Stupidly risky early retirement - tell me I'm mad

Can't offer advice but following with interest as I'm considering when to scale back my work, though i need to look harder at my pension pot. No way would an annuity give me that much i don't think...

Just do it!  You have  good reasons:

a job that is destroying my mental health

give me more time to support my ageing parents

before the issues from her disability prevent us enjoying a later retirement

If you take your pension now and pick up some part time minimum wage work you will be as well off as you are now with more time on your hands.  Does your wife have any pension?

No one reaches their deathbed and thinks " I wish I had worked more hours and years"

Four years more work for an extra 9 per annum. I’m not sure that adds up. I guess you are putting in 5-8k per annum at the moment. I’m not sure that 20-30k on the principle is making the difference. I suspect it’s the compound interest.

How about a downshift and leave the date where it is?

You only live once. I see your missus has a disability and you are concerned... read below..

I have four pensions, two final salary ones. I'm turning 55 and my job is 'fine' and I get a good enough salary that my wife is only working a day a week in a sewing shop (due to a shitty previous employer - she'd had enough of working for a bit).

We're mortgage free, but still funding two adult kids at home. I do, however, have a back injury - missing part of my spine from an RTA bike vs car, and whilst I'm OK currently, the pain etc may get worse, may not. I'm 9 years since accident and I think it's going to limit activity at some point/need major surgery.

I've seen too many folk die before they could take any pension etc, so I'm taking the tax free amounts from a couple of pensions I don't need, and getting a van for 'lifestyle' reasons - I also need a new vehicle as my car is old. The 'van' is for us to go off on bikes/paddle boards etc - space for carrying it.

Two colleagues who retired more recently, both wives fell ill soon after, and they haven't had the 'active' retirement they wanted - both chaps still fit and healthy, but more a carer now. Sister in law and hubby still working - he's a bit farked as his heart is knackered at 60.

Go for it if you can manage it, and even minimum wage is a decent amount. Two other colleagues have gone early, one managing off downsizing proceeds at 60 till they draw full pension.

Get advice if you need it, and do it.  Luckily I don't need to leave my job, but I can't see me being there at 67 in 12 years.

Four years more work for an extra 9 per annum. I’m not sure that adds up.

Yeah, increasing your pension by 60% with 4 extra years seems wrong.

As per TJ's last sentence, I say do it. My Dad had the opportunity to take early retirement at 55. If he had stayed in work for another 5 years, his role would have had a heap more responsibility with little extra reward so the drop in salary to pension was worth it.  Mum also retired at the same time so it gave them the opportunity to spend several months in Spain each year with my sister & her family.

Dad had wanted to make it to at least 80 so he would have worked 50% of his life, but a heart attack took him at 69. He had 14 years of (ironically) healthy retirement rather than the 9 if he had carried on working.  Chances are if he had stayed at work, the extra stress may have cut that short.

If its a final salery pension it could be.  You get less per year if you take it early - so not just have you a smaller pot / years of contributions but you get an"actuarial adjustment" so if for example you have 20 years contributions at 60 you get x amount.  But if you take you pension at 56 instead with 20 years contributins you get significantly less.  I had to wait until 60 for this reason

Would get me away from a job that is destroying my mental health

For figures, my current take home is about £24k a year.

That's not really a lot more than minimum wage (assuming a 40 hour week), and less than minimum wage come April, so even if you decide you do need to keep working, I'd jump ship for something less stressful.

Just do it. If your job is stressing you than much go,  your Pension + PT job and you are at your current income now. Just because a job is lower paid doesn't mean there are not stresses It just means your giving a f..k levels are lower

I have a PT job more for the social interaction with someone other than my wife and it pays for nice things & holidays

Just do it. Be happy now, while you are both able to screw the best out of life.

Pension + PT job and you are at your current income now

I'm on the side of doing it, but you are probably going to want to sack off the PT job at some point too - would you be okay on the pension alone at that point?

JFDI. I did it at 53 and haven't looked back. You really don't know what's around the corner and your valuable time is best not wasted pissing around in the office.

JFDI

I’m on the side of doing it, but you are probably going to want to sack off the PT job at some point too – would you be okay on the pension alone at that point?

I took early retirement at 50 and did part time (and enjoyable) work for 10 years. Partly it was for money but I'd not have had as many great life experiences or met so many great folk (including many STWers) if I'd stayed in my old career.

