Early Retirement Advice?

r_i_c

Hi,

Sorry if this is the wrong forum category: I couldn't see one for pensions?

I have a Vantage SIPP pension scheme. Am also a registered carer. The person I care for is a close relative and they have recently been diagnosed with a serious illness, hospitalized. Bolt from the blue.

Am now at home holding the fort, so to speak. The home I speak of comes to me in the event of my relative passing, but my income, slight as it is, is my carer's income, is everything. When that stops it stops.

Consequently - I am 59 - with also 13 years pension from full-time employment (education), a small pension in other words, and the state pension ~ whatever that amounts to ~ I may need to look at early retirement, because if the worst comes to the worst and I sadly lose my relative, I could be sitting in the family home with precisely '0' coming in. There's also a dearly loved family pet to look out for - just me & the pet in that case - with vet's fees for medication, pet food, & so forth.

Any advice greatly appreciated.

Sincere thanks,

Ric

Mistermeaner

What is the question?

Perhaps a starting point is to list your outgoings (bills + living expenses) then list your income (current and future)

Allow for inflation on your outgoings and then see how the 2 compare, today and in the future.

You say your relative may bit have long and that your income goes when they do so as awful as it sounds try and put a date on that.

You will need to know what your pension income, both private and state will be, and at what ages you can get each (there will likely be a trade off in value vs time on your private pension) also check your eligibility for other benefits.

Compare your income vs outgoings; if outgoings exceed then you have a problem.

Options are sell the house, release equity and downsize / rent

Other most obvious option which most of the world does is you need to work to increase both your current and future income

r_i_c

ggb1979 wrote: »

What is the question?

Thanks, & especially concerning number 3 below please ~

Perhaps a starting point is to list your outgoings (bills + living expenses) then list your income (current and future)

Allow for inflation on your outgoings and then see how the 2 compare, today and in the future.

You say your relative may [not sure what you mean here] bit have long [?] and that your income goes when they do so as awful as it sounds try and put a date on that.

This news is only just in today - still coming to terms with it

You will need to know what your pension income, both private and state will be, and at what ages you can get each (there will likely be a trade off in value vs time on your private pension) also check your eligibility for other benefits.

So there's:
1. teaching pension
2. state pension
3. private pension

Concerning 3, is this taken out in lump sum, reinvested or what might be the best course of action please?

Compare your income vs outgoings; if outgoings exceed then you have a problem.

Options are sell the house, release equity and downsize / rent

Hopefully downsize

Other most obvious option which most of the world does is you need to work to increase both your current and future income

Work is fine - always was - but my experience of agency work in education - since the crunch - is that it is unreliable, to say the least. It is a valuable option however and something that I may be looking at again sooner than I expected.

Mrs_Z

You don't say where the house is located or how big it is but would you have a spare bedroom that you could let out under the Government scheme? It's around £4000 p.a tax free - worth looking into if you have the space.

r_i_c

Mrs_Z wrote: »

You don't say where the house is located or how big it is but would you have a spare bedroom that you could let out under the Government scheme? It's around £4000 p.a tax free - worth looking into if you have the space.

Thanks. In the long term I would be looking to downsize.

Mistermeaner

Hi

Apologies for my poor typing, kindle uses auto predict which is less than helpful.

I was trying to suggest you need to think about how long your relative may be alive: do they have a prognosis? As callous as it may sound when doing your income forecast you need to have a view on when your carer allowance may cease and when you also be able to work again and inherit the house.

To get more direct answers you would need to provide more exact figures. E.g. value of house, mortgage owing, value of each of your pensions, lump sum and monthly income, ages they are available to you.


Investing generally means putting money away for a period of time to grow , which means you cant have beneficial use from it. Opinions differ on stock market investing but min 5 years generally much longer to ride out the bumps.

Main issue for you I think is the gap between now and state pension age, which investing won't really help with.

Nb as a crude rule of thumb you could you on an income of 4% per annum in your total savings. E.g. if after downsizing and taking your lump sum private pension you have 100k you could work on an income of 4k per annum from that as a conservative return +draw down.

