Retiring at 51

As you are being made redundant you do not have to make a precipitous decision. I would suggest you register at your local Intreo office and also apply for Jobseekers Benefit. At the very least this will preserve your PRSI record, as you can continue to claim credits. You could also take the time to look at what jobs may be out there and make some applications without any final committment. You should be eligible for Jobseekers Benefit, in addition to your PRSI credits, during this time. You will then be away from your current job and should have lots of free time while not cutting yourself off from the job market. You will be maintaining your PRSI record. This should give you some space to decide whether it is work or retirement for the future.

Losing your job

If you lose your job you need to find out about the different payments and services for unemployed people.
www.citizensinformation.ie www.citizensinformation.ie

Jobseeker's Benefit

This is a weekly payment to people who have lost their job and are covered by social insurance.
www.citizensinformation.ie www.citizensinformation.ie
 
Thanks Guys. I hear you.
I feel ive done 60 years worth of work in 35 years.
Totally burnt out and not interested in work anymore.
Thats really where im coming from.
I know what you mean about basing it on my savings now, but what else would I base it on.

I did a tot up of what expenses will be gone now if I retire.
Mortgage 1 : €1200 PM
Mortgage 2 : €550 PM
Mortgage insurance 1 : €50 PM
Mortgage insurance 2 : €30 PM
Parking Space : €100 PM
Fuel : €150 PM
Childcare €400 PM
Charity Donations : €100 PM (They will stop if I retire)
Savings : drop them from €1500 to €750 PM

If we get rid of 1 car thats an additional
Car tax €370 PY
Insurance €450 PY

Thats a total of about €3300 PM not including if we get rid of 1 car. Probably wont do that for a year or 2.
Working im only taking home €2850 after tax and AVCs and a few other work related things that come out of my salary.
I understand there will be no more AVCs and the savings will be halved, but these numbers look like im no worse off at this point once mortgages are gone. One is gone already and the other wont be too long before its gone.
There are probably tax credits that can be transferred too.
And i probably wont touch my pension or lump sum for another 5 to 10 years anyway. I'll be 60 or close to it by then.
We live very comfortably on our take home at the moment. The rental income pays the mortage and tax on the property. It will go into our pockets once the mortgage is done, less the tax. We want for nothing really and have several holidays every year from what we currently take home, at peak times like Easter and summer because I cant get holidays any other time. Pretty sure if I was retired we might change 1 or 2 holidays to off peak.

These numbers look good to me. I would gain 60 or so hours per week to myself and would be available at home more too.
The stress that would be cut out would be huge. Now I only started thinking about the possibility of retiring a couple of months ago, but im liking it as i get used to the idea.

Sorry if im dropping numbers all over the placce at you. Just trying to get this right in my head as scared to make a mistake.
 
Thats true, but they will be gone instantly if I retire.
Ive enough to pay it all off at the moment.

Ive also not been paying mortgage number 1 for a few months. Thats been and will continue to be put into an account and not touched, for just such a use. Redundancy and my last couple of pay cheques plus my expenses for the last quarter plus the money ive saved due to lockdown and refunds for cancelled holidays being paid will wipe that mortgage out and then some.
We've also saved the fuel, and childcare money since lockdown.

I just have to see if from a tax and expenses point of view on an investment property, should I use that money to pay off the mortgage or just use it to pay the mortgage every month. Its one of the many complications of my current predicament :)

That fuel will be almost totally wiped out. Thats what I put in my car every month (well before the lockdown anyway) and it only goes into work and home.

I know I might be looking at it the wrong way round, but it seems perfectly logical to me.
Disposable income after retirement is greater than disposable income before retirement. And you get 60 hours plus a week back. Im trying to see how that would prevent me just retiring.
Someone told me I could get social welfare for a year while I think it over, but im pretty sure after a year i wont be able to get another job in my business anyway, not that id want one. At least not one that pays well enough.

And if im being totally honest. A huge driver for this is that, since March, for the first time since my baby was born I am actually able to see them awake during the week. Used to be only some Saturdays and Sundays and holidays. I didnt realize how nice it is spending the day with them. So sad that I spent so many years seeing them asleep in the morning and asleep at night and missed them growing up.
 
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OMG_OMG said:
Disposable income after retirement is greater than disposable income before retirement.
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That couldn't possibly be true.

Your expenses might reduce somewhat but your household income will definitely be lower.

The right way to look at this is to (a) figure out your monthly expenses post-retirement; and (b) figure out your household income post-retirement. If (b) is higher than (a), then you're sorted (assuming your wife is happy to continue working to fund your household).
 
