Thoughts on life, death and when to retire...

RandallFlagg

I'm 52 this year and over the last year have made sure my wife's & my pensions are all located, consolidated (my wife had 4 pensions from various jobs over the years - these are all now transferred into 1), in order and valuations updated and benefits understood. I have a spreadsheet that plots out a forecast of annual cash drawdowns, allowing for income tax, with a retirement date from age 55 up to 67. Obviously, the amount of drawdown gets higher and the money last longer the later I retire but there's the dilemma.

It's non stop rock 'n' roll here in my life!

I was working with a old friend from a local transport company on a large project over winter, we started in September and finished at the end of January, except he didn't make it to the end of the job. Richard was last in my office on 13th November and on 27th December at 07:30am I got an email from his wife to tell me that he passed away at 10pm Boxing Day. It's a long story but he appeared fit as a fiddle in November but apparently had lymph node cancer and died from respiratory complications within 6 weeks of feeling ill. He was 66.

This shocked me and has really made me think about when the best time to retire is. At 66 I won't have even started drawing my state pension.

Do you work and work and work putting more and more money into your pension?, do you take the cash lump sum tax free to renovate your house, buy a new car, take a world cruise? Do you jump out of the rate race at 55 and maximise the time you have free before the grim reaper calls for you? I am getting weary of the daily trudge and commute but have no desire to leave and go and work elsewhere, my general desire to work for faceless greedy corporations is diminishing each year.

By the time I get to 55 I will be debt free, mortgage free, have a fair amount of savings and have 13 years of preserved index linked defined benefit pension alongside a current defined contribution pension but the drop from current pay would be significant and the money would run out in my mid 80s after which I would be reliant on state pension only. But if I work up to 60 or beyond, that's another 5 years when I could pour large amounts of earnings into my pension, along with my employer, and have even more of a savings pot.

If only we knew what the planned date of our death was...I never worried about any of this shit when I was 21, just enjoyed playing in a band, chasing girls and going to the pub.

I know you can get pension advice but I'm not sure a Financial advisor will help me wrestle with this. It's the age old dilemma, lots of time with a lot less money or a lot less time with a lot more money...

horse

Is something in the middle possible, e.g. going part time at some point?

Caffeine_Vampire

I’m 44 and it’s getting increasingly difficult to bat these thoughts away. No kids and mortgage paid so I’m in a different situation to most but I watched my old man die from an avoidable disease caused by his job. He was 64, worked like a bastard all his life and saw neither his pension nor his grandchildren. My attitude towards work changed in that moment. I live the hell out of every day, earn only what I need and don’t worry about the future. Time spent  doing what you love with who you love is more valuable than time you might never have.  

Mark1960

I have also considered this as I'm in similar teritory but a little older, and the only conclussion I have come to so far, as I also have no desire to work for another company, is to ask yourself if you are ready to retire? Personally I'm not yet so all other options (pension wise) are not applicable. Once I am ready to retire is I believe the best time to see what options I have. If you will be ready to and can affort to (albeit at possibly reduced income) at 55, then I would say retire. If you are not ready just keep reviewing it each year until you are ready

RandallFlagg

Sage advise fellas, thanks

p90fool

I've been to a lot of funerals in the last year, the one on Friday was of a 54 year old ex-athlete (same age as me, coincidentally) who died of cancer a few weeks after diagnosis. 

My wife's ex is a crazily fit 61 year old with an excellent pension from holding good managerial positions his entire working life, but he won't see it, he has inoperable cancer and is not expected to see this year out. 

Having lived very happily on an income well under the lowest tax threshold for the last nine years I know I won't need much to retire on, in fact the current state pension is significantly more than my current wage.

Wouldn't it be funny if being a feckless yob musician who never showed the slightest interest in planning for his future turned out to be the best plan after all? 

Take that, parents.
 

So yeah, time isn't money, time is time. 

RandallFlagg

horse said:

Is something in the middle possible, e.g. going part time at some point?

Yes that's a thought, instead of a hard stop, I could retire from this job when I've had enough and start drawing the pension and see if I can find a part time job to bump up the income, pottering around in B&Q garden centre watering plants would do me.

RandallFlagg

Well I've got 3 years to go before anything is an option, I just need to avoid death in the meantime.

sev112

@RandallFlagg ;

“made sure my wife's & my pensions are all located, consolidated (my wife had 4 pensions from various jobs over the years - these are all now transferred into 1), in order and valuations updated and benefits understood. I have a spreadsheet that plots out a forecast of annual cash drawdowns, allowing for income tax, with a retirement date “

How do you go about doing precisely all that?  Am in exactly same position, and wouldn’t know where or how to start?

