Possible early retirement

A question about : Possible early retirement

Hello everybody, this is my first post so please be kind! I have spent a lot of time on this site recently and it is full of good advice so here goes with my query about possible early retirement. I am 54 with Ј430K savings (Ј410K equities, Ј20K cash). I will receive a deferred DB pension at 60 worth around Ј8K at today's prices and the state pension at 66. My plan was to pack up work at 58 but in May I was made redundant, I did get another job immediately but it has been a complete nightmare and I am now looking at the possibility of just retiring early. My OH works part time and if I withdraw Ј8400 p.a. from my investments until I am 60, we should be able to manage as we are very frugal. I am interested in peoples thoughts about how best to go about this whilst protecting my capital as far as possible. Ј200K is in equity ISA funds, Ј100K other equity funds, Ј100K various individual shares, Ј20K cash accounts. I receive around Ј3K p.a. in dividends.
I am looking for another job but my confidence and self esteem is rock bottom at the moment due to the way I have been treated in my new job and I am aware that my age is not in my favour.
Any thoughts?

Best answers:

• Without wanting to kill the thread, it really feels like you need a financial advisor. I'm no expert but I would have expected 3% returns easily obtainable as a minimum which would give Ј12k pa income without having to touch the capital you've saved.
  Alternatively perhaps have a look round the investments and savings board.
• With the thick end of easily accessed assets of half a milliion quid to keep you going it would be sensible to instruct an IFA to do some number crunching for you.
• Pjcox2005 and Errata, thank you for your prompt responses. I will have a good look at the Savings and Investment Boards and consider an IFA. I need a kick up the backside at the moment due to recent job problems getting me down and being a natural worrier! I have never earnt a lot of money (max Ј18K p.a.) but I even had to earn my own pocket money as a kid, so I know the value of money and have always been a saver which is why I have managed to accumulate this sum.
• Thank you zyguhat789! I will also have a look at the Pensions Board to get some ideas about what to do. I am still employed at the new job but am now on unpaid leave until August so I am trying to get something sorted before I am due back. I was promised training which never materialised plus I was expected to work 10 hour days instead of the agreed 8. The boss expected me to hit the ground running and has constantly belittled me for my mistakes and the fact I am not as fast as him after a couple of weeks! He is supposed to be arranging some training in August but I think it will suit us both if I just quit as I do not need this aggro at my age and I have never come across a boss like this in 38 years of work. I have looked into JSA and I can claim so that is an option.
• I was in similar position, but opted for voluntary redundancy, and really have never looked backed since I stopped working over ten years ago
  Like you I had cash in the bank, shares, and a State pension ahead of me
  Have a look at Motley Fool High Yield Portfolio [HYP] which is basically buying good solid company high dividend shares in an ISA
  https://www.fool.co.uk/
• That's good to hear Farway, hope you are continuing to enjoy your retirement. I feel much better now and am going to sit in the garden and check out all the advice I have been given. Thanks everyone.
• You are so right Goldiegirl. I was intending loosening the purse strings and spending my salary from the new job on holidays etc but that plan seems to be going down the drain! I have been so used to saving that it is hard and scary to stop but my OH doesn't believe in saving and wants us to leave this world with zero in the bank which is a good plan. We do not have any kids and our nieces and nephews will all be OK so we will just leave them bits and pieces. I am sure they would soon spend the money if they got it as their inheritance! Thank you for your advice, this site is just what I need right now.
• Just to say I took early retirement at 55 on a lot less savings then you have and it is absolutely the best thing I have ever done. I am happier, healthier and easily managing on my income of around Ј800 a month.
  I have started growing my own fruit and veg, I have the time to cook from scratch now which saves a fortune and I have made a whole new circle of friends within the neighbourhood because I now have time to stop and chat when walking the dogs
  I read loads which has always been one of my favorite things to do, but didn't use to have time for. The TV is only on for a couple oh hours in the evening and sometimes not even that! We don't really go on holidays as they work out a little expensive but we are lucky enough to live within an easy day trio to either London or the seaside so we have a days holiday when we feel like it and come home to the comfort of our own beds.
  Didn't mean to ramble on, I just got up and for some reason am full of the joys of life today
• Depending where you work, you may save money on transport costs.
  Looking at things from the other side, some of your household costs may go up - gas/electric/water - as you will be at home more.
  If it's something you like to do, you would have more time to cook from scratch & batch cook (if you have a freezer) which would save you money. Visit the Old Style board for lots of tips for saving money, including meal planning, menus etc.
  Although your state pension age is currently 66 years, this could be changed over the next 12 years before you reach that age.
  And do you have the full number of qualifying years to get the full state pension (35 years for your DOB)?
  I'd actually repost this - with all the additional info from your later posts - on the Pensions board.
  There's some really good guys on there.
  Hope it works out for you.
  I took early retirement at the age of 50 (10 years ago) but I did have a substantial lump sum to add to our investments and do get a pretty good pension.
  8 years ago, we did a very detailed spreadsheet to decide when OH could retire without any income (until his deferred pension kicks in) and it's still looking good.
  We underestimated any income inflation and over-estimated expenditure inflation so we're in a better position than we planned to be - council tax, utilities etc are less than we expected and my pension is Ј100 per month more than we hoped.
  The only 2 things that haven't gone to our financial plan is that the Government put my pension age back by just over a year and also tied free bus travel to retirement age instead of age 60 but we can live with that.
  In fact, OH says I must buy more shoes!
• Thank you for your comments. My work travelling costs are Ј40 per month plus I have to use my car for work travel for which I do not get reimbursed fully so there is an immediate saving there. That saving would help towards extra gas/electricity costs etc.
  I am wary of my state pension age being raised again so try and think of it as a bonus whenever I do get it.
  I enjoy gardening, reading and walking so it would be nice to have more time for those pursuits. I would also like to volunteer at my local animal rescue centre one day a week and get my own dog again at long last! I will do some more research on money saving ideas on this site (particularly with cooking) and put this post on the Pension site as well. It is heartening to read of how you all enjoy early retirement and it seems a positive step. My OH only works 3 days a week now and he is happy with that, I would like to do something similar but will see how things pan out.
• Thank you Nar. I am now two thirds of the way through my life (hopefully!) so I do need to start doing the things I want to do instead of dancing to somebody else tune. My Mum died suddenly at the age of 66 which concentrates the mind in terms of how long I may live. My family is generally long lived (80's upwards) but that was a curved ball to say the least and I still feel angry at how many years she lost out on.
  I have been going for long 2 hour walks on my own this week which is helping me think things out and the advice on here has helped me prioritise what is important. This enforced sabbatical is actually turning out very well!
• A comfortable early retirement when I want it I suppose and that day has obviously come sooner than I expected. I have one friend who retired early at 56 last year as she hated her job and she is very happy so she is inspiring me. Me and the OH would like to travel round Canada, Australia and New Zealand so I should start looking at arranging something in the next year or so. I am beginning to think that being made redundant and getting a horrible new job which has thoroughly depressed me is a sign from somewhere to get out of the land of work at last.