How do you reconcile winding down to retirement with loss of earning potential

[Bigweekend]

I know if you work less, you're going to earn less, obviously, but financial security has always been my one big "comfort blanket". I've always worked hard in decent jobs and lived well within my means so I have reasonable pension provision and some savings. I could also take a paycut and still be OK, just the savings would need to reduce.

I'm a widow with young adult children. DS1 works FT, lives at home and contributes financially. DS2 is at Uni, I support him from my income (ie what he needs above his loan is afforable without spending savings).

I'm not enjoying work. I feel tired, unmotivated, bored. I no longer know what I'm working towards, I can't see a "next" job iyswim. I also work very inflexiblty which means I often have to decline invitations for things I'd really like to do.

I'm still 14 years from official retirement age, but I have an old DB pension I can take at 60 (without reduction) and savings that could fill the gap between now and then or then and when the rest of my pensions are due.

I'm thinking of seeing if I can go to 3-4 days pw. I would be fine on the reduced income, might need to dip into savings to support DS2 but other than that I could cover my outgoings. I appreciate this is a very fortunate position.

My fears are:

• I don't know how long DS2 will need support or what the future holds for him. He's still not in a good way following his father's death.
• I'm all both DC have and whilst they're adults and need to support themselves I wouldn't want them to have nowhere to turn in dire straights
• inflation. I'd be fine now but who knows what will happen to my bills and the value of my savings over the next 10/20 years
• the idea of spending all my income and never being able to replace savings again is quite scary to me

So, would you reduce the hours? It feels like once it's done I wouldn't be able to go back. It also feels daft not to if I can afford it, but I can't shake the feeling that it's stupid to voluntarily reduce my income.

You need to do it the other way round and work out how much you need to live on and enjoy your life, and this is ‘your number’ .
Then earn enough to meet your number.
Check out FIRE movement and also MSE retirement boards
dropping a day does not mean you lose 1/5 of your pay as NI and tax change, so you may be very pleased with take home pay despite apparently losing a whole day

time off is pretty much the best thing, and it’s value is hard to price

Fourteen years is a long time. A lot could change - in all areas of your life.

You mention your DS2 is still struggling with his father's death. Is it possible that some of your feelings about work are also connected to your bereavement?

I ask because I am wondering if a few years of less intensity might be what you need at this stage - but that doesn't mean you wouldn't be able to increase your hours or change jobs in the future. It doesn't necessarily mean you're committing to reduced hours/income for the next fourteen years.

What about dropping a single day initially and seeing how that goes? It might take a bit of time to adjust to the change in pattern and how you use your time (it took me a little while to get used to reduced hours). Do you have any particular days in mind as non-working day(s)? Or plans for what you would do?

I had a whole change of career with 14 years to go. Can you not rethink your work situation?

How about dropping gradually? Drop a day/half day to begin with and see how you find it?

I would drop to 4 days right now. Given what you've written I think you might find that change really enjoyable and even energising. Do that, then in a few months assess what it has felt like. Has having a bit more time made work feel better or worse? Does 1day more feel really good or was it a tweak and you need more?

14 years is a long time, but I don't really plan to work all of them whatever happens. I have my "good" pension due in 7 years, which is approx half of my current salary. I had a much better job in a different industry for 20 years pre DC. My retirement income, once I reach retirement age will actually be slightly more than I'm currently earning!

I think my current "attitude" could well be related to the bereavement. Priorities change and I find it hard to care about work the way used to. It has crossed my mind to ask for a temporary change of hours to help my mental health/recovery but I'm not sure if it's really fair to play that card. I think work might actually go for that more than a permanent change though, although it could mean I'm obliged to go back FT at the end of the temporary period.

This

I am possibly a similar age (50) but with much lower earning potential. I have a great job which I love but it doesn't pay well so I have to have a second job. DH works long hours but for just enough money. Anyway, we have been lucky so have good savings, no mortgage, second property but no private pension and younger children than yours.

So, I am looking at retiring.....never! Not (until we are infirm) from my second job or DH's which are self employed which is a depressing thought, right?

Well, next year we are taking a sabbatical from work, our youngest child will still be at school but at a point they can take a gap year so they will come with us. We are going to travel for 9 months. My employer will probably not be amenable to this so it may be a bigger risk than it seems and we will be using savings to fund it but I have lost three young (my age) friends last year, to cancer, and this prompted the decision to take a years "retirement" now while we are young/healthy/alive enough to enjoy it.

Would a version of that help you keep going OP? Less of a risk and a taster of what life in retirement could be like.

I wouldn't really see it as playing a card. Why do you think it would be fair? It's just working with the processes and systems as they exist.

Might they be open to a discussion at the end of a temporary period about making it permanent? They'd probably prefer that to losing you altogether. Or could you broach it as an "extended trial" as a middle ground and manage expectations?

Much as anything else a gradual transition might help with the "fear factor" that's making you hesitate at the moment, in terms of giving you some adjustment time to be sure you are comfortable with the decision?

I'm only thinking out loud.

*wouldn't be fair

Do love it when autocorrect removes a negative 🙄

Gosh, that doesn't seem like less of a risk to me. All my career I've found it easy to get jobs/interviews. Since I turned 50 that's completely changed. It might be a conicidence but I doubt it. The idea of needing to appply for work in my 50s after a year off terrifies me. It sounds very exciting though and I hope it works out for you.

I've also lost 3 friends my age in the last 3 years, in addition to DH.

I'm sorry for your loss

If your loss is recent, people normally suggest not to make any major changes for a year

When I am feeling a bit low, I arrange to do these things;

Visit friends who don't live nearby
Book holiday/s (sometimes with friends or family)
Arrange to do my favourite hobbies
Visit or do something new

This means that I continue at work, but I have things to look forward to.

However, you may wish to work less & have a day to do something.

I agree there is no point in work, work, work. There needs to be a balance

One thing I would be wary of if reducing hours is doing five days work for three days pay. I am recently retired and stayed full time leading up to it because had seen too many colleagues fall into that trap.

@Bigweekend definitely look at reducing hours. Remember the hours you drop are the ones that have the most deductions e.g. NI, pension, tax etc. so the drop in net pay is not as great as you think. Use a gross to net calculator to see the impact.

If you have a good cushion of savings then reducing monthly savings to give you a better work life balance is worth it. It’s getting your head around not saving as much and then once retired spending your savings - after all what are you saving for.

Yes, it's very true that my duties probably wouldn't change much, but one of my boredom issues is that I'm not really busy enough for 5 days. It was a new role when I took it on and I worked really hard to get it set up, but I've got such a good team around me now that really it runs itself

I’m rubbish at work advice but could you drop to 4 days a week so you have time for joy? You’ve had a tough time and a day for things you love is so important.

I like your idea of asking for a temporary drop to 4 days and see king how you feel. It may give you the clarity you’re looking for even if your current work won’t make it permanent at the end of the trial.