Semi Retirement

[DannyG]

I am 52 years old, Ive been in the same job (manufacturing) for over 20 years, real estate has been good to me the last few years, Im in a rut in life and considering pulling the pin on it all and semi retiring.

I think I may be in a position where I can take the risk of leaving 'work' as I know it and do something for myself to earn a bit of an income.

Has anyone else done this? Especially at my age?
Looking for thoughts on the subject.

My passion has always been fabrication of all sort of things. Every time I build something or fix something I always get people wanting them or suggesting "you should do this for a living" etc etc. Im some of you have heard it all before.

Up until now Ive always liked the idea but Ive never been in a position financially to be able to take the risk.

I have a fair amount of workshop equipment but I am seriously considering adding a decent sized metal folder and guillotine to my gear and perhaps dabble in making the odd 4WD canopy, perhaps a trailer or two every now and then and even some other larger camper style projects.....all of which ive done in the past so none of it is foreign to me.

I dont think for a second Id be making a consistent and high income that comes with a regular job but I do think I could make enough selling the odd project.

What are your thoughts? Risky? Poor decision? Great idea? What should I be considering here?

[HEM19X]

Mate, as the Nike ad says "JUST DO IT!!"

I was lucky enough to stop working at 51 [11 years ago], admittedly we have a business [wife's] that supports us but it has allowed us to travel a lot more while our health is still good... Can't imagine climbing some of the mountains we have even now!

The fact that you have a trade/skill that is salable means that you can work the hours you want and keep you out of the partner's hair.

Your accountant will be your best friend during this time as they will be able to advise you regarding ATO requirements etc BUT don't let them decide for you, do it yourself..


Good luck with everything "Live Long and Prosper"


Hem

[Rowlie]

I think your position is more common than you might think particularly at your time of life. I retired 5 years ago in my early 60s after 45 years in the same industry. When I retired I looked back and my only regret was not having a go at something else. Your post suggests to me you have already made your decision and now just looking for validation. I don't think you have a choice - you will always wonder wotif if you don't do it now.

Are you thinking of flying under the radar ie no ABN no GST reg. no insurance etc? If that is your plan then understand the risks before you do it but if you plan on doing it all legit then do a business plan before you jump. You'll need to determine how much you need to live comfortably without risking the savings you have already made then how much your on costs will be. Then work out a profit margin that will deliver you the outcome you need.

I hope it all falls in place for you mate and I envy you.

Rowlie

[paul.o]

Yep, don't undersell your skills. Make sure you put a good margin on your custom, bespoke, handcrafted products.

Also, is there any scope to start it out as a side hustle so you can get an idea of how it may all pan out?

Perhaps, take an extended break from work as a trial period?

All the best!

[DannyG]

Mate, as the Nike ad says "JUST DO IT!!"

I was lucky enough to stop working at 51 [11 years ago], admittedly we have a business [wife's] that supports us but it has allowed us to travel a lot more while our health is still good... Can't imagine climbing some of the mountains we have even now!

The fact that you have a trade/skill that is salable means that you can work the hours you want and keep you out of the partner's hair.

Your accountant will be your best friend during this time as they will be able to advise you regarding ATO requirements etc BUT don't let them decide for you, do it yourself..


Good luck with everything "Live Long and Prosper"


Hem

Thanks I love the thought of 'just do it'. I guess the old voices in the head say what if it doesn't work out. What if I can't make enough money to even feed myself. What if I have to go back to a regular job and start working for $25 an hour doing something I hate. What if I regret leaving a job that pays well.

I think your position is more common than you might think particularly at your time of life. I retired 5 years ago in my early 60s after 45 years in the same industry. When I retired I looked back and my only regret was not having a go at something else. Your post suggests to me you have already made your decision and now just looking for validation. I don't think you have a choice - you will always wonder wotif if you don't do it now.

Are you thinking of flying under the radar ie no ABN no GST reg. no insurance etc? If that is your plan then understand the risks before you do it but if you plan on doing it all legit then do a business plan before you jump. You'll need to determine how much you need to live comfortably without risking the savings you have already made then how much your on costs will be. Then work out a profit margin that will deliver you the outcome you need.

I hope it all falls in place for you mate and I envy you.

Rowlie

Hmm good question. I guess yes initially I just thought I would build a few things, sell them for a 'margin' dictated by market prices and see how that looks for a while. If it looks like its a regular gig and a genuine decent income is being made of course Id do it all properly.......but to start with I think Ive paid enough taxes in life to give it a crack for 6-12 months and test the waters. I mean given the initial set up costs involved if I did legitimise the first 12 months there wouldn't be a lot of money made anyway at best I dont think.

