How much is enough?

[tiredofthisshit21]

I'm 56 and feel like I'm done with work. Fairly high pressure job in financial services. I've completely lost all enthusiasm and finding it hard carrying on. Here's my financials:

£410k pension pot (DC)
£5k pa DB from age 60
£100k in ISAs
Tax free lump sum would pay off mortgage with some left over, house with about £500k.

Husband still working and will do for a couple more years. He earns well and could probably subsidise me a bit (we don't have combined finances). Our main expense is holidays but we would cut back a bit.

Would you retire now if your financial situation looked like this?

Based on whats here...
Personally no, but depends what kind of retirment you want.

Missing info is you DH savings pensions etc.
If he has 400k in isas and 800k in pension you are fine.

Assuming he isnt financially abusive.
I dont non combined finances at.this stage of life presumably youve been through so much and for so long you are past that.

We are married 5.yrs ans w kids and despite "separate finances and a.joint account" its all "our money"
Mat leaves, redundancy bereavement, health issies, butnouts mean life isnt 50/50

He has more in pensions and less in ISAs than me.

You missed the numbers required - what do you need?

How much each year?

Have you done the rebel finance course - free and on you tube. Think you would find it helpful.
Should you leave your job - god yes, you clearly hate it and have only one life. You have a big cushion so can but need to plan the next stage with your partner too. Between you it looks great.

I think I could live on less than £25k per year once mortgage paid, including paying for holidays. I've run the numbers through guiide and it looks really positive. I end up with DC pot never running out which looks a bit too good to be true.

No joint finances because of second marriage, no kids together. My choice.

It depends on your plans and lifestyle. I’m 56 and retiring in March. Husband is 60 and already retired. House paid for. Children left home. We’ve got a target we set 30 years ago and will now cut our cloth accordingly. Joint finances. One pot.

Hard to know without understanding your lifestyle and outgoing. Do you need timeout kids through university? Have expensive pets? Big council tax bill?

Assume you are currently on a high income - will the gear change be too dramatic.

what about a plot with your partner? Could you financially survive that?

would a job change be a better option for a few years to build a stronger cushion

Kids have all left home and don't need financial support.

Re job change I did that earlier this year and it just ended up being same shit different place.

You might find this helpful: https://www.retirementlivingstandards.org.uk/

Hmmm,

I wouldn’t see that as nearly enough to be honest. If you have about 1 million outside your house in assets between two of you, that would be optimistically £25k of real return (after inflation).

Can two of you really live on that? Holidays, insurance, house repairs, eating out and in, any health related concerns?!

If you start depleting the capital, each year it will yield less and you could have over 30 years left to live hopefully.

It’s a personal decision , but I would keep on working in your position.

So £100k needed to pay off the mortgage leaves you with £400k. You will need £25k for the first four years which will be post tax, so you would need to pull £30k from your pension. That would leave you £280k at age 60.
You then need £20k per year as you have DB of £5k for the next eight years. Pre tax that would be £23000, so £184000 in total. You will now only have your ISA left.
£12000 state pension and £5000 DB pension means you need £8000 per year so that would last 12 years.
So theoretically you have enough money to last until you are eighty.
However, what if you need a new car at some point? A new kitchen or bathroom in the next 20 years? Help to pay for a child’s wedding/house deposit? It is pretty tight so would really depend on your DH’s finances. Retirement planning is something that you need to work on in partnership.
finally you potentially would be at a high risk from poor sequence of return, when the stock market goes south at the start of your retirement and you have to pull out a larger percentage of your portfolio than planned

@Tearsofthemushroom only need £30k to pay off mortgage. So that leaves at least a couple of years of £25k income from tax free drawdown before touching the rest of the pot.

I think you have enough then - go for it. You can always do some work later on if you want to or if something comes up that is of interest.

Only one life and I would rather live intentionally and cheaply than work to splurge later. I guess you try it and see if you are the same.

