FIRE ... or not?

[whatdoidonext]

Lurked on the site for some time. Through a combination of advice on here and decent earning power I'm now teetering on whether I'm FIRE ... or not! Not sure whether my barriers to freedom are financial, mental, or a bit of both.

I'm 45 and want to retire as soon as possible. Wife the same age.

Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.

Savings
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.

Pension
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a final salary pension of around £25k at 55.

Outgoings
I'd say modest, but we live in South East which can be expensive.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in travel abroad (we've a dog and want to maximise our time out with him).
All my other enjoyments are relatively inexpensive - fresh air, hiking, photography, countryside walks with the dog.

So ... where can I improve my situation so I can quit as soon as possible? Am I almost there financial, but just struggling mentally stepping from a great salary to drawing down on savings and investments?

Others who have made the jump .... how did you switch your thinking?!?!?

[MarcherLady]

Hi @whatdoidonext

I think there are a few questions to ask yourself.

Your combined pensions in 10 years will be ~£73k before tax. Do you predict you will be able to live on that income? Including keeping your car(s) on the road and replacing them when needed, holidays, inflation.

If yes, then can you live on your savings between now and then without them running out? Including supporting your son, and paying the mortgage. If you run your savings down to 0 (ignoring the inheritance for the time being) would you be OK having little to leave to your son?

If yes to all of the above, then it seems you are mathematically ready to retire. Whether you are mentally ready - well, only you can answer that really.

For me the decision became easy when I imagined running out of money and having to live really super-frugally and it was still better & a more interesting challenge than the thought of working for another 15 years. 

There are loads of us in the UK on the Journals section, why not start a journal? There is a strong tradition of us talking each other through decision-making over there. I am guilty of quite a lot of waffling when it was my turn!

[bownyboy]

Wow! Finally Salary pensions of £73k at 55, so jealous!

I would stop RIGHT NOW with that guaranteed index linked pension coming in as you have £550k to last you 10 years.

But like MarcherLady says, what is your yearly typical expenditure?

[MisterA]

For me the decision became easy when I imagined running out of money and having to live really super-frugally and it was still better & a more interesting challenge than the thought of working for another 15 years. 

Yes, precisely.

My date is later this year. But, my portfolio is suffering right now, so I'm monitoring the situation. But as you say, weighing up working longer or living more frugally, living more frugally wins for me.

[MarcherLady]

...weighing up working longer or living more frugally, living more frugally wins for me.

The challenge comes when you have a partner to take into account who has a different point of view. If I had phrased the decision to my husband as being between those two options he would choose 'working longer' every time. Since he had already taken a redundancy package and stopped work it became quite fraught when I was trying to time my exit. It felt like he wanted me to keep working to support his lifestyle that I found unnecessarily spendy. From his perspective he felt like if I retired I was 'forcing' him to go back to work. When the pandemic started I compromised and worked for 6 months longer than I had planned, but then quit. He did not go back to work. So far we're just fine.   

[billy2shots]

Hi @whatdoidonext
.

 would you be OK having little to leave to your son?

I don't want to speak for the OP but I'm sure said son would be very happy with a £1m house and not see that as 'little'.
Guess it depends on what we all define as little but I'm sure 99% of us would see that as significant.

 On the subject of inheritance. To safeguard things you might want to open a sipp whilst still earning. Stash your your extra earnings above spending in their taking into account the limits. Once you stop earn your contribution limits are vastly reduced.
That could then ringfence inheritance for your son outside of your 'estate' as with a £1m home there could be plenty of IHT to pay. If you pop it before 75, your lad gets the sipp tax free.

[MarcherLady]

Hi @whatdoidonext
.

 would you be OK having little to leave to your son?

I don't want to speak for the OP but I'm sure said son would be very happy with a £1m house and not see that as 'little'.
Guess it depends on what we all define as little but I'm sure 99% of us would see that as significant.

Oh, hell yes, so would I! I used some imprecise language there, I was mentally counting the house as an asset that might have to be spent as part of my imaginary bad-outcome scenario, but then used the term 'savings' instead of 'assets'.

[Playing with Fire UK]

Have you tracked last year's spending? If your idea of inexpensive living is the same as mine then you are good to go right now. But spend level and risk tolerance is so personal!