Moneymakeover Considering early retirement - thoughts?

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johnpeel

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Hi, hoping to retire next year, but looking for advice/sanity checking from you all!
I wil be honest, I no longer enjoy my career, and its a ball of stress at tmes.

AGE: 58, wife 60
STATUS: Married no children

OCCUPATION
IT Manager (private sector)

INCOME
€75000 gross per year
WEEKLY TAKE HOME PAY: Approx 860 after deduction of VHI
Wife is retired, ex public sector, disability payment & pension circa 260 per week.

Combinet net income therefore €57k.
No additional income sources.

LOANS/MORTGAGE
None. I own my home, value approx €320.000

SAVINGS
Approx €610.000
Recent inheritance accounts for the 70% of this.

Investments
None - other than a modest Zurich pension - see next section.

PENSION FUNDs
34 years Public sector service - Defined Benefit - Pre 95. Calculated 30k p/a gross + 80k lump sum at 60.
4 years Zurich occupational pension - about 40k value at this time
400 PRSI class A contributions, so hopefully should qualify for pro-rata OAP at 66?

SPENDING
Home wil require some upgrading, estimating 70k expenditure in the next 2 years.
Currently take 2 european holidays per year - nothing fancy, ryanair fight and standard hotels / airBnB's

So a few questions:
Could I realisticly retire at 59? Should I?
Very conscious of savings being eroded by inflation - whats the best option for me to counter this?
We don't have an extravagant lifestyle, but are comfortable, and woud like to remain so. I guess I'm mostly risk averse, but I don't want to see current savings rotting away in bank accounts, and at least stay abreast of inflation.

Advice welcomed.
 
What work needs to be done to the house. Can you check to see if you would be eliglebe for any of the available grants. Warmer home scheme if your wife is on disability she may be eligible to apply.
You need a minimum of 520 contributions in order to qualify for a pro rate of old age pension.
 
johnpeel said:
400 PRSI class A contributions, so hopefully should qualify for pro-rata OAP at 66?
Click to expand...
If she could manage to get 120 more full rate paid contributions class A or class S, or voluntary contributions, she would get a much better COAP.

Is the 40k Zurich fund yours or your wife's ?

Check out this thread

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
 
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johnpeel said:
advice/sanity checking from you all!
Click to expand...
Why do you think you will do all day when you've no job to go to? Do you think you could live with your wife every day? Would she resent you being at home? These are the sanity checks you need to address.

You're living on 1120 weekly. Do you spend all of it. Age 60 you'll get 30K, how much is that weekly after tax?

Is the only reason for leaving work because you're finding the stress too much or do you dislike the job?
 
Interesting article in yesterday's English Times suggesting that talking about early retirement can be a symptom of burnout or dislike of current job. A better option might be to go part time or change job completely.
 
Bronte said:
Why [what] do you think you will do all day when you've no job to go to?
Click to expand...
You'd be amazed how much fun you can have when you don't have to trolley into an office every day!

Bronte said:
Do you think you could live with your wife every day? Would she resent you being at home
Click to expand...
gordon bennet, you'd think the OP is going to be stuck to the armchair watching reruns on the TV.
 
What I mean is that not everybody loves retirement. And one should think long and hard about all aspects of it. It’s a big change. For some it’s marvellous, not so much so for others.
 
It can be uncomfortable for many to ponder the point of their existence without having the sense of purpose a job gives, and so it is common to be hesitant about retiring earlier than typical.

The conclusion I personally have come to is that there is no point to any of this, so just go play!
 
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Thanks for all your inputs to this - much appreciated.

@niceoneted - Work planned invoves bathroom refurb, some works to make it more energy efficient, such as oil boiler upgrade, pumped cavity insulation, etc, and some general modernisation.
Re the 520 Class A contributions needed - assuming I worked to the end of 2026, that would leave me at 450 stamps. Can i make voluntary contributions to make up the other 70, or isthere any other options open to me?
I had thought I'd be eligibe for a small portion of the Contributary pension based on this:
1770151742886.webp
@S class - Zurich pension and the 400 Class A's are both mine.

