Talk me down, please!

[Snakey]

Hi all, and a very happy 2020 to you.

I have a first world problem that I'd like your help with. I'm 47 and planning to give up work at fifty (so, 2.5 years from now). I've worked and saved towards this for years but I now find that the closer it gets, the less I can be bothered plodding down the home stretch. I've always found my job quite stressful (this is as much my personality as the actual role - the only time I haven't felt this is when I used to work the kind of jobs where nothing carries forward from day to day e.g. factory work), and it leads to behaviours that aren't good for me, and in a way I'm playing a game called let's see if I can get to the finish line before [melodrama alert] something irreversible happens to my health.

Just before Christmas my nemesis got promoted while I got an inflationary pay rise, and I discovered I've been kept out of the loop on a couple of important things. This tells me they don't see me as key to the future of the business like they'd previously said! Logically in view of my secret plans it doesn't matter if I have been sidelined or my career ends up in a rut. The plan works on my current salary and all I need to do is sit it out for a couple more years. Nonetheless, the closer it gets to Monday morning the more I don't want to go back, and the temptation to hand in my notice is massive! But, I'm really not sure I can be bothered doing it all again somewhere else either. So rather than phone the agencies and start arranging interviews, could I just... pack it all in?

Pension: £1.1m (all DC)
ISA: £215k
GIA: £70k
Cash: £35k

Income: carefully juggled to be £99,999 with the excess going into my pension (I have some unused AA brought forward) as 55% beats 62% and there's an employer uplift on the contributions too.

- Mortgage £100k fixed at 2.29% until December 2024, tons of equity although I don't ever plan to sell. Intention is to pay this off with my PCLS.
- Need to find £35-40k for building works over the next couple of years (neither the cost nor the timescale is within my control)
- In addition I would like to refurbish kitchen, knock through the bathroom and put some insulation cladding stuff up on some interior walls and then buy some nice new furniture etc - guesstimate £35k in total - all this is optional
- Expenses if I literally live on the minimum possible and don't do anything else that costs money: about £8k a year. Obviously it would be nicer to make it £10-12k to include nice food, gym membership etc... and then double that to indulge in some travel and hobbies...

I know, I know, my diamond shoes are rubbing my heels... I'm so close to meeting all my financial targets in full that the sensible course of action is to keep my head down and plod through it and think of all those poor sods out there whose job is ten times worse and only pays minimum wage. Although I clearly wouldn't starve I may regret not sticking it out once the novelty of having time instead of money has worn off, I won't be able to get back to the same income (if I can even get a job at all) if I change my mind, and of course if [insert wider economic crisis here] comes to pass then my current view that "all I have to do is get to pension access age and I'll be fine from then on" might seem laughable with hindsight and I'll wish I had kept on earning and saving instead of burning through my existing savings.

Is this normal? Who's felt like this and what did you do? How can I get myself through the next 30 months?

[fca2019]

One option could be to do contract work if that is easy to get in your field. As you have 2.5 years to your FI target then would only need 2 with a break between. This may be less stressful if you can take less responsibility. I did contract for 3 years and it worked out fine for me.

[Darka]

I feel exactly the same - I don't enjoy my job anymore, however the income it provides is helping me towards my goal of retirement in a 2-3 years so I'm not letting it get to me.

I don't care that my career has been sidelined, as I no longer want it anyway - I get paid well and boredom is the biggest factor, but all companies are essentially the same and the grass doesn't stay greener on the other side for long.

I intend to carry on at it, it's not for long but the income it provides is my escape route so I can focus on that, I could of course get another job but I no longer want to work in the field I am in, and changing careers now would result in a pay cut prolonging the need to work - which is not acceptable to me.

Although I became financially independent this year, I need a little more for safety margin, cash reserves and decorating, etc so will stay on for that, counting down until the day comes that I can quit.

As for the next 30 months, concentrate on your hobbies and the things outside of work, that is what is important anyway.

