Early-retirement wannabe

bendix

waveydavey48 wrote: »

Hi all, very interesting thread. I'm just starting to look at retirement planning so thanks to all for excellent and knowledgeable info posted.

I have a question, apologies in advance if it's been covered already. In brief, I'm 49 with 2 occupational pensions which kick in at age 60. My tentative idea is to retire at 55, live on savings until age 60 then live on pensions, which I believe would be adequate. If I understand the matter correctly the minimum age at which someone is allowed to take a pension has recently been raised from 50 to 55. The nightmare scenario for me would be to blow my savings by living on them between ages 55 -60 expecting to live on my pensions only to find that when I'm 59 or so the government raise the minimum pension age beyond 60!

Any thoughts? Incidentally it doesn't seem right that we should all have a fixed age at which we can take a pension when we all started work at different ages.... in my case 16!

It hasn't recently been raised. The raise came into effect recently, but it was announced many many years ago. That's the key point. They are obliged to give a lot of advanced warning for this kind of thing, so don't worry about it.

waveydavey48

Thanks for that reply, that sounds reassuring. It would be a momentous decision of course so I would want to be sure of my ground. Can you please point me in the direction of the rules/law which govern how much notice the govt is required to give?

Gatser

waveydavey48 wrote: »

In brief, I'm 49 with 2 occupational pensions which kick in at age 60. My tentative idea is to retire at 55, live on savings until age 60 then live on pensions, which I believe would be adequate.

Incidentally it doesn't seem right that we should all have a fixed age at which we can take a pension when we all started work at different ages.... in my case 16!

I am with your cunning plan ! ie semi-retire at 55.
I plan to reduce working hours at 55 and "drawdown" on savings and part of pension fund.... until 60, when more pension is available.
When I talk to many friends who have already semi-retired, they all say they have never been happier... so thats why I am counting down the days to HAPPY DAYS!

Having also started work at 16, I cannot see why someone with £10m in savings & £5m in pensions cannot retire at 39 if they wish!
(I know I would!)
Surely the answer is to ringfence an amount to provide a "basic" pension... say £400k. So if you pay into a pension, you cannot get at the first £400k until age 55. (or get ANY Tax Free Cash until 55)

Perhaps this complicates things....

bendix

I dont think there are any rules, except the rules of commonsense.

bendix

Gatser wrote: »

Having also started work at 16, I cannot see why someone with £10m in savings & £5m in pensions cannot retire at 39 if they wish!
(I know I would!)
....

They can. What's to stop them?

They can retire whenever they want; they simply can't access the pension part of their funds until 55 and the reasons for that are quite clear and very well understood - it is the price one pays for the generous tax relief which helps to create that fund.

Algie

A month ago, I made a big decision to give up my (well paid) job at the end of June, when I will be 53, and contemplate what, if anything, I want to do next.
For me, it has been a huge decision and one that I've reached quite quickly (a bit too quickly perhaps!). Initially I thought that I would take a couple of months off and then find a more flexible job to keep me busy. I'm not sure what scares me more... not having a reason to get up in the morning (I have never been unemployed) or running out of money when I am no longer able to work! I'm probably the only one who can tackle the first scary thought, but perhaps others can suggest things I can think about regarding the financial aspect. My partner is 57 and is already retired with an index-linked pension of £1,250 pm (after tax). For the next two or three years, I can match that amount from savings and as we don't have a mortgage, we should be OK. At 55, I can take my company pension (defined contribution scheme) which has a current value of £540k I also have a personal pension with a current value of £110k, but I think I would lose some of its value by taking it before I was 60. In addition, I have a protected rights pension with a current value of approx £60 which I thought I could leave untouched until I reach 65. My partner and I also have savings in cash ISAs and other savings totalling £140k
My thoughts are something along the lines of either taking an income drawdown on the company pension at 55 or depleting our savings for a few years until I can get a better return on the pension fund. Does anybody have any views on the pros and cons of these two options?