I got made redundant in 2018 at 53 - got enough redundancy to pay the bills for about 18 months (no mortgage). In 2020 moved to Scotland, downsized the house which gave us a fair chunk of cash to live off until my pension (65).  I currently work part-time in a shop (£14k/year) and we need about another £10k/year from savings to pay the bills. Everything else is paid for, no loans, car, mortgages, pension payments and we don’t really take holidays but it’s enough for us to get by. I’m not planning to draw any pension until I’m 65, and will probably continue to do some part-time work. It really comes down to doing your sums, see what your minimum cost of living could be and whether you can get by on it? Most part-time work in retail etc is minimum wage at £12/hr and many employers treat you like $hit (I was a postie for 9 months) so bear that in mind.

Four years more work for an extra 9 per annum. I’m not sure that adds up.

It's 4 less years of contributing AND 4 more years to drawing on the pension. So, hypothetically that's say £20K less contributed to the scheme (employer and employee contributions) and £60K paid out. Still no idea if it makes sense.

On the surface you sound like you have lots of reasons to go for it. But....in 4 years time when you hit what would have been your retirement age how will you feel about being £9K a year worse off unless you continue to the minimum wage job 2-3 days a week? Could you end up reliant on the money and actually end up working longer than you would have done if you'd just sat tight.

Finally, don't discount the stress of working minimum wage. I took a big step down (but remained in education) 5 years ago. I now work for £20K less for a line manager who I'd never have employed in my old job, stuck living with his crap decisions and powerless to make changes. It's a lot to get your head around and I'd imagine a lot of people who drop into minimum wages roles experience worse.

You're not mad and it's sensible to get this thought through as soon as practical. As you know, I understand your situation fairly well, the work, the financial stuff and some of the family bit too.

I think you're also already aware that I have done something vaguely similar this last year. You're definitely right that it's time to give it serious consideration; if you want to, call me to chat/ rant and you can let your thoughts run. I will be away on leave this coming week, back and switching on the work mobile again on the 12th. You've got that number.

I went part time last year aged 50. Wish I had done it earlier. Now just do tue-thu, 3 days of work and 4 of none is a much better balance!

I currently work part-time in a shop (£14k/year) and we need about another £10k/year from savings to pay the bills. Everything else is paid for, no loans, car, mortgages, pension payments and we don’t really take holidays but it’s enough for us to get by.

I haven't run numbers for a bit now, and I know the cost of things has gone up a load, but £24k/year for just the minimum with no rent/mortgage seems like a lot.

Interesting thread . I’m 51 currently being made redundant. (Saga in itself)

The last 4 months I haven’t been working g that hard.

What I’ve noticed is:

Its brilliant not stressing about work

its great for getting g out to do what you want to

All my mates are still working (ie can be quite lonely in the day time)

Im not ready to stop fully working

So far utopian jobs don’t exist

We would have to make big cut backs to lifestyle to make it sustainable

But if they offer my job back tomorrow (which looks like they might ) would I take it? Probably not

As a career civil servant of 58 years of age, I’m handing in my notice when I get back in on Monday. After a fairly big fubar by them late last year, bollocks to them. Probably not the best pension advice.

I’m on the side of doing it, but you are probably going to want to sack off the PT job at some point too – would you be okay on the pension alone at that point?

That is a downside - won't get state pension till 67 and any inheritance is likely to go on care fees.

I now work for £20K less for a line manager who I’d never have employed in my old job, stuck living with his crap decisions and powerless to make changes.

Pretty much where I am now, the salary doesn't change the frustration

I will be away on leave this coming week, back and switching on the work mobile again on the 12th. You’ve got that number.

Have a good break. I may or may not be back at work then.

I don't often agree with TJ but basically his first post sums it up. Just do it

andrewh - a stopped clock is right twice a day 🙂

One thing to consider is more time means you can do stuff more cheaply often.

Watching with interest. I'm constantly calculating when I think I can retire. Depends on so many factors, but key one will be the end of this year when my share options hopefully mature. If that stays where it currently is then I think I could go  at 54 .....

But then the missus wants to keep working, and being retired but stuck in Manc sounds ****ing horrible 🙂

Go for it. We're going to.

After Kevin's Alps accident it changed our outlook on work/life balance completely. The consultant told him his injuries won't get any better so we have decided to step back from work at the end of March. Not an easy decision but the right one for us. Plans so far are to use our 90 days in 180 for three extended trips in the camper into Europe intermingled with trips throughout the UK.

Fingers crossed it all goes to plan and we get to ride in some amazing places. It's a pity it took an accident for us to realise it.

