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.

Part time seems to be the answer
save enough for your expensive house
invest in pension
learn to chill outside work
stat making proper retirement plans

I’m with @RandomUsernameHere and @Rainbowcat77 - id look at doing something paid, part time, with minimal commute/lower stress, given that all the cons for part time working are about those things.

Thats based on my belief (possibly self protective) that retiring this early would mean ending up doing some challenging voluntary job with all the stress and politics of a paid job, but no money. Might as well get paid.

You can afford to cover your monthly expenses so the main issue is the new house, will the drop in invested money bring your monthly income to a level too low to keep you both once you move?

Do you both love working? We took early retirement, me at at 53, and moved to France after buying a second house with our savings and rented our UK house out to provide supplementay income and only took out the balance from pensions to meet the income requirements. But we were both ready to stop work and take a massive break. After the first 5 years, we could work again later this year but he has no plans to and I will just sell pottery and so we are selling our house in the UK now to buy a second one with more space for a proper pottery studio for me. We will then sell this place and invest those funds somewhere. I'd be kicking myself now if I'd taken the advice of many people and carried on working just because. It was the best thing we ever did.

No children.

DH wants to retire by 50 (hes 45 too) but isn't decided about the next five years either. He has much more chance to do consultancy than me and potentially for big money. But he doesn't want to do this.

There's not much consultancy/freelance in my field.

£45k would be for both of us and would give us the lifestyle we want - comfortable but not extravagant.

We can't easily sell the shares because they're founder shares.

Neither of us would have full NI contributions but planning to top-up to get full state pension.

We have work pensions which are combination of DB and DC. I have no idea how much these will pay when the time comes.

To your second point, yes, I reckon I could work three days a week and my employer wouldn't notice.

Half of my job/workload is very autonomous so I can do as I please. As long as I do something no-one will notice for a few years.

Thanks for all tour comments. I think I need a financial planner 🤣

What would you do if you retired? Do you have people to spend the extra time with?

As PP have suggested, I would try part time before completely retiring.

I think I'd be tempted to move house first before changing circumstances in a major way. Also, the world is a very volatile place right now, could your investments drop massively?

I just reread your job description where you say that much of your job is automomous and you could effectively cut down without telling anyone. How difficult would that be?

I see threads where people complain about not having enough to do. That would not bother me. I ran an Ebay business while I was being paid for one academic job I did. No one seemed to notice and if they did I would simply have claimed i was doing it in my lunch break.

Noooo. I want to retire to get away from people 😂

Investments can always drop but most of our investments are in retirement trackers that adjust risk over time so we've been sensible.

It wouldn't be too difficult at all.
As long as I do the part of my job which is more rigid and turn up when I have to turn up, the rest of it is pretty flexible.

Move now to a bigger house and keep working full time

45 is too young. What will you do all day?

I'd go part-time as a pilot test. :)

The problem I think is that if you have both worked full-time for the same sector - and then that currently stops - I think that's a huge change and you both might find your lives/each other a bit boring without some work chat and something to do.

Could you both take three months off and then return to part-time work?

You need to look at your works pensions and the t&c’s.

our is retire at full value at 67. If you take early retirement you lose some of the value. I am not completely clear on how it works as am not there yet but to get maximum return on your money you have to take your pension at 67.

you can retire early and opt not to take your pension until 67. Or there is the option to work part time, your contributions will be less but you retain the maximum value so you will be much better off at 67 than if you retire early and take the pension at 55.

so speak to your work and figure out the best option there. If p/t means you secure post-67 retirement then you can relax a bit more about using your investments to bridge the gap.

why are you moving to a more expensive house out of interest? I will be looking to go the other way and release equity as I retire.

It’s the house move that is concerning me.

My preference would be to retire now and enjoy my life BUT with a house move in the horizon I don’t think that’s sensible.

You don’t know for sure how much the new house will cost, how much more the running costs might be etc. It would be prudent to settle into the house and then recheck your figures.

1. go part time
2. buy house
3. retire fully

I know the T&Cs about when we can take pensions, how much hit we take (%) etc. What I'm not clear on ATM is how much they'd pay out because they're a combination of DB and DC and its hard to forecast with the parameter that you stop paying in at 45 😅

We've never really factored pensions into financial planning so whatever's there at 68 will be a bonus.

We're looking to move because our current house has some things lacking that we'd like. Going part-time or retiring will mean more time at home (and we're both home-birds) so having the right house is really important.

You need to know what your pensions look like. Without that it's impossible to say. It isn't harder to see what pensions will look like if you stop paying in at age 45. In fact it's easier because they just work with a static sum plus average interest for the DC and the DB one is just calculated according to a standard formula.

We are literally overhauling our finances right now (I have a thread about it). Im sitting here surrounded by paperwork..