@Bronte Have lots of irons in the fire to keep me busy, so won't be bored. I intend to start a modest business in domestic appliance repair, as I see a gap for this in my area, enoy this work, and I have an electric/electronics background.

@Interstellar - Agreed. Both burnt out and no longer enjoy my job. As above, my plan is to develop self employment at something I like doing.
 
johnpeel said:
Zurich pension and the 400 Class A's are both mine.
Click to expand...
Yes you can pay voluntary contributions with your 400 class A + your class D contributions

However you can make 5k drawdowns from your ARF to get 52 class S. This will be a lot cheaper than voluntary contributions.

Your ARF could also be used to qualify for Benefit payment 65.

Can a retired PAYE worker use class S contributions to qualify for Benefit Payment 65.

The following is based on my reading of the rules of BP65SE, so it may or may not be possible. If a PAYE worker has taken early retirement and has ARF drawdowns over 5k per year they will get 52 class S contributions per year. If this person doesn't meet the class A rules in their governing...
www.askaboutmoney.com
 
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johnpeel said:
Wife is retired, ex public sector, disability payment & pension circa 260 per week.
Click to expand...
Is your wife also pre 95 ?
Does she have any class A Prsi contributions ?
At age 60 it could be possible for her to get extra Reckonable Prsi contributions to gain a partial COAP.

This might not be possible with her disability payment.

She would need some very minimal employment.

Could she manage this ?

If you get your appliance business set up you could employ her.
If the business was a limited company, she would only need to earn €38 per week to qualify for class A Prsi.

If it's just self employment she could assist you, and if she earned 5k per year she would qualify for class S Prsi.

Details here
www.gov.ie

PRSI and Family Employment

www.gov.ie www.gov.ie
 
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Bronte said:
What I mean is that not everybody loves retirement. And one should think long and hard about all aspects of it. It’s a big change. For some it’s marvellous, not so much so for others
Click to expand...
exactly, a job gives you purpose , not everyone can have meaningful pastimes or hobbies that take up all their time. Its easy to slip into watching daytime TV if you don't have the discipline of a job to goto most days especially in the dead of Winter when the weather is horrible like now. You are hardly going to out cycling or other outdoor activities in this weather if you don't have to. People need to be realistic about how motivated they really would be without a job, I think working part time or getting a different less stressful job for a few years should be considered.
 
In fairness to the OP and to @ClubMan I think that particular job of an IT manager is a highly demanding and highly stressful job, therefore he should probably get away from it altogether, however i think a less demanding probably non technical job he should go for . What stops alot of people moving down in the workplace is a loss of status, when someone asks them what they do, they are afraid to say they now work in a relatively low status job. However maybe having reached 60 he no longer has those hang ups anymore.
 
Retirement and especially early retirement is a total shockwave to a persons eco system and takes time to adjust to
Most people who retire enjoy the first year of freedom that comes with not having to go to work
but its after that that you have to start working on your retirement to get to the the place where it becomes the accepted norm
It took me about 5 years to get to the place where I finally felt I had moved on from employee to retiree
Each person will have their own journey during the adjustment period but once you get there,
You'll never want to go back!!

To the OP or indeed anybody in their shoes nearing retirement, Go for it, what have you got to loose except regret!!
 
Not to be morbid, but 60-75 (ish) is probably your sweet spot for doing all those things you promised yourself 'one day'.

Children are off the payroll, mortgage paid, decent car, income is all your own.

And before everyone comes at me that their 90 year old relative hikes Croagh Patrick or swims daily in the 40 foot; the reality is that physically, life & your years start to show at 75+

So OP - time to get out & enjoy yourself!
 
ClubMan said:
My last job of 17 years gave me a purpose alright. To get the hell out of the workforce ASAP and make my time my own.
Click to expand...
Well that could be a job problem or a you problem. 17 years is a long time to suffer. Too many of us stay in jobs we dislike because we get used to it. But at least you had a happy ending and are enjoying your own time spent as you wish.
 
niceoneted said:
Check to see if you can avail of any of the SEAI grants.
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Are they actually worth it. Is the price of the grants not built into the cost and in addition it's impossible to navigate. We looked into this as it's all the rage and decided to stick with traditional systems because we did not see how it made sense financially, and you had to use a company that does the whole process for you.
 
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