Majorscale

I plan to ditch the office job somewhere between 55-57 if I can afford to by then, and then look for something less stressful and taxing to do, maybe part time. Not sure I could go from my current job to doing nothing overnight, however I also want to retire properly at an age where I am (hopefully) still able to enjoy it! 

Mark1960

Get yourself an independant financial advisor, it will cost a few quid, but well worth it IMHO, as it could save you loads down the road.

jdgm

I am 64; have lost 3 friends to cancer in the last year, between ages 57-66. Last week I went to the funeral of the 57-year old who died of pancreatic cancer and I didn't even know he had it.

I was made redundant end of 2014 after 13 yrs; I have a tiny DB pension (I put as much in as I was allowed to), took the remainder of my DC pension and deposited it in another scheme (SIPP) where I can get cash out if need be; and am waiting for my State Pension (Mar 2020) which won't be the full amount as I was contracted out on a couple of occasions.

So I am unemployed and have a very low income from the DB pension which I have to top up from my savings, and by selling things (my beloved record collection is slowly selling on Discogs).

The saving grace is that I have no debt - I was able to pay off everything while I was working, so I can exist on very little.

But I don't get to go to the pub or to many gigs etc these days. However there are some huge pluses; all my time is my own (I still don't know how I found time to work), I don't have to sit in an office all day and no-one is telling me what to do.

You sound as though you are well positioned and on top of your finances; financial advisers will only try to get you to invest in some scheme which they will make money out of, in my experience - I had to see financial advisers to get hold of my DC funds.   It was a f***ing nightmare as none of them were in the slightest bit interested in what I wanted, and they can get quite nasty -  again, that was in my experience.  Don't bother with a financial adviser unless you are legally obliged to consult one in order to get hold of your own pension money.  And I personally would NOT buy an annuity under any circumstances at all.

The main thing is to get completely out of debt and then review things. As for if/when you are in your 80s....who knows? I probably won't have enough income by then...but I will still have the DB pension coming in - and so should you, surely?

The choice for most of us is; you can have time or you can have money. As you get older, time becomes much more valuable. From what you have written, I'd look at 'retiring' when you are 60-ish.  I would also start to actively keep fit; I had  heart scares in 2003 and 2013 (paroxsysmal atrial fibrillation) due to work stress.

Best wishes.

EricTheWeary

There is a lot of demand for those part time jobs at B and Q. *

I know I’ve said this before on here but my father retired at 55 which was when I was 18 so my adult role model was of someone who did some part time work, did some gardening, did a part time degree, got the garden in shape, did some travelling with my sister and me. By contrast my father in law had just retired at 65 by the time I met him he had gone straight to daytime TV and seeing how far his free bus pass could take him ( to Coventry bus station and back in off peak from their house in Brum as it happens). My eldest brother died in his early sixties and the other one is now having a forced retirement at 66, he has spent decades trying to keep up with the Joneses and his health is now shot to shit from years of stress. 

I really do feel old a lot of the time now but I can shed 20 years in 48 hours on holiday and I’d like to be nearer to that most of the time. 
There are a couple of blokes at work who have retired but now do part time through an agency. Their hourly rate is higher than mine and although they don’t get paid sick leave or pension contributions they couldn’t give a shit, it’s just all disposable income to them. Assuming my kids fuck off at some point that seems a reasonable place to be. 

* there is;  in practice something part time that draws upon your qualifications/ experience/ skills is going to be easier to get and probably more financially rewarding. Or turn those skills to help run a charity or something so it’s at least personally rewarding. 

RaymondLin

I am about to hit 40 soon and only now I realise the mortality and the impending retirement and money....my plan now is to save as much as I spend between now and retirement.  Say for 25 years, that means I can hopefully live for another 25 years on the other end of that with my savings and topped up with pensions.

For every pound I spend, I need to save a pound....

However, it won't stop me doing things that I love, such as travelling and photography, I turn up for work on time but I also leave on time.

