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Help! Shove me over the line, please

Including Financial Independence and Retiring Early (FIRE)
Snakey
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Help! Shove me over the line, please

#395197

Postby Snakey » March 13th, 2021, 12:47 pm

I'm about to turn 49 and I'm planning to hand in my three-month notice the day before the Easter break and leave at the end of June. I'm struggling to make this a final decision with no reservations. I need you to share your experiences, change my mind, put things into perspective and/or tell me I'm being stupid!

Here's my financial position this side of pension access age:

40 guesstimated value of EIS investments maturing in 12-18 months probably
50 Premium bonds
250 ISA balance
80 VLS100 not in a tax wrapper
40 cash (20 of which is waiting to go into my ISA on 6 April, the other 20 in regular savers or just in cash)
----
460
----

Out of the above I need to find say £75k for work done/to be done on my flat.

My basic living expenses, by which I mean bills and food and a couple of UK holidays and a gym membership, nothing "extra", are let's say £12k a year. I know from before that you guys don't think that's anything like enough, and you may well be right in relation to the future, but I've been keeping to-the-penny reconciliations for the last seven years and it's been well under that number so I've labelled it "basic" and it's a place to put my feet for now.

The maths looks great, right?

But.

I am struggling with a psychological block around the ISA balance. It's not even only that I don't want to spend it. It's that I want to keep paying in the maximum allowance! It irritates me out of all proportion that in six years' time I'm going to have this huge pension lump sum and nowhere tax-efficient to put it, while previously having had to drain the contents of the wrapper that I do have. With a time machine I'd put less in my pension and more in... something else... but here I am.

I have these waves of mind-changes. One minute I'm looking at that big total number and saying oh wow I can't believe how amazingly this has all worked out, it's going to be brilliant. The next minute I'm doing these daft calculations that involve excluding not only the 250 but also a further 100... and once I go there, I then only have 110 left over against a requirement for 75+72=147 (and this ignores the previous point about how £12k a year surely won't be enough once I'm retired and my world's got bigger).

My problem is that this is solveable. Easily. I could "just" work another year. I'd then have let's say £55k more (after living expenses), and twelve fewer months to make it last.

But work have been doing nothing but screw me over for the last 18 months. I let them jolly me along for most of last year with promises and excuses but their mask finally came off in mid-January and I don't know who I hate more - them for the lies and deception or myself for trusting them when they'd already shafted me once. My job is safe (and no way will they pay me off) but my position is untenable. It's one thing biding my time for a few months for weather/tax optimisation reasons, but quite another to suck it up indefinitely and leave a beaten man (as it were). It would be even worse if I had to actually be in the office rather than WFH, and that day is surely approaching. And what is the point in being financially independent if I can't stand on principle even now?

Or is standing on principle really stupid and I'm letting emotion cloud my judgment when the smart move would be to spend the next year doing as little as possible and then leave with all the financial boxes ticked?

Has anyone else had this sort of thought process blocking their way? Stupid ruminations about little things that feel so important? How did you deal with it? I mean it's so obvious what the right answer is - go now, and never mind about the sodding ISA balance because really, so what, and I'll never get this year of my life back? And yet. Is it fear of the unknown disguised as a "legitimate" concern?

Or is there any way around this that I'm missing?

Other facts:
I have £1.1m in my pension.
I need two more years' NI (after this current year) to get full State pension which is fine because I have a small amount of freelance income so I can pay Class 2. Freelance really is small - couple of grand a year maybe - it fell off a cliff this time last year and I can't rely on it coming back.
My flat is worth about £520k (who knows, at the moment) and has an interest-only mortgage for £75k which I intend to pay off with my lump sum.
I'm single, no kids.

My long-time concern about the pension access age has gone away. The only remaining risk is a wealth tax requiring payment out of pre-retirement funds. But really, if I waited until there was nothing that could possibly go wrong I'd die at my desk aged 86.

swill453
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Re: Help! Shove me over the line, please

#395200

Postby swill453 » March 13th, 2021, 12:58 pm

Snakey wrote:It irritates me out of all proportion that in six years' time I'm going to have this huge pension lump sum and nowhere tax-efficient to put it, while previously having had to drain the contents of the wrapper that I do have

You don't have to take your whole lump sum at once. You could either take out enough to use the ISA allowance every year, or just leave it in the pension where it's already tax-efficient.

(I'm aware some recommend taking it all out ASAP to pre-empt any potential change in rules, but it's 6 years before you can do anything anyway.)

