Early Retirement at 57

CelticRambler

I'll be 57 this year and am effectively "retired" for the last twenty years; still not short of things to fill my time! :D As I had/have no pension to count on, I do a bit of intermittent salaried work, about 16 weeks a year, but I find it's a struggle to fit that into my schedule of more interesting/useful/productive activities.

Further to what several others have said, and like with many other changes of life, what's most important is that you're not "running away" from your current situation, but "running towards" something else, otherwise you will end up creating and/or replicating many of the negative aspects of the present. It's also really important that both partners in the relationship are in complete agreement about the how and when the situation changes.

As for the financial side, one of the great advantages of being "retired" is that you're no longer tied into spending money because money has to be spent - provided you don't simply swap one costly habit for another. E.g. you'll be spending a certain amount on travel for your weekly commute, as well as trips to the shops, social and sporting events, weekends away, etc.

If you've "all the time in the world" it'd be easy to fall into the habit of jumping into the car and heading off to the hardware for that one piece of moulding you need to finish the job, or down to the shops for that one ingredient you're missing for tonight's dinner, or half way across the country to pick up that great bargain you found on DoneDeal … when you could just as easily put off each of those journeys, do them all in a single trip over the course of a long day and save yourself the cost and time of several km's worth of driving. Similarly, if you pace yourself in your purchases, you can save a lot on equipment and materials by having a permanent wish-list and then wait for the product to become available at the right price.

BalboBiggins

https://www.boards.ie/discussion/comment/121995716#Comment_121995716

That's an interesting quote. Did he mean it in a positive or negative way?

naughtysmurf

https://www.boards.ie/discussion/comment/121995989#Comment_121995989

that’s not how pensions work, re-read his post

yagan

I'm approaching mid 50s and from what I've seen of others who have retired after a full on lifetime of work is those who dismount too quickly seem to have a lot of issues like depression and general ill health.

If money isn't an issue then the priority seems to be transitioning to a different pace of life and getting used to setting your own goals and targets in the absence of an employer doing it for you.

We're kinda starting into that next phase, we now have a garden that's a challenge, and we're thinking campervan for touring Europe in the long run, although I fancy trying cycling a eurovelo route.

well24

https://www.boards.ie/discussion/comment/121996558#Comment_121996558

I just did. he never mentioned any thing else. Particularly about how pensions work?

Can you enlighten me please?

well24

https://www.boards.ie/discussion/comment/121996666#Comment_121996666

like I said it’s all about interests/hobbies..

You dont need a fortune to retire if you have this.. like the poster who said he would burn through 600k in 9 years..

SharkMX

You can draw your private pension at 50.

A financial planner will sort that out for you. You cant get the OAP til 66.

I forgot to add this link in my earlier post. Might want to give it a look if you are on the fence.

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.youtube.com/watch%3Fv%3DOuDCDp9Z9Y4&ved=2ahUKEwirzIvxj7WFAxXnQEEAHSCYDr8QtwJ6BAgUEAI&usg=AOvVaw1uIsPI6joBarjnneqJ3EBl

yagan

https://www.boards.ie/discussion/comment/121996684#Comment_121996684

Yeah, I hear some people fret about not being able to afford retirement and when I ask them why they think that way it always seems to circle back to them not knowing how to fill their days, so being able to afford distractions like long cruises is a priority.

Whereas for me a couple of weeks by a pool in Tenerife in Jan/Feb would be enough to keep the winter blues at bay. The rest of the time I'd be happy doing as I do now, a bit of exercise, a bit of garden, a bit of everything.

naughtysmurf

https://www.boards.ie/discussion/comment/121996668#Comment_121996668

unless I’m misunderstanding, he doesn’t mention any other savings just a potential pension pot of 600k & his wife earns 30k

If he retires & takes the 150k tax free he’s got 150k in cash plus buys an annuity or ARF with the remaining pension pot of 450k, the annuity will be in or around 22/24k as he says (4/5%of 450k)

So he’s going from paid employment of ? to let’s say an income of 2k a month & 150k savings in the bank.

