Early-retirement wannabe

westv

JoeEngland wrote: »

Unless robovacs can move furniture to vacuum the room properly then they seem like a pointless expense.

If they're good enough for Triumph13 they are good enough for me.

Triumph13

westv wrote: »

If they're good enough for Triumph13's wife they are good enough for me.

Fixed that for you.

WannabeEdouard

My ideal goal is to retire by 58 I have a two pensions. One is a DB commencing at age 65. The other is DC . I have some isa savings and no mortgage. Seems like only way i could retire early I am 54 would be to transfer DB to DC . I just got transfer quote for DB pension and On the face of it the figures look promising but i realise there is risk with DC pensions. Just looking for some comments on my figures and options. The goal is to retire at 58 latest.

CETV value = 522k
DC Value £160k putting in £31k per year for next 3.
Isa savings £45k
Full State pension at 67
No mortgage

DB guarantee 18.8K a year at age 65
50% Spouse pension on death.

Edit to add ideally i would like £28k a year to live on

AlanP_2

WannabeEdouard wrote: »

My ideal goal is to retire by 58 I have a two pensions. One is a DB commencing at age 65. The other is DC . I have some isa savings and no mortgage. Seems like only way i could retire early I am 54 would be to transfer DB to DC . I just got transfer quote for DB pension and On the face of it the figures look promising but i realise there is risk with DC pensions. Just looking for some comments on my figures and options. The goal is to retire at 58 latest.

CETV value = 522k
DC Value £160k putting in £31k per year for next 3.
Isa savings £45k
Full State pension at 67
No mortgage

DB guarantee 18.8K a year at age 65
50% Spouse pension on death.

Edit to add ideally i would like £28k a year to live on

You only refer to your pension etc. - Is spouse benefit of DB of any relevance to you?

If it is, what about their current situation and likely pension income?

Assuming no spouse DB + SP will give you your £28k from Age 67 so you need to focus on the period up to 65 / 67.

Currently 54 and want to retire at 58 so you need:

65 - 58 = 7 Years @ 28k = £196k

67 -75 = 2 Years @ £9k = £18k

Total required = £214k


Currently have £160k and adding £93k over next 3 years = £253k so looks like you will have enough without moving the DB across to DC taking above simplistic numbers.

Triumph13

You can get to your £28k without transferring and more safely.

Your current DC and ISAs plus 3 years of contributions get you to £300k - hopefully a little over with some investment growth. Take £125k of that and use it as a drawdown fund. You should be able to pull 3.5% drawdown, increasing with inflation, from that pretty much for ever. That yields £4,375 pa. If you want £28k post tax then you have a shortfall of £23,625 for 7 years until your DB, a shortfall of £6,960 for 2 years until SP and bang on £28k from then on of which 87.5% is guaranteed income with no worries about the vagaries of the market. Those shortfalls add up to £304k so you are basically on track to get what you want when you want without having to transfer.

WannabeEdouard

AlanP wrote: »

You only refer to your pension etc. - Is spouse benefit of DB of any relevance to you?

If it is, what about their current situation and likely pension income?

Assuming no spouse DB + SP will give you your £28k from Age 67 so you need to focus on the period up to 65 / 67.

Currently 54 and want to retire at 58 so you need:

65 - 58 = 7 Years @ 28k = £196k

67 -75 = 2 Years @ £9k = £18k

Total required = £214k


Currently have £160k and adding £93k over next 3 years = £253k so looks like you will have enough without moving the DB across to DC taking above simplistic numbers.

So the wife says she's not retiring till 65 she loves her job But yes i guess that adds to the equation. Thanks for the comments.

WannabeEdouard

Triumph13 wrote: »

You can get to your £28k without transferring and more safely.

Your current DC and ISAs plus 3 years of contributions get you to £300k - hopefully a little over with some investment growth. Take £125k of that and use it as a drawdown fund. You should be able to pull 3.5% drawdown, increasing with inflation, from that pretty much for ever. That yields £4,375 pa. If you want £28k post tax then you have a shortfall of £23,625 for 7 years until your DB, a shortfall of £6,960 for 2 years until SP and bang on £28k from then on of which 87.5% is guaranteed income with no worries about the vagaries of the market. Those shortfalls add up to £304k so you are basically on track to get what you want when you want without having to transfer.

But wouldn't the return be less and less each year if I begin to shore up shortfall. Ok for a little while i can use ISA but pretty soon i'd need to go to pension? Or am i missing something.

Thanks for the comments

Triumph13

WannabeEdouard wrote: »

But wouldn't the return be less and less each year if I begin to shore up shortfall. Ok for a little while i can use ISA but pretty soon i'd need to go to pension? Or am i missing something.

Thanks for the comments

No. You start with £300k across ISA and pensions combined. £125k of the pension gives you just over £4k hopefully forever. The remaining £175k just needs to keep pace with inflation while you spend it bridging the gap until all the pensions are on line.

WannabeEdouard

Sounds promising , i clearly need to do some more homework on subject.

So the risky scenario would be taking transfer and pot would be roughly 800k in 3 years. In that scenario i would have £200k tax free and at 3.5% drawdown (21k) i need 7k from cash. If markets take a hit i take full or almost full from cash reserve for a few years until hopefully they recover. Does that sound awful or viable?

WannabeEdouard

Triumph13 wrote: »

You can get to your £28k without transferring and more safely.

Your current DC and ISAs plus 3 years of contributions get you to £300k - hopefully a little over with some investment growth. Take £125k of that and use it as a drawdown fund. You should be able to pull 3.5% drawdown, increasing with inflation, from that pretty much for ever. That yields £4,375 pa. If you want £28k post tax then you have a shortfall of £23,625 for 7 years until your DB, a shortfall of £6,960 for 2 years until SP and bang on £28k from then on of which 87.5% is guaranteed income with no worries about the vagaries of the market. Those shortfalls add up to £304k so you are basically on track to get what you want when you want without having to transfer.

So been trying to understand this but still can't quite get it. So i would get £4375 and need to get shortfall from pension plus isa . Wouldn't i only be able to withdraw 8125 from pension tax free ? £4375 + £8125 = personal allowance and so need to make up to 28k from ISA (15.5k) which wouldn't last the 7 years i'd need to do this?