Scott.

staffordian
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Re: Help! Shove me over the line, please

#395211

Postby staffordian » March 13th, 2021, 1:30 pm

Take a step back and look at the big picture.

It strikes me that the "problem" of draining the ISA is a magnitude less important than the issues to your health and mental well being that not leaving might bring on.

I could go on to suggest that once you've left, you might get fed up with not working and want to get a stress free trolley gathering type job at Tesco to pass some time, meet people, and eke out your money to reduce the ISA drain, but that's all incidental, so I won't mention it :)

jonesa1
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Re: Help! Shove me over the line, please

#395212

Postby jonesa1 » March 13th, 2021, 1:35 pm

Clearly you're not at all happy in your current job, what would be your prospects for finding another role which suited you better? Based on your low spending requirements, a replacement job wouldn't need to be as highly remunerated as the current one. You could always leave and take a chance on finding alternative work, knowing you have more than enough resources to last until you can access your pension, which will then provide far more income than you say you need (with a state pension to follow). The ISA is really a red herring, you don't need to retain it to have your required level of income once the pension kicks in. Is minimising tax more important than getting out of a job you hate?

Andrew

EssDeeAitch
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Re: Help! Shove me over the line, please

#395214

Postby EssDeeAitch » March 13th, 2021, 1:41 pm

In my personal experience (and that of family and close friends) there are only two reasons to work. 1) You love the job 2) You don't have enough money to retire. You hate the job and have enough money to retire so just retire.

Enough of a shove?

TUK020
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Re: Help! Shove me over the line, please

#395235

Postby TUK020 » March 13th, 2021, 2:26 pm

You have enough money, and you have stopped enjoying what you currently do. So Stop.
Big question is what to do next? Doesn't have to be a job, or can be a complete change in direction, but don't think of jacking in current job as "stopping" everything.

nmdhqbc
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Re: Help! Shove me over the line, please

#395242

Postby nmdhqbc » March 13th, 2021, 2:38 pm

you've got way way way more than enough to retire on. probably have had for a at least a few years. just quit now. no more procrastinating.

even if you had zero pension you'd have enough.... £460k - £75k = £385k * 0.04 = £15.4k a year and rise with inflation.

Darka
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Re: Help! Shove me over the line, please

#395246

Postby Darka » March 13th, 2021, 2:40 pm

You have enough - get out, before the job kills you.

Take some time, relax, gather yourself and start enjoying life.

My net worth is less than yours, but I intend to quit in early December (3 months notice), so finish early March next year.
My planned income should be fine; only reason I'm not leaving earlier is that I need to fill a few cash buckets before I can hand my notice in.

Like you, I don't enjoy my job and get shafted by my employer almost every day, but to me I'm playing a game and early December, I win, they lose :D

Not worth your life.

Alan7878
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Re: Help! Shove me over the line, please

#395251

Postby Alan7878 » March 13th, 2021, 2:56 pm

TUK020 wrote:You have enough money, and you have stopped enjoying what you currently do. So Stop.
Big question is what to do next? Doesn't have to be a job, or can be a complete change in direction, but don't think of jacking in current job as "stopping" everything.


You have more than enough to fund your lifestyle in retirement but TUKO020's point about what to do next is a good one and it feels from the info you've provided that maybe this is what you need to work on. What are you 'retiring to' rather than focussing on what you are 'retiring from'.

I have a little while to go yet but I'm spending time now carving out a few interests (including investing!) that will keep me busy. Left without a plan, my natural state would be to watch charts, play with Excel and devour netflix. Not particularly balanced.

Best,

Alan

vrdiver
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Re: Help! Shove me over the line, please

#395256

Postby vrdiver » March 13th, 2021, 3:11 pm

I retired at 50, draining ISA's until I could access my pension (at 55, in my day).

Best decision I ever made. 6 1/2 years later and I'm topping up the ISAs and have more assets (even after the Covid19 hit on the market) than when I started.

If you hate your job, and you have a spreadsheet backed by your own spending evidence that you can survive and more, until you get access to your pension, then why wait? Your pension pot could yield 4%, so call it £40k a year. A quarter tax free, plus your personal allowance would leave you paying tax on about £17.5k, so say £3k a year tax. £37k a year, probably growing by at least inflation, means you can afford to run down your non-pension assets now, then start to top them up again from age 57.

