Early Retirement - pro's and con's

[polybear]

I'm in my 50's (where the bloody hell did it all go?) and seriously considering banging out and retiring early; I'm lucky in that I'm in a final salary scheme so the finances stack up ok.  Work is a long way from what it was, sadly, with pretty much zero chance of it improving.  I've been giving this very careful thought and planning for some time now; all the figures stack up without difficulty.

So I'm interested to learn of other's experiences when banging out early, good or bad.  My main concern is that I have little family (and not close by) so the loss of the social side of being at work needs considering.  I can easily keep myself gainfully occupied quite happily with hobbies etc so I won't be staring at the walls all day.....

Thanks

Brian

[tigerburnie]

There are so many unknowns these days, if Boris sells the NHS to the Yanks and we have to take out insurance for everything, I may have to go back to work and I didn't retire early, you may have covered most of the figures, but trust me, they do change and earning any interest from any savings is difficult.

[peter220950]

I packed in 3 years early, 6 years ago, and have not regretted the decision a single day. I still tend to keep a 'work ethic' type of existence, and don't think I have sat and done nothing for more than a handful of days in that time. I usually spend mornings helping out with chores and stuff around the house, and afternoons either in the modelling room or the new shed I built myself as a workshop.

A couple of things I find strange, you tend to lose weekends, as one day is the same as the next, and even now I find it strange going into town in the week, it somehow feels like I'm skiving off!

I was always a bit of a miserable b***er, happy in my own company, so think about whether that suits you. I now tend to go down to my local Men in Sheds once a week, which gets a bit of Male company, and more importantly a great support network. - Well worth checking out groups like this.

Finances are, of course a big issue, I am fortunate to be o.k. but if you are retiring in your 50's you need to make sure you can survive on pensions for 30 or 40 years.

There's also the option of getting a part time job, both for a bit of additional income and company, though I don't see it as a likely route for me.

I left my pension pot in place, rather than buying an annuity, and draw down the surplus gained in the year, so far it's been a good route for me.

If you're not enjoying your work get out if you can, you don't know what the future may hold, so enjoy it as much as you can.

[Ray H]

I too had a final salary pension. I had a heart attack and was on limited hours at the time of my retirement. I tried three times to pack it in but I realised for the first two that I hadn't got things in place to keep me occupied whilst I adjusted to the new life style.

 

I opted to take an enhanced pension that increased the amount paid until the state pension kicked in. I did a pre-retirement "course" a few years before - the best course I ever did. We were advised to take as much money as you could from day one because there was no certainty that you'd still be around (even on day 2)!

 

The absence of social interaction is something that is missed unless you were mainly a solo worker.

 

Oh, by the way, get yourself an independent financial adviser (preferably recommended by a friend), they're worth every penny they charge - my lump sum just keeps growing!

 

Hope that helps.

[34theletterbetweenB&D]

51 minutes ago, polybear said:

... the loss of the social side of being at work needs considering...

Volunteering in a role that you consider of value is an option to consider, whether exploiting skills you have, or to develop some new skills and experience.

Further education is another option to look into.

Activity that regularly throws you in among other people is helpful for most people in maintaining their level of social contact when the office round is over.

 

Do you actively enjoy living in your present home, are there compromises necessary for your present career? Is it possible that a change of home or location might potentially better suit your retired  circumstances? If any of this applies, best to get it sorted while still earning.

 

Ask friends and family who know you well for their thoughts on how you might be without regular employment. Someone may have a good insight for you.

 

 

[Mike Storey]

I retired 5 years early, but that was due to the health of my wife. We also then moved to France, also to help her health primarily.

 

There has not been a day when I have regretted it, despite the lower income and the uncertain future, and we have made more friends in the last several years than we ever had in the UK. That has been helped by volunteering part-time for a charity, but also by going to the local bar frequently, which has often ended up with us going to each other's homes and a circle of friends builds up quickly. There are many who rarely leave home, and then tend to just stick to themselves. Fine, if that is what they want, but it does not have to be that way.

