Early Retirement at 57

Jim2007

https://www.boards.ie/discussion/comment/122001810#Comment_122001810

Well your expected return rates are very much at the upper end of the scale… you probably need to do a range of calculations to know how risk sensitive your situation is. An annualised return of around 6% on a pension fund would be more acceptable and you'd also need to take into account the need to rebalance your portfolio to preserve capital in later life, so a return of say 2% - 3% might be more suitable from say 55 onwards and so on.

yagan

https://www.boards.ie/discussion/comment/122000973#Comment_122000973

That looks impressive.

I've always been an off season traveler, my favorite go to is Tenerife in January/Feb. Great for a bit of hiking on the caldera, but I hate the package holiday strips along the south coast so prefer the greenery of the north island. We're another decade off making the leap to caravan but I've great plans for spending time drifting around the hiking areas of north Spain.

TheBlock

https://www.boards.ie/discussion/comment/122001855#Comment_122001855

Thanks Jim, All I would be too concerned about is bottoming out, I'm not pushed on preserving the capital/inheritance as they'll get the house either way. I just want to be comfortable not extravagant.

If we could have €4,000 net a month we'd be pretty comfortable.

shaymouse

https://www.boards.ie/discussion/2058345724/early-retirement-at-57

59, would love to retire, mortgage paid, good PS pension at 60, along with a PRSA, only issue is I have 2 teenage kids, so will have to work until I'm 65.

Life is short, do the things you want to do, my mother died at 58, and one of my best friends died at age 57 last year.

Hontou

Many people mention travelling, even buying abroad as part of their retirement plans. Yet, they also point out that they won't be retiring before 60. I think dreams of travel are based on our wants and physical abilities right now, be that in our 30s, 40s or 50s. The reality is our abilities change as we get older. I was a great back packer in my 20s and 30s. This included flights of over 12 hours. I'm in my 50's now and never want to do a flight longer than 4 hours again. That will reduce as I get older. Airports are hell for older people. I don't anticipate having the patience for security in my 60s or the physical ability by my late 70s. I could run down the front stairs on Ryanair flights in my 40s. Last week, I felt like I would need to be a contortionist to do it. We are mortal creatures. Retire early if you can and live your dreams. Congrats if you are building up a fat pension pot but what will you be able to do with it? I'd rather have many budget holidays in my late 50s and early 60s than 5* holidays in my 70s and 80s.

banie01

https://www.boards.ie/discussion/comment/122000377#Comment_122000377

I have a degree in Business & Economics and my Mrs would most definitely say the same 🤣

I posted earlier in the thread and told the OP that if the numbers work for him? To go for it. Its an easy thing to say from the sidelines, so, I'll qualify that a little.

I'm 44 and due to persistent and difficult to manage chronic illness I have been out of work for a tad over 5yrs but, I have been medically retired for 4.

I am quite lucky in that I owned my home at that point mortgage free. My pension pot wasn't huge, but it was drawn in total last year and has ensured that I'm debt free going forward. My main income these days is Invalidity Pension along with doing reasonably well from equity investing and occasionally selling a watch.

My wife was diagnosed with breast cancer in 2022 and thankfully treatment has gone well and she will return to work soon. She has availed of Illness benefit and had income protection assurance via her own job. It was a financial stress test that we passed quite comfortably and has gone a long way towards confirming we have "enough".

Our son is 20, in Uni and the associated costs there are planned for. He is off to Vienna in Sept for Erasmus and that's already budgeted for.

Noone expects their working life to be over at 39 and to be fair, I can still undertake some work but shít happens. I'm not completely disabled but I am quite limited in what I can do without either extreme pain, or taking enough painkillers to keep Michael Jackson's Anaesthetist in a job 😉

My advice is based on my "retirement" experience. Retirement doesn't mean you need to stop working. You still can and you even have the benefit of being able to choose what you do. Be it volunteering, part time work or mentoring, sharing your skills and experience can be very rewarding.

I took the opportunity to return to Uni. My own health did mean I've had to take a year out mid course but, I'm in the final year of Criminal Justice degree and I'm leaning towards a master's when I finish. Its a great way to stay social, make new friends and see for yourself just how the kids really are alright 😉

I'm the kind of person who is very happy in my own company, but for any retirement, that can wear thin and there's no better way to meet new people than by being the token codger and throwing yourself into new hobbies via clubs & socs.

I know the OP mentioned his wife is happy to keep working until her own retirement. The advice I'd offer there, is that if you do retire early? Cook more, if you're home and she's working? Don't slob out and have herself come home to a messy husband and nothing in the oven.

Whatever the OP chooses to do? I wish him all the best with it.

bilbot79

https://www.boards.ie/discussion/comment/122001810#Comment_122001810

Seems reasonable to me. 2 questions:

1/ How was your portfolio structured when you were getting 8%?

2/ Wouldn't you be aswell taking the biggest lump sum possible given that it's only 20% tax between 200 & 500k?