As others have mentioned, start planning what you want to do with your time, rather than finessing the escape plan.

VRD

xxd09
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Re: Help! Shove me over the line, please

#395276

Postby xxd09 » March 13th, 2021, 5:17 pm

Aged 74 tetired 17 years
£100000 of a 60/40 portfolio gets you £3000 pa of income before tax
You have more than enough at your rate of expenditure
Go for it -have a year off-then stay retired or get a job you like at the hours you want
xxd09

andyalan10
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Re: Help! Shove me over the line, please

#395282

Postby andyalan10 » March 13th, 2021, 6:03 pm

Do it! Just like everybody else says.

My background - I resigned from a role and company that was giving me no job satisfaction at 49, spent 5-6 years earning a basic income self employed doing something I loved, now 59 and have been in France for 2 years with a house and lifestyle I'd never afford in the UK. Have taken the pension lump sum, the rest untouched, slowly spending that cash until I need more/a small final salary pension kicks in/the state pension arrives, and my pot is way smaller than yours.

Three further thoughts: -

As others have said, think about what you are retiring to, as well as from. You have a world of opportunities be they work, leisure, volunteering and so on.

If you think there's any chance you might want to work again in the same field think about how you explain your resignation. I found recruiters and potential employers were rather nervous of "I didn't like what the company was doing, so I resigned". Normal people don't do that, they job search before leaving.

Thirdly, to the person who said "If I'm not careful I could spend my time watching charts and playing with excel..." Your point is what, exactly ;-)

Andy

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Re: Help! Shove me over the line, please

#395284

Postby kempiejon » March 13th, 2021, 6:12 pm

Snakey wrote:
But work have been doing nothing but screw me over for the last 18 months. I let them jolly me along for most of last year with promises and excuses but their mask finally came off in mid-January and I don't know who I hate more - them for the lies and deception or myself for trusting them when they'd already shafted me once. My job is safe (and no way will they pay me off) but my position is untenable. It's one thing biding my time for a few months for weather/tax optimisation reasons, but quite another to suck it up indefinitely and leave a beaten man (as it were). It would be even worse if I had to actually be in the office rather than WFH, and that day is surely approaching. And what is the point in being financially independent if I can't stand on principle even now?

Or is standing on principle really stupid and I'm letting emotion cloud my judgment when the smart move would be to spend the next year doing as little as possible and then leave with all the financial boxes ticked?


If you feel they are taking the proverbial then for your mental wellbeing get out. You have enough financial provision so you can stop letting them mug you off and walk away now. Not as satisfying as, if your professional integrity and personality can stand it, turning the tables. Keep taking the filthy lucre while you phone it in, see how long it takes them to notice. When it comes to a head, talk about reducing your hours and contact time as you're not sure you can cope with the stresses. If you have a tame HR department (we don't) could you tell about the pressure of work getting you down?
In the meantime what are you going to do for the next 30 odd years, it's a lot of time to fill and if you've been fully employed for several decades it'll probably be a wrench. When your lack of commitment to the role finally forces them to push you out or you chuck it in and walk away make sure you take a few months off to strategise what you'll do for the next 5 years then you can revisit that in a few years.
I expect to walk away from the career within a year or so, I too have become disillusioned with the attitude of the organisation. I might follow my own advice, try not caring and definitely try to reduce my hours. I have plans for part-time roles and will look for some employment for at least a few years. I've a lot of hobbies and projects stacked up that could do with more time.

fisher
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Re: Help! Shove me over the line, please

#395285

Postby fisher » March 13th, 2021, 6:17 pm

I retired from IT at 48, and I'm now 56 and have been accessing my pension for just over a year. I have quite a bit in ISAs. Between the ages of 48 and 55 I lived off Cash Savings and dipped into my ISAs when I had to. I also used some interest free credit cards to give me some cashflow for the last 2 years before I could access my pension, borrowing the money on the credit cards and then paying them off from the pension PCLS.

In your position I would hand my notice in, live off any cash savings and let the dividends build up in your ISA, then start dipping into the ISAs when you have to in a few years time.

When you get to retirement age you don't need to take all of your PCLS at once you can crystallise a smaller amount whenever you need the funds and take 25% tax free as swill453 explained above. So you can start filling your ISA up each year from the PCLS. You don't say if you pension is in a SIPP, but if it isn't you could always transfer it into one to give you the best control of it. As vrdiver explained earlier on you can use your Personal Tax Allowance of £12,500 together with the PCLS to reduce the effective tax rate on any pension withdrawals to a very reasonable rate. If you took 50K from your pension each year it could be made up of £12,500 PCLS, £12,500 Personal Allowance & £25,000 taxable at 20%, meaning you're paying £5,000 in tax on a £50,000 withdrawal - an effective 10% tax rate.

