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Fire in sight?

Including Financial Independence and Retiring Early (FIRE)
Donfire03
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Fire in sight?

#350582

Postby Donfire03 » October 25th, 2020, 8:48 pm

Hi All

I’m seeking some friendly perspective on whether I am FI and can RE or at least take a long break and maybe work part time after 6 months to a year off.

I’m 47 and feel like I am completely burnt out from working. I work in a large Corporate. Until 3-4 months ago I was working 10-11 hours a day Mon-Fri. This was just about OK. Since then workload has gone up and now regularly exceeds 12 hours, working flat out all day.

Assets wise I have DC pensions of £580k, ISAs and taxable accounts of £340k and cash of £15k. My home is paid off and i have other property investments that I can crystallise in 5 years time, currently valued at £120k.

I need around £30k a year, rising with inflation to live well.

Thank you for any advice!

JohnB
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Re: Fire in sight?

#350587

Postby JohnB » October 25th, 2020, 9:13 pm

You can certainly afford to leave a job that's burning you out and have a year to reconsider. And for FIRE expecting £30k from £1050k should be OK, as 3% is conservative. Do you expect a full state pension? You need to be clear whether that £30k is pre or post tax, as you will be paying some. How much could you reduce your £30k if times were hard? And you should count your house as an asset for FIRE assessment, because selling it could cover 10 years of rental or 2-3 years of care home lifestyle.

Do you have a range of hobbies that will fill the huge time allowance that will open up. Often people who were busy, busy struggle being idle.

kempiejon
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Re: Fire in sight?

#350589

Postby kempiejon » October 25th, 2020, 9:21 pm

Donfire03,

If you hate the job knowing that you have the capital behind you to make a change without worrying about the bread line is a strong position to be in. Why not look to change. Giving up working because you hate one role might be putting the cart before the horse.
Always questions with those sorts of starters. Are you UK? How are you going to make £30k p/a from that pot? Where are you invested and what's your return rate been so far?
Do you have a Significant Other and/or kids? Might you have later?
Here's my thoughts on some sums. With £460k in non SIPP and 8 years until you can get to your SIPP and a desire for £30k annually index linked you might be being a bit previous.
Drawing down £30k from the ISA etc until SIPP time would conservatively leave you a pot of £800k or so and 3% withdrawl would give you about £24k, can you live with that?
With 40 odd years left to fill what are you going to do with all that time other than count your money?

Donfire03
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Re: Fire in sight?

#350591

Postby Donfire03 » October 25th, 2020, 9:29 pm

Thanks for the reply. I find that it can be hard to be objective to look at my own situation.

I am around 5 years off from having a full state pension, although I would probably like to work to max this out, maybe part time or at least prepare to pay voluntary contributions.

There are so many interests I would like to pick up if I had a bit more feee time!

I think I could cut back to spend c £25k a year. Less holidays etc and a bit more thoughtfulness around spending. This would be my net spending - I’d plan to drawdown cash an£ taxable accounts then utilise 25% tax free drawdown on the pensions when they become available.

In terms of asset allocation I should have mentioned, I’m c 65% global equity, 35% bonds looking across all investments.

Thank you.

Adamski
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Re: Fire in sight?

#350592

Postby Adamski » October 25th, 2020, 9:35 pm

Sound good to me! I'm a similar age and position, and semi retired. The freedom of not working is great 8-) Personally I like a clean break and handed my notice in, but first dropped to part time, whilst figuring things out. If want to continue working part time, I wouldn't take a full year off, as things can be tricky if too long out of work.
Last edited by Adamski on October 25th, 2020, 9:38 pm, edited 1 time in total.

mc2fool
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Re: Fire in sight?

#350594

Postby mc2fool » October 25th, 2020, 9:38 pm

kempiejon wrote:...8 years until you can get to your SIPP...

Maybe more. While the OP will be 55 in 8 years, in 8 years the minimum pension access age goes up to 57, although exactly when in 2028 hasn't been determined yet. https://www.which.co.uk/news/2020/09/pension-freedoms-age-to-rise-to-57-how-could-the-change-impact-you/

kempiejon
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Re: Fire in sight?

#350596

Postby kempiejon » October 25th, 2020, 9:42 pm

mc2fool wrote:
kempiejon wrote:...8 years until you can get to your SIPP...

Maybe more. While the OP will be 55 in 8 years, in 8 years the minimum pension access age goes up to 57, although exactly when in 2028 hasn't been determined yet. https://www.which.co.uk/news/2020/09/pension-freedoms-age-to-rise-to-57-how-could-the-change-impact-you/


good catch. I must remember that as these questions often come up and that timetabled change needs to be in mind.

Snakey
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Re: Fire in sight?

#350598

Postby Snakey » October 25th, 2020, 9:55 pm

Hiya

Scary times to do this in, is what I'm thinking. At the start of the year I felt the same as you - there's a thread somewhere - but lockdown went the other way for me and I work less hard now. Can't personally see any reason to pack it in while the opportunity cost of continuing is so "unprecedentedly" low. I mean it's not like I can travel the world right now or even be much of a flaneur.

Oh, for a crystal ball. People are acting like it'll all have gone away by the New Year, but what if you can't walk in to a part time job in 6-12 months time at any salary? Suppose there's a massive Brexit/Covid-shaped downturn and you find yourself in a big heap of redundant 40- and 50-somethings, mostly more desperate than you as they'll still have mortgage and debt and less in the bank?

Can you get consultancy work in your line of business? Pick and choose your projects, fit them around your wider life, take short breaks in between?

Other people who know more than me will be along to crunch the numbers, but looking at it over-simplistically you could divide your ISA/GIA by the number of years between now and private pension access age and have more than your £30k (fine unless we get seriously runaway inflation) and so it maybe wouldn't matter that much if you did never work again. The question would be whether your pension (plus whatever your property investment gives you) would fund that same level of spending for what would hopefully be a further four decades.

One other risk is tax/regulatory changes as they try to work out how to pay for all this. As in "wouldn't it be funny if they...?" [moved the pension access age to 63 overnight, charged NI on pension income, imposed a one-off wealth tax, dropped the LTA to £100k without grandfathering, made the State pension viciously means-tested or raised the qualifying years to 50 etc etc]

Personally I am aiming for early summer 2022 when all that's more of a known quantity, and spending the intervening period collecting the cash and getting all my ducks in a row. But then I'm not the one working 12 hour days.

tjh290633
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Re: Fire in sight?

#350614

Postby tjh290633 » October 25th, 2020, 11:24 pm

You might find that packing in your current job and finding one that you would enjoy doing, albeit at a lower rate of pay, might be a useful strategy. One of my options when I was made redundant in my late 50s, was to go busdriving, having been a conductor in my long vacations many years ago. I never did it, because I had an offer that I couldn't refuse, but after retirement took up voluntary driving for our local Community Bus. For me it was pure enjoyment.

Some take up gardening for others, but there are many avenues open.

TJH

dealtn
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Re: Fire in sight?

#350672

Postby dealtn » October 26th, 2020, 10:08 am

Donfire03 wrote:Hi All

I’m seeking some friendly perspective on whether I am FI and can RE or at least take a long break and maybe work part time after 6 months to a year off.

I’m 47 and feel like I am completely burnt out from working.

Thank you for any advice!


Health beats wealth regardless.

Take a break, plenty of time to assess if that remains temporary or permanent.

Donfire03
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Re: Fire in sight?

#350854

Postby Donfire03 » October 26th, 2020, 6:57 pm

Thanks all. I really appreciate your insight. Lots to ponder!


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