[Millie]

Something you may need to consider before you take that final step of quitting is what you will do with your time when you retire (as you'd identified 50 as a retirement date you may have already ?).

I was in a similar position to you two years ago and did quit. I'm happy now, but had a couple of "interesting" months afterwards until I firmed up what I was going to do (I volunteer part-time for a charity). Suddenly you have a lot more time on your hands, so I'd strongly recommend looking into what you intend to do when you retire (if you haven't already).

[TUK020]

Hi all, and a very happy 2020 to you.

I have a first world problem that I'd like your help with. I'm 47 and planning to give up work at fifty (so, 2.5 years from now). I've worked and saved towards this for years but I now find that the closer it gets, the less I can be bothered plodding down the home stretch. I've always found my job quite stressful (this is as much my personality as the actual role - the only time I haven't felt this is when I used to work the kind of jobs where nothing carries forward from day to day e.g. factory work), and it leads to behaviours that aren't good for me, and in a way I'm playing a game called let's see if I can get to the finish line before [melodrama alert] something irreversible happens to my health.

Snakey,
Let me try to oversimplify this for you!

You are comfortably off, big pension pot, but you can't access that for a few years.
Job is well paid, but stressful, and you no longer enjoy it.
Change career. Become a postman or .... you pick.
You are at the point that any further contributions into pension would hit LTA.

So downsize job to something with minimal stress, not demanding hours, much lower pay.
Use cash & ISA to coast until Pension available.
tax free lumpsum will then cover all building works/outstanding mortgage etc

If this eats into your overall margin of safety, you can just keep the postman (or whatever) job going longer for a couple of years beyond 50 before accessing taxable benefit from the pension
tuk020

[xxd09]

Aged 73 retd 17 years-a bit further down the line than you
Would it help to keep you going to the finish line to feel that you could go if you have to
You have worked hard and got a good plan in place
That realisation gives you a lot of mental strength (that others in the work place might notice)
Do your job not because you have to but because you can -in fact you are already free!
Take enjoyment from the fact that every day of work is more cream on the cake for your plan( which is nice but you do not need)
Leave when you want to but on your terms
xxd09

[JohnB]

I think you have passed the finish line some time back, but haven't realised it. Assets of £1.4m + most of a house, and saying that you could live on £10k a year is a huge inconsistency. Assume 3.5% dividends, and you already have a safe £40k long term without touching capital. If you can't imagine spending more than that, why on earth are you earning more?

When I was 46 I hated jobs, and while my salary was less than yours, my excess income was £40k a year. I spent 2 more years running my spreadsheets, banking the cash and moaning to my friends, before deciding to stop. No regrets 3 years on, I might be £120k poorer, but I'm much, much happier.

Your problem is bridging between 47 and 57 (they might raise the access point to SPA-10), but you've got £300k to do that, knock off £40k for repairs, and its a bit tight, but 9 months more in the job will fix that, as you use half the 20-21 taxt year and avoid hitting punitive tax. You've pumped your pension too far and neglected your ISA, as you'll be breaking the LTA limits soon, but I think you'll be fine in the autumn.

(you could go now, and plan to fund years 54-57 on credit cards or loans secured against your house, paid off against the SIPP lump sum)

[nmdhqbc]

I'm 47....
Pension: £1.1m (all DC)
ISA: £215k
GIA: £70k
Cash: £35k

- Mortgage £100k fixed at 2.29% until December 2024, tons of equity although I don't ever plan to sell. Intention is to pay this off with my PCLS.
- Need to find £35-40k for building works over the next couple of years (neither the cost nor the timescale is within my control)
- In addition I would like to refurbish kitchen, knock through the bathroom and put some insulation cladding stuff up on some interior walls and then buy some nice new furniture etc - guesstimate £35k in total - all this is optional
- Expenses if I literally live on the minimum possible and don't do anything else that costs money: about £8k a year. Obviously it would be nicer to make it £10-12k to include nice food, gym membership etc... and then double that to indulge in some travel and hobbies...