If you do retire your wife will be able to get your €1650 annual tax credit and also claim the €1600 home carer tax as you'll be caring for the child. She'll also be able to earn another €9000 @ the 20% tax rate (paying €1800 less tax).

You would be subject the Homemaker Scheme which will make it easier to qualify for the contributory pension as the years spent caring full-time for you child while they are under 12 will be discounted. You could crunch the numbers thereafter to see if it made sense to start paying voluntary PRSI contributions.

You can read up on these things on https://www.citizensinformation.ie/en/
 
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Paying off your mortgage (s) is a separate decision to retiring.

Paying off your mortgage reduces your annual expenditure. But I don't think you are being honest with yourself to include it in how you are better or worse off if you don't return to work.

Honestly expressed, I think it's more like if I retire, pay off my mortgages, stop my avc saving, do the childcare myself, it's cashflow neutral.

But obviously you will then have less cash/liquid assests, and you will not be adding to your nest egg.

(Not trying to put you off the idea, just trying to paint rational picture).

If your families net take home will be higher than annual expenses then it can work.

But to be more definite you might want to model it into the future. And include some cases like paying for retirement home, wide becoming unable to work, kids needing house deposit or whatever else.

Some people live on very very little. You can definitely make it work.
 
Roughly speaking you pay off mortgage now, live on wife's income for few years, then use some of your redundancy and next few years savings to bridge last few years till you can drawdown on pensions

in 9 years when fully retired you are looking at:

Pension 500k at conservative 3% withdrawal - 15k
Rental - 10k
Wife pension - 35k

I.e. 60k pre tax income

And that is not allowing for growth of pension or apartment income.

That should be comfortable with no mortgage.
 
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Biggest negative in my opinion is if you continue to work you could build up more capital which you can then use to insulate yourselves against any future surprises. E.g. state goes bust, pensions halved, hyper inflation, serious injury or disability or pyrite in apartment etc
 
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SPC100 said:
Roughly speaking you pay off mortgage now, live on wife's income for few years, then use some of your redundancy and next few years savings to bridge last few years till you can drawdown on pensions

in 9 years when fully retired you are looking at:

Pension 500k at conservative 3% withdrawal - 15k
Rental - 10k
Wife pension - 35k

I.e. 60k pre tax income

And that is not allowing for growth of pension or apartment income.

That should be comfortable with no mortgage.
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Thats more or less how I was working it out.
With the pension I was going to take the max tax free lump sum though, so might not be as much, but then I guess it should grow in the mean time.
My wife will have AVCs with her pension too. And a lump sum.

Im thinking I can do this now, and because of the timing with mortgage just finished and redundancy money i'll be actually better off financially, even still saving €750 per month plus wifes AVCs (Thats a substantial buffer that could be dipped into. But we would probably be adding to savings instead). And 60 hours per week better off as well. At 68 I should get the state pension.

I was thinking last night that if I totaled up the outgoings that will be gone compared to January this year (Ive been putting away what I would have spent then in a separate account and it is building fast) comes to about €40K per year. Thats after tax money. Its equal to an 60k per year job.
And I never even thought of the tax allowances that MichaelM posted.

When eventually we both retire we should have after tax income of over 50K per year (15k from my pension fund, 10k investment property, 35k wifes pension) even before i am old enough to get the state pension. Approx 200K in lump sums will be sitting in the bank at that point too. We live very comfortably on far less than that even now. If I do retire this year then we will have after tax income of close to €60k until my wife retires. We will drop nearly €10k per year when she retires and I start to draw down pension, but we will have nice lump sums at that stage too.

I know im trying to get the downsides and upsides here as its a huge decision and thank you all for your input. It helps me immensely. Its good to churn this idea inside out. Decision time is fast approaching :) and ive had so much good advice reading AAM over the years.

BTW how do you thank posts. I cant find a thanks button :) I would like to thank everyone.
 
SPC100 said:
Biggest negative in my opinion is if you continue to work you could build up more capital which you can then use to insulate yourselves against any future surprises. E.g. state goes bust, pensions halved, hyper inflation, serious injury or disability or pyrite in apartment etc
Click to expand...

I was worried about what if those things happened things too. Most of those and death would kill any plan even if I was working for another 10 years and they happened then. If they happened in 10 years I would still be wiped out, but I would be worse off at that point by about 30,000 hours in a job rather than at home with the family.
 
