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Some interesting numbers above. And don't forget in all this the relevant question isn't really "will I be able to live the life of Riley and go on 6 month round the world cruises twice a year drinking champagne all the way?" but more likely "do I need to work another 5-10y in this stressful job I resent in order to have a better pension over a shorter retirement period in which I've just missed out on the best 5-10y of my remaining good health?"
Yep, probably the most relevant question really!
"do I need to work another 5-10y in this stressful job I resent in order to have a better pension over a shorter retirement period in which I've just missed out on the best 5-10y of my remaining good health?"
Word....!
Quite like my job and the lads I work with. Didn't like the fact I was working more than I was doing other things I enjoy.
I look at many older folks and they've the money, but not the health to really enjoy their retirement in any active way. I don't fancy reading newspapers, going to the theatre or watching TV as a past time.
job I resent in order to have a better pension over a shorter retirement period in which I've just missed out on the best 5-10y of my remaining good health?"
nail on the head. this was my reason for calling it a day at 55.
i had serious health issues in the past, which scared me. so when the new grandkids came along my first thought were, i ant to spend some quality time with them whilst still healthy. so i stopped work and we looked after them pre school so their parents could work.
on a side note...... my father in law never did anything with the our kids. he worked up to being 67..... weekends, overtime. everything. not that he needed the cash. house was bought for cash £2k new in 1964. he worked because he is a miser and greedy, nothing more.
now he is 84. had a small stroke, done nothing about it, done nothing since retiring. sits in his chair with a sad mournful cloud over his head.
i never ever want to be a man with money with no enthusiasm to spend it enjoying life.
i would rather be skint, eating picnics in the garden with my grandkids.
A bit of an opposite to this thread (and likely, most posters on it)
Ive been putting a little bit into A SIPP for the last 18 months, to supplement my civil service pension when it comes or allow me to retire ever so slightly early and not draw that CS pension until its due.
I just checked its growth, cripes, I can't see almost 10% being sustained. I feel we may be heading for a 'realignment'.
Thing with the big houses, is they were the family home and people don't want to live anywhere else. We tried that with FIL and MIL, but they didn't want to move. By the time it was sort of needed it was too late. MIL lived in the lounge and slept in the dining room in later years. The four bedrooms were never used. My folks are rattling round in a large five bed house but they won't downsize. Dad is starting to struggle with the gardens.
My in-laws sold their big family home (with even bigger gardens and fields) that they renovated from a dilapidated shell – so they had massive emotional ties to it. Once they accepted they couldn't manage it anymore, they were soon over it and now realise that it was the best thing they could ever have done.
""do I need to work another 5-10y in this stressful job I resent in order to have a better pension over a shorter retirement period in which I've just missed out on the best 5-10y of my remaining good health?""
Part time may work for some. I have been part time for 16 years. Currently around 20hrs a week over 3 days. Evening or weekend work so I can do my cycling/jogging/walking in daylight all year round. I have managed a few multimonth bike tours using holidays and unpaid leave. In fact my only grouse with my current boss (senior not immediate) was that she refused to let me have unpaid leave so my last bike tour was only a month.
My work colleagues are all pleasant and the job is low stress. Aiming to retire fully just short of 67 in 2 years time. I don't feel I have missed anything not being fully retired.
Still in good health and touch wood years of health left. My dad was walking round the golf course at 89 and still bivvying on mountain tops in his 70s.
In fact come to think of it he went part time around 53. Fewer hours than I do as he was in a job he could do consulting. So 36 years of active semi-retirement.
Contrasting some of the answers here with those on the ‘rich’ thread. Rich enough to retire early ?
I've just started drawing an income from my SIPP to cover the few years til my Teachers pension kicks in. I've now got another reason to earn less from p/t work, as it will put more of the pension payments under tax free personal allowance. Ton's comments here clinched it - more time, less consumption. I've got nearly 200 Munros to drag myself up (along with other hills), just bought my wife an ebike as she wants to do some bike travel and my Dad needs more care.
can you share any insights into how much less, as a %, you feel that required investment income relates to income when you and partner were working ?