I must have missed something though because it seems to me you have way way way more than enough to quit now. 57 you can access your pension. Worst case scenario as not sure when the age rises. So £12k x 10 years = £120k. I assume that £12k includes the mortgage payment? Call it £80k for house work. That's £200K which is less than you have in your ISA. I have no idea what GIA is. First hit on google is the Gemological Institute Of America. But if that's available then take that too and live off more than £12k a year. Then at 57you'll have way more than you need in the Pension. 3.5% of £1.1m=£38500. You could keep the ISA invested or for certainty keep it all in cash. All you need to do is make it 10 years then you're very wealthy. Easy. You have F-You money so go to work and tell them all just that.

[TUK020]

One other point:

I have no idea of your working environment or culture. What I am about to suggest may be completely wide of the mark, so I apologise in advance if I cause any offence.

One possible cause of stress is that cost of living increase + keeping you out of the loop on important developments may be the usual way of giving a broad hint that your career track there is over, and you should leave.

This might be difficult to accept; however, if this is the case, understanding it actually helps your negotiating position.

Ask what projects they have that would result in working yourself out of a job. Any large company has these sort of things that usually no one would go near because they result in career death. Indicate that you would be happy to take them on in return for an agreed package at the end.

[SalvorHardin]

As others have said, you've probably already got enough now.

Regarding work, you could always cut back now. Do the bare minimum, zero unpaid overtime, don't volunteer for anything, etc. Who knows, they might even make you redundant with a payoff!

It's important to plan for what you're going to do after retirement. Even when retiring from a job that they disliked, many people struggle because their life primarily revolved around their job. I used to see this happen quite a bit in a past job where I was involved in some clients' retirement planning.

So when I retired (at 39) I had already planned enough for the first three months to keep me as busy as if I was still working. It helped that my social life had nothing to do with work.

P.S. What is a GIA? General Investment Account is my guess (it probably isn't Gulfstream International, whose share code is GIA)

[PinkDalek]

[I have no idea what GIA is. First hit on google is the Gemological Institute Of America. But if that's available then take that too and live off more than £12k a year. ...

I wondered that as well but a Google for "GIA investments" finds it to be a General Investment Account (or GIA) to hold investments outside of tax wrappers (such as pensions or ISAs). Most here would say unsheltered but there's more below.

Random link https://www.willisowen.co.uk/gia/gia-frequently-asked-questions

[kempiejon]

Like others I think you can afford to cut back now. Does work make you miserable and would knowing you could afford to walk away let you stop being bothered about the things that currently get to you?

[stressor]

Hi Snakey

No one can tell you exactly what to do because it depends on your preference for continuing to save from a reliable but stale job which is in the top 3% on annual earnings vs drawing down on your considerable savings (which seem to bw ample before and after the pensionable date). That said, what I can advise is you continue to save up in your ISA as long as possible because it's the most efficient vehicle and use the GIA (general account) which is the least efficient because of dividend+capital gains taxes.

I can help you out with a quick back of the envelope calculation. Lets say you continue to save in your ISA from 47 to 57 at around 3.5% with no taxes or fees and you pay in 20k max allowance in capital and starting at 215k. At 57 your ISA would be worth 538k; manage to save another 10 years until you are 67 and the ISA on its own will be worth almost exactly 1million. Lets say interest on the ISA was only 2% and not 3.5%, then at yr 10 you would still have 481k and at year 20 807k.

This tells me that no matter what your decision, you should continue with your ISA, and make sure you can save at least 20k per year and either live off your GIA savings/cash or continue to work. Lets also look from a worst case, you have about 100k in cash/GIA which would probably cover all your living expenses for the next 5-10years (but not bigger project spends), after year 10 you can draw your pension and if you want top up the ISA with that..... so I would say the worse case is you need an income that raises at least 20k after tax (more would be better of course but i am talk worst case), and this could be virtually any job you like and you will still have 1million pension and 1/2million in investments in 10years (projected*).

bw

[Chrysalis]

How much are you actually spending on living right now? I’m wondering if the £8-12k estimate is what you could limit spending to if you had to, or what you are habitually spending. If it’s the former, it probably needs testing. You have 10 years to get through, with £75k of spending already earmarked, from your non pension assets.
Also, is it just you in the household, or are there other people involved with your decision?