Gatser

Algie wrote: »

My thoughts are something along the lines of either taking an income drawdown on the company pension at 55 or depleting our savings for a few years until I can get a better return on the pension fund. Does anybody have any views on the pros and cons of these two options?

Firstly... good for you!
Slightly envious as I still have around 2 years to join you...

I prefer the option of drawing as much as possible from my pension (but avoid higher rate tax...because I plan to work a few hours 55-66) and if I do not need to spend it all...put it into an ISA (or donate to well behaved children).:T

Especially as we can only now drawdown at the GAD rate.

I see no point in having a big accumulated pension pot as I depart this planet...

cyclonebri1

Algie wrote: »

My thoughts are something along the lines of either taking an income drawdown on the company pension at 55 or depleting our savings for a few years until I can get a better return on the pension fund. Does anybody have any views on the pros and cons of these two options?

Don't know if it's just me but something inside fihgts me very hard everytime I want to do that,:D, dipping into the interest is just about "paletable";)

Marine_life

Algie wrote: »

A month ago, I made a big decision to give up my (well paid) job at the end of June, when I will be 53, and contemplate what, if anything, I want to do next.
For me, it has been a huge decision and one that I've reached quite quickly (a bit too quickly perhaps!). Initially I thought that I would take a couple of months off and then find a more flexible job to keep me busy. I'm not sure what scares me more... not having a reason to get up in the morning (I have never been unemployed) or running out of money when I am no longer able to work! I'm probably the only one who can tackle the first scary thought, but perhaps others can suggest things I can think about regarding the financial aspect. My partner is 57 and is already retired with an index-linked pension of £1,250 pm (after tax). For the next two or three years, I can match that amount from savings and as we don't have a mortgage, we should be OK. At 55, I can take my company pension (defined contribution scheme) which has a current value of £540k I also have a personal pension with a current value of £110k, but I think I would lose some of its value by taking it before I was 60. In addition, I have a protected rights pension with a current value of approx £60 which I thought I could leave untouched until I reach 65. My partner and I also have savings in cash ISAs and other savings totalling £140k
My thoughts are something along the lines of either taking an income drawdown on the company pension at 55 or depleting our savings for a few years until I can get a better return on the pension fund. Does anybody have any views on the pros and cons of these two options?

Was it a sudden decision and what has made you take the decision?

This thread is all about the non-financial as well as the financial motivation that people have!

Nevertheless as regards the most efficient sources of income, I would be looking into that quite carefully over the coming months and probably asking for projections from the pension providers or the differences between taking the pensions at 55 or delaying and then comparing that against using my savings. You may find that you are penalised quite heavily for taking the pensions early such that you may benefit from drawing down more heavily on savings?

Algie

Marine_life wrote: »

Was it a sudden decision and what has made you take the decision?

This thread is all about the non-financial as well as the financial motivation that people have!

Point taken Marine_life. My decision was a bit sudden. The idea began brewing during the Christmas/New Year break and by the end of March I was ready to act! Motivation? Well, let's see... We've been lucky enough to have travelled extensively over the past twenty years to some amazing places, but all of it has been condensed and, in order to maximise the "experience", done at great expense; business class travel, luxury hotels etc. When we started looking at holiday brochures for the next short luxury holiday experience, I suddenly realised that I wanted something more. What I really wanted, more than anything else, was time to relax, experience the world on my doorstep and smell the roses in our garden! I also knew that there was almost no chance that I would be made redundant to help fund this dream. Despite working for the same company for twenty two years and seeing people all around me being made redundant with handsome payouts over the years, it was clearly never going to happen to me (too accommodating, too helpful perhaps?) which left me with the unenviable position of resigning and deliberately making myself unemployed in the worst economic crisis since the 1930's in order to achieve my aim of reclaiming a bit of my life! (OMG I feel another sleepless night coming on at the thought of it!)