VimFuego

I jumped out of the rat race 12 years ago at 37, so possibly younger than many who do so. I kinda came to the realisation over a period of about 2 years, that I needed to do something else. Mrs F got cancer, then my dad died suddenly, then about a year after that a cousin of my mum died aged 67 (I kinda knew him fairly well from family gatherings etc). For me that was the clincher, I'd spoke to him last at my dads funeral, and I recall clearly him saying how he was looking forwards to retiring and all the plans he had. So he retired, and within a few months diagnosed with cancer and dead a few months after that. 
At the time we were debt free and have no kids, so our necessary outgoings were, and are, small. We both have private pensions that will pay out something when we are too old to work, and have a fair bit of capital tied up in the house, which we will sell and downsize at some point.
Now I work about 15 hours a week as a gardener/handyman etc. It's hard work sometimes, and I am starting to feel a bit creaky, but I work in the village, and most of my clients I walk to.
The downside/s is that sometimes the work in inconsistent, bad weather can play havoc with your income. All my clients are elderly, so I know that sooner or later, they will die and I'll have to replace them. I do miss the regular income, that's for sure, but by and large I'm much happier than I was 12 years ago.
It's not for everyone, if you like good living and all that, then possibly not the life for you.

Blaendulais

Jumped at 53. Sold 6 classic cars and a porsche.  Comparatively really skint compared with when working.  Comparatively super fucking happy tho.   Seen to many people save for days that they dont get.  

Strat_a_tat_tat

@RandallFlagg. ; If you've got 13 years of DB pension... that shouldn't ever run out. Even if you spend the rest.

I'm going through similar thoughts for the future. My concern is not just having enough while I'm around. I want to make sure my other half won't have to struggle when I'm gone. That makes it even harder to work out what to do.  :-(

One note of caution... the IFAs I've encountered have been less than impressive when it comes to anything beyond fairly basic knowledge and advice.  If you can, it's probably a good idea to try to get your head around general options and investments etc. Two reasons...

1. Nobody is going to care about your cash like you're going to.
2. Building on your existing knowledge of investment options etc. is going to put you in a better position to evaluate the 'skills' a specific IFA can offer... if you do decide to use one.

RandallFlagg

sev112 said:

@RandallFlagg ;;

“made sure my wife's & my pensions are all located, consolidated (my wife had 4 pensions from various jobs over the years - these are all now transferred into 1), in order and valuations updated and benefits understood. I have a spreadsheet that plots out a forecast of annual cash drawdowns, allowing for income tax, with a retirement date “

How do you go about doing precisely all that?  Am in exactly same position, and wouldn’t know where or how to start?

Well, I dug out all the old paperwork I could find and luckily had something from all every pension we've had. We called them and asked for up to date statements of transfer value. Once we had those my wife's current pension provider just needed the details of all 3 other of her preserved pensions and facilitated the transfer. It took a while, couple of months I think but once it was complete she has an online portal through her pension provider that shows the new pension pot value.

Mine is the same, I can login to Standard Life portal and see the pot value and also a future prediction of pot value based on an estimated investment return and planned employer & personal contributions, so I can see what the pot should be at any point in the future. My 13 years of final salary is not viewable online so I ask for an up date statement of benefit and a transfer valuation periodically and use that.

I plot these values on a spreadsheet and divide the amount up across as many years as I want to drawdown cash, add a line deduct 20% tax on the amount over the current tax free threshold and add the state pension and get a forest annual total pension for us both to live on.

Sesh

I like to think, nearer the time, that I'll be able to dump the career and potter in a low stress job for the last few years. Winding down to retirement is important. At 42 and a day I've got at least 25 years to go though. Should be mortgage free within 10 years but my pension is going downhill. They keep making me pay more in with the promise of getting less later! Makes you want to suck a shotgun. I want to be able to contribute to the kids uni fees if they go and towards deposits if I can. We'll see. 

Strat_a_tat_tat

RandallFlagg said:

I plot these values on a spreadsheet and divide the amount up across as many years as I want to drawdown cash, add a line deduct 20% tax on the amount over the current tax free threshold and add the state pension and get a forest annual total pension for us both to live on.

I think the state pension is taxable... so you're likely to have to pay a bit more tax than your current model suggests.

RaymondLin

Strat_a_tat_tat said:

@RandallFlagg. ;; If you've got 13 years of DB pension... that shouldn't ever run out. Even if you spend the rest.

I'm going through similar thoughts for the future. My concern is not just having enough while I'm around. I want to make sure my other half won't have to struggle when I'm gone. That makes it even harder to work out what to do.  :-(

One note of caution... the IFAs I've encountered have been less than impressive when it comes to anything beyond fairly basic knowledge and advice.  If you can, it's probably a good idea to try to get your head around general options and investments etc. Two reasons...

1. Nobody is going to care about your cash like you're going to.
2. Building on your existing knowledge of investment options etc. is going to put you in a better position to evaluate the 'skills' a specific IFA can offer... if you do decide to use one.

You latter 2 points is why I have just opened an index fund this year, upped my pension at work.

My new hobby is now maximise my savings.