[swill453]

I can help you out with a quick back of the envelope calculation. Lets say you continue to save in your ISA from 47 to 57 at around 3.5% with no taxes or fees and you pay in 20k max allowance in capital and starting at 215k. At 57 your ISA would be worth 538k; manage to save another 10 years until you are 67 and the ISA on its own will be worth almost exactly 1million. Lets say interest on the ISA was only 2% and not 3.5%, then at yr 10 you would still have 481k and at year 20 807k.

That seems a pretty nonsensical calculation. The OP has at most 2.5 years left to work, and is considering giving up even earlier than that. So the prospect of being able to put £20k per year for 10 years into an ISA is zero.

Scott.

[vrdiver]

Pension: £1.1m (all DC)
ISA: £215k
GIA: £70k
Cash: £35k

- Need to find £35-40k for building works over the next couple of years (neither the cost nor the timescale is within my control)
- In addition I would like to refurbish kitchen, knock through the bathroom and put some insulation cladding stuff up on some interior walls and then buy some nice new furniture etc - guesstimate £35k in total - all this is optional

How can I get myself through the next 30 months?

As others have said, your pension looks like it will exceed the LTA, so I'd personally stop contributing anything that could be diverted into an ISA or even just a cash account.

For planning purposes, you can forget the pension until you hit age 55-57. At 47 you are within 10 years of having access, so I'd expect any further changes to pension access age to not effect you, but you might get hit with a 10-year link to retirement age and a state retirement age of 68, so I'd plan on no access until 58 just to be safe.

That leaves £320k cash, or £250k after the building work. That £250k should ideally include a year or two of salary reserve - let's call it £20k (as worst case you could cut back on spending to minimum, if you had to). £230k to last 11 years (my worst case assumption to access pension pot).

If inflation runs at 3%, then spending £20k in year one, and awarding yourself that 3% inflationary rise each year, would exhaust the pot at the end of year 10, leaving you with your £20k reserve fund to cover any gap to when you get your hands on your pension pot. Not quite your £24k target, but nicely above the £8-12k baseline.

I've assumed zero earned interest on the cash pot - safety is key for this pot of money, so you'd be looking for savings accounts (fixed term or variable - whatever gives you some return) premium bonds etc. I've also assumed any further capital expenditure comes out of the £20k/year, e.g. replacement car, TV, washing machine etc. Ditto healthcare/dentistry costs should you need them.

Basically, you can quit today if you want to, and if you accept that things might get a little tight if inflation takes off or you overspend too early.

If that makes you nervous, ploughing all your spare cash (including diverting any pension contributions if possible) into savings will change the picture in your favour quite quickly. Would it help to see what the picture looked like if you did that for 3, 6 or 12 months, then set that date as a review point?

As previously mentioned, working on your exit plan to get made redundant might be a fun challenge. Knowing that you no longer need to jump through hurdles for the sake of a performance review is also quite liberating if you aren't enjoying work any more.

Good luck with FIRE - it really does beat working.

VRD
(retired 5 years ago at 50)

[Itsallaguess]

Would it help to keep you going to the finish line to feel that you could go if you have to

You have worked hard and got a good plan in place

That realisation gives you a lot of mental strength (that others in the work place might notice)

Do your job not because you have to but because you can -in fact you are already free!

Take enjoyment from the fact that every day of work is more cream on the cake for your plan( which is nice but you do not need)

Leave when you want to but on your terms

I think this is great advice.

As someone who finds thoughts of early-retirement becoming more and more prominent over the years, I've developed a rough plan to use a final 12-month period of working to fully 'test-drive' my financial plans, where I'd not touch my normal 'working wages' bank account for a full year, and try to 'financially exist' as though I'd finished work, without having actually done so, and without actually telling anyone that I intended to....

