Considering early retirement

GullyFoyle

I'm a single male, 54 years old, getting tired of commuting. I've started to think about early retirement and would like some opinions & suggestions on retirement income.

I'm pretty lucky to be in an index-linked (RPI) final salary scheme which will allow me to retire early. I'd get about £10,000 p.a. before tax from it if I retired now. I also have 2 old stand-alone pensions and some AVCs, totalling £136,000, plus about £52,000 in ISAs, and assorted savings of about £65,000.

This seems like a pretty healthy total - I've a fairly frugal lifestyle and the mortgage is paid off.

So now I'm wondering what I could have as a retirement income given these funds, and what would be sensible options for realising it?

babyblooz

I suppose it depends on your lifestyle! I am jealous though, I haven't anything like that behind me, but I would sooooo like to retire!

GullyFoyle

babyblooz wrote: »

I suppose it depends on your lifestyle!

As I say, my lifestyle's pretty low-key - country walks, listening to music, reading a lot, browsing the web, and occasionally eating out. I don't really believe in retail therapy or being a fashion victim. Some might find it boring, but each to his/her own...

Another area I'd like to hear some opinions on is the medical side of retirement - is private medical insurance generally considered worth investigating, or does the NHS handle the really important stuff better? If private medical insurance is worth doing, what kind of policies are best value for retirees who are still reasonably healthy? All pretty vague, I know, but if anyone has useful tips, I'd like to hear them.

bendix

So what are we looking at? 10k as a base. 136k annuity or USP delivering a conservative 8,500. Around another 120k which could give you a 7k conservative. All up 25.5k before tax and no mortgage. Seems pretty good to me. I'm assuming you'd get a state pension in a 13 years time too.

GullyFoyle

bendix wrote: »

... 136k annuity or USP

USP?

Around another 120k which could give you a 7k conservative

Some sort of income investment vehicle, or a simple savings account?

I guess it's wise to keep some cash available for emergencies, so a high interest savings account would fit the bill - but one would want a reasonably consistent interest rate...

I'm assuming you'd get a state pension in a 13 years time too.

Yes.

EdInvestor

USP is another name for "income drawdown" - a pension system where you leave the remainder of the money (after 25% tax free cash) invested fro the long term and take an income from it.This offers the hope of a rising income to beat inflation. Drawdwon plans are usually invested in a mix of equities (especially the ones paying dividends), property funds, cash and bonds.

bendix

My figures are very rough, but seem reasonable. 120k should be able to generate 7,000 of income. That's only around 6% and i see ads in the press for simple savings accounts generating that all the time.

Even conservatively, you can rely on 22k a year before tax.

I guess it's up to you to decide if you think that's enough.

Personally, I wouldnt want to spend all that - you have to keep your pot growing so that it generates income to the same level in real terms (after inflation) in the future.

GullyFoyle

OK, thanks all, that's given me some food for thought.