I feel so relieved now we have made the decision.

That’s not really a lot more than minimum wage (assuming a 40 hour week), and less than minimum wage come April, so even if you decide you do need to keep working, I’d jump ship for something less stressful.

Take home could at this point include big pension contributions. Then there is tax and national insurance. So it could be well over minimum wage

I’m 58 and didn’t hate my job. I’m already down to 4 days a week. I’m also on teacher so it’s not like i never get away, I assume i won’t be fully retired for another 5 ish years.

Much as i didn’t like the idea that money matters my parents retirement has been great fun but they spent alot of money

OP any chance of finding a similar role that you didn’t hate?

But it’s so much your life not mine. All the best whatever happens

Do it !!

If your mortgage is paid where is the risk?  I personally wouldn't even bother with the part time job.  What you expect as a pension about my income tho I do have capital as well but I assume you would also get a lump sum?  I am also assuming your partner will get a pension?  I live easily on my income and use the capital as a back up and to pay for one off trips

If things had gone to plan Julie and I would have retired on around £20 000 a year between us which we expected to be plenty

Yeah, increasing your pension by 60% with 4 extra years seems wrong.

Seems fine to me. My pension age is 68 and I've currently accrued about £20k p.a*. If I take it at 58 (the earliest possible year I'm able to) that drops to about £10k p.a.

(*"Fortunately" I have at least another 15 years or so to contribute...)

I live easily on my income and use the capital as a back up and to pay for one off trips

Well that's clearly a contradiction isn't it. Why not be open about how much capital you have. For a lot of us the capital will be all we have, at least for the first dozen years or so.

" I can easily live on x, because I also have y which I can dip into as and when I want to supplement x."

Not meaning to have a go at you BTW. 🙂

No wild fantasy at all. Especially if mortgage paid as will be surprised how little you need to get by on.

Would get me away from a job that is destroying my mental health,

give me more time to support my ageing parents,

MrsMC... would give us time to do stuff before the issues from her disability prevent us enjoying a later retirement.

Massive reasons for change, especially 3. Life is too short. When you are doing a job its difficult to see life beyond that. Its like a membrane you push at but really cant see beyond, because you are doing what you do now and its what you do. So cant think of anything else.  Once you stop doing what you do (break that membrane), you are no longer obsessed by what you do now, and can start to think of other things to do and all your full life experience is now relevant and they are out there.

I was lucky, offered really good redundancy at 51 in '16. Bummed around. Did a big ride. Built a campervan. Drifted into the pandemic in '20 and ran out of money. Moved somewhere cheaper. Spun up a 3-4 businesses. Am now '59. One of the businesses really took off so now I am really good with minimal hours (3 months on, three months offnow) until I take my pension in 4.5 years time. Just as well really as my Dad died at 67 so that only gives me 8 years.  Please do PM me if want more background.  I really dont miss the soul destroying, organisational hierarchy, group-think non-career job at all.

I would consider separating leaving your job, and taking your pension now. You can stop doing what you do now. Do other, less stressful things and explore the fun of doing something different and have the fallback of taking your penson if it doesnt work out.

me and my wife both finished at 55.

we retired on a meagre pension.  3 years in it is the best decision we have ever made.

more time less cash is a nice way to live.

So long as you can make the numbers work it’s a no brainer.  I think a lot of people overestimate how much they actually need to live an ok life, but I wouldn’t want to be regretting the decision at retirement…our expenditure tends to increase to suit our income - so as long as you plan/budget/control that transition you should be able to wind it back.

what does your wife think?

I took mine 3 years ago, at 53, after I'd just had enough of the reverse takeover the business i was in suffered - they completely killed off the previous ethos / ethical working and good treatment of staff. Everyone was totally pissed off with the place. I just worked out how to unlock the golden handcuffs of the final salary scheme.  To be honest the place would have made me properly ill by now if I'd stayed (it damaged several of my colleagues who were good honest trustworthy people before they got out, and I needed to be out before I went the same way).

I took a lump sum from the pension, and paid off the mortgage, saw our child through uni and out the other side into a job etc.  All good uses of the ££.

I'm still working (in a different Co) as my industry is short of experienced people.  But dropped to part time - 4 days a week now, and tapering over the next couple of years.

I decided that having more time in my latter 50sand 60s to do stuff is more vital than extra ££ that I'm too broken to make use of later.  In my case we'd have to be a bit careful but would be OK if I stopped tomorrow.  Luckily the work I'm doing at the new place is for really interesting development projects and with good customers, so that may be different to your situation.