TheBlock

https://www.boards.ie/discussion/comment/122002212#Comment_122002212

Is 70% Equities, 20% Bonds, 5% property 5% Cash.

Lumpsum limited to 25% of pot so would be €300,000 getting an extra €100,000 cash but paying 20% on it just to sit in bank account does'nt make sense to me.

bilbot79

https://www.boards.ie/discussion/comment/122002234#Comment_122002234

https://www.boards.ie/discussion/comment/122002234#Comment_122002234

Can you still take the 100k later? Can you dip in and take say 20k this year and 20 the next?

Reason is I'm thinking it might be useful to keep it in reserve and use anytime your income tax threatens to go to 40%

blackbox

Early retirement suits people ( like me ) who have plenty of interests outside work.

A bad idea for anyone who lives for their work.

I took a redundancy deal at 60 and never looked back. Best decision I ever made. BTW my children were finished their education and my mortgage was cleared.

Jim2007

https://www.boards.ie/discussion/comment/122001880#Comment_122001880

I'm not talking about inheritance, I'm talking about preserving it for your retirement.

TheBlock

1m depleting at 60k a year is 18 years from 60 with no growth. I don’t think it will bottom out.

TheBlock

I believe it’s one bite of the cherry per pension up to the max of 200k across all. Yiu can take whatever you want from the ARF after that but will be taxed at your marginal rate.

Raoul Duke III

One factor that I like to consider when planning retirement scenarios is income taxes - and my desire not to pay much more of these in my retirement.

An ARF of 2m means you would have a min income of 80k p.a. (i.e. 4% withdrawal). You would pay about 24k on this, giving a net income of 56k.

An ARF of 1m by contrast would provide a gross income of 40k and a net income of 32k.

There must be a sweet spot that you can plan towards that minimises income tax in your retirement?

bilbot79

https://www.boards.ie/discussion/comment/122001991#Comment_122001991

I'm making parallel investments in health, fitness and diet because what's the point in being an old, rich miserable guy.

For real though, I cut back 95% on drinking, doing strength exercises every two days and cycled my VO2 Max up to 67 (this is the biggest predictor of longevity and can be kept high when you're old if you start from a high base).

Now I could be struck down by a rare cancer tomorrow but fingers crossed I follow my grandmother's path and live till 100. I've seen older folks on documentaries that are cycling, lifting weights, loving life into their 90s because of their good practices. If I can be like that I could have another 40 years of good life ahead.

1. Build a strong financial base

2. Develop longevity habits

3. Start 1 & 2 early

Henry Ford III

https://www.boards.ie/discussion/comment/122000174#Comment_122000174

I'm a QFA with over 30 years experience.

I looked at doing the CFP exams years ago but didn't bother with them ultimately, as I felt they wouldn't add to the quality of advice which many clients have benefitted from year after year.

There are some excellent QFA's just the same as there are some bang average CFP's.

Worth remembering before you rush to taint the well earned reputations of many.

Henry Ford III

https://www.boards.ie/discussion/comment/122000355#Comment_122000355

I wouldn't agree.

"The QFA is renowned as the gold standard designation for finance professionals.

The QFA is a professional designation which meets the Central Bank’s Minimum Competency Code (MCC) requirements for selling and advising on five of the eight categories of retail financial products set out in the Code.

By completing this online course you gain a wide understanding of professions in finance. The QFA is renowned as one of the leading designations for finance professionals with over 22,000 QFAs in Ireland, and is ideal for anyone working or seeking work in life assurance, credit unions, mortgage lending, pensions or investments.

To hold the QFA with LIA, you must complete an online course consisting of six modules offered by LIA’s academic education partner, Atlantic Technological University (ATU). All our courses are provided online via distance and self-directed learning, meaning you can study from home or work before sitting your exams online. 

QFA Loans, QFA Life Assurance, QFA Investment, QFA Pensions and QFA Regulation are 2-hour multiple choice exams with 100 questions. The final module, QFA Financial Advice, is a 2 hour 30 minute written exam paper.

Once the course is completed you can apply to LIA for your QFA designation and will receive the Certificate in Professional Financial Advice by Atlantic Technological University (ATU) – a 30 ECTS (European Credit Transfer and Accumulation System) qualification at level 7 of the National Framework of Qualifications".

I don't believe a word of your claims btw.

downtheroad

https://www.boards.ie/discussion/comment/122003023#Comment_122003023

If the QFA, at Level 7, is the gold standard, then what is the CFP Level 9 qualification? Diamond? Platinum?

It's a strange qualification that permits you to sell 5 of 8 products set out by the Central Bank's Minimum Competency Code...what are the 3 products you can't offer?

Spanish Eyes

I went mid 50s on a generous package. An offer not to be refused. I was offered many consultancy positions based on my pre retirement career, but you know what? I said no thanks. I had been that person working all the hours God sent and there was no way I was going back to the same stresses again. Now admittedly the settlement was good. Not humungous but more than adequate.