From back when I was working full time to the current day, my total income, is down by about 60%. If I'd carried on working for a further 10 years my salary would have been larger too (plus inflation). Looking at my wife's mate recent retirement, she's down by about 50%, though it's a much smaller amount regardless.
Thanks scotroutes. I think I should have posed the question as comparisons of net income pre and post retirement, as gross income while working may have a significant contribution going to pensions and other savings, along with possibly high rate tax and NI.
In my last couple of years working I was able to pay around 30% of my gross income to my SIPP via salary sacrifice for example, which along with tax and NI brought my net income down fairly substantially, although it was still a fair bit more in the bank every month than I’m currently projecting my income once I’m using my pension for monthly drawdown.
In my last couple of years working I was able to pay around 30% of my gross income
I'm currently paying about 127% of my net into my pension. I've got to admit. It confuses hell out of me!
^^ how does that work then ?
I'm not in the UK so my pension/savings/investments don't map directly to those in the UK but I'm in a similar situation to you.
I retired just over a year ago, and I'm anticipating* my post-retirement net income to be about 90% of my pre-retirement net** income.
Age 62, own home, no mortgage, no debts, no kids. Mrs Vlad is still working (for at least another 18 months) and she will have two reasonable defined benefit pensions when she's 60.
Ultimately, I'm aiming for a net income in a similar ball-park as pre-retirement but this is only possible as I was pretty frugal before retirement and I'm happy to be frugal, if needed, post retirement. I'm also quite heavily invested in US EFT so this may all go horribly wrong at any moment 😀🤔
* I say "anticipating" because I haven't been retired for a full tax year yet and I've got a mixture of a modest defined benefit pension and other discretionary sources. My DB pension just about covers my mandatory, regular monthly outgoings so I've been topping up my pension from savings when needed, but I still need to work out how much extra I'll need to pull out of my investments this tax year (mostly for tax efficiency purposes). I'll also have two small state pensions at 65 and 67 to look forward to.
** My definition of net being after tax AND after contributions to savings and investments, which were a large proportion of my salary.
My aim is to have about 2/3rds of my current net income (including state pension) but reckon even half should be OK, I just don't want to scrimp and save in retirement like we have all my working life. We currently spend about a third of our income on mortgage and car loan which we won't have (ending soon 🙂 ), hence plucking the 2/3rds figure from that, allowing us to live as we currently do. However we are still paying for 2 grown kids at home( last year of school and 2nd year of uni), so again, when they move on in the next few years that frees up more, hence plucking the 50% figure from that and TBH that's not far of what we would both get in state pension alone, hence looking at going at 60 and financing the 60-66 gap, there is actually a benefit payment you can claim at 65 in ireland, so I really only need to cover 60-65.
Thanks, yes, the grown up kids at home is a thing indeed. In my situation the only thing that has changed is my employment status - we are obviously in same house, no mortgage, boys both working and living at home/at partners a few nights a week etc. wife still working part time.
cars are new and no finance, no other debts, but… we do spend a lot on general stuff, no doubt a learned habit from being fairly cash rich. Trying to adapt to a leaner way of life has some challenges for all of us currently..
job I resent in order to have a better pension over a shorter retirement period in which I've just missed out on the best 5-10y of my remaining good health?"
nail on the head. this was my reason for calling it a day at 55.
i had serious health issues in the past, which scared me. so when the new grandkids came along my first thought were, i ant to spend some quality time with them whilst still healthy. so i stopped work and we looked after them pre school so their parents could work.
on a side note...... my father in law never did anything with the our kids. he worked up to being 67..... weekends, overtime. everything. not that he needed the cash. house was bought for cash £2k new in 1964. he worked because he is a miser and greedy, nothing more.
now he is 84. had a small stroke, done nothing about it, done nothing since retiring. sits in his chair with a sad mournful cloud over his head.
i never ever want to be a man with money with no enthusiasm to spend it enjoying life.
i would rather be skint, eating picnics in the garden with my grandkids.
I’ve literally last Friday called it a day,(58 and 2 months young), in my notice period.