Your ISA is there to be used for your own convenience, rather than left to your estate - don't worry about taking money out if it.

JohnB
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Re: Help! Shove me over the line, please

#395287

Postby JohnB » March 13th, 2021, 6:23 pm

I retired at 48 from a job I hated. 4 years on I can't imagine how I ever found the time to work. Your bridge to a pension is very secure.

I worry about your £12k spending. If you keep that up you will die very rich!

wanderer
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Re: Help! Shove me over the line, please

#395315

Postby wanderer » March 13th, 2021, 9:29 pm

I completely understand how you feel about running down the ISA. Saving is sometimes addictive for me and I get a warm feeling when topping up!

You will run down the ISA a lot more slowly if you take up a basic, non stressful job to fund your £12k pa needs. By my rough calculation 27 hours per week at minimum wage would get you that, and would be tax free. It doesn't sound like getting a job per se would be a problem, and maybe you could do even fewer hours if you found a job slightly higher than minimum wage. 3 days a week as a senior barrista could be just the ticket!

Although it can be tempting to leave work suddenly, especially if you're unhappy with the way you've been treated, bear in mind that you may have more power than you initially think about managing the exit. As another poster said, consider if the HR department might provide helpful leverage and play your exit from your current job carefully - if you are going to leave with no regrets anyway, you have nothing to lose other than perhaps a leaving party. It might be advantageous to leave after a period off "sick" if you are able to play the slightly longer game, for example. Don't leave for "free" if you can make them pay something!

Good luck and here's to a bright future!

monabri
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Re: Help! Shove me over the line, please

#395433

Postby monabri » March 14th, 2021, 12:41 pm

You sound stressed - a visit to the docs and you might get the next few months off with a doctors note - revenge? Then there is the option of going back after the time off work with stress and being a right PITA (what they going to do...fire you?) If you have decided to leave, what can they do to you?

CliffEdge
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Re: Help! Shove me over the line, please

#395435

Postby CliffEdge » March 14th, 2021, 12:43 pm

Or go back and tell them how it's going to be...

and then leave

Sobraon
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Re: Help! Shove me over the line, please

#395444

Postby Sobraon » March 14th, 2021, 1:22 pm

Just some thoughts…
It's later than you think - a recent Monevator article looked at joint survivorship 80+ very sobering (I know you have not said if you have a partner). As an illustration 2 weeks ago everyone in the family was doing well. Then my younger sister, slim v.fit, and not all that much older than you had a heart attack requiring two stents, BIL had a quad bypass on Wednesday and woke up blind from pressure from a brain bleed whilst under so 6hr brain surgery on Friday - has some vision now.

You say "work have been doing nothing but screw me over for the last 18 months". Well there are two things I can see here. This sounds like one or more individual people are disrespecting you and are continuing with the process. They can only disrespect you if you give a f**k (sorry), and at 49 the individual(s) has/have decided you are too old to move and too young to retire so they might as well "sweat the assets".

My plan when I was your age was to go at 55 but at 55 I was really enjoying my job and stayed on until 59. I probably stayed on too long but I don’t think I regret it. However it took me quite a long time after I retired to get back to being both mentally and physically fit – it would have been a lot easier at 55.

Monarbi is right on the money.
monabri wrote:You sound stressed - a visit to the docs and you might get the next few months off with a doctors note

tjh290633
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Re: Help! Shove me over the line, please

#395507

Postby tjh290633 » March 14th, 2021, 5:49 pm

To add to the post above,
Sobraon wrote:My plan when I was your age was to go at 55 but at 55 I was really enjoying my job and stayed on until 59. I probably stayed on too long but I don’t think I regret it. However it took me quite a long time after I retired to get back to being both mentally and physically fit – it would have been a lot easier at 55.

I got made redundant at 57, told all my friends in the industry and was offered a job which I thoroughly enjoyed, working with old friends, until I retired at 65, then carried on doing part time work on a retainer for another 5 years. In the meantime I started driving for our Community Bus as a volunteer and enjoyed the complete change of direction. Sadly they wouldn't insure us after 75, so I am now a trustee of the charity.

TJH


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