 

The social life of work (unless you happen to work locally and with people who live locally) can be very short-lived. I have only kept in regular touch with a very few. Unless you are certain that is vital to you, just do it. 

[Derekl]

I retired "late", about a month after 65th birthday in December 2016. Although I enjoyed the work I did, I was happy to leave it. I have a private contributory pension, which, a bit to my surprise, turned out to have enough to keep me at current (relatively modest, but very comfortable) standards to age 88.

 

The first slight shock was on the first Monday morning after retirement firing up the laptop, doing what was needed and then at 10:00 am, wondering what to do now? The second, more serious, was a diagnosis of suspected laryngeal cancer, which stopped the pleasure of small cigars and required 6 weeks of radiotherapy - one way of occupying retirement. That sorted, apparently successfully, and then a few trips here and there, followed by a PET scan to check that the radiotherapy had worked. It had, and the throat area was clear, but there was a prostate cancer problem. Another 6 months to sort that out, and here we are - not a great deal achieved in the first 2 years or so - perhaps I shouldn't have bothered.

 

I chose the draw down route on the advice of an IFA, who pointed out that if circumstances change then you can always opt for an annuity. My pension pot is not growing, but is also not reducing as much as might be expected, although my suspicion is that this is because a lot of the investments are offshore, so enhanced as the pound collapses under the strain of Brexit.

[John Tomlinson]

I retired quite early, and haven't missed it for a minute.

 

If your finances are OK then that's a very big plus. If something triggers a financial armageddon then we're all stuffed anyway, so no point carrying on and on just in case.

 

The fact that you're on here says a lot, you have an interest and won't be getting up, having breakfast and then settling down in front of the telly every day!

 

I found I saw one or two people from work for a while, but if that history is all you have in common it probably won't last, and anyway you'll be bored hearing tales of how its all going in the office after a bit.

 

Probably worth trying to join one or two things if you're on your own. Most voluntary organisations are in need of more help, and it's a lot easier to join than resign, but it does help to build new relationships.

 

John.

[brianusa]

If you can afford to, do it!  My goal was to retire at 55 or so and now I've been retired for nearly thirty years and enjoyed every moment of it.  Do what you like when you like, no one to tell you what to do - SWMBO excepted of course!  We've had time to go on holidays, enjoy our hobbies or just read a book.  One aspect of early retirement is the aging process,  there are some things you can't do any more and there are others you don't want to do, so you have to adapt and if it means getting up  or going to bed later, so be it, that's life and be glad you can enjoy it!

[rab]

I retired 3 years early and never regretted it, especially as at 66 I was diagnosed with bowel cancer. Thankfully I've had the all clear and am slowly getting back to normal, but I was able to have 3 years of quality retirement.

 

i too had a final salary scheme, and when I did the sums, the difference between my salary and my pension was equal to what I had been putting into savings each month, so I knew I could live on that for the 3 years until my state pension kicked in.

 

Yes it felt strange at first. I found myself thinking 'when does the holiday end' and also felt strange being in town in the week, and sitting having a coffee watching the world go by.

 

Yes I missed the guys I'd worked with, but in my case I was involved in church work, and for some reason once they found out I'd retired that involvement increased !

 

I guess the other thing i missed was the banter, but I find this forum goes a long way to making up for that. 

 

My only concern in your case would be you're retiring that much earlier, which means you're having to make the pension pot stretch further.  But as has already been said, that's where a GOOD financial adviser comes in.

 

Hope this helps.

[DaveF]

 

I retired at 56 having made certain that my pension would be enough to live on - a final salary scheme but with a (considerable) reduction for going early. 

 

My employer then offered me work on the basis of 1 or 2 days a week for a year as an IT consultant, which was icing on the cake - especially as 1 year's work became 8.  Most of the work I could do at home so it wasn't onerous.

 

So I retired a second time at 64.

 

I've never regretted leaving the original job - though for me it had always been a job I loved and someone kindly put money in my bank at the end of each month, I enjoyed the second job just as much.

 

I enjoy even more the extra time for my hobbies once I did less and later no work!

 

Money turned out not to be a problem, my savings have tended to grow with time.