You don’t win if you don’t actually get to use your pension 🙂
It’s the whole health thing,you could have the money to go or buy whatever bike you want but you’ve squandered the time element to actually enjoy it or can’t be bothered because something hurts.
How little or much money you have doesn’t matter as long as your fit enough to enjoy yourself and have enough to cover the bills.
You can’t buy health or time 🙂
I finished at the end of Oct - at 60. Worked in HR for a long time, I 've seen far too many mainly senior employees not get past 60 because of health issues - usually stress related. And end up retiring /leaving in poor health. The job was taking too much from my health and may be we are a little less resilient as we get older - hence it was time to go. Not going back - there was a weight of the shoulders moment.
its good to read about people age 60 or nearly being able to retire. The point made a few posts up :
How little or much money you have doesn’t matter as long as your fit enough to enjoy yourself and have enough to cover the bills.
is pretty much the key, however it’s quantifying the ‘enough’ that I find a bit tricky as I navigate the process..
I said this a few months back and I'll say it again now. While it's great for those that have made the jump, using examples of relatively healthy 50 and maybe a few 60 year old retirees who've been retired a for a few months / couple of years and for whom it's all going swimmingly is in my opinion creating false hope. We're a self selecting community, there's not many on here that retired early 25 years ago, the money ran out and now live on buttons to counter the great stories above.
That's my fear and yes, I might not live until I'm 85 but there's a pretty good chance I will (I'm 57 next birthday) and I need an income that will last. Sure, we all know about Go-Go, Go-Slow, and No-Go and we don't need the same income for ever but unless we want to chance it on a state pension safety net we have to consider it.
As an example - as i said I'm 57 next birthday, don't smoke or drink, relatively healthy and by some standards for this stage I have a very healthy pension pot, above £0.5m (I started early and maxed out getting full employer contribs, the wonder of cpd interest rather than being a particular fat cat earner)
I just plugged that into a pension calculator to get an annuity quote, taking the max 25% out to finish the mortgage and give me a pot for the Go-Go part of retirement, and they would give me £15k a year annuity (index linked)
Is an annuity a good estimate for how fast you could draw down - I'd argue that they have been doing it long enough to have a reasonable idea, and yes of course they win some, lose some, and stack the deck so they always skim a bit but even if that's 20% undervalued, that's still around £1500 a month for me and my wife until state pension comes in.
So my urge to all considering it is to also consider if part of your plan needs to be an annuity to protect against being over optimistic and the money running dry, because there's no-one on here living that misery (yet). At the very least an annuity calculator gives you a ballpark for what the pros would allow you to live on.
Could you live on £1500 per month though in current money if you assume you have no mortgage and you're not working. I know you can but the reality is probably no spare money to do anything. Can you do anything about this between now and when you want to retire. For a couple £2500 looks more realistic but still not getting you going away 3 times per year (Yes I'm fully aware you can but that's not everybody's idea of fun)
If you had a pot of £500k in 2025 in a typical "high risk" 100% share fund it would have gained about £85k. 2026 will be different but no idea in what way.
Can you chuck a lot more money at your pension between now and expected retirement but if this is detrimental to your current life is it worth it. Future healthy active you would say yes it is but next 3-5 years you may not.
Currently Annuites look expensive if you work on the assumption stock market returns 5%+ every year. Some people need the certainty though or can't trust themselves to look after a large pot of money.
Just on annuities, I’m considering splitting my pension pot and buying an annuity that would cover my fixed costs each year and leaving the rest in a drawdown where, if I have a good year I get to draw down a bit more and have a few extra treats that year, and if I have a bad year I maybe don’t get a holiday that year. Not sure if this is a good or bad idea though, just nervous about relying 100% on my pot to produce with the uncertainty/noise around stocks/crashes. Anyway that problem is about 5 years down the line.
which is why at least some as an annuity is a good idea. Even if it doesn't look super attractive now I suspect it will at some points in the future, so I agree with theotherjonv
I’m 61 tomorrow and our monthly expenditure is a touch over £2k. I have a part-time job which covers half, plus we have our own business that covers the other half. My plan is to carry on working just to give me something to do. Downsized 5 years ago and still have a chunk of the house sale proceeds, plus some shares and savings that will easily cover any one-off purchases and big bills. By the time we both reach state pension age, estimated income for both of us is going to be over double what we have now. I’m just in the process of trying to find an IFA to assist - a few small pots that could do with being consolidated. No kids or dependents to worry about legacies - started with nothing, going out with nothing.