But my bikes definitely need more riding before it's too late.

Much depends on whetherMrs MC also has an occupational  pension to draw or whether £15k would be it.

I'm still working at almost 64 despite having no mortgage and a pension.  But Mrs IRC has no pension or current income.  We run  don't particularly try to live cheaply though.  I actually enjoy part time work. Possibly reducing hours but don't plan to fully retire until 66. At earliest.

I work 22 hours per week in a no stress enjoyable job. shifts are clustered so I get regular full weeks  off mixed with days where I work 5 days. I have had stretches where I stopped work for a few months to go bike touring. I found dropping from full time work to irregular part time work a great lifestyle choice.

A pension of £15k plus 20 hours at min wage (less tax and NI) would give you somewhere  around £24k take home. So no better or worse off. More time for life rather than work. If your current job is affecting your mental health my advice would be go for it.

Plan B could be set a date a year or so from now. Say spring 2026.  In 15 months your pension would  increase presumably. Would the stress be any less at work if you knew the clock was ticking down and you be less invested  in it knowing you were on a slow wind down?

Finally, if the choice is to pack it in immediately I would suggest finding your new low stress job first before chucking the current one. Job hunting while living on £15k per year could be stressful in itself after dropping from £24k.

You're not mad.

I'd prioritise LPAs and possibly a will change to protect your children's inheritance, sorry to be morbid, but anything can happen to either of you

In the meantime consider whether a spell off, either with stress, a career break or PT in your current role, might change your outlook. Chat to someone at work about that and consider counselling

As someone fortunate enough to be retired on a FS scheme those last few years make a huge difference. You don't mention tax-free lump sums; is that £15k pa everything? That and another £1k per month is you for another 35+years

Retirement is great, I recommend it, but only when you're set up

more time less cash is a nice way to live.

Need to change my username.

MrsMC has her own pension when she retires, but is incredibly cautious about money matters, and is not entirely comfortable with the idea.

Got a retirement webinar next week to get a better handle on the income/lump sum and tax implications. We'll see what that brings up.

Do it.

Money ain't everything. People think they need lots of money to be happy, but mostly that money is buying them things they think they need.... Netflix. Fancy phone. Flash motor.

My mum died at 68. My friend last year at 54. My old man retired at 64, is still knocking about at 80 with more money than he knows what to do with, but even in his 60s he didn't have the health which meant he hasn't enjoyed retirement. He's just waiting for God, as it were.

Better to look back in the things you've done rather than regretting those what if moments.

I'm semi retired at 42,been living in a van and bumming around Europe the last two and a bit years.

The retirement webinar may be the decider for you. Loads of good advice in the preceding comments but only you know how bad you feel going to and at work presently...and only you knows what you could manage on, financially, month by month, If retiring early solves your mental ill health but gives your wife stress and worry...will it have been worth it? You need to go into this 'united' so to speak. Best of luck

I am also in the camp that think you are not mad. Stepping off the career ladder is a big moment for anyone and needs consideration, but it sounds like you are thinking on the right track.

One thing that helped me (forced out of my career 3.5 years ago at 55ish and decided to partially retire) was getting a better grip of the finances. I actually paid an IFA to do it for me, but it was expensive and now I have more time on my hands I have spent a lot of time listening to the Meaningful Money free podcasts and feel I understand my finances and options much better now than before. For example, have you checked your state pension forecast on the .gov.uk website? which can be topped up at a bargain price if necessary - See Martin Lewis Website for details

There is also a MeaningfulMoney paid for course. I haven't done it (yet), but it gets you on to a private forum where people are discussing this time in their life and are able to use a financial modelling too called Voyant Go (that's a link to the Meaningful Money video episode on Voyant) which may also help you clarify things. I have a spreadsheet that I made, but my IFA 3 years ago gave me a copy of a Voyant Go report on my finances at the time and its much easier to read/understand and if you have access to the software itself it can make :"what if?" questions much easier to answer.

Finally, like others have said, you can probably get a NMW job fairly easily. I now drive for a supermarket once a week. It helps structure the week, gives me some exercise, gives me an in-store discount of 20% on food and 25% on homeware/clothes etc and has a great pension (yes, you can 'sort of retire' and still pay in to a pension depending on how you structure your finances). Some colleagues drop in and out of it IE work a lot in the lead up to Christmas and then have some of the summer off, so working verses not working is not a simple one-or-the-other decision.