OMG_OMG said:
I was worried about what if those things happened things too. Most of those and death would kill any plan even if I was working for another 10 years and they happened then. If they happened in 10 years I would still be wiped out, but I would be worse off at that point by about 30,000 hours in a job rather than at home with the family.
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You wife will have a lump sum of around €100k, right? That will give you a significant addition to your nest egg.
What sort of life insurance do you guys have? If you retire then having a good policy in place on your wife, as the sole earner, is important. She probably has death in service benefit as she's a State employee but if you don't have the savings to protect yourself then make sure you have the insurance.

BTW, if I was you I'd go for it.
 
Purple said:
You wife will have a lump sum of around €100k, right? That will give you a significant addition to your nest egg.
What sort of life insurance do you guys have? If you retire then having a good policy in place on your wife, as the sole earner, is important. She probably has death in service benefit as she's a State employee but if you don't have the savings to protect yourself then make sure you have the insurance.

BTW, if I was you I'd go for it.
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Hi Purple.
Thanks for the post.
I just looked into insurance now when I read your post.
She has death in service. And also salary protection insurance that she has been paying for for the last 25 years out of her salary.
The insurance on the apartment has €7000 built up in it that i will get when i cancel it. Never even thought of that. That will boost back up the funds if i use to pay off that mortgage. I just checked and tht mortgage has exactly €49851 left on it as of today.
We took out a 21 year policy when the sprog was born that pays out €1M if either of us dies before they are 21. The insurance ends at that point. It is about €200 PM (Another thing that will be gone in about 12 years). No illness insurance.
I have no insurance through work to speak of.
Other than that we just have normal house insurance and health insurance.

I guess i can take a year or so after i get redundancy to test it out for size. After that I am probably committed and will never get back into my current line of work. I wouldnt get back in at the same salary anyway. I really dont want to go back to that career. Its toxic and getting dangerous now. Has been slowly worsening for years and ive managed to stay away from the toxic people, but its flooded with them now and you cant avoid them anymore. And starting any new career I wouldnt have the patience for. Ive spent too long working and commuting over the years. Had enough. If I retire 10 years early i get 30,000 hours of time back for myself during those 10 years. That makes it sound good.
 
OMG_OMG said:
After that I am probably committed and will never get back into my current line of work. I wouldnt get back in at the same salary anyway. I really dont want to go back to that career. Its toxic and getting dangerous now. Has been slowly worsening for years and ive managed to stay away from the toxic people, but its flooded with them now and you cant avoid them anymore. And starting any new career I wouldnt have the patience for. Ive spent too long working and commuting over the years. Had enough.
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You haven't mentioned the area you are in but have you got skills that could be used in other areas?
You can get a job working 20 hours a week in Lidl or Dunnes while the kids are at school. It doesn't have to be in the same area your current career. Basically don't make the decisions that "right, I'm retired now". Take a year or two out and see how things go. You will get a job if you want one. The only question is what job.

There are very few real Rubicons that we cross in life.
 
Thanks Purple.
The reason I dont want to mention my current work is that its becoming full of criminals now and its getting harder to avoid them in the job.
Part of me getting redundancy im sure is my failure to engage with the bad element. Im not good for business. But eventually that will lead to them putting their focus on me, so im happy to get out now. They do not like people who are my age and havent been to jail. There is one other company left that arent involved with the mob that i might be able to go to, but once im out for a year I wont get in there as my contact in there would be gone and having worked for the other guys I would not be wanted.

Regarding working in shops etc. I could do that if I wanted or if I needed the money.
Im hoping i dont actually need the money though, so wont have to. And pretty sure that we would end up paying the high tax rate on any money I earned part time. A job at €13 per hour or whatever that would be after tax, its not really worth it for me.
 
From what you say, it is good for you that you are getting out of your current situation and leaving with a redundancy package is better still, also clear that getting another similar position is not for you. It seems to me you don't have to make a decision about retirement right now, you can just see how it goes, after a while some form of part-time work might suit you for various reasons and then you can look for something suitable, something completely different to what you are leaving behind now.
 
planck said:
From what you say, it is good for you that you are getting out of your current situation and leaving with a redundancy package is better still, also clear that getting another similar position is not for you. It seems to me you don't have to make a decision about retirement right now, you can just see how it goes, after a while some form of part-time work might suit you for various reasons and then you can look for something suitable, something completely different to what you are leaving behind now.
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TBH the more you guys help me discuss it the clearer it is for me. Im heavily leaning towards doing it.
And youve helped me realize that it doesnt have to be permanent if it doesnt work out.
 
Others have often felt like you do about work at the moment. A break from working and a more reasonable / ethical employer and industry might change your mind in the future.
 
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