Yep, don't undersell your skills. Make sure you put a good margin on your custom, bespoke, handcrafted products.

Also, is there any scope to start it out as a side hustle so you can get an idea of how it may all pan out?

Perhaps, take an extended break from work as a trial period?

All the best!

The side hustle thing is something I considered but to do it properly I really need to take the plunge, sell something significant, build a dedicated workshop and invest in some larger tooling. So once I do all that im all in really.
I recently took an extended period off work but I used that time to build a unit, which is part way what has helped me into this position.

Thanks for the comments so far gents. There is a lot to consider but Ive spent enough years thinking (dreaming) of it......it may be time to stop being a dreamer and start being a doer.

[paceman]

Thanks for the comments so far gents. There is a lot to consider but Ive spent enough years thinking (dreaming) of it......it may be time to stop being a dreamer and start being a doer.

sometimes, when faced with this type of decision, i ask myself the question:

what is the worst case scenario?

if i can be happy/live with that, if it eventuates, then that tends to guide me, one way or another...

[Traveller]

I agree with the 'just do it' as well. If you think that finances won't be a big concern, what is holding you back?

I retired at 59, and like most, anguished if we had enough money to allow it. We were quite surprised as to how far the dollar has gone and certainly we don't regret pulling the pin for a second. Our thinking was to enjoy what time we had left, as you never know what is around the corner. What really drove me on at the time was the thought that if I am lucky I will still be travelling into my mid seventies/early eighties. At the time that was 15 - 20 years away. I then looked back at how long the last 15 - 20 years had seemed to take, and the answer was in a blink of an eye. I figured if the future went as quickly as the past then why work when you don't have to. So far, even including Covid, the time is going faster than when we worked, bl**dy scary really.

Follow your dream!

[Pottsy]

DannyG, everyone’s experience will be different, it seems to me you are close to making your decision and the change in your life, it’s just a matter of taking that last step. I had planned on retiring at 62, did it at 56, albeit the situation changed due to the wife’s health and the first 4 years were a bloody nightmare.Things have settled now somewhat, I turn 62 this year and we are making some changes financially by selling some investments which combined with our pension will allow us to do the travel (just in Oz) that we have always enjoyed, spend time with the grandkids, pursue our interests and hobbies.
Time passes too quickly, you never know what tomorrow brings but I have learnt you cannot worry about things beyond your control. When a challenge presents itself, you deal with it.
Make the most of your decision, whichever way you go and I wish you all the best with it.

[Jimbags]

If you have any trade quals, consider casual/part time tafe trainer. That can help supplement your income until the fab work takes off and also gives a backup when work is slow. Not sure about tas, but here in vic a casual teacher can earn $80/hr and it is cruisey work. Just need to complete a cert IV in TAE to be able to fully assess students.

[DannyG]

sometimes, when faced with this type of decision, i ask myself the question:

what is the worst case scenario?

if i can be happy/live with that, if it eventuates, then that tends to guide me, one way or another...

Its a great way to look at things and its something I apply to a lot in life. I guess when faced with the worst case scenario being I could end up living in my shed on unemployment benefits to feed myself......its not a bad prospect 

DannyG, everyone’s experience will be different, it seems to me you are close to making your decision and the change in your life, it’s just a matter of taking that last step. I had planned on retiring at 62, did it at 56, albeit the situation changed due to the wife’s health and the first 4 years were a bloody nightmare.Things have settled now somewhat, I turn 62 this year and we are making some changes financially by selling some investments which combined with our pension will allow us to do the travel (just in Oz) that we have always enjoyed, spend time with the grandkids, pursue our interests and hobbies.
Time passes too quickly, you never know what tomorrow brings but I have learnt you cannot worry about things beyond your control. When a challenge presents itself, you deal with it.
Make the most of your decision, whichever way you go and I wish you all the best with it.

Thanks and congrats to you.
I think realistically I am perhaps 12 months away yet before I can make it happen but that will fly by if I make the decision and start putting everything in place to get to that point.
I would be happy to be able to do a bit of travelling around Oz in retirement and have a few hobbies to keep me active when I am not travelling.

I agree with the 'just do it' as well. If you think that finances won't be a big concern, what is holding you back?