Happy to answer questions if it helps, but I am a random on the internet so beware 😉

Lots of useful thoughts and opinions, as I knew there would be.

I've got a mate who does a couple of supermarket delivery shifts a week, and I feel it makes sense to do more "seasonal" work in the winter to make the most of the summer.

Appreciate the job isn't great but I would be looking at other ways of getting-by to hold off drawing your pension if it is FS and truly such terrible 'value' by taking it early. And are those projections of FS pension if you continue working that job, or if you ceased employment and froze it but don't drawdown until 60 is it still as good? You need spreadsheets really, it's a very personal (couples) decision. How much do you need to simply live on and run the house and car, bit of contingency for unforeseen stuff (boiler, roof), do you need to add NI contributions to get the full state pension etc. And then a tab for retiring at each year over the next 5-10 years, what would be your income. I would seriously consider living frugally on a part time job and not draw the pension if it makes such a big difference, but only you can decide if you can manage that and what savings you have to drawdown on.

I was in a roughly similar position 3 years ago and 'did it'.

Money vs time: If you run out of money, you can always earn more. No way to get any more time, no matter how rich you are.

I don't regret it (I would have gone mad had I stayed).

If you try it and don't like it, you can always get another full time job, but:

...I now drive for a supermarket once a week. It helps structure the week, gives me some exercise, gives me an in-store discount of 20% on food and 25% on homeware/clothes etc ...

Very much this. It's nice to have something low stress that brings you into contact with other people and also put some spending money in your pocket.

Forget about the retirement cliff edge being a line in the sand . With phased draw for it's really different to buying a rip off annuity.

Get a part time job first , say 3 days a week then bin off your full time role.

Learn to live on £300 a week. So you only draw down a few thousand each year from your pension.
If you can transfer it to a super low cost tracker fund you might find that the growth is the same as the drew down. , or very close to it.

Ie your fund goes up by 3% and you take out 4% your pot will last very long time like that. t

People who have retired early on small amounts: what do you do about potential big expenditures (ie your roof needs replacing - something that wouldn't be covered by the typical "have 6 months living expenses put by" plan)?

I could happily get by on a pittance tbh but the prospect of needing to either spunk all my funds on repairs or gamble that I'll make it through 30 years without needing to seems daunting.

hold off drawing your pension if it is FS and truly such terrible ‘value’ by taking it early.

The OP hasn't really given enough info to judge whether it's poor value or not.  I've got a little bit of paid up final salary pension from an old job.  If it take it at 55 vs 60 then it's discounted by 24%.  10k at 60 or 7600 at 55.

But by the time I'm 60 I'd have received 38k in this example - in cash terms it would take until I was 77 before I'd have received the same in cash terms.  IN NPV terms it would be later than that.

Take that 38k and put it into an ISAs and it could be generating more than the lost pension (and would be tax free)

People who have retired early on small amounts: what do you do about potential big expenditures (ie your roof needs replacing – something that wouldn’t be covered by the typical “have 6 months living expenses put by” plan)?

I could happily get by on a pittance tbh but the prospect of needing to either spunk all my funds on repairs or gamble that I’ll make it through 30 years without needing to seems daunting.

I have my lump sum as a chunk of capital.  If the expenditure is too much for that it would have been done by a loan on the flats.  Circumstances changed tho and I ended up with more capital and less partner than expected 🙂  Even quite a large sum on an interest only loan is not much a month.  I have no dependents to worry about passing anything on to

Do it. Downsize now, release some cash, take your 25% tax free and live a little. Two weeks into lockdown triggered me to do it. What's the worst that can happen? Take a part time job if you need/want. Beauty is, you're in control.

Easy for everyone to say do it, but they won’t be living with the consequences if it goes pear-shaped. Look very hard at your expenses, current and future, emergencies etc.

If you're close to considering it you're probably well over the threshold for it being a reasonable decision.

You can always get a part-time job in a supermarket checkout if you are truly strapped for cash. But in reality you'll value your spare time more than the wage you'd get. Easier to cut out a few more fripperies.

It all depends on your attitude to these things DrJ.  If things had gone to plan for me and Julie we would have had a smallish pension and a decent lump sum.  Thats your cushion / safety net.  I did say I was assuming OP would have that same lump sum and without that then its risky indeed.