If you had a pot of £500k in 2025 in a typical "high risk" 100% share fund it would have gained about £85k. 2026 will be different but no idea in what way.
remember though that a lot of people with decent pots are nearing the retirement age so have likely derisked the pot to some extent, so unlikely to still be 100% in ‘high risk’ stocks and getting those returns. Also a lot of these funds are heavily weighted to US stocks so while the stocks may of gained 15-20% last year the dollar dropped by over 10% negating some of these gains (well did for my 100% equity fund anyway).
I said this a few months back and I'll say it again now. While it's great for those that have made the jump, using examples of relatively healthy 50 and maybe a few 60 year old retirees who've been retired a for a few months / couple of years and for whom it's all going swimmingly is in my opinion creating false hope. We're a self selecting community, there's not many on here that retired early 25 years ago, the money ran out and now live on buttons to counter the great stories above.
That's my fear and yes, I might not live until I'm 85 but there's a pretty good chance I will (I'm 57 next birthday) and I need an income that will last. Sure, we all know about Go-Go, Go-Slow, and No-Go and we don't need the same income for ever but unless we want to chance it on a state pension safety net we have to consider it.
As an example - as i said I'm 57 next birthday, don't smoke or drink, relatively healthy and by some standards for this stage I have a very healthy pension pot, above £0.5m (I started early and maxed out getting full employer contribs, the wonder of cpd interest rather than being a particular fat cat earner)
I just plugged that into a pension calculator to get an annuity quote, taking the max 25% out to finish the mortgage and give me a pot for the Go-Go part of retirement, and they would give me £15k a year annuity (index linked)
Is an annuity a good estimate for how fast you could draw down - I'd argue that they have been doing it long enough to have a reasonable idea, and yes of course they win some, lose some, and stack the deck so they always skim a bit but even if that's 20% undervalued, that's still around £1500 a month for me and my wife until state pension comes in.
So my urge to all considering it is to also consider if part of your plan needs to be an annuity to protect against being over optimistic and the money running dry, because there's no-one on here living that misery (yet). At the very least an annuity calculator gives you a ballpark for what the pros would allow you to live on.
Theres no way I could match your pension pot and tbh whatever I do now won’t drastically increase mine.
The issue is that if your in this thread thinking about doing it you can’t change the last 20 years of investment and compound interest you made.
I have positioned myself to be in living in Spain to make the most of whatever I have YMMV.
The issue is no two of us are the same and there are many uncertainties,I suffered Brexit.
Planning for the unforeseen future is always going to be a little tricksy.
Planning for the unforeseen future is always going to be a little tricksy.
It is but there are ways to derisk. Which by their nature are pretty much always conservative with a small c but that's my point, using only the examples of people who retired a few years ago and for whom it's going great I think is false, there are no balancing stories and consequently I think skews thinking.
Look - it's your life and your future, but I'm not convinced the great stories we're hearing about will turn out as great in the end. There, I said it.
The problematic early retirements are almost always people who have actually lost their job (redundancy or employer going bust etc) and unable to find a job (...at an adequate salary for their lifestyle/commitments...). "Retired", but not through choice.
How many people have actually met someone who did their sums, walked out voluntarily at 50-55 say, and regretted it subsequently?
Far more people are massively conservative about early retirement than too optimistic.
How many people have actually met someone who did their sums, walked out voluntarily at 50-55 say, and regretted it subsequently?
Not many, admittedly, but a couple. My Dad for example, he has had to continue working into his 80s (OK, he also enjoys that) and has also had to equity release on what was planned to be inheritance (OK, you can also argue downsizing is part of his pension plan), and he is now quite rich on paper but D2D costs need more careful management than he envisaged.
