Early retirement, did people question your choices?

[Floofydawg]

I'm planning on retiring at the end of this year, by which time I'll be 57. Professional, well paid job. I'm just tired of it all. I'll have a fairly comfortable retirement but I won't be rich. My thinking is that you can't get the time back, but I could always earn a bit more money at some point if I felt I needed to.

When I've told friends and family, some of them are questioning my choices quite hard. Family are very money driven and they can't understand why I would give up a well paid job this young.

If you retired early, did you have people questioning you? Did you regret your choice?

Clearly how much you need is very personal and - as with all money threads - there will be people who can’t live on twice what someone else find luxurious

so just assuming that early retirement people won’t have enough money because you wouldn’t is odd

So here are my sums. I will have mortgage paid off. Then I plan for £22k pa after tax. Husband will have slightly more. Pot of around £220 between us for holidays/large purchases etc. House sale will release a further £150k which we won't spend on property abroad, so more of an emergency pot.

I think that's ok.

I've been doing lots of reading and research about pot size but there isn't one definitive answer because there are so many variables such as inflation, stock market performance, how long we're going to live for.

There are lots of online calculators that you can use to estimate pot size but I think I'm just very cautious especially in light of the very high inflation we've had which could happen again.

We'll probably downsize too but I'm really not sure how much equity we'll release due to moving costs and stamp duty. We don't want to downsize to a much smaller place as we still want to be able to have family over and we both like and need and our own space.

Where did I assume the early retirement people don't have enough? I am well aware people lead different lifestyles and will need different amounts.

You will live well on that. Ours was/is pretty similar and we have travelled the world, in relative luxury, paid for two daughters’ wedding and enjoyed life-so far. We are 12 years in.

Do you have DB pensions? I think it's a lot easier with them as you know exactly how much you'll have and it will last for the rest of your life.

With DC pots it's a lot harder to work out how much you will need. DH has a small side business which he wants to expand in retirement and is quite lucrative. It's something he really enjoys so we will still have some income once we've retired from our current jobs.

This is a really interesting thread.

DH (57) and I (59) are just in the process of pulling together our financials to see if/when we can retire early. He's more desperate than I am, to be honest - I'm not sure I wouldn't rather reduce to 2 days and keep going for longer. Our 3 DCs are finally off the payroll, and we have a lot of equity in the house, so we can downsize and pay off the mortgage quite easily.

But we've had some negative reactions from people when we've mentioned it. Especially from family. Doom-laden pronouncements from DDad about running out of money, eyebrows raised from career-focussed workaholic siblings (all older) who could quite easily afford to stop anytime, but can't imagine doing so, and DM grumbling that if we down-size/move then how can she visit?

I'm torn... yes, it will be nice to have time for myself, but I don't want to be scrimping and saving for 30 years, so....

Do people not think this will end up means tested?

Not easily
its more likely that you may get options - say additional NI to get it guaranteed in future but for people over 50 it’s probably fairly safe

General rule of thumb for pot size is 25 times your expected annual expenditure. Provided it's invested you don't have to calculate inflation - the investment growth takes care of that so you do all your sums in today's money.

@itsthetea but there aren’t enough young people to support the costs of an ageing population in terms of state pensions & healthcare costs. We are not far off a dependency ratio of 2:1.

@Woollyguru small DB pension (around £5.5k pa index linked) which kicks in at 60.

Not for people our age, no. People need to be given time to plan their retirements. To do it any other way would be political suicide.

I think it will be political suicide for any age tbh.

This country is one of the richest in the world

and fortunately our time bomb demographic isn’t a sharp as at first expected. I think the argument “not enough to support it “ was also tried when the whole system was brought in. In those days you had relatively few women working so the working population wasn’t large then either

it’s just we don’t spread the money around well and rely on the poor to fund everything and the rich to protect their wealth and grow it

I noticed reform wanted to bring Scottish taxes in line with the rest of the UK - basically taking more money from the poor - the bottom 55% - and giving to the rich. It’s a right wing policy. And we have lived in a right wing county for decades. We need to reverse it g we our money back.

The triple lock is unlikely to hold for long, I think, and there will be other measures that nibble away at the edges of the state pension. But outright means testing would be very hard to sell politically.

Yes I have heard of that rule but it seems to be for a specific asset allocation and for a pot that you want to last for 30 years. But at least it's something to go on.

Our expenditure will start high and reduce over time so maybe I could work out the average and use that to calculate pot size?

A lot of people on this thread seem to be assuming they will live to 90.
That is statistically unlikely.

On balance, I'd rather be 'cutting my cloth' a bit in my late 80s, than work forever to try to counter something that might not even happen. If dh or I drop dead 3 years into retirement, I would definitely regret working longer than I needed to, on the off chance I live to 95 years old.

Very wise, I agree.

It’s certainly a possibility - but I extremely doubt this would affect anyone planning their early retirement in the next couple of years.

I'm retiring next month at nearly 56, though do have the option of going back if i want to or need to. Everyone i've told has been understanding of how stressful my profession is and that im struggling with burn out and compassion fatigue, though many have been surprised as said profession is also a vocation and identitiy...

Another reason I took early retirement was that 4 hard working colleagues who I worked closely with over 30 year career sadly died in my last 18 months of working; 2 of them left behind primary age DC and none had reached anywhere near retirement age. It very much coloured my decision whether to take redundancy/retire earlier and spend time with DH. Carpe diem.

I'm 57 on Friday, I retired last July. I had a couple of comments from some people but mostly people totally get it.

I do an odd bit of supply here and there which keeps me busy but I've loved it, feel less tired, can holiday when I want to.

It is the BESt thing I could have done.

I was expecting negativity, esp from the in laws but I have only experienced positive comments (at least to my face).
Most surprising of all was that several of the neighbours hugged me! And congratulated me.
DD said we should be proud of ourselves, in that we have worked hard, helping people all our lives and we have made prudent financial decisions along the way. She said "that's quite an achievement Mum".

Aw @LancashireButterPie and brought up a lovely child!