I have never looked back. Not once. I closed that door and touch wood enjoy waking up every day in reasonably good health and can either turn over and snooze listening to podcasts or audio books, or jump up with the lark to go out for the day, a few days, a week whatever. The freedom of it all is worth every penny lost in a full time salary and perks. I am not making this up, since once I got out of the ratrace I realised that status doesn't matter anymore. I am a nobody now and that suits me just fine!

As @CelticRambler above said, the freedom to roam at will at inexpensive and quieter times is great. The Tuesday flights to Europe are full of people like me. Tuesday is the least expensive day to fly BTW, oh God the secret is out. And book six weeks before departure. That's my travels finished now that you'll all be on to it. The number of golden oldies that move around the continent/world is amazing. I do the same but at a more measured pace financially.

The downsides to early retirement are NONE in my case anyway. I keep my hand in re current affairs, reading, a few other hobbies, and spend a lot of time at this time of year proof reading and editing my younger relatives' college dissertations. I've learned a lot through reading this very esoteric stuff! But I'm basically a lazy git and am not bothered about having to fill every minute of every day with something productive or hobby related. Silence and doing nothing for a little while are luxuries I didn't have for many years remember. Not trying to take over the thread but giving a positive spin. OK I am alright financially which is a huge thing I suppose. I'll never be rich but I don't want to be, just to have enough to live and a bit of a cushion is all I need.

anewme

This is a great thread and it’s great to hear everyone’s experiences.

Is it by mid/ early 50’s that everyone is saying I’m done with this. ? I think this is particularly true of corporate workers, I’m working to pay my mortgage and while the work is ok, it’s not something I enjoy or would choose. The hours are long, the commute is long and the drama is large.

I also think that my Dad started getting his dementia in his late 60’s looking back now and it is in the family, if I start getting dementia in my late 60’s and retire at 60, that means I feel alive for 8-9 years having been a mouse in a wheel for 40 years. I hate that thought. The older I’m getting the less fouks I give about the corporate world.

There was a great thread a year or so ago on ask about money quite similar to this about retirement.

Bass Reeves

https://www.boards.ie/discussion/comment/122000122#Comment_122000122

It makes no sense putting money into a pension fund without tax relief at one of the two rates. Actually you really need the higher rate. With larger funds you will have significant tax issues on draw down to be paid paid at 30% and 50% effective rates if living in Ireland

If you are investing for retirement outside of the tax relief you should be investing in savings funds ( much the same as pension funds) but the capital you invest can be with drawn tax free and you pay tax only on the gain made by the fund.

As well you have much more control of these funds and can tailor draw down to suit your circumstances and tax situation

Bass Reeves

https://www.boards.ie/discussion/comment/122000443#Comment_122000443

IIt Just dose not maje sense in Ireland unless you live in Dublin and intent to mive to rural Ireland. If you want to buy anything decent in the locality you live in its unlikely your excess cash thrown free will exceed 100k. Usually the house you buy will require upgrades that will eat into that surplus unless you are willing to transfer to an apartment compkex

Buying and selling will burn 20k+ between auctioneer, legal and engineer fees

anewme

would anyone consider something like Spry Finance lifetime loan?

Bass Reeves

https://www.boards.ie/discussion/comment/122001810#Comment_122001810

First You should take the maximun 25% lump sum which on you assumptions is 310k. You will pay 22k in tax to draw that down.

However the day you draw the lump sum you have to start pension draw down with in 12 months 4% minimum of the fund per year., unless you have a few different pension pots

Bass Reeves

Just on a few assumptions lads are making. The average life expectancy in Irelandcat present is approx 81/84 for Irish men and women at present. Men have closed the gap rapidly over the last 30 years and are expected to exceed women's life expectancy in 15-20 years.

However life expectancy at 60 is hitting 3 years above that if you are aged 60 and rising about 5%/ year. The average oersonat 60 eill li e to there mid 80's...…think about that figure many of us may live into our 90's and beyond. If you are in the higher socio-economic group you are more likely to live longer

A person in there 70's is no longer old. 40 years ago when I started work, lads in there 60's after a lifetime of work ( often hard physical labour) were old men as they retired.

Bif

https://www.boards.ie/discussion/comment/122003279#Comment_122003279

Can you give an example of such a savings fund? Thanks.

smokie72

Interesting video about retiring early…

https://youtu.be/2v-N-vu2nik?si=q_CGYav6c1NZIjlF

Bass Reeves

https://www.boards.ie/discussion/comment/122003492#Comment_122003492

There's different types such as EFT's or the banks provide different versions of tracker funds. One issue is you have to pay tax on any gain every 7 years I think.

I never used them I invested in stock and property.

bilbot79

https://www.boards.ie/discussion/comment/122003375#Comment_122003375

Not if I can help it. Possibly useful compared to downsizing for some.