Add to this your teacher and state pension as and when you can

r_i_c

Dear ggb1979,

Many thanks, it's my mum who's become seriously ill - just days ago - more sudden than sudden with virtually no warning signs - and that includes a GP misdiagnosis. Consequently I am in a state bordering on sudden grief - shock - and I can't think too clearly. The lady may recover, she may not, it's unknown. Something like an abdominal infection which should be operated on but at her relatively advanced age they are hoping to treat it with antibiotics. Up until very recently she appeared to be in excellent health so matters such as I am looking at now were not to the fore. But I have to look on the bleak side. As a supply teacher the longest employment I was given was a half term. At other times you can go weeks sitting in an agency pending tray, it's no skin off their backs. Since the 2008 crunch the situation has deteriorated. On my own I could often sweat it out but now I have the upkeep of my mother's home plus her pet to look out for, I have to start trying to plan ahead. I am old by teaching standards, that means expensive (pay spine) and with schools scrutinising their budgets I am unlikely to again find full time employment as a teacher, sadly.

Your initial post was helpful, at least it gives me a list of things to look at. I have most details on the Vantage SIPP which was set up over a decade ago. I don't understand when it would start paying (hopefully) interest, the figures seem to remain static whenever I am sent a review. The amount is about 37.5K . I will post what I can find subsequently, I don't know the value of the property off-hand but it is somewhere in the household paperwork. Will update.

Best thanks.

[Please bear with me, am to-ing & fro-ing to hospital all the while]

SailorSam

If you're benefits you may be able to get help with your pets from the PDSA.
Remember although things can be free, they are a charity and need amy help you can afford to keep going.

http://www.pdsa.org.uk/

r_i_c

Thanks, the pet is a high priority!

bowlhead99

What I'm not understanding, and maybe it's a difference in terminology, is why you say you would need to look at early retirement.

You say you may need to look early retirement, because
"if the worst comes to the worst and I sadly lose my relative, I could be sitting in the family home with precisely '0' coming in.".

Surely if your circumstances put you in a situation where you had 0 coming in, and you were of working age, and felt you didn't have enough pension and other assets to keep you going for the next 40 years of your life (or at least the years of your life until state pension is available), then the LAST thing you should consider is to retire from the world of work and gainful employment.

So, while getting a supply job or a permanent full time job may be difficult, or perhaps you don't have the same appetite for it, having not gone to a day job outside the home for some time due to your role as carer, the last thing to do would be to decide to jack it all in, and 'retire' from the idea of working to bring in an income.

If you have, say, five more years of employment in you (even part time / temporary, or in a slightly different field), that will potentially build up some more retirement provision. As opposed to, eroding the value of your investments as you spend them.

If you want, you can access your £37.5k SIPP now. However, you will only be able to take the first 25% of it tax free and the rest will be taxed at your marginal rate as you take it out. And remember when it's gone, it's gone. As someone who does not have much of an income, if unemployed or working for low pay, you might be able to take a decent chunk out during each tax year at 0% tax, before you start to move into the basic rate tax band.

But whatever you take out beyond what you actually need to live on should probably not be taken if you need to pay tax on it, and if you take it while it's tax free, it should be invested in ISAs until you really need it. Or just let it grow tax free inside the pension and take from it later, meanwhile using your downsizing money to fill up your ISAs, to give a tax-free income source for later.

r_i_c

You are absolutely right - in a perfect world. My fear is that I may spend some time looking for gainful employment with nothing coming in. Yes, I would rather work and allow my pension to grow. If I can't find work I am loathe to go unemployed, but I guess I may have to bite that bullet until something turns up. I'd be willing to do almost anything, as long as I can care for the pet, so it would be local work. Even shelf stacking or equivalent.

Whatever happens, I still need some advice please on re-investing the SIPP if that is the best thing to do, when I do retire in say another 10 years? The last thing I want to do - had no intention of considering as a carer - was to draw on my SIPP (ie. in a 'lump sum') which I think the government has made easier for people to do?

Will hopefully approximate the property value by and by - as you can probably imagine everything is at 6s & 7s with me at the moment.

Many thanks