 

David

 

 

[Ozexpatriate]

I wonder if there is anyone who regrets retiring early?

[Ozexpatriate]

^^^ That wasn't a flippant question by the way.

 

Because of the health care situation here in the US, I don't believe that I am in a financial position to retire early. I am in my mid 50s and in the US, Medicare (government assisted healthcare for seniors) does not kick in until 65. In my cohort, full social security does not begin until 67. I don't think I am financially ready to cover almost 10 years of private health insurance, in addition to all the other living expenses.

 

(And despite somewhat recent advances in options in the health insurance market here, I can't trust that they will continue to be in place for private individuals. I choose not to be more specific about that comment due to our 'no politics' guidelines.)

 

Edited July 30, 2019 by Ozexpatriate

[TheSignalEngineer]

I retired early after almost 38 years in the railway industry. My final salary pension scheme was boosted by the AVCs I paid when my children were at University. At that time students got grants depending on parental income. Pension contributions were deducted from your income so it meant that they qualified, if I hadn't paid the AVCs they got nothing and I had to keep them in food, etc.

By 56 the AVCs had busted the Revenue rules, so I finished and paid off the mortgage. For 7 years of the next 10 I did some ad hoc consultancy work mainly for my old office drawing my last payday exactly 48 years after my first.

 

Regrets? No. I still find it difficult to fit in everything I would like to do, so don't have time for boredom. Fortunately I have had good health and managed to stay active to the extent of doing over 1500 miles of off-road cycling last year.

I have never missed the pressures of working on 24/7 projects, especially post-privatisation when you had a client who knew sweet fa about the job he was supposed to be doing. I enjoyed still being involved through the occasional work without the pressure, and the growth of social media means that I still have contact from a distance with several of my former staff and workmates, also some of my fellow commuters from my working days.

[peach james]

I pulled the pin from the RCN after 20 years and 3 days...and now are back at work at about 1/2 time.  (I'm 43).

 

(I have 2 kids, 9 & 13).  I get 40% pension of what I made before, and health care is covered here in Canada.  (probably close to NHS in terms of coverage)

 

IF the $$$ adds up, then staying at a "job" that has become only a millstone of a job- why?  

 

So, the questions I see to ask is does the money add up, and if it does, then why work at something someone else wants you to do when you can work at something for yourself ?  

 

 

[tetsudofan]

I packed up work back in 1998 and have not worked since then. Most of my working life was spent in Asia so I don't have any UK-type pension so, working in the financial world,  I started making provision for myself quite early in life. This was probably made easier by the fact that I was single and will remain single and, as the song goes, I did it my way. This also was helped along by surviving a merger at the end of my working life but was able to take advantage of a very generous package as they were still looking for candidates a year after the merger.

 

Upon return to the UK I did not touch the generous package for twelve years and placed the funds with an experienced financial advisor. When I started to drawdown I was surprised at how well the fund has performed. As it happens my financial planner, as he's now called, has just updated my "Lifetime Financial Plan" to ensure that I am still on track to meet my goals. Primarily this is to be able to maintain my standard of living throughout my lifetime including having sufficient funds to pay the potential costs of care, ideally in my home, if required as time goes on.

 

According to the calculations by age 94 (another 20 years away) all my realisable assets would have been depleted . This does not worry me as most of my money is currently spent on my hobbies (trains, trains and trains) which I should be able to stop if need be. Instead of buying model trains I'll be buying care services!!

 

Another thing that is important is to have something to do to keep you occupied once you've retired. In my case I enjoyed five years living with my Mum before dementia kicked in which meant that the next four years were spent caring for her. I learnt quite a lot during that time and since then have made alterations to the house which would be available if I need them.

 

Also believe that if you move you don't move to the countryside or halfway up a mountain. Where I am now it's flat, is less than 10 minutes walk from the station, 5 minutes from the bus stop and doctor's surgery and 20 minutes from the centre of town.

 

Another thing is make sure you have written your will and appointed powers of attorney so there is no hassle when you need them. These can be easily changed or updated if need be, much easier than having to sort things out when you can't.

