Thinking of retiring or downsizing my career in my 50’s. Would appreciate a 2nd opinion.

Many thanks again to everyone for all your great advice.

I have summarised all the advice that I received below – as a summary for myself but also as in case that it might benefit anyone else that reads this thread.

Summary:

  • The primary issue is that I am a bit fed up with my job, not that I yearn to retire. Maybe the best solution is to change job, rather than rush into early retirement prematurely, just because my finances allow it.
  • If I do decide to pursue the retirement option, it does not have to be all or nothing. I could consider a reduced working week (which would line up with my wife’s current situation), taking a sabbatical, or quitting for just a year or two etc.
  • Whenever I do retire, understanding how much income you need to live is critical. I need to do a detailed exercise to estimate this which should not only include day-to-day expenses but also periodic expenditure like home repairs, new car, medical expenses, holidays, gifts etc. I also need to look at items that are currently paid for by my employer when working this out (e.g. health insurance, mobile phone, laptop, travel expenses etc)
  • This financial exercise to compare estimated spending and pension values etc needs to look at myself and my wife jointly.
  • We also need to jointly plan what we will do when retired. How will we fill our time in a way that we are contented? Ideally, we will both retire around the same time.
  • We will need to learn to slow down, chill out and take life as it comes when we retire. Retirement lifestyle is different to that of a working professional – we will need to learn to adjust.
  • I need to be smart about the way that I retire my PRSA and RAC. Retiring the PRSA early (possible from age 50) is a way to generate some income via an ARF which would keep up PRSI contributions if I do stop working. Also, to delay retiring the RAC (possible from age 60) would leave it invested for longer without the burden of imputed distributions.
  • I will probably not be entitled to the full Irish State Pension as I cannot contribute to PRSI after age 66 but I should keep an eye on this in case it changes.
 
What a great summary, GSmith - fair play.

As a matter of interest, does anyone know whether there is an actual or effective minimum of ARF drawdown to fully maintain PRSI credits for given year?
 
GSmith said:
Thanks Odea.

35k - is that each or for both of you?
Click to expand...
While I can't speak for Odea or indeed what anybody else would need financially to live on each year as it will differ from each couple to couple
I can give you a rough breakdown of what we, a couple with no kids but a cat in our mid fifties have spent over the last six years to end of 2022

Overall we've spent a total of €231K which equates to an average of €38.5K a year
When I break down the figures and remove travel €58K and then what I've spent on cycling €40k :oops:
The average now comes in around €22K a year

€22K a year might sound to some people as been too little to live on but from our prospective it's more than enough
Everything is included in that from all our utility and grocery shopping bills, the running cost of two old cars a 131 and an 07,
two Laya Control 300 Create heath policy's, repair and upkeep of our house, all our socializing and takeaways etc etc.

I often hear here and in other places that a couple who are relying on two state pension as their main source of income in retirement will have a somewhat bleak existence, well going on my figures and the life we're living, if you have a small private pension of a few hundred thousand to go with the state pensions you'll have nothing to worry about (per se) except how you're going to spend all that free time you now have access to.
 
Cervelo said:
While I can't speak for Odea or indeed what anybody else would need financially to live on each year as it will differ from each couple to couple
I can give you a rough breakdown of what we, a couple with no kids but a cat in our mid fifties have spent over the last six years to end of 2022

Overall we've spent a total of €231K which equates to an average of €38.5K a year
When I break down the figures and remove travel €58K and then what I've spent on cycling €40k :oops:
The average now comes in around €22K a year

€22K a year might sound to some people as been too little to live on but from our prospective it's more than enough
Everything is included in that from all our utility and grocery shopping bills, the running cost of two old cars a 131 and an 07,
two Laya Control 300 Create heath policy's, repair and upkeep of our house, all our socializing and takeaways etc etc.

I often hear here and in other places that a couple who are relying on two state pension as their main source of income in retirement will have a somewhat bleak existence, well going on my figures and the life we're living, if you have a small private pension of a few hundred thousand to go with the state pensions you'll have nothing to worry about (per se) except how you're going to spend all that free time you now have access to.
Click to expand...
Thank you for that. Reading posts here and in my late 40s, I sometimes worry about what we should do or more should have done concerning our pensions. While we have been relatively frugal all our adult lives, pensions have not always been our priority for investment or our main investment as we also wanted to make sure our lives were secure before that time. When we definitely focus on them now and we should definitely have a good few hundreds of thousands in savings, I am happy to hear that costs can be somewhat managed.
 
Cervelo said:
While I can't speak for Odea or indeed what anybody else would need financially to live on each year as it will differ from each couple to couple
I can give you a rough breakdown of what we, a couple with no kids but a cat in our mid fifties have spent over the last six years to end of 2022

Overall we've spent a total of €231K which equates to an average of €38.5K a year
When I break down the figures and remove travel €58K and then what I've spent on cycling €40k :oops:
The average now comes in around €22K a year

€22K a year might sound to some people as been too little to live on but from our prospective it's more than enough
Everything is included in that from all our utility and grocery shopping bills, the running cost of two old cars a 131 and an 07,
two Laya Control 300 Create heath policy's, repair and upkeep of our house, all our socializing and takeaways etc etc.

I often hear here and in other places that a couple who are relying on two state pension as their main source of income in retirement will have a somewhat bleak existence, well going on my figures and the life we're living, if you have a small private pension of a few hundred thousand to go with the state pensions you'll have nothing to worry about (per se) except how you're going to spend all that free time you now have access to.
Click to expand...

That is very informative, you aren't in receipt of the state pension yet. In your planning do you expect your current income to drop by ~22k pa by the time you hit state retirement age and then topped up by the state pension?

Being able to fund ~40k pa for close to 20 years indicates by the time you hit 50 you had a sizeable private pension pot?
 
DublinHead54 said:
That is very informative, you aren't in receipt of the state pension yet. In your planning do you expect your current income to drop by ~22k pa by the time you hit state retirement age and then topped up by the state pension?

Being able to fund ~40k pa for close to 20 years indicates by the time you hit 50 you had a sizeable private pension pot?
Click to expand...
Yes and no, at the moment we're living off savings and investments and going by current spending should be enough for the next 15 years
By the time the state pension kicks in the fund will be fairly close to depletion and will be a welcome income stream to replace this
I also have a small PRSA of €250K which hopefully when I cash it in in ten years time will be worth €350 to €400K

The thing with early retirement is unless you have what is called FU money, you have to get comfortable with risk and decumulation of your wealth
but you also have to be aware that as you get older especially in your late sixties and early seventies, even though you have the resources you might not have the physical or mental capability to enjoy it, so it's better in my opinion to front load your retirement while you can and then in the sunset years you can live a very frugal life remembering the good times, that's of course if you can still remember ;)
 
Cervelo said:
Yes and no, at the moment we're living off savings and investments and going by current spending should be enough for the next 15 years
By the time the state pension kicks in the fund will be fairly close to depletion and will be a welcome income stream to replace this
I also have a small PRSA of €250K which hopefully when I cash it in in ten years time will be worth €350 to €400K

The thing with early retirement is unless you have what is called FU money, you have to get comfortable with risk and decumulation of your wealth
but you also have to be aware that as you get older especially in your late sixties and early seventies, even though you have the resources you might not have the physical or mental capability to enjoy it, so it's better in my opinion to front load your retirement while you can and then in the sunset years you can live a very frugal life remembering the good times, that's of course if you can still remember ;)
Click to expand...

It's all FU money if you don't have to answer to the 9-5 :)
 
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