Retirement?

[IVFNewbie]

We have no mortgage left to pay, 100K in savings but only around 120K pensions. No kids. We're in our 50s. When could we retire? Not worried about being rich in retirement. Just want to DIY, hobbies like gardening, reading, making music and dog walking- all quite cheap to do.

So the plan was for DH to retire in a year but Universities are offering severance deals and he managed to get a good deal, equivalent of a years wages so has recently left.

Not all universities. Mine is actively recruiting so, sadly, no severance deal to be had.

you'll want a decent holiday, good quality food and drink, days out, visits here and there, signing up for say an art course, etc., and it all costs money.
I wouldn't need any of these. I don't do that now when working.

So, a year or so on, we now have £150,000 in pensions and £250,000 in savings. I am just 56. Wife is 51. Looking a bit better I think. I'm aiming for retirement at 57 if this year goes well. Wife will want to continue 3 days a week (£1000 a month). Yes, we are both on track for full state pension.

IVFNewbie, are you a high earner or have you had a windfall to increase savings?

The usual working assumption is 4% drawdown so would equate to approx 16k per year so approx £1260 per month, with £1000 from your wife.

I think that's more do'able although if you drawdown capital for holidays, house repairs etc then your income would drop. If you are a high earner the drop in lifestyle would be more noticeable.

When you say 'on track', do you already have enough qualifying years for full state pension? The figures will stack up better once you can start taking that, but there's a ten year gap to fund before then.

yes, I have already qualified for fulll state pension. Wife will have in a few years

I earned well last year. I'm in tech sales.

I’d be very careful. My second-hand experience of early retirement is that people with very definite active plans for filling their time (“I’m going to volunteer at the nature reserve Mondays and Thursdays and look after my grandchildren Tuesdays and Fridays, Wednesdays I have my French course, I meet up with my friends for a natter over coffee Saturday mornings and Sunday morning I go to church”) tend to do well. People who say “I’ll potter about and maybe do some DIY” seem to experience rapid mental and physical decline disproportionately often, and end up as the kind of people who say “Oh I’m far too busy next week, because I’m going to the doctor on Tuesday and Tesco on Friday.”

If you just want a change I would consider a different job, maybe part time. But early retirement with no plan and little money sounds like a bad idea.

You need to work it out compared to your likely spend - some people need 50k a year , others are happy on 20

spreadsheet of all current spend - don’t assume you will spend less but think where you might spend more - more trips out ? More hobbies ? That’s how much you need . Add inflation buffer

work out how much you could get each year - say 4% of the pension pot would be 5k

when you get to state pension age - would that be enough?

what is the gap between needed and how much you have ? Could you use some of the savings to cover the gap? I’d keep some savings back for major things like a new car or roof or boiler ? Say 5k a year for ten years from your savings …

if it’s not enough you need to work a few more years

may also be worth thinking what happens if one of you dies - would the other person have enough ?