Julie and I had very different attitudes to money and it took some persuasion and compromise for her to accept this.   Sounds like the OP and his missus have the same difference in attitude to money. Both sides may have to compromise and to find middle ground.  For us that compromise was going at 60, I wanted 58, she wanted 65.  I also had to agree to keep my registration and be prepared to go back to work.

compromise and communication is key but in the end both of us were completely burnt out by work and thus prepared to accept a lower standard of living

Getting your partner’s view is pretty important and at least trying to get on the same page. Mrs DB doesn’t have a pension - she spent too many years as carer for her disabled mother but we are topping up her NI contributions so she at least gets the full state pension. The best piece of financial advise we got was buy the smallest house you need, not what you can afford - so we now have a 2 bed rather than a 4-bed. There’s also a balance to be struck between those younger years whilst you’re still in good health and relatively active vs later years of retirement. I have a chunk of shares that are our contingency fund to cover any surprise expenditure. It really comes down to going through the numbers and determining what your ‘means’ are and whether you can live within them.

The best piece of financial advice we got was buy the smallest house you need, not what you can afford – so we now have a 2 bed rather than a 4-bed.

Do you mean when you retire?

If not then this sounds like some of the worst advice I've heard, not the best.

Best advice I can give you is, if you can afford to get out then do so. You will manage on your new income easier than you think because, well you have to. You could always top it up with a few hours easy stress free work if need be. Retirement is absolutely fantastic, having every day and night as your own is worth way more than the cash.

If not then this sounds like some of the worst advice I’ve heard, not the best.

Selling a 4 bedroom house in Hampshire and buying a 2 bedroom house in Scotland meant that the proceedings from the sale has given us enough to live off (+part-time work) until I can draw my pension at 65 and still have a bit left over.

If not then this sounds like some of the worst advice I’ve heard, not the best.

Why would you buy, and keep working extra hard or extra long to pay for, a house that's too big for your needs?

Selling a 4 bedroom house in Hampshire and buying a 2 bedroom house in Scotland meant that the proceedings from the sale has given us enough to live off (+part-time work) until I can draw my pension at 65 and still have a bit left over.

Did exactly the same, sold my house in Berkshire and bought a cheaper house in Scotland. Actually slightly larger, but I liked the view.  Paid off mortgage and gave me a chunk of capital to fall back on if needed.  Best thing I have done in years.

depends on what your end game is morecash.  The bigger house will cost more both to buy and to pay for but it will give you more returns if and only if you sell it and downsize.  Or you can use that same money to either live a better lifestyle or retire earlier

Keeping my 2bed flat for 30 years is a big part of why I was able to retire at 60.  I could have traded up to a 4 bed house but I would have had to work more hours and probably longer

We also decided not to upsize our house, pay off the mortgage sooner and therefore retire earlier. I've seen too many folk held back by their mortgage and then "unwilling" to let go of a larger property.

Looks like neither Dovebiker nor MCTD actually read what I wrote. Ho hum.

Do you mean when you retire?

If not .....

the older i get, the less i want, which equates to spending less. which obviously means needing less cash.

we have a small 3 bed semi. we are looking for a 2 bed flat or terrace house. there will be a bit of capitol from the move, to top up the kitty.

i read these threads and they make me smile. the worries people have when it is a simple thing.

you dont like work. so dont work. if you find down the road you need more cash, get a partime job, or sell your big house for a smaller one.

live a more simple life. travel cheaply. use cheaper accommodation. use a cheaper supermarket. buy a cheaper car. change is good.

I'd retire early.

I have, though I have health issues too, which have meant I haven't been able to work for 3 years. I was asking about getting my local government pensions at 55, this April, but it was mentioned I may be able to get them early without deductions due to ill health/disability and I did, so that's ace.

We don't have great financial needs, as Ton, we live pretty cheaply with no fancy holidays, cars etc . Also means I have less stress as I don't need to worry about ESA and the trauma of that.

The only thing I'd say is that at some point, you will get caught out by bigger, unexpected expenses (house repairs, car repairs etc).

That is why you don't put all your eggs I. One pension but run an ISA as well which you can also drop feed into.
Keep say 10% of you overall stash invested in a tax
efficient wrapper.

The only thing I’d say is that at some point, you will get caught out by bigger, unexpected expenses (house repairs, car repairs etc).

Or entirely expected expenses like medical bills and care costs. Apparently a part time job at Tesco is the answer.

Medical bills?   No NHS for you?  Care costs?  The state will pay for the basics if you have no money and thats something  I am willing to risk.  Few folk have enough to pay for much LTC anyway without selling a house

NHS ? Is that still a thing? And care costs come in many forms.

