Moneymakeover Stopping work at age 45, spending savings, PS pension, investing

[Fortune]

You can afford to do a much lower paid job if it's what you love doing.

This needs to be in giant, bold, underlined letters. Someone who loves on €22k a year, and with a 7 figure net worth can afford to do any job and never worry about the salary being too low.

 

[misemoi]

OP I am sorry to hear about your family losses, this must have been a very tough time and I am sure continues to be.

A lot of posters on here start with what they want to do and then need to figure out how to make the money work for that. I would urge you to start there as well, and you will probably have the funds to do whatever it is you choose to do. Remember very few things in life are truly irreversible, so you can take time to try a few things and see what suits you - if they don't then just return to your life as it is now. This could look like education, volunteering, travel, a new job, a new business using your skill set. Explore some ideas with friends and with professionals, you might be surprised at what people suggest for you based on how they know you or on what you tell them about yourself. You are only 45, so you have many many years ahead in hopefully excellent health and the comfort of wealth to be able to do as you choose.

 

[moneymakeover]

To get 2% AER, the money needs to be in a 10 year bond for 10 years. So there are cash flow issues if a person wants to live off that interest. This can be mitigated to an extent using a fixed term deposit ladder

I see what you mean but in the long term with the interest payments, and maybe keep a cash pot of 200k you should be breaking even.
Some of these high dividend yield stocks/ETFs might be an option but I like the fact that tax is not an issue with the state savings.

About your job, I always think it's better to be busy. Could you rent a room 4 nights a week near the job and avoid the commute? Paying maybe 800 per month rent?

 

[Ruffian]

About your job, I always think it's better to be busy

The other side of that is that life is what passes you by when you're busy being busy. I reckon it depends a lot on the person, the job, and the circumstances.

 

[Tuscany]

You’re in a fine position financially and I'd suggest not to be in any great rush planning your future financial arrangements.
Don’t work about the job that you have a career break from. Make the most of your career break. Avoid drifting, do something that you find rewarding, satisfying whether it pays or not.

Think volunteer, community activities. Is there something totally different that you might work at part time that you would look forward to doing a few days a week. You have the financial wherewithal to try different things. You have had a difficult time personally and your former job does not sound enticing. As for now, just do stuff that you find appealing but do something that stimulates and see where that leads; you’re only 45.

And the emergence of a partner on the scene could also change a lot in your thought process/lifestyle.

I liked this bit!

I run two cars

 

[Nordkapp]

OP, if not mentioned in the previous posts, the supp pension AFAIK is not available until age 60. Looked into this myself.
Agree with Brendan and Sarenco, by all means have some cash available in special savings but get the majority of your pot into equities. How you do this is key, lump sum when markets are low or Dollar Cost Average (DCA) where the market confidence is low.
Would I take on a further property when real estate is expensive, no. We live in interesting times, but I like the retirement idea, it’s just the ‘what’ do you want to do in retirement.

 

[Ruffian]

OP, if not mentioned in the previous posts, the supp pension AFAIK is not available until age 60. Looked into this myself

True, but the OP seems aware of this:

Public service pension. Final salary based, payable at age 60. 17k per year in today's money based on accrued service to date and current salary scale. 17k includes the supplementary pension.

 

[messyleo]

If it's a final salary based PS scheme then OP should double check NRA is not 65 rather than 60

 

[Ruffian]

If it's a final salary based PS scheme then OP should double check NRA is not 65 rather than 60

He did indicate that - but in a different thread: "I commenced employment with the LA before 2004 so my minimum retirement age from the LA is 60 and it is a final salary based scheme."

 

[Richard45]

Thanks again to everyone, I have noted everything even if I haven't responded to specific questions.

With regard to jobs, I was offered a job with a semi state organisation but turned it down due to it being a 4 hour daily total commute with no possibility of hybrid work.

I still have a particular type of role with this organisation in mind that I would enjoy and find stimulating and pays about 50k with the possibility of hybrid work. The smaller the commute that I am willing to do, the less chance I have of landing one of these jobs. I think a 1.5 hour daily total commute should be my max. If I got one of these 50k jobs, I could continue with my existing public service pension but as the new salary would be lower and my pension is final salary based, that may be very foolish. There may be other pension options though, a separate pension under the PS single scheme or defined contribution one of up to 12% employee, 20% employer contribution. That seems good and would give me exposure to the stock markets.

But the most important things for someone in my position are to do something I like, avoid long commutes and protect/preserve my existing public service pension.

 

[presidenttttt]

Just to iterate you would likely benefit from some advice and guidance to consolidate your savings/deposits and structure your finances. Because I do not understand how your cash can be split across so many state instruments and tracked either.

You are in a good position. I would not over index on your spending of 22k per year. For example, you state you own your house - there will be big and sometimes unplanned expenditure - new boilers, leaky roofs.

Looking for a job you like makes sense and provides comfort and sanity for most. I think they call it "financially free" (free to do what you want) as opposed to "retired". I wouldn't dream of a 2 hour commute if I was not dependent financially on a job.

 

[Richard45]

Just to iterate you would likely benefit from some advice and guidance to consolidate your savings/deposits and structure your finances. Because I do not understand how your cash can be split across so many state instruments and tracked either.

It is easy to structure and track. Statements twice per year and every time a deposit matures, I get a letter and a form for reinvestment or repayment. A few seconds to fill in form and return in the freepost envelope provided.

I have been putting money in from salary and inheritance since about 2005 and have used 3, 4, 5, 5.5 and 10 year fixed term products. As time passed, my maturity dates laddered well and because max holding limits are per issue and don't apply on reinvestment, I had less limitations. For instance, if I put new money in a 3 year bond because I was at the holding limit for the current issue of the 10 year bond, once the 3 year bond matured, I could reinvest that money into a 10 year bond. Even if the 10 year bond current issue was the same as it had been three years earlier.