But both retirement age (for early retirees) and life expectancy are moving in opposite directions meaning the length of time to cover is getting longer. I'm not surprised a mid 50 year old hasn't got many examples, ask me in another 25-30 years time.
A couple of my fellow Wildlife Trust volunteers have had to get themselves a part-time job to supplement their finances until the state pension pays out. Bit annoying really, as now I'm the only qualified minibus driver for our Thursday sessions.
If you had a pot of £500k in 2025 in a typical "high risk" 100% share fund it would have gained about £85k. 2026 will be different but no idea in what way.
remember though that a lot of people with decent pots are nearing the retirement age so have likely derisked the pot to some extent, so unlikely to still be 100% in ‘high risk’ stocks and getting those returns. Also a lot of these funds are heavily weighted to US stocks so while the stocks may of gained 15-20% last year the dollar dropped by over 10% negating some of these gains (well did for my 100% equity fund anyway).
True. I used 17% as that's what the UK Vanguard 100% lifestrategy fund is quoting for last 12 months. An own brand global from Peoples Pension I have is more like 13%.
Derisking maybe also happening automatically for most people as that's what the default setting is on workplace pensions. Ones I've looked at derisk quite aggressively and very early.
I have joined the early semi retirement club as of 31st December 2025 via redundancy at 53. I was fortunate to be mortgage free with a reasonable DB pension and a healthy DC pension pot along with other provisions and 2 year redundancy payment. I will be returning to part time work in April doing just 2 days a week in a similar field which I feel is perfect for me.
All I'll say is do not take your health as granted, those who know me will know the journey I had back in 2017 so Im simply looking at this as the wind down phase to fully retire in a couple of years. YMMV.
I just plugged that into a pension calculator to get an annuity quote, taking the max 25% out to finish the mortgage and give me a pot for the Go-Go part of retirement, and they would give me £15k a year annuity (index linked)
Is an annuity a good estimate for how fast you could draw down - I'd argue that they have been doing it long enough to have a reasonable idea, and yes of course they win some, lose some, and stack the deck so they always skim a bit but even if that's 20% undervalued, that's still around £1500 a month for me and my wife until state pension comes in.
£1500 a month isn't a lot. Have you considered part time work? I have been part time for 16 years. Benefits? Cash obviously. Compared to full time you have loads of time for activities. You can walk/jog/cycle outdoors in daylight all year round. Social contact.
I was fully retired for 6 months during which time I had an 11 week bike tour. I enjoyed working part time after that. The advantage of having a part time job you don't need the income from is they have no hold over you. I booked flights for another 2 month bike tour before asking for a month unpaid time off on top of holidays because I was going regardless.
The other advantage of not depending on a salary is you can try anything. If you don't enjoy it then you just leave.
£1500 a month isn't a lot. Have you considered part time work? I have been part time for 16 years. Benefits? Cash obviously. Compared to full time you have loads of time for activities. You can walk/jog/cycle outdoors in daylight all year round. Social contact.
Correct, but I'm not considering retiring yet. I used the annuity calculator as an illustration of what the experts would pay you for a pot my size / my age to demonstrate that even those that think they are being careful are at risk of running out, and why the guarantee of an annuity might be a consideration.
Sorry. My mistake. I'm with you on being cautious of full retiral too soon. I have around 230 or 240 days a year to do what I want. No need to fully retire.
If you are thinking the annuity route then do consider how flexible they have become in recent years. As pointed out above you can split your pot between drawdown and annuity, you can also take a fixed period annuity. Maybe you will need more in the shorter term and less in the future, you could take an annuity over a fixed period of time, say 10 years, take a cash lump up front and pop it in an isa. After 20 years you should have state pension to go alongside what you have left over or saved.
One think to watch with annuities right now is the falling interest rate, I put in my current DC pot into the Legal & General calculator a few months ago (July?) and it offered me £60k upfront £14k pa for 10 years and £17k at the end of that period. The offer now is not nearly as generous.
Kind of a side question, but casualy looking at annuities I see youcan get ten year guarentees for example..what happens if you live longer, do they shaft you on what they pay out after ten years?
