Would you retire now or go part-time with this financial situation?

[Spitloon]

You're 45. You're married. You have fully shared finances.
You have £1m invested in various places which is generating about £5K per month interest at the moment (so £60K per year - ish)
You have £100K cash.
You have shares in a couple of companies which might pay out £200++ if things go well. But no guarantee.
You have a house worth £370K which is paid off.
You want to move to a different house in the next few years but no rush. That house would be about £600K.

Currently you spend about £30K per year in total.
But you'll be increasing this because you'll soon have more freedom for holidays, meals out, weekends away.
An annual income of £45K would be more than enough.

You don't hate your job but its stressful. You have a lengthy commute but this only averages a day a week over the year. Half your job is very autonomous where you can basically do what you like, which gives a good level of freedom but also means it can just expand. And it has done.
You want to take early retirement - i.e. give up working completely by 50. You know some MNers are dead against this but this is your plan, and works for you.

Would you:
> Give up work completely now.
Pros: No more work.
Cons: Cliff edge, weird adjustment process maybe.

> Go part-time for the last five years (contractually).
Pros: Still earning a bit. Slight reduction in the non-autonomous bit of your workload.
Cons: Stress doesn't necessarily reduce. Still have to work and commute.

> Go part-time for the last five years (just don't tell anyone).
Pros: Still earning full salary.
Cons: No reduction in the non-autonomous bit of your workload. Still have to work and commute. Potentially awkward to navigate.

DH and I have very different perspectives and I'm interested in what others think. Thanks.

Go part-time but tell everyone you are semi-retired. Has a better ring to it.

I’d retire now. Life is too short to spend working if you don’t have to. Yes it’ll be a strange adjustment for you, look into hobbies you can do, travel, do things ‘you’ want to do.

I’m an all or nothing person so I’d leave work altogether. You are married aswell so what is your spouses situation. Working , retired or part time etc

'You' and DH are both currently working full time in basically the same job.

retire now, life is short

May sound a bit daft, as not really needed, but I would still make sure I paid my NI stamp for state pension, and for all the other contributions based security and access to health care it gives.
State pension will be neither here nor there in your budget, but the history of contributions may be important at some point.
Id go part time and just say quality of life is important when anyone asks.
And get some really good hobbies

If you are unsure, go part-time as it makes it easier to move towards retirement. You can always switch quickly into full retirement if you want.

You need something to retire to, so what does that look like for you?

What are your husband's views as ideally you would both be on board.

is 45k a year for both of you? So your husband will retire too?

your 1mill will inflate quite quickly if you’re not reinvesting any of the proceeds.

You’re planning to move to a more expensive house - are you going to take on a mortgage or use some of your investments which will obviously reduce your capital to generate income.

I would keep working for a while and then go part time. Your money will need to last the rest of your life which could be another 50 years. I’d want more of a cushion.

Can you freelance? So not tied to an employer but still working as much or as little as you want? Appreciate that not every career can do this but there are potentially opportunities to consult / teach / short term contracts that could alleviate the cliff edge of stopping work rather than part time.

Are those figures shared or individual? Would your OH retire too?

Not one of the options you have given, but how about changing job and doing something you enjoy?

I retired at 55. In your position I would go part time and ease into it. If anything changes you can always step hours back up.
It would also keep some routine whilst you adjust and swing the balance from mostly working to mostly not.

As an exhausted 45 year old, min wage my god I’d retire!!!!!!

I would go part time or another option, find a job you enjoy. You’re awfully young not to be working and if the part time gig isn’t working for you, you can give up then.

Are those investment amounts joint or does your husband also have investments?
The shares- do you mean £200k?
How many more years NICs do you need for a state pension?

Total assets currently (ignoring the shares) £1.47m (assuming your husband's are included here)
Plan to buy a house- £600k. Not sure if you have included moving costs here but shall we say £30k?

So remaining assets- £840k

A rule of thumb is that you should be able to take 4% per year, increasing in line with inflation, for 30 years. This would mean £33.6k rather than the £45k you want, but of course does not take state pension into account when it becomes payable. If you do also have £200k shares then you're closer to that £45k.

The absolute killer for plans like this is inflation. If you are making £60k on £1m now, that seems like a 6% return but in real terms it's more like 3%. Unless you keep reinvesting at least part of your returns then the real value of your investments- and therefore your income- will drop hugely over what could be a 40 year retirement.

There are so many variables here. I'd suggest you either spend some time with a spreadsheet mapping it all out with different returns and inflation rates. Alternatively this is one of the rare times that it would actually be worth taking advice- a financial planner is what you want.

In your shoes I'd go part time (contractually) or try another job. That still leaves open the idea of retiring early if you change your mind. If you retire at 50 and don't like it you may find it harder to get back.

There isn’t enough information there for me to come to a conclusion about what I would do, other than see a financial planner - but gut is to stay working at least part-time.

I know you said shared finances but is that your shared savings/investments too (confused by the ‘you’ )? Pensions to kick in later at 57? Children to support through early adulthood? Full NI paid so get full pension at 67?

DH retired at 55, I am 52 and still working (part-time) - I won’t get full NI (without paying it) until 56 so that is my goal, but I will prob work until 60. I enjoy working though (despite it being stressful and annoying at times) - part-time, not full time! DH is more than happy retired, I really don’t think I would be yet. Part-time is good though.

This is key. One person with an income of £5k pm from a pot which, if well invested, will continue to grow and never run out looks very good.

However if its to replace two people's salaries who will both have time on their hands, not so much.

Plus I don't understand the bit about going part time but continuing to earn your full salary because you don't tell anyone? Surely you're not suggesting your employer won't notice if you work part time for full time money?

But with the amount of cash you have, it would probably worth paying a financial planner to advise you on how to achieve your goal of retiring soon and not running out of money.

I think it would be madness to retire and then a few years later spend £300k+ to buy a bigger house.

How is it £1m in investments is only generating £60k (0.6%) a year, so?

You definitely need an IFA

60k return on £1m is 6% tbf

If this was me I’d feel way too young to just retire and not do anything. I think instead I’d want to use the financial freedom to look around and see what else I would like to do work-wise for a few years.
a completely new career, maybe one that’s lower stress and lower paid could be an interesting direction for your life to take.

What about Pensions?
Are the numbers joint with “you” and DH?
Have you considered tax on the £1m interest?

Your maths ain’t mathing.

The spanner in the works is the plan to buy the more expensive house, and the huge unknown is the shares. I would plan to sell the shares soon, put the money somewhere to earn a bit of (tax free) interest in the meantime, and plan the house purchase around that cash pot plus whatever you get for the current house. This leaves the £1m untouched and paying interest which you live on. Would be absolute madness to dip into the £1m to fund the house.

Do you have children? We are in a similar situation and will keep working (me PT, DH FT) until DS goes to Uni which is 4 years time. While he’s at school we might as well keep that routine.
So DH will be 56 and I will be 53 when we retire fully.