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Can I retire when I am fifty-three?

(57 Posts)
ShropshireMiss Fri 22-Apr-22 01:13:09

Would it be realistic for me to retire in three years time, when I will reach 53 years of age?
I was a teacher for many years but a few years ago changed to a lower paid but less stressful/less time consuming civil service job.
I am now mortgage free with a small bungalow and no dependants.
My teachers’ pension will start in ten years time when I am 60 and will start at approx £12,000 together with a lump sum.
My civil service pension will start in 17 years time when I am 67 and currently will start at about £3,000 (I transferred in an old stakeholder pension) and will start at about £4,500 if I stay working another three years.
My state pension is due to start at 67, so in 17 years time, and I will have built up the full NI contributions by then (I need 37 years due to being contracted out).
What I’m not sure is will I be able to manage on my savings & investments between from age 53 to age 60 when the first pension starts, and then to age 67 when the other two pensions kick in?
I’ve got about £400,000 in savings & investments. A quarter of this is in premium bonds & cash ISAs. The rest is in stocks and shares which produce a dividend income of about £6,000 although it’s currently being reinvested.
I don’t have any children so leaving an inheritance isn’t an issue for me.
I feel like I should be able to take the plunge and retire now and live off the investments and savings, but it feels like a big step to take.

Pepper59 Fri 22-Apr-22 01:44:51

I think I would take advice from a reputable financial advisor (independent). Although you are mortgage free and no dependants, the cost of living has risen horrifically, along with fuel bills and I don't see it getting better any time soon. Do you have plans as in hobbies when you retire? Even though you seem to be very sensible with finances, 53 seems a bit early and retirement halves your income. Houses also need maintained and there is always something breaking down or needing replaced. Have a trial run of living on your retirement income for about six months. See if you can do it and put the rest of your wages aside. Good luck, whatever you decide to do.

Pantglas2 Fri 22-Apr-22 06:54:29

I’d say yes from a financial point of view if you’re prepared to lose/use a quarter of your capital (ISAs/premium bonds) to provide an additional income to the dividend over the seven years between 53-60.

I’d use the time and earnings between 50-53 making upgrades to your bungalow where necessary- kitchen, bathroom, dg, ch, etc so that it’s future proofed.

Good luck with your plans.

Urmstongran Fri 22-Apr-22 07:06:04

We retired when I was 60y and Himself was 62y on an awful lot less than you SM. We used our modest lump sums and private pensions to ‘see us through’ until our state pensions kicked in. No regrets even though now we have no savings left and live solely off our pensions! It’s all about choices at the end of the day isn’t it? We chose time over money - not in a silly way, we do have enough for our needs - but many would not be at all happy with my bank account!

Do your sums, work out what’s important to you and decide accordingly. Good luck!

UserNamesAreOverrated Fri 22-Apr-22 07:24:56

I'd go for it. I retire in 10 weeks at 65 and if I could have retired at your age I'd have jumped at it. If you use your savings to get you through to when your pensions start coming in well it's not like you want to leave the money anywhe Ire. And I strongly doubt you'll manage to get through even half of it.

You'll be retired and able-bodied - what a wonderful combination. If you have a professional financial advisor then speak to them because they might recommend re-jigging your investments to produce more income and less capital growth which coud be useful. They'll also know what to cash in first.

If I were you, I'd totally jump at it.

Oopsadaisy1 Fri 22-Apr-22 07:35:19

Ask yourself what you want to do if you retire now, do you want to travel the world, go on to theatre trips, Hotel stays, do up your property?
Unless you want to just ‘potter’ for the next 20 years you will need at least the same amount as you are earning now each year until your pensions all come through.
You need to speak to a FA to get the most efficient way to fund whatever lifestyle you want to have, at 53 you could do so much, but you need to have funds in place, if you use your savings they will dwindle very quickly the way costs are rising.
Having said that, it’s a good position to be in as you have no other calls on your money except to enjoy it!

Daisymae Fri 22-Apr-22 09:00:06

I would say that you need financial advice from a professional source. Personally I would consider part time work to keep you going until your first pension kicks in. That way you will have time to do the things you want to do while still young, but protect your savings. I would say that you are in a very stable financial position but the choices you make now will obviously have long term implications.

