Can I retire now at 61 (Another one)

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patfish

Registered User
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Personal details
Age: 61

Single No children

Income and expenditure
Annual gross income from employment or profession: 14k

Type of employment: Rental Income and ARF which pays roughly 1.5k annually.

Recently made redundant and was on 95k p.a.


Summary of Assets and Liabilities
Home worth €260k no mortgage
Savings of €200k in various banks on deposit of about 2% on average
Pension fund: €280k (ex company)
Company shares: €4k
Buy to Let Property worth €220k no mortgage

Buy to let properties
Rental income per year: 17k
Rough annual expenses: 3-4k

Borrowings

None

Do you pay off your full credit card balance each month? Yes

What specific question do you have or what issues are of concern to you?

Took redundancy last year in the job and currently enjoying retirement. I’m pretty good with money matters and used my spare time to forensically check my general expenditure which comes to 30k per annum. From 66 I will get most of the state pension, rental income and ARF which is about 30k in total presently. Given the depletion of say 100k of savings till then I still feel I can manage easily for 15 years with the intention of dissolving the BTL later and using up the savings to keep me going beyond 80 which is a good check out time right now.

Am I missing something glaringly obvious in my perspective all things being equal?

I’m torn with the idea of maybe working another 3 years either part-time or back to my own hamster wheel job just to be sure to be sure. It would be nice to have a bigger pension, but I don’t have any taxable income to boost it right now. I could earn about 90k pa if I went back for a few years.
 
patfish said:
Am I missing something glaringly obvious in my perspective all things being equal?
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There’s a fair bit of risk in having a big chunk of wealth tied up in one property. There are lots of horror stories out there about bad tenants. OTOH you have a lot of cash to live on if the rental causes trouble. As you get older as well the general hassle of being a landlord is something you could do without.

But otherwise in terms of wealth and likely outgoings I think you’re easily able to retire. Good luck!
 
Tax?

You would have to pay around €2,250 income tax & USC on €30k from 66 (no PRSI from 66 and no USC on the State Contributory Pension).

Does your €30k budget include a provision for irregular expenses like house repairs, car replacement, etc?

You probably could retire but it all looks very tight to me.
 
Did you add in an extra 5 years of reckonable Prsi up to age 66 when calculating your possible contributory pension ?

You will gain 52 class S contributions per year based on your rental and ARF income.

Make sure to sign on for Prsi credits. These will allow you to qualify for 65s benefit.
If you already have at least 13 paid class A contributions in the calender year of your 61st birthday, you only need 39 credits in your 63rd year to qualify.
 
Like you we were concerned about retiring early. Prior to retiring we put a plan together that we called the 4 Pillars.
It comprised of (1) Pension, actuarial reduced, (2) AVC fund, commenced drawdown early, (3) Rental Income from buy to let properties and (4) Cash.
Now we have a rolling 5 year Plan that includes selling property and the Contributory State Pension plus balancing income versus expenditure.
It looks like you have a number of options and a plan will give you some peace of mind, hope you enjoy your retirement.
Have you considered the rent a room 14k?
 
I would say that working 2 or 3 days per week feels very different from full time. And there's a huge difference obviously between having an income and never earning again.

If it's viable, give it a go. You can always ditch it if it isn't working. Much harder to get back into the workplace after 5 years out when cash is a bit tight.
 
S class said:
Make sure to sign on for Prsi credits. These will allow you to qualify for 65s benefit.
If you already have at least 13 paid class A contributions in the calender year of your 61st birthday, you only need 39 credits in your 63rd year to qualify.
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Sorry this wont work. I forgot about the rules for subsidiary employment. Your rental income will mean that you will be considered as in employment.
 
If you signed on for credits as stated you could effectively qualify for 65s benefit by applying for Jobseekers benefit at age 65.

To qualify you would need to have been employed at class A for a period of at least 6 months and ceased this employment immediately before submitting your claim. This is to satisfy the rules for subsidiary employment and claiming Jobseekers benefit.

Jobseekers benefit at age 65 and 65s benefit are basically identical.
 
