes I need advice and assistance from my bank. If you are unable to provide it, I will move my money to a bank which can. Here is what I want you to do/ help me with, please. ".

  It has never yet failed to produce an entirely satisfactory result.</div></div>

I think my FIL has joined MN 🙈

@Frenchfancy

I would go for it. Don't worry about annuities, they are not worth it. And personally I wouldn't worry about keeping the capital either. Just draw it down at a steady rate. You own your home and have a full state pension. You may live to be 90+ or you might not make 70. Life is for the living.

I'm glad you've posted this. So many people talking about annuities on this thread that I was starting to think I was going mad. Do people still actually buy annuities anymore?

@coco I was just thinking omg is my dad on here?!

I suggest you look for a bungalow all on one level, exterior door wheel-chair accessible. Space for a walk-in accessible shower with a seat, usable by a personal assistant helping you to shower. A manageable garden with sitting out space, where you can potter, keep a pet and dry laundry or park a car.

Oh my word! The OP is only 61!!!

I love threads like this - they’re so exciting (I am a bit weird though). It’s of course a very personal decision but one thing to keep in mind is you cant buy time. That level of commute is lost time and will likely impact your health. I would take the leap and remain open to part time work that will get you out and in social circles. A financial advisor can help you with budgeting etc. But from pp’s it sounds manageable.

@2bazookas

I’d be looking to buy a 3 bed town house up North.

AFTER you retire on a pension.annuity, you won't want to face the legal and tax expenses of any later house move. So, you should be considering a North property that will be your last move ever, suit you for the rest of your life, through old age/ infirmity and visiting carers etc/

A townhouse is not it.

I suggest you look for a bungalow all on one level, exterior door wheel-chair accessible. Space for a walk-in accessible shower with a seat, usable by a personal assistant helping you to shower. A manageable garden with sitting out space, where you can potter, keep a pet and dry laundry or park a car.

Or, a custom-built retirement flat ; either on the ground floor or with lift access.

If you buy a place where the only lavatory/ shower/ bedroom is up stairs, then a very small accident/fall/ illness causing immobility, can force you out of your home almost overnight. Being trapped upstairs (where the bed/lav/shower are) unable to access the kitchen, cooker, washing machine sitting room, open front door to visitors etc, is no better. I've seen this happen to older friends with awful results.

Bloody hell - I'm 61 and these are certainly not on my list of 'must haves' when (if) I move!!!

Fingers crossed OP you've got a good 20 years before you need to be worrying too much about accessibility issues.

So say you may need it for 30 years, that gives you around £16500 a year from your private pension and in a few year you will have state pension too. Do you have a partner that will also have a pension?

I'd move, ditch the job and go part-time instead of retiring completely. PT work will give you a nice balance but still allow for more time for family and hobbies. I'd look at buying somewhere that would be suitable for long-term so that you don't have to move until later life and only if necessary.