Cabbie21 Fri 22-Apr-22 09:09:34

I agree with all the advice already given.
I wonder what your motive is? What do you plan to do with your time? Do you have any health issues?
Personally I think it is a long time to be retired on a possibly limited income, but I don’t know your circumstances.

mumofmadboys Fri 22-Apr-22 09:16:43

Your savings are quite substantial and will provide an additional income for a long time

Shelmiss Fri 22-Apr-22 09:19:06

If you can afford to, then why not? I’ve not worked professionally for a few years now, I’m 59 and loving it.

henetha Fri 22-Apr-22 09:24:13

One of my family retired at 55, after years of planning for it.
It's been very successful and he doesn't regret it one bit.
So if this is what you really want, then yes, go for it.

Franbern Fri 22-Apr-22 09:25:19

Considering retirement is a lot more than looking at the finances ( as important as that is).

Why are you thinking about retirement at such a young age?

Do you have some sort of hobby to which you wish to devote a great deal of time?

I finally retired just a few months before my 70th birthday (and I did have a very time-consuming hobby). I really thought I was ready for retirement (was already helping one or two days a week with a g.child), Can only say I hated it. Took me several years (plus a home move) finally to settle down into retirement mode.

I can understand someone in the OP's financial position and age, considering cutting back on work hours - going part-time, surely that is the best outcome.

foxie48 Fri 22-Apr-22 10:04:08

I worked for 5 years longer than I needed but it boosted my pension and I rather enjoyed my job. I actually spend more money in retirement than I did when working as I have more time to spend on my interests and hobbies. A good deal of my socialising was paid for by the company I worked for and I also got a nice car etc and now I have to pay for myself! I think it depends on what sort of retirement you want but at 53, you're probably looking at 30 or more years of retirement with possibly a long period of inflation ahead. I reduced my working days for a few years before retirement which worked well for me, perhaps work part time and see how you get on?

PamelaJ1 Fri 22-Apr-22 10:07:34

You don’t say if you are married so I presume that you aren’t.
My sister gave up her job at 60, her DH cut his working hours and she is finding it difficult, she hadn’t realised he was quite so needy.
It’s not all about money. Having it helps of course!
What will you do? I’m nearly 69 , work a couple of days a week and I love it. I meet people and keep stimulated, put the world to rights with my clients and get paid. What’s not to like?

ShropshireMiss Fri 22-Apr-22 10:09:27

Thank you everyone for all your comments, they have all given me food for thought.
I know work does give you a purpose and a reason to get up in the morning. So you could end up retiring and then being bored. I suppose I was thinking of spending time at home reading on the patio and watching films, and perhaps doing some voluntary work such as volunteering at a local National Trust property. I would like to go for holidays in Wales on the coast, but I think that’s where the money might start getting tight.
At the moment I really enjoy my job as I can work from home with a brilliant computer set-up, but I’m not sure that I’ll enjoy work so much if I have to stop working from home and work in the office instead, which is what has started me thinking about retirement.
I know I could tinker with the investments, to get 4% income from the three quarters in stocks & shares which would produce £12,000 income a year and still leave the other quarter in cash ISAs and premium bonds for peace of mind.
A second option would be to carry on working for five more years and retire at 55, which would mean there would be five years between retiring and my teachers pension kicking in at 60 where I would be reliant on the savings & investments.
The third option would be the route of least resistance and carry on working for ten more years and retire at 60 when the teachers pension starts. I would be in a really good financial position then and am sure I would be able to afford frequent holidays to the coast in Wales. I can’t see myself being fit to work past 60 as I have some health issues, so 60 would be my maximum retirement age. To be honest could see myself working to 60 if I can carry on working from home, but am not sure I could cope with ten years in an office.

mumofmadboys Fri 22-Apr-22 10:14:22

I retired at 56. No regrets. Love being reired. It doesnt sound as if you have expensive hobbies or needs. Go for it would be my advice!

