We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
phased retirement plan ?
MadMat
Posts: 270 Forumite
Anyone else considering a "phased" retirement plan? - while I realise that planning decades ahead is an inexact science at best, I would appreciate comments on the following outline plan
background - I'm 43, self employed, basic rate tax payer, and have vague plans to start to slow down in my mid 50's and fully retire at 60, or soon after. I have a DB pension from a previous employer forecast to pay 7.5k p.a. from age 60 (or less if I take a lump sum)
1) invest £100 a month into a S/S isa from now until age 55, this money would then be used to downshift to part time work from around age 55 until 60 when the DB pension kicks in, drawing down on both capital and investment income I'd hope to draw £250-£300 a month tax free from this fund for 5 years, which would pretty much deplete this fund at age 60. hopefully by age 55 my outgoings will be a lot less than they are now too as both kids will be in their 20's!
2) Invest £120+£30 tax relief into a personal pension from now until age 60, when it can then be used to supplement the DB pension, again drawing down on both capital and investment income for ages 60-67 until I can draw state pension to top up the DB pension for the rest of my days!
is this something that could work or am I living in cloud cookoo land and going to be working till i drop
Mat
background - I'm 43, self employed, basic rate tax payer, and have vague plans to start to slow down in my mid 50's and fully retire at 60, or soon after. I have a DB pension from a previous employer forecast to pay 7.5k p.a. from age 60 (or less if I take a lump sum)
1) invest £100 a month into a S/S isa from now until age 55, this money would then be used to downshift to part time work from around age 55 until 60 when the DB pension kicks in, drawing down on both capital and investment income I'd hope to draw £250-£300 a month tax free from this fund for 5 years, which would pretty much deplete this fund at age 60. hopefully by age 55 my outgoings will be a lot less than they are now too as both kids will be in their 20's!
2) Invest £120+£30 tax relief into a personal pension from now until age 60, when it can then be used to supplement the DB pension, again drawing down on both capital and investment income for ages 60-67 until I can draw state pension to top up the DB pension for the rest of my days!
is this something that could work or am I living in cloud cookoo land and going to be working till i drop
Mat
0
Comments
-
I think you are very optimistic,i have had my pension 38 years and am 59 years of age.
I started paying the sort of quantities you mention and increased to £500 per month the last few years and the pension pot is now 165K,i am being told i will receive approx £6000 per annum which is in my opinion is a very low return and will not allow me to finish work at 60 as intended.
All the best and i hope it works for you0 -
I think you are very optimistic,i have had my pension 38 years and am 59 years of age.
I started paying the sort of quantities you mention and increased to £500 per month the last few years and the pension pot is now 165K,i am being told i will receive approx £6000 per annum which is in my opinion is a very low return and will not allow me to finish work at 60 as intended.
All the best and i hope it works for you0 -
Sounds fine, but the incomes we are talking about here are on the low side here and you wouldn't exactly be going away on holiday every other month in retirement. But I'm guessing you've worked that one out and it fits your lifestyle. If you can, you should pay more into a pension + ISA.Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0 -
Re state pension https://www.gov.uk/new-state-pension/overview0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.8K Banking & Borrowing
- 253.4K Reduce Debt & Boost Income
- 454K Spending & Discounts
- 244.7K Work, Benefits & Business
- 600.2K Mortgages, Homes & Bills
- 177.3K Life & Family
- 258.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards