Retiring early – How did you do it ?

This brings in another point in 1996 Labour??? Decided to give " free" 3rd level education, resulting in our universities dropping off a global scale that we had gained over a 100 yrs . I'm a RTC man , or IT now. We again just made a mess, and my wife has a PhD "in old" money. And she worked part time.
It's the parents who stump up now and really makes pension contributions increases very difficult until we are in our 50s....and then it's a balancing act .........sorry I'm ranting
 
Our estimated "extra" 3rd level cost (although some related to turning 18) for 1 at home 36 week term - assumed more or less self sufficient rest of period ( summer job I hope etc.)cost
registation
3000​
lunches
1440​
bus
720​
health insurance
830​
leisure
1080​
lost child benefit
1680​
home carer tax credit lost
1600​
10350​
 
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Her longevity is both sides, her Dad died young 68 but he smoked and gave them up at 60 "Senior Service " giving up killed him. She did smoke until 48 and gave up successfully , her mother has one cigarette a day at 90 .....moderation is key.
 
But if they pay for leisure, and we pay for health insurance, home carers allowance, not applicable, and I/we make lunches and breakfasts and dinners. Don't know why you added in " loss of child benefit " its moot.

5k without part time seems in the ball park, and 4k if they do.

Bus €720 nah.....€10 a week on leapcard as a student
 
Pretty sure the student leap card cap is €20 per week and the average trip into town is 2.50 each way (so also €20, excl nights out etc) - don't think you get much public transport these days for a tenner a week!
 
DeepThinker started a good thread on preparation for (early) retirement. He's getting some excellent relevant financial advice here. There's far more to retirement than the money. Generally, we have control over the money as we've had years to prepare. Some invested better than others, but so what? You can do only what you can do and you have to retire sometime. You can't do Genie and blink your eyes and have a pot of gold produced in front of you.

Looking at RTE television last night I note that two celebrities (an architect and a horticulturist) both not short of the few bob. But, each built a "den" down their gardens. The dens were to be used as a work area and a retreat. Both had corrugated roofs and were basic (both with a bath, electricity, some furnishings and a bit of a view). Anybody who would hop into retirement expecting everything to be the same as during the working life could find himself (usually a he) consigned to the shed down the garden.

You must prepare and allow the other people in your life to do what they have always being doing. Don't worry, You'll get your slots too. Avoiding confrontation is a major part of retiring. You'll be spending much more time with those nearest and dearest to you. Ensure you use that time fruitfully and joyously.

You're not a babysitter-on-demand. You are nobody's instant solution to anything. Get into some kind of routine. Walk, talk and make friends. You have lots of time available to you for the first time since you were a toddler. Use it wisely.
 
And if you're into it, find some type of hobby or interest now that you are interested in, that you can either qualify in, or get a lot of experience with. The Adult education departments of secondary schools are always looking for teachers of 10 week courses.
 
I (have a) plan to be in a position to retire at 60 if I so wish. I won't have a problem with the non-financial side of things. My projected retirement budget sees more spending than my work pension will provide so I have to ensure that other funds are such that they can bridge the gap between early retirement and hitting state pension age. I know rules around state pension can change but one has to make some reasonable assumptions in order to plan.
 
It seems like an unrealistic goal for most to be able to quit work and retire at 60. I expect to have to supplement our income, if I can afford to go early. This will be through part time work or some form of consultancy. Interested in hearing from people in the financial planning business as to how people’s ARFs or Annuities are performing and what level of fund they have needed to have saved to achieve an exit from work at 60.
 
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Well, you can take 25% of pension pot (DC) tax free up to max of €200K. You must put €63500 aside (for some reason) and then take min of 4% of the balance as pension pa. You can of course take more. By my reckoning, you should therefore have min of €863500 in fund. Hopefully the fund will increase or at least hold value per annum giving you the 4%. However, if you are in your late 80's and in a nursing home, then your pension doesn't matter to you as you are just waiting for God to call you to a better place. Life is to be lived. No point in leaving all your assets to the next generation for them to enjoy, when you can also enjoy the fruits of your labours.
 
I presume a strategy would be to max out your tax free lump sum to €200k and use that as a buffer to get you from 60 to 68 when you will (hopefully) qualify for the State pension. That’s €25k per annum. Not a huge amount over that time period but not to be sniffed at as an annual income which is by its nature entirely tax free.
 

Thats the basis of my approach, however I also have a number of personal pension funds. When I retired (at 60) I took a cash lump sum of 500k (the tax free 200k and an additional 300k at 20%). I also had cash on hand. I drew down one of my personal pensions, such that it pays me approx 33k pa (the 20% limit). So I use the pension I am drawing down, plus whatever cash is needed from my cash pile to provide my income from now until 67. At that point I will have the state pension, and whatever cash remains available plus the pensions that I haven't yet drawn down. It is likely that I will have assets including pension assets when I die, however this is fine as it will have a good home.
 
  • How did you do it?
  • Looking back, what advice would you give a couple in their early 50s who want to retire age 60?
  • What would you do and equally what would you NOT do?
  • What are the pitfalls to avoid?

Hey DT

I retired at 60. I had an outline plan for a long time and started some detailed planning at about your current age, so your question is timely. Here is my shot at answering your questions in no particular order :

Knowing yourself/selves is critical. People have very very different priorities. A few examples of this as it applies to me. I had a very comfortable standard of living when I was working. I knew I wouldn't be poor in my old age, but I also knew that some of the working life luxuries wouldn't continue (top marque car, fine dining, etc). And I was fine with that. I came from nothing (my parents would dispute this) and regarded all that fancy stuff as transitory, to be enjoyed when I had it and not to be missed when it was gone. So I did an analysis of my annual expenditure (at age 52) and identified the stuff I was prepared to do without, leaving me with a clear idea of the income I needed for the decent standard of living I now have. That gave me the target income/cash pile I required and I built my plans around that. I had 8 years to figure all this out, and kept my finger on the pulse throughout (without it becoming an obsession). It also meant that I didn't suddenly wake up shortly after "R-day" with a chip on my shoulder because I was short of funds.

Another suggestion is to decide on your "house/accommodation" plan from now till death. That may sound drastic, but what are your expectations ? My parents left it too late to move out, and spent their later years rattling around a huge poorly insulated and somewhat isolated house. I looked at the downsizing/moving options and decided to stay in my existing house until the time goes to move to a nursing home. In making that decision I scored all the practicalities for each decade (60s, 70s, 80s). Comfort/warmth ? Garden maintenance ? Transport/Isolation? Shops/Social ? Having made the decision to stay put, I did an amount of work to "future-proof" the house - insulation, accessibility/mobility, south facing sun/reading room etc.

One other suggestion is to use any spare cash that crops up along the way to get rid of your mortgage/dump into your pension. Consider this any time you get a pay increase, bonus, tax cut/refund, windfall, legacy etc. Be brutal and do it immediately, if possible before the money is in your current account. It never ceases to amaze me that the whole country went nuts over the SSIA scheme, when pensions are an even better bonanza, just longer term. Also, this approach also helps you to start the process of cutting your cloth..........

There is lots more on the financial planning side, but you get my drift. Put a bit of time and effort into it now and a lot will fall into place over the next 8 years.

As has been pointed out by a number of posters, the non-financial side is also important (but not something to be afraid of). I had no fear on this front. I was never ever bored for as much as 1 minute at any stage in my life. I have never had a difficulty keeping my mind occupied. I had a very fulfilling and successful career, great colleagues, etc etc. But I had had quite enough of all that and I relished the day I left, said good bye to all of it and haven't looked back (Cut pretty much all the ties tbh). And the answer to all the offers of Consultancy, Project Work, Part Time work, Non-Exec Opportunities, etc etc was two words, second one OFF. I had a long list of things I wanted to do but never had the time to try, and this together with various ongoing interests means I am still short of time most days. I guess I am also fortunate that I am fearless about trying new things, and can throw myself into anything. I also fairly quickly got used to enjoying some "down time": simple things, like going to a pub on a say a Tuesday at 12:30, IT under my arm, sipping a pint and having my lunch, and heading home at 3pm. I never ever considered such a thing when I was working. But it is very very pleasant to do it now and again. I mention all this not as a template - we are all so totally different that many would find my approach an anathema. But its back to my opening statement - Know yourself - and plan accordingly. As an example of this I took a week off work when I was 54 or 55, and planned nothing in advance for the week. Each night before going to bed I planned a few things for the next day, including staying in bed for an extra 30 mins each morning, and I loved it. Walks, drives, visits, explorations etc. The freedom to do whatever I wanted.

Your 60s should, in my estimation, be the best years of your life. Free from constraints and demands, hopefully healthy, mellowed by experience and age, nobody pointing targets and expectations at you. You absolutely deserve a great decade, but you will only realise this if you prepare for it.

Sorry this is a bit rambling, but at my age I no longer feel the need to diligently arrange things in a logical and orderly fashion !!

Good luck.
 
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Freelance - If ever you and I are in the south of Spain at the same time . . . . you're welcome on our terrace at around 1.15pm any day and I'll supply the wine. I bet the conversation would be entertaining.

Incidentally, I watched a television programme about a cardiac surgeon in Belfast who was approaching retirement. When asked if he would miss using his god-given skills he merely replied "No" and he hoped the biggest decision he would have to make was whether to use Marine Blue or lighter colour in his painting of landscapes.
 
Thanks. So 2 children 30 to 40k! Ouch
Over 3/4 years then theres the Masters and PhD.... and the real "ouch" no tax relief.
20% relief on 3rd level fees when 2 kids are going together in the same year. Not a whole lot and should be on each child.

I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.
 

Congrats @Freelance on your enviable financial position
And well done for planning so well!

1)In relation to the the taking of the drawdown ( from fund growing Gross of tax ) up to 33k wondering what you used to decide better to do this rather than using the cash pile ( growing minus tax)
Asking as will be in similar position on this point
2) re taking the 300k @ 20% was there any (internal ) argument with yourself whether to take or not ( I probably won't be impacted as not much over 800k but here is hoping !)
3) did you disregard state pension or assume you will get full ?
Thanks
 
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I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.
Each to their own. My own parents put me through college and I am forever grateful to them for it. I’ve given money to them for home improvements. It’s not bizarre.
 
I find this enabled helplessness and cosseting of adult children slightly bizarre; let them pay for it themselves with a combination of part-time income and a loan ergo early retirement might be more realisable.
Agreed. I'm of the opinion that school leavers should work for a year or two prior to going to university. Allow them to mature and also time to save.
 
When I retired (at 60) I took a cash lump sum of 500k (the tax free 200k and an additional 300k at 20%). I also had cash on hand. I drew down one of my personal pensions, such that it pays me approx 33k pa (the 20% limit).
Taking a lump sum of €500k would suggest that you retired a pension pot of at least €2m. If that's correct, would imputed distributions not effectively force you to draw down more than €33k pa?