Is leaving corporate employment at 50 financially feasible

[ClubMan]

However, I think it is mitigated to a degree by having c. €200k in cash at 50, taking the tax-free lump sum, and his wife continuing to work part-time.

And possibly by using a PRSA to allow phased/staggered access to retirement benefits instead of it being an all or nothing/one time only event.

https://www.askaboutmoney.com/threads/is-leaving-corporate-employment-at-50-financially-feasible.244739/page-2#post-2016241

 

[Denton]

It will depend on assumptions used but using some of the basic figures provided the fund lasts to approx age 87 providing for 5% net growth on pension for 2 years and then the ARF thereafter. The cash savings and the tax free lump sum from pension remain on low yielding deposit (which may not be the case). Withdraw €40k from cash savings for 2 years until taking €50k gross from the ARF from age 52. State pension from age 66 included

Increasing the growth rate out to 6% on ARF moves the age to 92

Is this graph from something you created yourself?

 

[Richie O'Neill]

@Denton - just a screengrab from cashflow modelling software I use. Really useful in demonstrating future cashflows and what the future may look like - I just used simple analysis based on OP first post but you can build in any type of scenarios (monte carlo analysis to simulate financial crash type market events for example). Ideally if you have enough data and someone says can I retire at X age and have Y income you can show them. There's only 2 versions I know of that have been built for Irish marketplace that have the tax rates, tax credits, deemed disposal, correct ARF drawdown rates based on age etc all built into the system

 

[Denton]

Thanks @Richie O'Neill . Mind sharing the names of the two versions you're aware of? I just use some extremely basic spreadsheets for now but curious to see something that has been purpose built and takes into account the tax rules here etc.

 

[Fibbernacci]

They also have a retirement calculator: https://www.informeddecisions.ie/pension-calculator

Really like this calculator. One of the best I've seen.

Only two things missing for me 1. Provision for UK state pension which a good few Irish people qualify for and 2. Incorporation of different possible drawdown dates for DB/AVC vs DC (my spouse DB not available till 60)

 

[Richie O'Neill]

@Denton - I use one called Cashcalc and Voyant is the other system. Generally only available to financial planners under a subscription service.

 

[Denton]

That rules me out so!

 

[givecredit]

Really like this calculator. One of the best I've seen.

I tried it this evening. I reckon it's underestimating my tax in retirement by circa 10k.

 

[Fibbernacci]

I reckon it's underestimating my tax in retirement by circa 10k

Funny enough I always noticed on their YouTube that they zone in on the optimal potential tax rates often. I wonder if it's properly calculating tax vs age or is it averaging it out over a lifetime. There will be big differences when PRSi is not due and USC not due on state pensions.

 

[givecredit]

There will be big differences when PRSi is not due and USC not due on state pensions.

I've factored this into my calculations. I've sent copy of my report and queried it with the team at decisions.
His podcasts and YouTube are fantastic. I can definitely say both him ,meaningful money and here have helped me retire 6 years earlier then expected. Of course myself maxing out contributions helped too.