Change of outlook after turning 50

[inthenameofpride]

I’m having a huge change of heart about my plans leading up to retirement. To give some context I am in a well paid professional job with a pension pot around 550K. I imagined I would see out the next 7 years and look to retire from main job at 57 and work on my small business. I am very enthusiastic about the business but have little time to apply to it. One primay aged DC. I am fortunate that the pension pot has gown well over the last few years and I surprised myself when I looked at the projected figures for age 57. On the other hand I’m time poor and feel increasingly frustrated with the treadmill of of earning decent money then pouring it all back into childcare and regretting not spending more time with DC. And I suddenly have zero motivation to progress my career. Am I crazy to consider switching to a much lower paid job (on paper) with much greater flexibility? Or even jacking it all in and working on my business?

Go for it. Small job or small business. DC won't want to spend time with you as mich in 7 years time.

Compromise? Part time in professional role and part time in own business?

Without understanding your financial situation it’s difficult to advise. I will say, I’m the same age and feel the same as you. I have no desire to progress my career. I would love to go part time but have teenagers to fund through university and a mortgage to finish paying. I have a plan to reduce to 4 days in 3 years and 2 days at 60.

I would go for it. You sound very stable financially. 7 years is a long time to stay in a job you have no interest in.

Is your mortgage paid off? Do you have other savings to bridge to receiving pension?

If your business excites you and covers your basic needs then go for it - you’ll appreciate the flexibility, and can manage your time around your family.

I’d also caveat that the pensions projections always sound high but discount for purchasing power. You’ve still got a healthy sum, but won’t be quite as flush as the figures suggest.

Scale back on work and spend more time with your child.

You don't know what the future holds and can't assume good health will see you through the next decades of your plans. I remember a poster on here saying their medical consultant had described being in your 50s as sniper alley health-wise - so many people in that age range die.

You should live for today with an eye on the future, rather than spending the present planning for a future that you may never reach. Especially with a child - you won't get that time sgain.

I hate to be the one to say it but we don’t know enough about your financial situation eg have you paid your mortgage off , do you have an OH who also works and has pension provision . Savings etc . You have only mentioned your pension at £550k and 7 years fluctuations of value so we don’t know what it will be worth at 57. That imo isn’t enough and won’t go as far as you think . I’m not sure what lower paid job with greater flexibility you’re thinking of but most lower paid jobs don’t have flexibility eg if it’s retail you have to be there , no working from home etc .

@hattie43yes the rest of the finances are not in such great shape so it’s a risk. I’m a single Mum so sole income and still have a lot left on mortgage. I’m planning to convert to interest only and invest some money to help with bridging the gap to 57 and then use some of the tax free lump sum to pay off the mortgage at 57. Lots of equity in the house but not planning on moving so won’t realise it.

I’m considering a term time only job

I worked term time briefly and it’s not all it’s cracked up to be. I couldn’t take time off for assemblies or early finishes, school events so would have missed all of that with DDs. After 3 years I went back to normal hours (part time initially) and enjoyed much better flexibility and pay. Just something to keep in mind.

Ah I see . I think you just need to sit down and really work out your financial plan . 10 yrs providing for yourself before state pension needs to come from somewhere . It maybe you can think outside the box and get in a lodger to help pay some utilities etc .
Finances aside if you can make them work absolutely go for it . There comes a point when time is more important than money . I retired 2 yrs ago on this basis with no regrets . You have done really well to support your family up to now and I would not risk things going pear shaped in the future . Could you maybe do your plan and then work for another couple of years putting every spare pound away .

I don't think I'd do it just yet OP. A lot of people in midlife feel fed up and demotivated, but as a lone parent with a young DC and a big mortgage I just think it's too risky. Yes, your pension pot is in decent shape, but you say the rest of your finances aren't great, so it just doesn't seem prudent to me, when you have so many more years ahead of you to support your DC. If you work FT could you maybe go to four days a week, so you have a day free to work on your other business or at least have a bit of freedom and flexibility? I honestly wouldn't give up that well paid professional job just yet.

You are not going to want to hear this but the reality is you may need to sort all your finances first. If you retire at 57 you potentially need funding for 30+ years. You also have to think about your DC and funding university etc.

You are at the peak of your earning power and you need a strategy to get all your finances in shape. There is a lot of helpful tools out their find the approach that works for you:

• FIRE = Financial Independence Retire Early
• Rebel Finance School - they have just started a new 12 week course. Stick with it as it does make sense.
• Personal Finance Flowchart https://ukpersonal.finance/flowchart/
• State Pension Forecast - https://www.gov.uk/check-state-pension
• Mortgage Overpayment Calculator - https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

Invest the time now in future planning and you won’t regret it.

@Kirschcherriesthis is so helpful thanks so much. It’s also interesting to hear the motivation shift is common at this age. It seemed to come out of the blue!

I think it's a risky plan when you are the sole income earner.

If you have plenty of equity in the house, selling that downsizing would give you security, but a getting a new mortgage now is expensive.

Have you investigated whether you could get an interest only mortgage? They aren't easy to get. We have one, but our joint income is high, and we have a lot of savings, significantly more than you in pensions, 60% LTV on one house and mortgage free on another property. The mortgage will be paid in full when we sell the house and we will live in the other one. We don't need to touch our pensions to pay it off. Our savings alone are greater than the mortgage. The monthly interest payments are covered by renting out our second property.

With all this, we had to jump through hoops to get the interest only mortgage.

And what provision do you have your child should anything happen to you?

Personally, I think I'd be slogging on to 57, but putting all salary in the HRT threshold in the pension, and piling as much into a S&S ISA as I can afford. Then you will have significant financial freedom at 57.

Work it all out, but no, you are not being unreasonable.

I'm in a not-dissimilar boat, and switched to part time a couple of years ago due to not having enough hours in the day. This year my second goes to secondary, and I get another 1-2 hours a day back from school runs, and I'm finally going to actually have some spare time to go to the gym (or something - something for me).

The only thing to remember is that they don't get any cheaper (the kids) I'm looking ahead to uni etc. so when you're doing the future budget, keep that in mind.

heartily recommend part time though.

You need to work out how to get that mortgage paid off and some income in between now and that tax free draw down which incidentally might not exist in 7 years.

You are going to need spreadsheets.

All the financial advice seems to be not to focus on paying off the mortgage and plough money into savings instead.