I made my early retirement dream a reality at 52- Times Money Mentor

More and more people are retiring early or quitting their jobs in their 50s.

After the COVID-19 pandemic, the number of early retirees surged, leaving more people due to long-term ill health and caregiving responsibilities, but lengthening NHS waiting lists are no longer a problem. It got worse.

But not everyone leaves their job for reasons beyond their control. The Bank of England said Many people in their 50s and early 60s are retiring to “live the life they want.”

So what does it take to retire early and how should you manage your retirement money?

read more: How To Retire Early: The Fire Exercise

Gary Tuttle, 58, from East Anglia, retired at the age of 52 after working as a factory worker and manager for more than 40 years.

“I’m one of eight children, and like many families in the 1970s, my parents were in a difficult financial situation,” says Gary.

“My father worked as a cleaner on the city council most of his life, and my mother stayed at home and took care of the family.

Gary’s parents owned a three-bedroom townhouse and lived solely on his father’s income.

“This education gave me a good understanding of finances, budgeting and money from an early age,” he says.

By the age of 13, Gary had taken on several odd jobs to earn money. He spent his summers picking strawberries, delivering newspapers, and working at a local fair.

At the age of 18, he got a job at a factory that packed frozen vegetables for a frozen food manufacturer, and started saving his pension.

“At this age, I still wanted to retire early, no later than 55,” says Gary.

“I had the opportunity to start investing in pensions. Initially I was in a stakeholder plan and after a few years transitioned to a final salary (defined benefit) plan when I became shift manager.

“For the next 11 years, I continued to contribute about 7% of my salary to the final pay scale. I also made an additional voluntary contribution to another workplace plan. % is paid as an annuity.”

read more: ‘I’m a fire saver and plan to retire at 38 feet

“I ran out of mortgage in 2016.”

Gary was laid off in 1998 and transferred to another plant for a chilled food manufacturer. There he earned an equal wage as a manager and paid the same amount as a pension.

“At this point, I was meeting my partner, taking out a mortgage, and buying a house. I got my mortgage forgiven,” he says.

In 2011, Gary’s employer eliminated the final pay system and introduced a defined contribution system. This is where both you and your employer pay. The amount you receive when you retire depends on how much is in the pot. The same is true for investment performance.

“My employer donated 9% and I donated 6%. So, thanks to the tax relief, I only contributed 4% and 15% of my salary would be paid as a pension. I did.”

By 2017, Gary was paying 58% of his gross salary into both a corporate pension and a separate private pension.

“I also have a stocks and shares ISA and held around £85,000 in 2017,” he says.

“I have always been a basic taxpayer. But by the end of my career, I was technically a high taxpayer. As a result, I was only receiving around £23,000, which reduced my net salary and tax liability.”

“I would like to have £230,000 in my private pension by the time I am 65.”

In March 2018, Gary took the plunge and retired at age 52, with a defined contribution of £386,000 plus £85,000 in ISA savings. Initially, he withdrew money from the ISA to fund his retirement until he was able to receive a private pension at the age of 55.

“The plan was that this would continue until age 65, after which I would earn £18,000 a year through my defined benefit plan, and another £10,000 when I started my National Pension at age 67,” he said. he says

Gary has now been retired for five years and draws £18,480 a year out of his pension.

“Most of these withdrawals are tax-free as 25% of personal benefits and pension withdrawals are tax-free. On top of that we add £5,000 a year from the ISA, which is also tax-free.”

Gary’s wife, who worked part-time at a supermarket, also retired. In total they share her income of £33,000 and pay very little tax.

“With that income, I have managed to incorporate eight vacations abroad from the end of 2021. And I love to visit Gran Canaria at least twice a year.”

read more: The best ready-made personal annuities

Gary has four grown children aged 26 to 39, four grandchildren and is expecting a granddaughter in November.

“We spend a lot of time helping out where we can. We love watching them grow,” he explains.

“I hope to have a private pension of around £230,000 by the time I am 65, when I can take my final salary pension.

He plans to end his involvement in a private pension and pass it along with his family to his children as part of an inheritance. “

Gary says his thrift and hard work throughout his career has enabled him to live the retirement life he’s always dreamed of.

“I want as many people as possible to dream of a day when they can achieve their goals of financial independence without worrying about their day-to-day work.

“You don’t have to make a lot of money. But early retirement requires planning and always spending within your means.”

read more: What is pension withdrawal and how does it work?

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