 

….. and, most important, enjoy your retirement!!

[PatB]

Whilst not actually retired, as such, MrsB and I, in our 50s, are, for various reasons, unlikely to work full time in our respective professions again and so our situation has some relevant parallels. MrsB has some health problems which preclude being able to guarantee availability for work, and I have discovered (or rather acknowledged) a deep aversion to stress and ar$%#*les which prevents me from returning to engineering, even with the industry starting to pick up again.

 

I don't miss the social side of working full time. TBH, I found it to be a negative, as I had very little in common, apart from work, with the majority of colleagues over the years, and actively disliked more than a few. Having now left that particular world behind, I find myself in the arts and crafts field, making stuff and selling it at craft markets and through a shop of my own. Whilst technically work, as far as the Tax Office is concerned, it could hardly be described as a career. However, in doing so I'm meeting a far wider range of far nicer and more interesting people than I ever did as an engineer.

 

Whilst I never measured my self-worth by professional achievement (which might be why, although competent, I was never outstanding or particularly dedicated in my profession), I gain some satisfaction from knowing that what I do now (I'm a potter) might be dug up by the future equivalents of Phil Harding and Tony Robinson in a couple of millennia. OTOH, the nature of the projects that I worked on as an engineer means that most of what I did is now either obsolete or redundant. No lasting legacy there.

 

The big one is finance, of course. Over the years my income as an engineer has been up and down a bit, although the good years have been very good. A tendency towards easy-come-easy-go (which we don't in the least regret) led to only limited provision for the current lean times. I have to confess that it's a bit unstable and hand-to-mouth at the moment, MrsB gets a small government payment and I do just about see an income from the pottery. Enough to get by, anyway. Next year MrsB can access her retirement savings which should be enough to cover our outstanding debts and provide enough of a supplement to our income to keep us going until I can get hold of mine, which should then keep us in modest but adequate fashion until and beyond when the Aged Pension kicks in for each of us. There'll be no yachts or world cruises (or r-t-r 0 gauge), but our needs and ambitions are few these days, and I regard our financial future with rather more confidence than our financial present.

 

In all, I'm glad I don't work as I used to. I hadn't actually realised how much I disliked what I did, and how much I dreaded every work day, until I stopped. I am so much happier and healthier now (if we ignore the little problem with my blood pressure that I discovered a couple of months ago), that living on Aldi baked beans seems a small price to pay. Family history suggests I may not make it far past retirement age anyway. It would be rather regrettable if I spent the intervening years miserable in order to finance a retirement which didn't happen.

[Siberian Snooper]

I took early retirement and I have to say that it's the best days work I never did.  After 5 years, still a couple of years until state pension age, I have no idea where the time has gone and i've barely scratched the to do list. If I fancy some company I go down the pub for a couple of beers and also there's the model railway club, If you have a preserved railway near you, you could do some volunteering, as another way of getting out about.  

 

 

 

[polybear]

2 hours ago, PatB said:

........and I have discovered (or rather acknowledged) a deep aversion to stress and ar$%#*les which prevents me from returning to engineering, even with the industry starting to pick up again.

 

 

Hi All,

Many thanks for all the replies so far, which have all been excellent and most useful  

I can certainly relate to PatB's comment above - I'm also in "Engineering", which nowadays means a company which spends endless man-hours writing documents that will simply clog up a databank and never get read, all for the sake of "ticking a box" (fortunately I've managed to body-swerve most of that, but since my Line-Manager - a top guy - banged out at the end of May then it's only a matter of time....).  Meanwhile, being in the 50's bracket (on a Final Salary Pension Scheme) means both The Boss and the H.R. Dept realise there's very little chance of anyone resigning for work elsewhere. Hence pay rises and career opportunities go to the smart young set fresh out of Uni (clever, no doubt, but when they ask "Where's the USB port" on a piece of kit designed in the 70's, or asking what "b.a." means on a threaded component then I do start to despair...) whilst those with long service are expected to impart their knowledge on the new starters whilst being kicked in the nuts every pay rise time.  Sound familiar? Rant over.

