#FinancialPlanning #RetirementGoals #LifeExpectancy #SavingsStrategies
Hey there, financial wizards of UKPF! 👋 Here’s a thought-provoking scenario for you – If you knew your chances of reaching 60 were slim, would you change up your financial plans?
Imagine being in the shoes of someone facing a 16% chance of hitting that milestone. Do you stick to your original retirement timeline or hustle to bring it forward? 💭
Here are some key points to consider and maybe kickstart the discussion:
– Doubling efforts to increase income for an earlier retirement
– Balancing government and employer contributions against potential early access to savings
– Evaluating the impact on future plans like having kids and enjoying retirement
Personally, I believe that exploring ways to increase income is a smart move. Maybe redirecting current contributions towards a more accessible savings pot could be a strategy worth considering?
What’s your take on this delicate balance between planning for the worst and hoping for the best when it comes to financial security and retirement goals? Share your insights and let’s brainstorm together! 🤔💡
Sorry for your news.
I think what I’d do in these circumstances is perhaps try to focus more on carving out more time on the journey rather than trying to retire early.What I mean by that is perhaps saving up for some extended periods off to do what you want to do (travel, pursue hobbies, watch the kids grow up?).
That could be inbetween jobs, or perhaps unpaid leaves of absence, or going part time.Depending on the employer they might even be sympathetic to your situation and help you in that regard.
Above said, if you’re currently underpaid then switching jobs remains the right call.
Whatever you decide to do, make an actual financial plan. Work out how much you need to save to achieve your goals. Best way to make it actually happen.
Just one note of caution on the life insurance – if you now have a diagnosed condition then I’d imagine you need to inform them (if you haven’t already) for it to be valid.
Sorry to hear of your diagnosis.
I would agree that my plans would be totally changed to make the most of the time I’m healthy still, saving for post 60 doesn’t seem like a priority in your case if it were me. Would be like u suggest saving hard atm and getting the best job u can will immediately help with a view to may be to look to reduce ur hours and live of some of ur savings u can build up or give up work entirely if possible even before 55 the current min ret age for private pensions .
R.e. Your Lisa if u already have a property not sure that will benefit you vs withdrawing taking a hit and using say and s&s isa instead. Depending on your living expenses I would look to tackle the mortgage ASAP via overpayment if you don’t have life cover in place should the worst happen.
Also not to be morbid but would be a good time to check on your affairs ala a will etc or even depending on the condition ur have looking into if a lasting power of attorney is appropriate now if ur condition may mean u potentially lose that ability later on chasing all sorts of issues for your spouse.
Also worth reviewing any illness related insurance you may have which may payout depending on your diagnosed condition r.e. Critical illness cover etc is also worth doing given ur diagnosis.
The LISA withdrawal penalty is a flat 25% before 60, the penalty doesn’t decrease as you approach 60. If you need the money before 60 then it’s unsuitable for you and you should look for another approach. It does sound like you will want to access it before 60 because retiring at 60 when you know you only have a handful of years left sounds miserable.
Honestly, I’d find some way to work two days a week. Or I’d sell the house and buy a van and travel Europe for years or move somewhere where the cost of living is dirt cheap and live the retirement life NOW
I’d have the opposite thoughts on retirement tbh. My focus would be more on enjoying the time now. Also, more context is required. Is there going to be a mild regression in quality of life of is it likely to hit hard later on?
Sounds like your wife is pretty covered (low ish remaining mortgage considering your ages, decent pension). The small chance you make it to 60+ then at least the mortgage is paid off and the pension is sorted. My main concern would be if you require expensive health and social care over pension/retirement. Is the house set up for you potentially living there disabled for a few years?
It’s a tough one. If anything I’d stick with the pension and use savings to enjoy life.
You talk of kids on the horizon. I always see my pension as an outside of inheritable estate lump sum that goes to my wife and/or kids. U like life insurance, it’s not really got any get out clauses. If I live long enough to use it; then it serves that purpose too.
Also depending on illness and later a defined prognosis. Some pensions can be cashed out early, if a terminal diagnosis is given. I believe if 12months or less. (Needs checked).
One thing I’ll say. You’re 32 and have a reduced chance of seeing 60. It’s still a greater than 0 chance and it’s almost the same lifetime away from what you’ve experienced today. If you rule out 4 years of learning to walk, talk, use a toilet and eat your own food. You have double the time you’ve had here already.
Just live your life. Don’t double down too much on work, that’s a detriment to everyone’s health.
When I was in my early thirties I got diagnosed with Type 1 diabetes after an autoimmune response to a very ordinary infection. I looked at the actuarial stats and knew (wrongly) that I wasn’t likely to ever get to retire and that my most likely death age would be 47.
So I stopped paying into any pension- I had very little anyway due to many job hops.
My attitude to career and life changed dramatically for the better as I started enjoying everything and seeking fun and fitness all the time.
Eventually I was 48, looked around and realised I’d had years of high (to me) earnings and that death wasn’t imminent and I had no pension.
I’ve been trying to repair that with much less income ever since.
So I’d keep on with the long term stuff whilst living your life for today.
You can access the nest pension and your SIPP aged 58. you can’t withdraw from it now. You may be able to access the pensions early due to ill health https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/changes-in-circumstances/suffering-from-ill-health-or-im-incapable-to-work.html#:~:text=You%20may%20also%20be%20able,pot%20as%20tax%2Dfree%20cash.
Personally now I’d try to get a new job and negotiate working 4 days a week (pro rata salary – but hopefully the pay rise would balance that out). Try to spend as much time with your family as you can.