You will be more than familiar with hospital wards such as the one where my daughter works full of old people in declining health waiting to be discharged into a care home. As soon as a space becomes available. And before you get to that stage there may be times you need some extra help that nobody else will pay for. My mium looks after my dad who has Alzheimer’s. She can afford to get someone to help clean the house, do shopping etc. She’s not in a position to stack shelves or do a paper round so it’s good that her pension and savings are beyond the minimum.

As you say, everyone has a different level of risk aversion and maybe everything will turn out fine for the OP. I hope so. But I hope he makes an informed decision.

As you say, everyone has a different level of risk aversion and maybe everything will turn out fine for the OP. I hope so. But I hope he makes an informed decision.

Yup.  I have no issue with your post putting the other side

Nothing much to add, but just wanted to say I find these threads so useful. It's hard to have conversations about finance with friends and family. And I've been burnt by IFAs too many times now. A bit of anonymity online is handy occasionally.

Me personally I'm 57 this year. Hoping to call it a day around 62. Best early retirement move I made was getting hit by a car, which says an awful lot about my financial education! Compensation paid off the mortgage and added a good sum to the retirement pot, but thankfully the physical aspect hasn't been as bad as predicted and I've been able to continue working. But that's on a 3 day week shift pattern so I get a lot of time off. Really hate the job, but my attitude to it has changed and I remind myself that I'm on a few quid more than mine wage, I can do it with my eyes shut, and there is zero stress. Should my back injury start to deteriorate I might have the decision to call it a day made for me, but fingers crossed.

I am pumping nearly 50% of my salary into a S&S ISA dripping in monthly. That should give me enough to get me from 62-67 when I'll draw on small pension + state. That's the theory anyway.

@wait4me

” I am pumping nearly 50% of my salary into a S&S ISA dripping in monthly. That should give me enough to get me from 62-67 when I’ll draw on small pension + state. That’s the theory anyway.”

Why not put the ISA money in to the same (or similar) S&S pension; a low cost Vanguard SIPP for example? Then it will also benefit from the Tax relief and be almost immediately worth 25% more.

Answered this once already, but having another go.

I'm a little younger at 52 1/2. I'm in the lucky position that I can draw a final salary pension in full at 60 for 24 years of service. I left the scheme in 2020 at what will be a career high salary and due to the rpi that the final salary is linked to it has been way way outperforming my current income that is now worth significantly less in real terms than it was in 2020. I've really lucked in on the pension side and switching schemes when I did. I'm now in an average salary scheme that only fully matures at 67 but I could take it early from 55 I think...or maybe it's 56. I'm in a job that is mediocre in pay but very very long hours term time with long holidays. It's just about tolerable - I work with a lot of nice people which helps. Morally I have an issue with what I'm doing at times but hope I atone in other ways!

I've looked at new jobs and applied for a handful. Unfortunately (or maybe fortunately) I've not managed to persuade other industries my skillset is transferable in your 50s. I was looking for a new challenge and hopefully more consistent hours even if more weeks worked. I could be persuaded to rip up everything below if something comes up.

I've come to the conclusion that sitting tight to 60 makes the most sense. I've done the sums, written the pros and cons and every other option has too many cons. I've come to the conclusion it's finish line syndrome.....or like when you really really need a piss and once you can see to bog you can hardly hold it in. In generations to come 60 will seem ridiculously young to give up work. In reality even if I give up my current job at 60 I'll still probably need to do something to span the gap to 67 when the state pension kicks in (and maybe to hold off drawing my current pension early) mainly because Mrs C's pension is nothing like as generous as mine and as a team we might be tight for cash. And there's no way I'd let her keep on working and me stop because of that.

The trick I reckon is to find a purpose in your 50s and make life still enjoyable whilst still working. I'm reminded of Kryton's post a few weeks back that I was Incredibly rude to him on where he was basically saying as he'd collected together all the material wealth he needed, what was the point in life ( not seen him on here since then - hope he is OK). I'm lucky (or I engineered my luck) by moving to a part of the world I hugely enjoy living in and realising my dream of moving back here before I retired. Fun is literally on the doorstep. I'm at one now with leaving work worries at work and consider it as a source of income, but to keep on working in the same for now and be at peace with that. And maximising the good times whilst preparing for a healthy (mentally, physically) and financially worry free retirement. But not to jack it in and move to the next phase any time soon.

I'm also excruciatingly aware that there are many many people that will be reading this thinking "what a tosser" because working to 67 as a very minimum is not a choice but an absolute necessity. We 'could' be in danger of becoming peak 'STW' in the subject.