I retired this year at 56 from my teaching job. My pension is under £20k. House is paid off and I have no debts. DP and I have separate finances too. Kids all working and self sufficient.

I was like you and after 29 years teaching I had just had enough. I couldn't have gone on any longer.

I've been doing some supply work, 2-3 days a week and I'm I really enjoying the best bits of teaching. Remember you don't have to stop work completely, you can get other part time work if you need to.

After 4 months of semi-retirement my savings have grown and financially things are fine.

@BG2015that's great to hear, thankyou.

I totally get the desire to get out of a job you no longer want to do and retire. I calculate it a lot!

Have you run it through the moneyhelper and pensionbee calculators as they seem to produce lower figures than guiide? Have a free pensionwise appointment to talk it through.

State pension age could well increase and at 56, that could well apply to you. Are you still OK on £25k (I assume this is index linked) if your husband dies a good while before you and you no longer have anyone to share expenses with. Will either of you take an annuity that continues to benefit the survivor after the first of you dies?

At 56 unless I had health issues, I would want to be more sure I had enough, so I would try to hang on in there and add another few years of saving. Go part time, do a less stressful job or work full time without overtime if it gets you through.

Also I don't think you get to just take 25% tax free and leave the rest invested. As I understand it if you draw down some money, 25% of what you draw down is tax free but the rest is taxed as income. You can pull out the full 25% if you take an annuity with the rest. I may be wrong on this, but certainly that is how my husband's has been treated.

@GOODCAT that's how drawdown works. You can draw down and leave the rest invested. I have retired friends and this is exactly what they do.

I'll have a look at moneyhelper - thanks. If my husband died before me I would get his pension so I'm not worried about that.

It's really important to work out your actual outgoings. What do you spend annually now?
I also think this is the time to combine finances with your DH. There is no point in retirement one of you having more than the other.
Spend some time working out your real outgoings, proposed outgoings. Total assets.
Then do a year by year income / outgoings excel. You can then tweak your spends up / down for see how long they last.
You might have enough, you might not, all depends how much you want to spend.

Would you be okay if you separated?

it was a pattern with my parents friends. Quite a few divorced a year or so after retiring.

If you are that miserable I’d leave . People talk about optimum retirement levels but you can cut your cloth and you’ll hardly be on the breadline . I also think you could take time out and if you wanted look at another job in a few years , one without the pressure . Since I retired last year I now value time more than I ever value money and having worked in banking for years that’s not something I ever thought I’d say .

I know you can drawdown and leave the rest invested but when my husband drew down a small amount this year just over his annual income tax allowance he was taxed on it, it was intended to be his only income for the year aside from when he gets state pension early next year and he would start to use his pension pot from the next tax year. It was well under his 25% amount allowed.

As a result of all the uncertainty over the budget and the tax, in November he ended up taking the rest as 25% tax free lump sum and then bought an annuity with the rest. As it happened he did this at the top of the stock market so did a lot better than he might otherwise have.

What I am trying to say is get advice so you are sure, we thought we understood the rules had changed and he could reclaim the tax before the end of the tax year, but clearly we didn't and although he can reclaim the tax he has to wait until the next tax year.

Its doable, depends how much you want to stop working.

Yes I would. One thing you can't buy is time. You have sufficient and let's face it, more than most retirees. Once you retire you spend less in some areas and more initially in others. Why not enjoy your hard earned savings while you have the strength and interest. I'm retired, older than you and could do anything. Except I'm happy doing nothing now. Don't let life pass you by.

Time is definitely the thing.

Ive had a leisurely morning, wrapped some Christmas presents, read my book and I’m heading out to pick up something from M & S later.

I love my lazy Mondays.

Im working tomorrow but not sure about the rest of the week. I only work Tuesday to Thursday anyway.

We have 4 trips planned next year. I’m loving it.

55 early next year, retiring EOY
DC Pot £1,026m and £67k in another pot
ISA’s and savings £100k
No mortgage, no pets, no kids, no debts, new ish car paid in full. Going to travel