Retiring early was great. Then we got bored and missed the office

Goodwin, who lives in Yorkshire, joined the army soon after, which allowed him to travel the world, and left at 30 as a captain. “I sort of fell into recruitment and built up my business from there. I had planned to retire at 40 but the recession delayed that, but I was pleased to manage it by 50,” he said.

When he retired Goodwin took on various property projects, developing houses and a farm, and helped set up a couple of not-for-profit businesses to keep him busy, including a classic car rallying venture called Rally the Globe.

“The travel itch that I scratched in the army never left and car rallying allowed me to keep travelling the world with my wife. When I retired, I thought life would be good without ever having to work again and that I could enjoy the money I had made,” Goodwin said.

“But there is a limit to how many holidays and fancy meals you can enjoy without a challenge to occupy you.”

This year Goodwin, 59, made a big decision: he chose to go back to the workplace. He and his son Michael, 29, have set up Jigsaw Equity, a company that invests in recruitment.

“I think retirement is a bit of a myth,” Goodwin said. “I am mentally sharp and can’t just put my feet up. Age is just a number, it’s about your mental and physical ability.

“If you are the type that wants to build and grow businesses, I have come to realise that doesn’t change as you get older.”

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The great unretirement

Goodwin is not alone in finding the early retirement dream not all it was cracked up to be. A survey of 3,000 over-50s by the insurance group Legal & General found that 11 per cent had gone back to work after retiring. Many had a desire to stay mentally active after finding themselves bored at home. Others had faced a very real risk of running out of money.

Lorna Shah from Legal & General said: “Rising living costs are driving people back to work to top up their income as the pressure is on to make their money go further. However, we found that people are not returning to full-time roles, so they are likely to be topping up the money they make from work with some form of income from their pension pot.”

The Pensions and Lifetime Savings Association says that a single person would need £31,300 a year after tax to provide a “moderate” standard of living in retirement and a couple £43,100. This includes £1,400 for a two-week holiday abroad each year in a three-star hotel and a long weekend in a B&B in the UK. It would also cover a small car replaced every seven years and about £55 a week on groceries. Crucially, it does not include housing costs so anyone hoping to enjoy a moderate retirement on this budget will need to have cleared their mortgage and not be paying any rent.

To fund a “comfortable” retirement a single person would need £43,100 a year after tax — this includes about £2,000 for a fortnight in a four-star hotel abroad once a year and three long weekend breaks in the UK. A couple would need £59,000. This allows £70 for a weekly food shop and dining out once a week.

The full new state pension — which is worth £11,502 a year for those with 35 years of national insurance contributions or equivalent credits — covers a big chunk of the cost of a moderate or comfortable retirement. But you cannot claim it until you are 66 (this is going up to 67 in 2028 and 68 by 2046).

You cannot usually withdraw from a private pension until you are 55, so to fund a very early retirement you would need savings and investments outside a pension, or income from other sources, such as renting out a room or property.

‘I stopped work at 42’

Susie Masterson was a sales director in the technology industry for 20 years and before she quit in 2016, she and her husband spent a year scrutinising spreadsheets of their finances.

“I was 42 and we wanted to make sure we could afford for me to quit permanently,” Masterson, 49, said. They spent months analysing her husband’s projected earnings, all their outgoings and decided what they could go without — such as cutting back on travel to prioritise the mortgage.

“I recognise this was a fortunate position to be in,” she said. “Although successful at my job, I was working 60-hour weeks and it massively affected my wellbeing. I also wanted to spend my time with my son, who was one at the time. I look back now and can’t believe the lengths I was going to — I’d be in bed in the middle of the night, feeding my baby while on a conference call with work on the other side of the world.”

In 2003 the average age for a man to leave the labour market was 63.8 years old — last year it was 65.3 years. Women retired at 61.4 in 2003, now it is 64. The government has made a concerted effort to get the over-50s back into the workforce after many quit during the pandemic. The push has included skills workshops and one-to-one support at job centres — but for many, leaving the workforce has not been voluntary. Ill health, age discrimination and a lack of part-time roles make returning to work difficult.

“I wasn’t expecting to miss so many things about the working environment, but I did,” Masterson said.

“I also missed the challenge. Not chasing the highs and lows of managing multimillion-dollar deals, but the resilience that builds up when you are asked to make a difficult customer call, or handle a staff dispute.”

Five years after retirement, Masterson retrained as a psychotherapist, setting up her own practice, Ultraliving, that she runs part-time, so she can work around school hours.

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How to fund your retirement dream

Sarah Coles from the wealth manager Hargreaves Lansdown said: “One of the most effective ways to ensure that you don’t run out of money in retirement is to save enough that you can just take the natural income generated by your investments. That way you leave the capital alone, and can be sure it will last as long as you do.

“Many people will work on the basis that on average they should be able to take income of around 4 per cent a year from an investment pot.”

If you wanted your 4 per cent withdrawal to meet the post-tax target £43,100 needed for a comfortable retirement, you would need a pension pot of £1,402,500, assuming that you retired before state pension age, according to figures from Hargreaves Lansdown.

If you had a state pension, you would need a pot of £984,950 to be able to withdraw the £39,398 (4 per cent) which, added to the £11,502 state pension, would give you the £50,900 that is equal to £43,100 after tax.

Anyone thinking of leaving the workforce will also need to factor in any planned expenses.

“When you retire in your mid-60s, these may be limited to a round or two of home improvements, new cars and possibly special holidays. If you are planning a 40-year retirement, you will need to cover two or three times as many rounds of each,” said Coles.

Carla Morris from the wealth manager Brewin Dolphin said that tax and legislative changes could send the best of plans awry. “If you planned to be paying a 20 per cent basic tax rate and fiscal drag pushes you into the 40 per cent bracket, that’s a big chunk out of your income.

“We often ask people who plan to retire with limited savings whether they are doing this simply because they don’t like their job.”

‘I quit at 50 — and I’ve loved it’

Suzanne Smith had an epiphany when she turned 50 — she wanted to leave her career as a lawyer for good. A year later she retired from the workforce and never looked back. “The corporate world was like a hamster wheel. But once I retired I had so much brain capacity and time to learn new things, it was so freeing.”

She did a French degree at King’s College London and discovered a new passion — buy-to-let property. “I bought a few for the income, which I rely on as my pension now as I have a long way to go until I get the state pension.

“Because I was retired I didn’t want to pay a lettings agent to manage the properties for me, but there was little information around on how to do it yourself. So I started a blog to help landlords, and that has really taken off,” said Smith, 56.

Property investors can read her website, The Independent Landlord, for free and her weekly newsletter has 5,000 subscribers. She also has a podcast and has a whole new range of skills, including plumbing, tiling, photography, web design and coding.

“The website is not money making, I just love helping other landlords and the sense of community it comes with. I would never have had the time for all of this if I wasn’t retired. I am re-tiling a tenant’s kitchen by myself next month.”