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Sarenco said:
Does your €30k budget include a provision for irregular expenses like house repairs, car replacement, etc?
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Kind of. I have no car (I hire GoCar if required) and I live in an apartment so management fee inflation is only risk but it's well run and there is a healthy sinking fund.

S class said:
If you signed on for credits as stated you could effectively qualify for 65s benefit by applying for Jobseekers benefit at age 65.

To qualify you would need to have been employed at class A for a period of at least 6 months and ceased this employment immediately before submitting your claim. This is to satisfy the rules for subsidiary employment and claiming Jobseekers benefit.
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I think what you are saying is that I should work in my 64th year till 65 for at least 6 months to be able to claim Jobseekers benefit ? As time to plan alluded to above I was gonna work part-time for the next few years and apply for JB but are you saying that doing 6 months just prior to turning 65 would qualify me ? I am currently signing on for class A credits and will do so whenever there are windows in my work patterns anyway (despite paying a small S class stamp on the ARF).

Thanks for the comments folks.
 
Financially, you are well positioned to enjoy retirement. With respect you're the kind of person who could give sound financial advice to people in their 40's with forward financial planning.

I see you have the option of working part-time, if necessary. Not only is your situation a winning horse, it pays each-way too.

For the record:- I wish I had retired at 60 instead of 65. I'm the kind of person who cannot get his head around those working until they are 70. They'll never get those extra years back.
 
Leper said:
Financially, you are well positioned to enjoy retirement. With respect you're the kind of person who could give sound financial advice to people in their 40's with forward financial planning.

I see you have the option of working part-time, if necessary. Not only is your situation a winning horse, it pays each-way too.

For the record:- I wish I had retired at 60 instead of 65. I'm the kind of person who cannot get his head around those working until they are 70. They'll never get those extra years back.
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I can't get my head around people who say they wouldn't know what to do with their time if they were not working (i.e. if someone wasn't telling them what to do). I'm 52 and the sooner I'm out the better. It's not that I don't enjoy my work, but I know I would enjoy more 'not work'.
 
Thanks for the advice guys. If I'm still around in a year or two I'll update any speed bumps in the process. I'm enjoying the time off so part time work will be my friend for now
 
patfish said:
Thanks for the advice guys. If I'm still around in a year or two I'll update any speed bumps in the process. I'm enjoying the time off so part time work will be my friend for now
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Good luck. I've had breaks before of only working 2 days per week. Working 5 days per week is a drag. 2 days per week is like having a trip to the Day Centre.
 
patfish said:
I think what you are saying is that I should work in my 64th year till 65 for at least 6 months to be able to claim Jobseekers benefit ? As time to plan alluded to above I was gonna work part-time for the next few years and apply for JB but are you saying that doing 6 months just prior to turning 65 would qualify me ? I am currently signing on for class A credits and will do so whenever there are windows in my work patterns anyway (despite paying a small S class stamp on the ARF).
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The qualification requirements for The Over 65 Benefit and Jobseekers Benefit are complex and getting more convoluted every year. So you will need to thoroughly check that you meet the requirements and plan accordingly.

There is a possibility to maximise the amount payable under Jobseekers Benefit, based on the following provision "If you are between 65 and 66 or turn 65 while receiving Jobseeker's Benefit you may continue to receive your payment up to your 66th birthday. This applies even if your claim is due to end before that date."

Jobseeker's Benefit is paid for 6 months or 9 months depending on the number of social insurance contributions you have paid.

Let's assume that you are entitled to 9 months Jobseelers Benefit, based on your contributions. And let's say you start claiming when you are 64 years and 4 months old. You will then get JB for nine months, i.e. until you are 65 years and one month old, and because you are between 65 and 66 when you claim is due to end, you will continue receiving the benefit up to your 66th birthday. In this way you can receive the JB payment for 20 months approx.

Notes:
There are other qualification requirements ,e.g. the requirement to have paid contributions in your Governing Contribution Year (or a mix of some paid and the balance credited)
There are various stipulations about prior claims
The regulations tend to be applied stringently and to the benefit of the Department, with the onus being put on the claimant to prove entitlement
You need to factor in any delay/deferral periods
 
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