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!

@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>

comedy gold

I think you could definitely make your numbers work, if you drawdown 4% a year of your pot you’d have an income of 20k a year, little tax to pay and no mortgage. You’d also have a cash lump sum after selling your house and your state pension at 67.

But the state pension isn't guaranteed. How can you place reliance on it?

@Fogormist

But the state pension isn't guaranteed. How can you place reliance on it?

A lot of people solely rely on the state pension to live so I think it’s extremely unlikely that the government are just get rid of it otherwise a lot of older people would literally be living on the streets or in extreme poverty. Sure, they can move the goalposts and increase retirement age so people can’t access it until later but no government (who largely rely on votes from older people) would be stupid enough to abolish it.

They might means test it. That would affect OP.

@Chippymunks

I think you could definitely make your numbers work, if you drawdown 4% a year of your pot you’d have an income of 20k a year, little tax to pay and no mortgage. You’d also have a cash lump sum after selling your house and your state pension at 67.

a 4% drawdown is often considered to be an amount that will not deplete your fund, if it is invested in something that generates growth*.

Try the drawdown calculator.

You can, if you use repeated Partial Encashments, take 25% of each tax-free, rather than taking all the tax-free allowance in your initial wedge.

As the number of remaining years you intend to live grows shorter, you can reasonably increase the percentage you withdraw. Notionally you might use up all your money so it runs out just after you do.

*but if the market has a big crash, and you continue taking the same amount of money, you will be taking a larger percentage, which will deplete your fund even if the market grows again afterwards

PigletJohn so the OP’s pension would be easy enough to live on.

@Fogormist

They might means test it. That would affect OP.

They tried that, and gave up as it stops people saving.

@Fogormist

They might means test it. That would affect OP.

Lots of things might happen but I don’t think it’s unreasonable to make financial decisions based on existing schemes and provisions, and the truth is the SP exists and there’s no sign of it changing drastically. It’s like saying everyone should be putting aside thousands incase the NHS might not exist in the future.

@Dindundundundeeer I didn’t know that! When was that?

I struggle to understand why you would want to continue doing something you don't enjoy

Yes, it’s a no brainier for me. Move to Yorkshire with a view to finding some sort of part time work to supplement your income - if you need or want to,

If you'd be happy with your son's style house at approx 220k that would leave you a 650 pot (500+150 from house) - 20 for relocation fees and costs leaves 630. At 4pc drawdown rate it shouldn't run out and give you 25,200 per annum plus something to leave for your boys, which seems fine if you don't want a super luxurious life and have mortgage paid.

I echo others in that I'd perhaps think about a part time job, even if just to help with the transition. I hear about a lot of people struggling on retirement particularly if they've been busy before.

[quote Cocomarine]@Dindundundundeeer I didn’t know that! When was that?[/quote]
@Dindundundundeeer

I would also be interested to hear when it was tried in the UK, because I have never heard of it happening.

I would def take the redundancy, sell up, buy small and get a PT job just a few hours a week to pay the gas bill.

My husband and I are having similar conversations at the moment - I'm 43 and he is 38 and we both dislike our jobs. If we stay where we are, we will need to take out a mortgage of between 650-850k for the house we want. If we move to Devon, we could buy a better house for around a 150k mortgage which we'd then look to pay off in 5 years and then cane the pensions/savings (as appreciate we wouldn't hit state retirement age for a long time) for a further 10 years before retiring (or going part time in some hobby job) at 58 and 53. However, we also have young DC (1&3!)

You sound like you're in a great position.

@Cocomarine
@PigletJohn

Well it was by a slightly less overt method, but when the pension credit calculation was undertaken, anything you had saved over the state pension was discounted against the benefits you received. The State Pension could also be part of the calculation for some people.

You had people saving, but then losing money because of it.

The result was means testing pension benefits and meant that for many people saving of any type of any amount was a waste of time. You had to be able to lift yourself over that hurdle.

They scraped it.

I think that was more to attack people on benefits. In certain quarters this is still a popular sport.

the same quarters take care to stay on the right side of pensioners, because they vote in large numbers.

Just coming back with an update. I started doing the commute a couple of months ago - I commuted by train and it was pretty stress free. There was still no point in my commuting as my team were remote, but there you go.

the company has now had a massive re-org and I have been made redundant, leaving with just under 30k!

I’m going to stay put for the moment, do some work on the house and generally chill. I still intend to move up north but maybe not for a couple of years now.

Sometimes things work out OK 😀

Glad to hear things have worked out. £30k is a nice payout given you were considering finishing anyway.

And I think factoring the state pension into plans is perfectly reasonable. If they want to make changes they will find it very tricky and it will mean any changes have to be made extremely far in advance. It would not be possible to go from expecting to receive over £150 per week on what has already been contributed to nothing for someone renting within perhaps 10-20 years. Any adjustments would need a very long run in and still be very unpopular. People should be factoring it into their planning. Yes, it’s not enough and orivate provision is also needed, but it can make up a chunk of retirement income - perfectly reasonable.

Enjoy your relaxation and thanks for coming back with the update. Always good to find out what happened.

If you live for 30years that's about 16k a year, plus your 15k redundancy and the difference in house prices and your state pensiom. Given you're rent free and could pick up work potentially (even if its min wage shop work etc) I'd go.

Wow £30k redundancy is mahoosive. Good for you.

Result! Hope it all works out for you and you can enjoy your retirement.

No, of course she won't. She'll just blindly buy something off Rightmove with no research at all. Fucking hell. Does the OP come across as stupid? Her sons live in the area. Are you from North Yorkshire and just think all southerners are stupid? Don't want any more outsiders visiting York?

@haveienoughmoney was so pleased to see your update. Im very pleased that the commuting was not as bad as you feared and your willingness to give it a go has resulted in the upgraded redundancy payment. Still sucks that they seemed to be ignoring their own OH and equality aspirations 🙄 Enjoy your retirement

I'm 61 and considering when to retire, moving to nearby northern city to be nearer things to do and adult children. I'm not sure why, when people talk about age proofing when choosing a future home, the options mentioned are bungalows or retirement flats. I'm looking at swapping my semi-detached for a flat that would mostly appeal to young professionals; spare bedroom, ensuite, good storage and close to public transport / short journey into the city. It will take a lot of research and house hunting, but I don't want to move again or be segregated in an old people zone! If it's more than one floor up I'd make sure there was a lift and a balcony and car parking space would be essential. It needs to be a modern build for sound proofing / maintenance and the lease will need very close scrutiny. I'm hanging on in there at work to maximise my pension and savings but I can't wait to leave. A part time job would be nice, but I'm realistic about my chances of getting one. I fully expect that when I do go (sometime between one and 3 years time) the economy will be in a pretty bad way.