I would have 2 major concerns. The first is the cost of upkeep of the new home you plan to buy. If the house is more expensive then council tax and running costs are likely to be more. Are you budgeting for that? The other is do you have enough to cover the expensive years eg the year you need a new car or to replace the boiler or the roof?

I would continue to work for a few more years.

How secure is the income from the £1M? Looks like 6% which is quite high for most 'safe' investments currently. You need to not dip into the savings and perhaps increase them in line with inflation for quite a few years, then if necessary you could start drawing the savings down. I think it's doable. If you moved further away could you get the dream house somewhere cheaper? Or is that factored in already.

If I had £5k per month interest I'd retire and do some travelling ... you are a ling time dead!. We retired much later than you at 57 on less income but so glad we did. We leave the UK in winter ... its a no brainer.

I have a little bit less than you @Spitloon and am older at 55. I do have an IFA who handles all my pensions and investments. It’s well worth imo having one. According to him even with pessimistic forecasts I can easily fully retire now and still have enough money to see me to 96. Even with buying another house etc etc. Anyway my point is see an IFA, they should ask a lot of questions about your current and proposed lifestyle requirements and may bring up things you haven’t considered or been suggested here. Then go from there.
My plan is to go part time and semi retire in 2026

I agree if the income from the £1M is £60,000 and you only spend £30,000 you already have a good surplus income, pensions will be extra, the exact amount of the pensions wouldn't affect my decision. You could take your private pensions early as well rather than wait to 68.

I did retire early, not quite that early, with considerably less savings, which have actually grown significantly since I retired, partly because I could spend more time maximising my returns rather than letting things just roll on.

It is really worth looking at scheme rules and calculators. With DB pension schemes such as public sector there is (on paper) on average no loss in total received for taking early. It will be actuarially reduced so that smaller amount paid over more years. A gamble on lifespan. In the older schemes 60 is the pension age and missing out on 8 years if don't take it until 68.

I went part time at 55 and topped up earnings with proceeds of the sale of my business. I am lucky to have a generous NHS pension which I took at 59, ten months early so with a small reduction. My planned retirement age was 60 but I was diagnosed with breast cancer at 57. Made the most of sick pay then left the NHS and now just work one day a week in the private sector.
My DH went part time at 55 ( 3 yrs earlier than me) then gave up work, burn out, to be a SAHP when DS needed a lot of ferrying around as a teenager who played a lot of sport. He planned to get a part time job once DS was able to drive but had a stroke just after DS turned 17.
Currently we have a gross income of 80-90k depending on how much I earn. I have been contributing to a private pension ( to reduce tax) and once DS has finished uni I’ll retire fully and use my private pension to top up my NHS to maximum I can before I pay higher tax rate.
When we both hit state retirement our joint income will be around 60-70k in today’s values. My pension is linked to inflation so keeps up with cost of living.

We have about 250000 in savings and private pensions between us and have chosen to use draw down pensions since our health problems mean that annuity may not yield the true value in our potential lifetime. The draw down also pays out the remaining pension to the survivor on death.

Since we are currently funding DS at uni we know that we are going to be very comfortable. We have been spending savings on the house over the last 4 yrs. Replacing white goods when they breakdown with appliances that will hopefully last 10yrs+ and have had a new ch boiler and double glazing replaced. The upgrades have halved our energy bills. The longterm plan was always to make our current house more energy efficient. Reducing living costs overall makes better use of our savings, it’s nice to be earning interest but all of the interest is taxed.

Life experience also affects individual planning. My parents both died before state retirement age so never to full advantage of the money tgey had invested. And my youngest sister died recently, before she was able to retire. She had nearly 250k in cash savings alone which she had accumulated for retirement along with two civil service pensions. Fortunately her DH gets part of her pensions but it’s tragic that she was never able to enjoy the money she had worked hard to build up.

We now have a policy that if we want something we buy it. It’s actually much harder to spend money when you have been careful in the past. I still look for bargains, shop on Vinted and take advantage of offers where possible. I bought a new jet washer that was half price in Tescos yesterday using clubcard points that have built up over the last 12 months. I have a points account with my bank account which has a balance of £250 currently. Our washing machine is likely to need replacing within the next couple of years so I’ll keep collecting them and use the money to buy a new washing machine eventually.

I’m afraid I’m of the generation that will wear clothes until they are threadbare and rarely replace items for cosmetic reasons. So we are unlikely to live beyond our means. Because of careful investment in pensions our income is actually more post retirement than pre retirement. Early retirement was the aim although for us it was somewhat enforced due to health issues. I am glad that we had the worried about tomorrow attitude as young people. You have no idea what’s coming and the lack of stress now has been fantastic after what we went through as a family.