I retired at 59, and like most, anguished if we had enough money to allow it. We were quite surprised as to how far the dollar has gone and certainly we don't regret pulling the pin for a second. Our thinking was to enjoy what time we had left, as you never know what is around the corner. What really drove me on at the time was the thought that if I am lucky I will still be travelling into my mid seventies/early eighties. At the time that was 15 - 20 years away. I then looked back at how long the last 15 - 20 years had seemed to take, and the answer was in a blink of an eye. I figured if the future went as quickly as the past then why work when you don't have to. So far, even including Covid, the time is going faster than when we worked, bl**dy scary really.

Follow your dream!

Thanks its something I hear all the time...."should have done it sooner". Its a big decision and to be honest its a worry, so many what ifs when it comes to money.

If you have any trade quals, consider casual/part time tafe trainer. That can help supplement your income until the fab work takes off and also gives a backup when work is slow. Not sure about tas, but here in vic a casual teacher can earn $80/hr and it is cruisey work. Just need to complete a cert IV in TAE to be able to fully assess students.

People are crying out for employees at the moment so to get work even on a part time basis is quite easy, its getting the money that you think you deserve that is not the easy part...oh and imagine if they wanted you to actually work for the money 
Im not sure the TAFE avenue is for me but all these ideas are worth considering, Thanks.

[Mace]

Mate Ive made major career moves three times, including working for myself for10 years. The third bought us down south 10 years ago. Although its been bumpy at times I wouldnt have missed it for quids.

I like your idea of moving into it slowly.  Would your present employer entertain you working part time for a while?

As youve said, businesses are crying out for workers at the moment.  If things did taper of with your own I doubt you would have any problems finding something else to supplement the cash flow if needed.

Cheers Pal.   

[DannyG]

Mate Ive made major career moves three times, including working for myself for10 years. The third bought us down south 10 years ago. Although its been bumpy at times I wouldnt have missed it for quids.

I like your idea of moving into it slowly.  Would your present employer entertain you working part time for a while?

As youve said, businesses are crying out for workers at the moment.  If things did taper of with your own I doubt you would have any problems finding something else to supplement the cash flow if needed.

Cheers Pal.   

If my employer would entertain working part time that would be the perfect scenario for me but sadly the current person running the show won't entertain anything for anyone.
He is very much a person who makes his own decisions based on his own ideas and does not collaborate with anyone for anything......its actually quite entertaining watching his management style pan out 

The best thing to happen to me in the last few years was covid and its effect it has had on realestate in Tasmania.

I was really lucky about 6 years or so ago I decided to build a new house on the 'worst block' in the street but in a really good location in regards to potential real estate value. The block of land is steep and it was very difficult to build on so they couldn't sell it.....I bought it for a very cheap price at the time. Then I was even luckier to find a builder who built the house for the budget I outlined but It took a lot of work getting the property to the point where all this could happen but now we are reaping the rewards.

And as luck would have it, just prior to covid I decided to use the equity in that property to buy another block of land on the coast, in another good location in regards to potential realestate value and I built a small unit/dwelling on it....well its not quite finished yet but could easily be completed in a month or two if I so desired. At the time I thought the block was a little pricey but it was a nice block in a nice location and you need to pay the money to get nice thing sometimes.

Then covid hit!! We have gone through the over inflated realestate prices down here and now its settling back into the typical 7-10 year flatline but the result was that realestate values increased significantly. I still see some properties waaaaay over priced but they are not selling instantly like they were a few months ago. Interest rates rising will also bring that to grinding halt. But the new norm is a higher value.

I had a saying at work that if I win between 500k and a Million in loto I have a plan that would see me retire and just potter around in my shed to make some money on the side.........well covid was my lottery, so now I am considering putting my money where my mouth has been 

[Rowlie]

Early in this thread Hem19x suggested you speak with an accountant. That is really important even at this early stage. He/she can give you the reality check you are seeking and cover off the pitfalls before you find them.

At your age you are ideally placed to maximise your superannuation. I know a lot won't agree with locking your money up but in 10 - 15 years it will be your best friend. Someone got hold of me when I was 55 and gave me a shake. I am now enjoying a retirement I never considered possible.

Buying more gear/tools, getting some insurance to protect your assets (Public Liability) and your tools and machinery / shed that won't be insured under your home insurance once you start earning an income are all things an accountant can guide you on.

The world is your oyster but a small outlay for some professional advice early in the process will possibly be the best money you ever spent.

Rowlie

[DannyG]

Early in this thread Hem19x suggested you speak with an accountant. That is really important even at this early stage. He/she can give you the reality check you are seeking and cover off the pitfalls before you find them.

At your age you are ideally placed to maximise your superannuation. I know a lot won't agree with locking your money up but in 10 - 15 years it will be your best friend. Someone got hold of me when I was 55 and gave me a shake. I am now enjoying a retirement I never considered possible.

