Early retirement

One thing to remember is do it while you can. We had several years of lovely freedom but family matters have taken over more now and we've had to adjust again to different circumstances.

We ( probably as many our age ) decided when I was 60yrs and the wife 55yrs were in five years time going on a world cruise and then tour Europe in caravan for at least 6 months. Lovely they say ! until the letter arrives from the D.W.P 2 years ago which read something in the lines 

" Dear Mrs C thank you for the 40 yrs of hard work and contributing to the wealth of our Great country, please now carry on for another six years when we're sure things will be better and we are able to return some of the monies you have generously contributed ".

Mortgage paid kids grown up and flew the nest, this will make me 71 years of age by the time we can fulfill our dreams.

Thanks a bundle. !!

Not exactly early retirement - but I gave up going out to work at 63. I had always enjoyed my work (IT department of a well known kitchenware retailer based in the Lake district), and also the small close knit group of colleagues.

But as two weeks off work was coming to an end I realised I didn't want to go back, so I gave three months notice and walked out for the last time on Christmas Eve 2010. I enjoyed those last months - especially being able to tell people "sorry, I won't be able to do that, I'm leaving".

I miss the people but not the work, and I was rather pleased that I was replaced by two people!

Financially it was a bit of a leap of faith, and I was ultra cautious with spending at first, but a combination of factors have meant we don't feel any worse off. The farm is doing well and I have portion control at mealtimes - no more leaving food out that should last more than one meal and someone saying "I might as well finish that off".

Of course I still work almost as hard with farm admin, but I can fit it round my life.

The house is still a right mess and don't mention the garden, but give me time - I'll get round to it sometime.

The transition from work to retirement was fairly easy for me. When I was 53.5 years old I asked to be released on early retirement. When I was around 54 it was agreed. At that time those around me could not understand why I did not wait as redundancies seemed on the cards within the next couple of years with increased payouts. My answer was simple. The country printed pound notes every working day but nobody was printing vouchers giving additional years of life. For the last 15+ years of work I was different than many. All of the senior engineers where I worked wanted maximum promotion which gave them more money working 9 to 5 overseeing several others and also a lot of time tied ti what I considered administration rather than design and contract preparation/supervision and responsible for particular areas of the county and aspects. I, on the other hand did not have several working for me but rather several working with me.  I helped other teams by producing designs for them, did my own projects, improved the abilities of those working with me and my work hours were governed by my own programming. I often worked from 7.30 until gone 7pm. At times worked partly from home and worked some time at weekends to hit targets. I never accepted overtime however and always insisted that I receive time in lieu or else management should find somebody else to hit the timescales that I did. That gave me over 12 weeks leave a year plus bank holidays etc. The management always backed down from insisting that I took overtime pay as they needed somebody that could hit tight deadlines and produce the goods to a good standard. 

How did I determine that I could afford to retire? Having lost my wife at just turned 43 and having reached 48 with my youngest daughter away at uni  I requested 12 months bank statements. At the time I was usually away in my caravan for around 6 weeks a year plus a few weeks abroad, weekends away and long weekends with friends. Also out several nights of the week. I reckoned that my pension would be at least around £3k short until OAP kicked in. I had some savings that would make up the shortfall. When I was around 53 Fliss came to live with me. She is 3 years older than me and I convinced her to take retirement as where she was working was a long commute timewise (and it was cramping our lifestyle with me able to take so much time off). I reviewed the situation and decided that I had enough savings to retire at 55 even if my works pension was not available until I made 60 and I could, if necessary, just walk away.

In the event, because some costs were now shared, I did not have the £3k or £4k shortfall and despite us being away for 4 months of the year my expenditure and income pretty much matched. Now that I am 65 my OAP is really surplus.

As for my capital that has increased from £280k to £370k over the last 10 years before considering the effects of inflation. 

Your situation Husky is different in that you need to consider the needs of you and your wife. I only had to consider my own in relation to my retirement. If I should die before Fliss she has my house and some additional capital and a few thousand form my pension to add to her own savings and income (not a much as a married partner) and would be secure.

Go through your expenditure and income, allow for capital to replace LV and cars etc and make an informed decision

I'm not trying to teach you to suck eggs but make a detailed spreadsheet showing what you get in now from all sources and all outgoings and what would be the figures if you retired and factor in holidays, cars, servicing...

I agree generally with Cornersteady. I would say though that if you consider all income and expenditure for a year (or two) then as long as you factor in unusual expenditure such as vehicle replacements and also present capital then the amount of detail need not be too great,

The one thing that has "helped" at times is (we think) a savings buffer for the unexpected,although my company pension is good compared to what some even earn these days,its always handy as was the latest case when a change of car was "forced on us",without the need to have a think can we do it

You asked about pitfalls, Husky rather than the rosy side of retirement life. I can honestly say that there were none when I had to retire in 2001. Sure my income dropped like a stone but the annual income still exceeded spending, after we got rid of the second car etc. We spent a lot more time exploring for longer periods, naturally.

But the biggest plus was that my wife and I get on like best mates so there was no problem spending more time in each others company. As you are self employed and effectively work from home, I think, you might already be spending a considerable amount of time with your wife so this shouldn't be a concern. I have known couples retire and hate it, always moaning about the other half. Remember that if your wife has a social life outside of you that she carries on when you are working then you'll need some empathy to see how your new lifestyle affects it. It might not as I don't know your circumstances and don't want to. 

The income level is probably your biggest worry but maybe you can maximise income by down sizing your house.

Anyway whichever way you go you will at least have done it with your eyes wide open.

Thanks all for your advice , I will read it all in more detail tonight when I have more time 

Just been on the government website to do my pension forecast, just out of interest, roll on 2029 is all I can say!  

quite sizeable chunks taken out of my earning were NI, pension, and tax, so taking the first two out makes quite a difference and cushions the fall in come, and although you can still earn £157 per week with out paying NI. Tax will still be there of course but it might be reduced as perhaps you won't be earning so much over the £11000 threshold? 

If you do take on further work you might be automatically enrolled onto a work pension (they even tried it on supply work) so make sure you ask to opt out, if of course you want to.