Even he he was very disciplined & took 10k of his 150k every year to bump his monthly by 800 a month until his state pension kicks in, his 150k would be gone in ten years & all he’d have then is the state pension from 66

There are loads of potential future costs, they could both live until their mid eighties or longer, as mentioned, health insurance, car ownership if they have one plus just the day to day costs of living & home ownership before you look at leisure / travel & other nice stuff

I’ve no problem with him doing it, just saying do your sums & if you’re happy with the lifestyle that income will give you and it suits you, grand but I’d recommend getting proper professional advice too

Jim_Hodge

https://www.boards.ie/discussion/comment/121996440#Comment_121996440

I've heard it used both ways but to me it's a huge positive.

well24

https://www.boards.ie/discussion/comment/121996858#Comment_121996858

well it’s not potentially 600k, it is 600k :)

But you have to include the state pension aswell.. I know it’s not a certainty, that’s why it’s so hard to calculate how much you need..

Any formula out there to calculate it?

most people would need less when they retire as they would not have mortgage, kids, travel to work amongst other stuff.. I would think 2k a month is sufficient, depends o what you want to do really.. as a poster said if you want to go on a massive cruise every few mths then yeah you will need loads, but months in Tenerife every winter you end up saving money, less electricity, heating cheaper food etc

look at the last vid posted.. some good info there, where he does state ppl can overestimate how much they need!

yagan

Another quote I like is "if you enjoy wasting time then it isn't wasted!".

I'd hate to facing full retirement thinking every day not working has to have validation.

Iguarantee

https://www.boards.ie/discussion/comment/121995967#Comment_121995967

4% gross or net?

Revolut offer >5% gross but it’s only ~2.4% net…. Big difference!

bullpost

https://www.boards.ie/discussion/comment/121997139#Comment_121997139

Its gross I believe. Its only available with their premium "metal" card which costs around €20 a month.

naughtysmurf

https://www.boards.ie/discussion/comment/121997053#Comment_121997053

I will look at the video later, my gut tells me though that by 66 the 150k could well be gone & yes replaced by the state pension at 66

57 is very young to be restricting your income to 34k for 9/10 years or potentially a lot longer imo assuming he’s coming from a decent higher salary & that will be an adjustment in itself & factor in inflation too & yes it’s hard to calculate & everyone is different, personally I hope to be gone Jan-March to warmer weather

well24

https://www.boards.ie/discussion/comment/121997290#Comment_121997290

You must be on a massive wage, 34k a year = just under 3k a month - must have an expensive coke habit or something lol

I would say 34k net = 50 - 55k salary.. this salary is above the average, plus you dont have all the expenses I mentioned b4..

But yeah each to their own, if you have expensive tastes then you will need a lot more. But I assume ppl with expensive habits would be earning alot more, therefore should have a bigger pension when they do retire..

well24

Quick calc, he retires at 57 with 150k lump sum, and if he wants to maintain 2k a month, he has 450k for this

He will get state pension at 68 (isnt it now?), therefor 24k for 11 years = 264k

Then the remaining 214 he will have state pension of approx 1k a month, therefore only needs 12k per yr out of the 214 which will last him approx 18yrs - up until he is 86…

Not bad really..

Making alot of assumptions here, that his pension does not fall in value, the state pension still exists, he doesnt have any major expensive health concerns, inflation etc..

But when talking about retirement you have to, its always a risk..

nothing stopping him doing mixers, or part time work after 5 yrs (when he's 62 for example), or moving abroad where his money would go alot further..

I would love to retire when Im 60, and am making financial plans for that.. who knows if the amount I have by then will last til I die.. I could die when Im 65 or 95!

Edit: sorry made a big mistake in calc above, he will have 186k left by the time he is 68, so will have 12k for 15.5 yrs, so up until he is 83!

Jim_Hodge

Just with regard to the lump sum. I know from personal experience and discussion with other retirees that many don't make huge inroads into it. It's actually surprising how you don't need as much as you imagined when retired.

well24

https://www.boards.ie/discussion/comment/121997447#Comment_121997447

Agree, that 150 could invest in a property abroad… live their and save a fortune :)

yagan

https://www.boards.ie/discussion/comment/121997490#Comment_121997490

My only fear with that is what happens when living abroad and there's a health complications. I've pondered such a move and looked at websites about retired Brits in Spain/France/Portugal and a recurring theme seems to be is all mostly goes well until it disasterously goes wrong.

