Pensions Planning: The NUMBER

kinger101

kempiejon said:

I've dismissed annuities but they do indeed seem a good solution for some. I know a guy who got very excited when the rates rose a year or so back. Buying a 5% RPI product does have that certainty. I just want more.
In fact I was just talking about sequence of returns, inflation and asset allocations just this morning. With a view to 30 years retired it's stupid to do think I can do anything other than cautious guessing. I do have a good handle on the next 5 years though and will keep that outlook and updating the plans.

The near 5 percent is based on a single rather than joint.  And RPI will drop by around one percent when they shift the calculation to CPIH.

But the "more" from drawdown might not be sustainable.  I think a hybrid approach of getting enough from SP + DB + annuity for one's basic needs makes a lot of sense.

I can't see me using my DC as fully drawdown unless it includes a 5 year cash (or equivalent) buffer.  And being prepared to adjust my living standard if necessary.  Which I think will be doable, but I wouldn't replenishing the cash pot at a rate of 5 percent of the DC.  

kempiejon

@kinger101 I think a hybrid approach of getting enough from SP + DB + annuity for one's basic needs makes a lot of sense.

Yup me too and that's an idea for the planning for the 67/8/9 year old me. I the meantime I'll need more than 5% to keep me in shoes and chardonay for my post permanent, full-time, employment me. An annuity at SP time might be where I direct some of the capital to take some of the risk off. Hopefully I'm a long time retired so making plans for decades out is a guess today but review the portfolio every few years and rebalance as seems sensible. 

pterri

Started a new thread but relevant to this thread as will I think 

https://forums.moneysavingexpert.com/discussion/6584859/indecisive-and-overly-cautious#latest

GlasgowExpat2

I’m hoping to retire next year at 61 (single).  think I’ll be ok but having doubts. 

I can take a DB of £7k at 61 and another of £9k at 65 (if I take it at 61 it’s about £7k), DC pot is currently £60k. Savings of about £220k split between ISAs and fixed rate bonds. Total outgoings last year were £14k. No mortgage 

QrizB

GlasgowExpat2 said:

I’m hoping to retire next year at 61 (single).  think I’ll be ok but having doubts.

You seem to have everything under control.

GlasgowExpat2 said:

I can take a DB of £7k at 61 and another of £9k at 65 (if I take it at 61 it’s about £7k), DC pot is currently £60k. Savings of about £220k split between ISAs and fixed rate bonds. Total outgoings last year were £14k. No mortgage 

If you take both DBs at 61, you'll have your £14k a year without having to touch your DC or savings. You can use them for a better standard of living and/or as a find for capital expenditures (new kitchen/boiler/car, whatever).

When you get your State Pension as well, you'll have more money than your current expenditure demands.

optoutDB

kinger101 said:

 I think a hybrid approach of getting enough from SP + DB + annuity for one's basic needs makes a lot of sense.

I agree with this,

Annuity + DB + SP + House = Basic needs
Investments = Gravy

I put house in there because it seems that in 80% of retirement planning it gets ignored and everyone just assumes a paid off house that will get passed on when they die. When I looked at my brother's retirement plan, my first question was "where do you sell the house?" 

nicknameless

optoutDB said:

kinger101 said:

 I think a hybrid approach of getting enough from SP + DB + annuity for one's basic needs makes a lot of sense.

I agree with this,

Annuity + DB + SP + House = Basic needs
Investments = Gravy

I put house in there because it seems that in 80% of retirement planning it gets ignored and everyone just assumes a paid off house that will get passed on when they die. When I looked at my brother's retirement plan, my first question was "where do you sell the house?" 

House is care insurance for us (no dependents to inherit).  

Phossy

Ditto on the house being care insurance (even though we do have kids who would inherit if there is anything left)

Forever_Red

I'm looking at retiring in about 12 months aged 57 and my wife will be 55. I've worked out we'd need about £30k but budgeting for £35k just in case. I've got a small DB pension of about £6,500p.a and my wife's DB of £11,000p.a. We've got savings and shares that could cover the rest until we are near to state pension age.
I'll also have a Sipp with approx £370k that can be used for house renovations or a BIG holiday or to just top up our month to month expenses if the savings etc run out.

No mortgage and no dependent kids. Things are finally heading in the right direction 

kempiejon

Forever_Red said:

I'm looking at retiring in about 12 months aged 57 and my wife will be 55. I've worked out we'd need about £30k but budgeting for £35k just in case. I've got a small DB pension of about £6,500p.a and my wife's DB of £11,000p.a. We've got savings and shares that could cover the rest until we are near to state pension age.
I'll also have a Sipp with approx £370k that can be used for house renovations or a BIG holiday or to just top up our month to month expenses if the savings etc run out.

No mortgage and no dependent kids. Things are finally heading in the right direction 

It is worth considering that if you retire at 57 and your only taxable income is £6500 from DB there is another £6k unused personal allowance. Using some SIPP money allows you to receive that income tax free until state pension eats most of that allowance. Looking at tax and asset allocation specifically between ER and SP was an extra wrinkle in my planning. Should I take the whole lump sum from the pensions soonest or stagger with 25% of each annual allowance being taxed. Having part of the fund as cash/bonds to mitigate sequence of returns risk in those first few years and having an idea of a base level of costs rather than a would-like number gve me the confidence I had enough before jacking in the 9 to 5.
What will you do with all that time?