This will let you see amounts - you can choose how much they payout after a fixed term ends.
https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/compare-annuities
If you are thinking the annuity route then do consider how flexible they have become in recent years. As pointed out above you can split your pot between drawdown and annuity, you can also take a fixed period annuity. Maybe you will need more in the shorter term and less in the future, you could take an annuity over a fixed period of time, say 10 years, take a cash lump up front and pop it in an isa. After 20 years you should have state pension to go alongside what you have left over or saved.
One think to watch with annuities right now is the falling interest rate, I put in my current DC pot into the Legal & General calculator a few months ago (July?) and it offered me £60k upfront £14k pa for 10 years and £17k at the end of that period. The offer now is not nearly as generous.
This is part of the problem, you don’t know exactly what the financial situation will be when you take out an annuity.
Financial crashes aren’t unheard of and you probably don’t want to need to be taking an annuity then.
I expect when Barrings went pop there were a few unhappy retirees.
Don’t forgot the limits now that the U.K.Gov now covers banks for aren’t that great
When I started my pensions, I can actually remember laughing at picking the retirement age .
Which the government then stopped at a later date.
I’d always planned to live later life in Spain or France, it was usually something in the middle of nowhere in the the mountains , then of course you had Brexit which means you need a ‘lot’ more money behind you to do this.
Brexit would have caused issues second year NLV can require showing €72k in the bank for a couple so you’ve big pockets or sold up everything but Brexit wasn’t a thing I had to worry about until I did.
I suppose what I’m getting to is that its all a state of flux, there’s a bit more to retirement planning than the money side and timings everything and the world does whatever it wants.
I suppose the answer to how much money is enough to retire on is , just a little bit more 🙂
I do think at the end of the day it’s a matter of having to cut your cloth to what you have.
I was going to live up to my name and also mention that I’m aware of more unhappier people who didn’t make their retirement or didn’t have much of it as opposed to people retiring earlier and regretting.
DoD Dad wasn’t expecting a triple bypass and a stroke, he had retired early but tbh DoD mum was looking after DoD gran so they didn’t do what they were planning or the retirement they expected.
I think you have to factor this in as which is why YMMV vida tan dura 🙂
FYI:
I can’t get the quote to work but Brexit quadrupled the requirement for the main applicant
- Main Applicant: Must prove 400% of the annual IPREM.
- Each Additional Dependent (e.g., spouse): Must prove an additional 100% of the annual IPREM.
For those curious about annuity modelling I can strongly recommend the link below. The calculator lets you model pot size, age and a variety of annuity types (fixed etc) so will give you a good idea what you could get.
https://www.legalandgeneral.com/retirement/pension-annuity/pension-annuity-calculator/
Having revisited this thread recently, I have realised that there really is no answer to the question posed in the thread title. Many people have retired in their late 50’s with what some would see as a small pot, maybe around 200k. Others are unsure if they can afford to retire with a pot 4 times that size.
Setting up a tracker of all outgoings and looking at how those may change in 2/5/10 years has been very helpful advice for me, as suggested a few times by others.
I have concluded that at age 60 in 2 weeks time, and having taken an exit deal from work late summer, I could probably get by on what I have in pension and savings, along with my wife’s smallish part time income, but I’d like to be doing some high value part time work, a day or at max 2 days a week. That would bring in perhaps 25/30% in the income I would like in a month, be tax efficient and keep my gainfully occupied ! So that’s my current focus.
I'm certainly thinking about it come 60ish - currently 56. Son has moved out so we will see how that continues and I hope he can support himself. Some changes at work aren't going to improve so hanging on (new Finance system that's really impacting my ability to do my job as an accountant), and our Deputy finance Director has just retired at 60 - we'd know he'd go as he has a lot of service. A number of my colleagues have retired early, I'd like either a part time job or volunteer, but I'd do something like work in B&Q as I've an interest in DIY and gardening.
I've looked at the figures on my main pension and somewhere between now and 67 gives a decent figure.
I'll be looking to drop to 3 days a week at sixty, 53 now. I'd rather do that then resign and find a part time job, predecessors have done the same so it won't be out of the question. Fortunately I enjoy what I do, it's stress free and interesting, which is a large part of the battle.