I've also seen many friends and work colleagues either not make retirement, or not have long to enjoy it, so that's a big decider too.

Please, keep the replies coming...

Thanks

Brian

p.s. The Application Form is all filled in and signed by my Line Manager........just got to decide whether or not to submit it....

 

[Barry O]

I packed in full time employment 5 years ago then 3 years ago took my pensions.  

Cricket umpiring in summer..model railways...

[TheQ]

An interesting set of replies,

I've 4 more years officially till 66, but because I have  pensions of , RAF 12 years, GEC13 years (half of which I was paying in triple UK pay) , and I'll have 10 years here. I'll have sufficient pension to retire a year early.. In fact with savings etc, If someone really upset me I could walk out now..

 

However I have been setting myself  up for things to do if SWMBO gives me time off..

The MRC , http://broadlandmodelrailwayclub.co.uk/  which meets on several days a week and the club house is available 365 /24/7 I'll probably up it to the equivalent of a full day a week, but over a couple of days.

The Sailing clubs, https://horning-sailing.club/   https://www.sfsc.co.uk/pages/ I'll be able to attend, all 70 days racing a year, all 26 evening races each summer, and assist at the sailing school at the club another 26 afternoon / evenings a year.

Once that has settled in, I may well volunteer at the RAF Radar Museum..  https://www.radarmuseum.co.uk/

Then there is 1.5 acres of Jungle that may turn into a garden..

 

I don't think I'll have any spare time....

 

Oh I forgot something the 63ft shed I've built in the garden for the project of  a life time Model railway ..

Edited July 31, 2019 by TheQ

[caradoc]

I also retired early, 3 years ago at the age of 57, having first checked with the excellent Railways Pension scheme that I would be financially secure. I put in 38 years service, although as this was entirely shift and weekend work, and overtime, both rostered and non-rostered, I consider that I had actually done far more tnan 38 years ! In fact the shift and overtime demands, still ongoing even at my advanced age, were taking a toll on me and formed a major reason for finishing up. I am of course taking home less money than when working (especially given the afore-mentioned overtime) but I do not regret it for one moment.

 

[Izzy]

 

I took early retirement in 2005 at 55 when my FSS was changed and all I had paid in over 32 years would be quite considerably reduced and not paid till 65. This was one of a number of changes that in total meant the job was no longer worth doing. I do not regret it one bit. I had sometimes thought that being able to retire at 60 would be nice, but 55, never. You can miss the social interaction with others, which can be quite easily overcome in various ways, but not the actual work.

 

In her work my wife had often encountered those who said that when they retired they planned to do this and that, but when that time arrived in many instances they were no longer able to do what had been intended through changed circumstances, mostly of a health nature rather than financial. This helped make the decision.

 

If you can get by financially go for it. Most of my former colleagues have now left, some very nervous about what the future might hold, with no going back, but none regretting doing so once over the hurdle. As is so often said, you’ll begin to wonder how you ever found the time to go to work........

 

Good Luck

 

Izzy

[jamie92208]

I retired on an FSS shortly before my 50th birthday and started drawing my pension on my birthday.  Financially it's surprising how much your daily expenses dropped once I left work.  If the finances allow I would definitely recommend retiring as early as possible and enjoying life whilst health allows.  I was surprised how many opportunities for using my time cropped up.  Modelling obviously but also work in the voluntary sector. I think it's important to try and find something that stetches the grey matter.  For me it was spending 8 years helping to turn a garden shed back into a passenger carrying horse tram along with several other projects.  The good thing about volunteering is that it's possible to walk away.  

 

My initial objective was to draw my pension for longer than I paid it and I'm now nearly 60% of the way there.  

 

Jamie

 

Edited August 8, 2019 by jamie92208

[john new]

E retirement = Best thing I ever did.  Liked quite a lot of the paid job but not the toxic and stressful management environment that came with it. Still work as a volunteer, as you can see from my sig entries, but the pace is set by me and therefore the stressors are mostly absent.

 

As you have a hobby (or you wouldn’t be on here) boredom/inactivity, the downside killer of retirement at any age, wont affect you. Go for it.