Luckygirl3 Fri 22-Apr-22 10:20:57

Heavens - I would be out of the door like a shot if I had your savings!! You only get one go at life and you have the chance to be free while you are young enough to enjoy that freedom - why wait? You do not know what is around the corner.

OH retired and was instantly diagnosed with PD - so that paid put to any retirement fun. I looked after him for years, then he died and then covid arrived instantly and now that that is waning I have very painful mobility-limiting conditions that stop me doing what I want to. I am not asking for sympathy here but just trying to illustrate the maxim of Seize the Day - you do not know what is waiting for you.

Pepper59 Fri 22-Apr-22 10:23:21

Check you don't get penalised on your works pension for retiring before 60. Unless you are retiring on health grounds. It's just occured to me that in some professions you can get penalised for retiring before the allocated retirement age. Definitely see a reputable, independent, financial adviser. Wishing you the very best.

Redhead56 Fri 22-Apr-22 10:32:23

It all depends on your lifestyle it seems rather early for retirement unless you want to travel widely while you are still fit and able. You have no family or commitments you seem determined you want to retire early so go for it.
We retired from our business at 60 and 65 some money has been spent on home improvements as they crop up. I contribute to our families trips out etc as they can be rather expensive I enjoy helping out.
I helped with childminding for a few years after retiring my husband started volunteering work. Our time is spent on hobbies gardening family and friends and our favourite sports club.
How do you plan to spend your time will you a work part time or volunteer?

ShropshireMiss Fri 22-Apr-22 10:37:44

Thanks for all the comments, they are all really useful and giving me things to ponder.
I wouldn’t consider taking any of my pensions early. I will automatically get my teachers pension at age 60, which I am extremely grateful for. I will get the full new state pension at 67 (maybe moving to 68) if I keep paying NI for four more years and I live that long. I will get the civil service pension at the same age I get the state pension, again if I live that long.
The other investments aren’t in a pension, so I can start either taking dividend income or selling chunks of them for income without any minimum age or penalty. Obviously being in stocks and shares the value of them could potentially halve if there was a stock market crash like what happened in 2008, but if I cashed the whole lot in now inflation would eat away at them.

DiscoDancer1975 Fri 22-Apr-22 10:39:41

I’m not brilliant with all the money side of things. All I know never know what’s round the corner, whatever you choose to do.

All I would say’re very young to be doing this, especially as you don’t have children/ grandchildren to invest your time in. I’m not saying this is the be and end all. Many people are estranged, or simply too far away for regular contact, but they do have these people on the back burner. Do you have a partner?

I would be mindful to be honest. Do you want years and years stretching ahead of sitting on patios reading? Great for a holiday....but the rest of your life?

If your health is good, I’d be rather inclined to stay in the thick of it, and be around people.

Whatever you choose to do, I wish you all the best.

Chardy Fri 22-Apr-22 10:45:48

You used to be able to take your teaching at 55, but it would lose about 25% of what you'd get it you waited (because you wouldn't be paying in and they'd be paying out). I know a lot has changed with Teacher Prnsions in the last couple of years, I suggest you contact them.

Luckygirl3 Fri 22-Apr-22 10:51:16

The idea that you might have years and years of boredom ahead of you - sitting on patios reading would not enter my head. I never needed work to validate who I was, and have never been bored in my life. So much to enjoy out there when you have the freedom to do it - and it need not be expensive. Lovely places to walk in Britain, voluntary activities (e.g. school governor), wonderful literature to gobble up, new hobbies to try, fun to be had!!! Just do it!!

ShropshireMiss Fri 22-Apr-22 10:54:13

Thank you for all the comments, they are really giving me lots of helpful things to think about. No I don’t have a partner. I do have a cat.

ShropshireMiss Fri 22-Apr-22 10:59:16

I would like to do some volunteering, such as at a National Trust property, or with the home library service, and I do love visiting English Heritage, National Trust and Cade sites, and walking in the countryside. I had been thinking of buying a static caravan or holiday park home in Wales by either the sea or a lake to stay in at weekends, but that seems to be a bit of a minefield with dodgy caravan site and holiday park owners.