My idea would be that it would be such an interesting 12-month period for me, and also given that I would be the only person who knew that 'the plan had actually started', that it would be totally unlike any other period of my working life, and as such, any lingering resentment that might have got me to that point would hopefully drive itself to such a low level of importance when compared to the fact that 'the plan' was actually in action, that a final year of working life which could be treated as a relatively low-risk 'test-drive' of all my financial-systems might actually turn out to be quite a lot of fun...

With a fair wind, and if everything worked out with my 'external finances' (ex-wages), I'd hopefully get to the end of that 12-month period knowing with a much higher degree of confidence that things 'will work out', and as a huge added bonus I'd have an extra year of wages built up in my 'not-touched bank account' which I could use as an additional financial buffer for the 'already-working-plan'...

I think the other big benefit for me personally of using a 'final-year plan' similar to the above would be for something that other posters have alluded to in their replies, which is to get used to the mental side of such a huge decision. I'm not sure I'd like a 'short sharp shock' of just walking in one day and giving a month's notice, and I think I'd very much prefer a longer time-frame to get used to the idea, even if work would not actually be informed of it for another 11 months....I think allowing myself to 'know' that I was in my final year at work would do me a lot of good in terms of the 'what next' questions, and I think allowing myself to have that longer internal-conversation, as well as carrying out the above 'financial litmus-test', would be a great way to spend a final 'working' year....

It sounds like the OP is nearly at the finishing line, and whilst he might have the figures to go now at a 'technical' level, personally I'd not have the confidence to actually do it without carrying out something similar to the above process. I tip my hat to those that would, but I expect we're all a bit different when it comes to such a huge milestone in our lives...

I wish the OP the best of luck with whatever he decides to do. He's got himself into a great position.

Cheers,

Itsallaguess

[kempiejon]

As someone who finds thoughts of early-retirement becoming more and more prominent over the years, I've developed a rough plan to use a final 12-month period of working to fully 'test-drive' my financial plans, where I'd not touch my normal 'working wages' bank account for a full year, and try to 'financially exist' as though I'd finished work, without having actually done so, and without actually telling anyone that I intended to....

This is a cracking plan and the OP could start now, it might give some insight as to how optional work currently is, also giving an extra push to savings. Another useful step is to keep a detailed spending record. I detailed all my expenses following a belt tightening exercise driven by redundancy 6 years ago. I occasionally double check it but I know my outgoings and what expenditure could be reduced if needs must. I've been running a similar test-drive, I move an amount equivalent to the expected dividend income for a year to a feeder account and all my wages go to my pension. It handily has given my pension a nice bump for a couple of years and proved I can live of my investments, I'm currently building a cash buffer and excess income for safety.

[baldchap]

Being a similar age, but not as advanced in my plans, my vote would be that you had enough now … until I read about the mortgage, and intended repairs.

Why keep the mortgage? Yes, your interest rates are low, but I feel that being mortgage free is part of the mindset of being ready to retire.
I paid back all but a nominal amount a couple of years ago, but being an offset mortgage linked to my accounts, I keep it going (6 years to run) as a source of cheap loans so as not to dip into savings/ISA's and derail the master plan. (The most recent event being a new roof).
Repairs - I am in a similar situation, I would like to get a lot done before retiring, but it has slowly dawned on us that we don't want to spend the rest of our lives in this property. I would give that some serious thought before undertaking expensive repairs.

The suggestion from itsallaguess regarding a 12 month test drive is a good one. Thanks.

[Wuffle]

The workplace is feudal, it is just a big triangle and nearly everybody runs out of road. Be thankful you didn't run out in the twenty thousands like most do.
Having got your head straight over that, keep turning up knowing that you don't have to go and you will find that the stress isn't real either.
Spend the very large amount that you get for turning up (that is what it becomes) on either yourself or people you like.
If you are really worth the 6 figure salary, doing nothing, or next to it, at your age is criminal.

Wuffle.