Buying more gear/tools, getting some insurance to protect your assets (Public Liability) and your tools and machinery / shed that won't be insured under your home insurance once you start earning an income are all things an accountant can guide you on.

The world is your oyster but a small outlay for some professional advice early in the process will possibly be the best money you ever spent.

Rowlie

Thanks and yes I agree 100%. I do have an accountant he is retired and only handles a few large corporates now so I have just done my yearly tax return myself for the last couple of years, although I have called him from time to time about things and he is always willing to throw ideas at me.

If/when the time comes that this all gets serious Ill seek out a new one.

[paul.o]

If/when the time comes that this all gets serious Ill seek out a new one.

It appears that time is now Danny.  Have the chat with an accountant and then you might be able to put a time frame on the seroiusness and get a bit of a plan rolling.

Don't let fear stop you.

What could possibly go wrong?

And like Paceman said, worst case scenario?

 

[Marcus73]

Stop being a pussy and just make it happen!


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[Bookleaf]

The time is now (am I repeating something?).  From personal experience.  Before you actually retire.  It takes up to 12 months to put good financial plans in place.  Starting on retirement day is just too late.

Not only talk to your accountant, but I found the smartest thing I did was to talk to an accredited financial adviser.  The things he had in his knowledge base and at his fingertips to set things in place well before retiring were things I never even thought of or knew was available for me to do. 
The accountant will think of tax things up to the time you stop paying tax.
The planner will do just that - plan for your financial future well into retirement complete with tax minimization and pension (full or part) in mind and consistent income well into the future.
And it will not cost you anything (directly).  All fees will/should come as kickbacks for the financial product providers used, and any residue as a direct charge against your nest egg, not as an invoice to you each year.

It is just so comfortable to know there is a secured, constant income now and into the future that has all been set up by him and I do not have to worry about anything - ever (well I hope ever).

[Bigpickle]

Some years ago, I had a mate that had a brain tumour that eventually took his life. I was minding him one day to give his wife a break from the caring duties when I heard an opinion piece on ABC Radio.
The person being interviewed was a University student involved in a study of people with a terminal illness. The circumstance for my friend made an immediate impact.
The young girl (student) was asked "What is the most common line that these subjects of the study have.
She replied that nearly all of them had one major regret in their lives to that point.
That they had never taken more risks. Not physical risk but the risk of just walking away from a job they didn't like or were bored with. The risk of changing their lifestyle rather than stick with the safety of incumbency.
I have tried to live that philosophy ever since. Came unstuck a couple of times but I have never regretted trying.
Just go for it and worry about potential consequences later.

[Ranger_Scott]

I assume that you also have super... I think with most super companies/schemes you can discuss issues like this leading into retirement. I've pencilled in leaving at 58 (3 years time) and have already put out feelers to the super guys I pay into. They are quite happy to prepare a plan when it gets closer to maximise usage out of my super.

[edz]

With the country screaming for workers ...If it falls in a heap or not what you thought it would be ...there is bound to be something else out there to move onto ..Even if it was just for a short time till you found something more suitable .

[DannyG]

Thanks for all the encouragement and advice gents.

Its a big decision and pretty much every person except one has said go for it.

I have been to a financial adviser and his advice was sound, made a lot of sense and as it turned out was 100% accurate.
I always thought my aim in life was to get the mortgage paid off as soon as possible........his reply to that was why would you when its only costing you (at the time) less than 3%.............use your equity to create wealth and you won't need to worry about a mortgage down the track.

Yes I have super and I am looking forward to 8 years time when I can start using it to my advantage but another 8 years at my current work place is enough to make my toes curl.

[DandyD]

I always thought my aim in life was to get the mortgage paid off as soon as possible........his reply to that was why would you when its only costing you (at the time) less than 3%

People kept telling me do do the same. It was costing me 0.44% so it really didn’t make any sense at all. I let it run full term.

[Fizzie]

A bit late to the party, but I'll join the Do It club!

With regard to the mortgage, I'd suggest trying to get rid of it before you start living off savings.

We've been doing that for just on 2 years now & it's remarkable how little you can get by on, but, we don't have a mortgage payment to make every fortnight! If we did, it would be a different matter

& to throw in another few cents worth, something to think about is making boxes, especially if you get a folder & guillotine! Custom sizes, with no International Shipping costs , would have to be popular!

[fishfinder]

Don’t do it, you need to pay taxes so I can semi retire. Hang on I already have 😁.