Early Retirement/pensions

Due to ill health it's looking like I'll have to temporarily give up dog walking for a living (I'll still do my own dogs). I want to work from home, woodworking, so I am considering taking early retirement with the lesser of my deferred pensions, I can take a cash sum (far more than expected) and a reduced monthly pension payment. I can use the cash sum to invest in any additional tools required and materials, what do you think?

 

I've always believed in retiring as early as you can afford to.
Once retired, "you have time to spend money," which you didn't have when you were working. So you need enough.
I was in retail management, so the hours were long and the job could be stressful. But the money was could, as it should be.

I retired just before my 58th birthday, it was a long term plan. To achieve this we didn't waste money during my working life, but we had a decent standard of living. My wife only ever worked part time on and off and gave up completely in 1985 due to her contracting MS.
By this time I'd paid off the mortgage. I'd put the maximum you can into my pension from the age of forty, by which time the last of our three kids had left home and no longer need our support, (well not completely), so I left with a good "wedge." We had an endowment mortgage so at 65, I got another "wedge," when the endowments paid out. Fortunately in 2005, there were still such things as a "terminal bonus."

Because I've no longer paid a mortgage, or into a pension fund since I retired, or have been paying a boat load of N.I. since I was 65, with my company pension an annuity and the enhanced state pension my "disposable income" is about three times what it was when I was working, (still paying a boatload of income tax), so "we don't go short."
I get free prescriptions, and the winter fuel allowance but I'll be a bit miffed if I lose my free TV licence. I think I've earned it, having put up with rubbish BBC TV programmes for decades (as have many of a similar age).

You are doing the right thing, by intending to keep busy. Too many people retire and then sit in front of the telly, either due to lethargy or financial circumstances. Many don't last long. The earlier you retire before 65 the better. It's said it prolongs your life if you're active.

As I've so many hobbies, as has my wife who is the same age, the last 21 years have flown by.

 

Just hoping Carol will let me get Oxy/Acetylene welding equipment, I was the best welder at school many many years ago!

 

At the risk of preaching to the converted (you have probably taken advice) you can only take up to a total of 25% tax free. Anything over that is liable for tax and may take you into a higher tax bracket.

Open a business account. If you do use some of the pension funds for equipment pay them into that account by on-line transfer (making it clear that it is a loan) and enter it into your business accounting ledger as a personal loan to the business. When I loaned myself money I raised a credit note to myself stating the repayment terms (ie; direct debit of £xxx starting on such and such a date and ending on blah blah blah date) and the full details of the transfer (the acct. no, sort code that it came from and the date) so that the revenue doesn't look upon it as income, either to the business or yourself personally. Take care to enter the repayment as a debit on your accounting ledger as the loan repayment every month (if repaying monthly) or when the lump sum is paid back.

 

Just get it.

Never ask permission. It's your money.

Just makes sure she has enough for what she wants, after all, she'll be making lots of cups of tea whilst you indulge yourself with your hobbies.

 

You must have been if you could weld wood!!

It can send insurance through the roof.

 

longk "O" level in metalwork, the woodworking bug came later!:glad:

 

I'm a self-taught woodworker.....and it shows!

 

Ditto! I do find it relaxing though.

 

You guys make me smile but I have to weigh all my options, it's not just me and I won't be selfish.

 

On the basis of ill health? You'll probably need an occupational health professional to issue a certificate of permanent ill health that will permit your occupational pension funds to release funds and start paying pensions.

Regardless, if you've reached the minimum age for occupational pensions then go for it, and forget about learning new skills unless they're your idea of a new fun hobby. Just make the most of being able to forget about work and enjoy leisure time.

We've been managing for absolutely ages on a miniscule amount of our former income as 2 qualified professionals, but use our extra time to make the most of our massively reduced income, and reckon we now have a much better lifestyle.

 

Life is what you make it.

If you're retired and have some money, spend it.
"There are no pockets in shrouds."
Take some out of the house if you want more.
Otherwise, if you have to go into care, the Council will take it to pay for your care.

 

Hey Scrungee, I have two deferred pensions both came into effect aged 55, I am now 62 (and a half), I'm not using ill health to further my income, just give me the opportunity to take things easy and work as and when I can, that I can do at home........... also means Carol gets the most use of MY (our) car!

 

First and foremost you should get a state pension forecast to ensure you have a full state pension due to you when the time comes.

Check your State Pension

It could also be worth considering a higher monthly pension for the rest of your life and a reduced lump sum?

 

I will have another source of income through property and my state pension and other deferred pension at retirement age.

Also further income (I hope) in the meantime through woodworking.