I'd rather downsize than give up my primary residence in Ireland. Besides I lived in oz for years and heat has its own tedium after a while.

pauly58

You have to have a hobby or interest to get up in the morning for, my Grandfather didn't, he got up, sat in his chair until lunch, then did the same until tea. He was dead at 66.

well24

https://www.boards.ie/discussion/comment/121997615#Comment_121997615

Im assuming they already have a primary residence in Ireland, and they are using the 150 to buy property abroad, live there for 5/6 months of the year (winter) and save a fortune..

Anyway, 2k a month is alright, but in years to come 2k wont be worth as much as it is now.. but sure ya could be dead by then…

Impossible to know the future.. its a tough one to know what to do.. but if your sick of your job / commute and all that, fook it go for it.. can always do the part time if necessary..

My parents did that, father retired at 63, and lived the winter in Gran Canaria for 18 years, definitely helped the health an awful lot, you can see it in them..

yagan

https://www.boards.ie/discussion/comment/121997674#Comment_121997674

There's definitely a lot to be said for shaking the Irish winter chill out of the bones as we age, and winter breaks are definitely part of future planning. Plus even though I'm early 50s and spend a good bit of time working outdoors my doctor put me on vitamin D after the months of overcast we've had since last June!

Viscount Aggro

You need 2m in a pension pot these days. That's quite normal in professional circles.

Take 4% yearly income.. that's 80k.. that would be good enough to live on.

Forget about the state pension.. it will likely be means tested.

well24

https://www.boards.ie/discussion/comment/121997726#Comment_121997726

Not many are gonna have 2m (including myself), no where near it. Where did you get that from?

Well means tested is not fair way of doing it, how about 2 people on 50k, one spent all their life and the other saved!

The individual who saved will get a reduced state pension?

They both paid the same PRSI contributions!

I doubt it will happen that way..

And again a person who earned say 30k, compared to the individual who earned a 100k.. so the guy who earned 100k would get less state pension? but he would have paid more PRSI!

paddydriver

https://www.boards.ie/discussion/comment/121997726#Comment_121997726

I think he/she is trolling.. very few out there are going to have anywhere near €2M in a pension pot and no Gov would be crazy enough to means test the state pension - they'd be wiped out clean in following election.

Masala

You will still have bills…

VHI €1600 for you..€3200 for both. Car Insurance €500, House Insurance €500, Life Insurance €150. ESB €2,000, Heating €2000. Sky €1,200 Thats nearly €10k out of your €24k… leaving over €1000 a month to live on outside of your wife's take home.

you won't be travelling the world on that, or buying a new car or kitchen etc… unless you want to dip into savings

Viscount Aggro

They will spin it by saying .. we will have to push out retirement age to 68 or 70, to be able to afford state pension. Or that everyone deserves a living wage. Some other socialist claptrap.

The 2M figure is the SFT - standard fund threshold. Lots of retirees are up at this level.

Patrick2010

https://www.boards.ie/discussion/comment/121997726#Comment_121997726

Fair play if you have that, I won’t be near that and I doubt few I know have. Mortgage paid, could easily live on 20k a year but I don’t have an expensive lifestyle. You reckon you need 80k a year to live without even touching the two million?

well24

https://www.boards.ie/discussion/comment/121997774#Comment_121997774

nah, over expense there.

I like the way you dbl the health ins for 2 people, but keep all the other expenses as full for the 1 person to pay lol

1600 Health I dot pay that much

Not 500 for hse ins

4000 for heating and electric - wow I’d say I pay maybe 2500 a year.. plus if you live abroad for the winter that goes down a lot!

Do t have sky, would never pay for sky- Jaysus!

More correctly, for 1 individual, abt 1200 for health ins, 250 (if it is 500 a yr!) hse ins, 500 for car ins (as each prob have own car) 1250 for heating and elec. you 10k has gone down to 3250 :)

and as already said if you do want to travel the world, expensive cruises every few mo tha well yea of course you will need a lot more!