Why not put the ISA money in to the same (or similar) S&S pension; a low cost Vanguard SIPP for example? Then it will also benefit from the Tax relief and be almost immediately worth 25% more.

@bentandbroken it's something I constantly mull over. Current thinking is the tax free aspect of the ISA will benefit more than being taxed on the way out of the pension. Probably not a bad thing to build up the ISA pot, but I may revisit this in time.

You're not mad at all, and like many earlier posters I did the same 3 years ago at 55. Fortunately I am in a good financial position.

What I would strongly encourage is to see a financial advisor. They'll ask about your outgoings, your income and your plans. Also your attitude to risk.

Are there any pre retirement courses at your work? One at mine gave me some ideas and encouraged me to make a plan.

I ended up transferring my (good final salary) pension out and investing it into a SIPPE  ((I used True Potential for this, but other companies are probably better).. This suited my goal of leaving my other half with my full pension and the kids with anything left. A company pension may not benefit your kids much (if that matters).

But get advice - one takeaway is that you don't need to replace your current income with pension - once you remove NI, and regular savings, and tax etc you can have a much reduced income and still have enough...

Good luck with a plan!

Wait4me - putting money into a pension is still more tax efficient than an ISA - you get tax relief at source and then 25% of it is tax free when you draw down. Plus obviously if you’re higher rate taxpayer you then get additional higher rate tax relief.
ISA you’re putting in after tax but obviously any gains are tax free. So maximum gain is just tax relief on gains, whereas in a Pensiin you’re getting relief at source then 25% tax free again later on. Plus you could argue getting the relief at source gives you more to invest early on and therefore bigger long term gains.

Is there something in the water/air! I turn 53 this year and may have the chance to go this year via voluntary redundancy which would equate to 2 years pay. Only have a small amount of mortgage left so would clear that and cover me to 55ish when I can first start accessing my DB scheme. Yes, the penalty for early access is 4% per year below 65 however with it being linked to RPI the actual 'loss' is closer to 1%. Plan is to use that and share scheme dividends to cover until 58ish then access the other pot drawing down roughly following the 4-5% rule.

I have no idea what kind of contingency pots people are thinking of held in cash/isa etc but think 3 years of living expenses to be about right..

I have long had an aspiration to do something more rewarding with my time rather than argue with people over spreadsheets or trying to convince 'leadership' not to do stupid things.

I look forward to 2025 with equal amounts of fear and excitement.

@bentandbroken it’s something I constantly mull over. Current thinking is the tax free aspect of the ISA will benefit more than being taxed on the way out of the pension.

It's an interesting one this.  If you're a higher rate tax payer then putting money into your pension now is almost certainly the best choice.  Can then take a lump sum out of our pension (tax free) and feed that into ISAs over a few years when you retire to give you a tax free income

if you're NOT a higher rate tax payer then it's much less clear - ISA gives you flexibility in case you need the money before retirement and (in theory) locks that is as tax free growth/income.

Pension income is taxed when it comes out and tax rates have effectively increased (with tax bands not increasing with inflation). Could increase more in future - theres a good argument for national insurance applying to everyone (or it being wrapped into a single, higher, income tax rate). The care bill needs to be paid for somehow and it shouldn't be young people paying for the elderly.

In theory ISA income is safely tax free.  the amount you can put in annually might not increase, or might be removed completely, but would be a big step to take away the benefit you supposedly gained when you put the money into it

At £24k pa you're only just above Minimum Wage so any job you get will be barely less pay - just go find a less-stressful job.

And your pension, are you really going to be clearing £15k pension from a £24k job?

He said he takes home 24k.

So I'd guess a gross of about 35k, and a decent public sector pension that he joined some time ago, before they started hacking away at them.

On the ISA v pension question. It depends. When I get my old age pension I expect to be verging on (Scottish) higher rate tax when combined with my occupational pension.

So aside from the tax free lump sum I will pay 42% on anything I take out the pension. Anything I take out an ISA is tax free.

My current thinking is that barring unforseen emergency I will leave my relatively small pension fund untouched so that in the event I snuff it first Mrs IRC will inherit it.

It isn't enough, even combined with house value for inheritance tax to be a factor.

Any spare cash will therefore be in ISAs with no tax to pay should a lump sum need withdrawn for new roof or new car etc.

There was more of an argument for pensions when I was getting higher rate tax relief going in but my plan is to reduce part time working hours enough to get below the higher rate tax threshold