Do we have enough for Early Retirement

robin61

madeinireland wrote: »

An update from me too. I didn't retire and I'm still working - but just waiting for the next vol redundancy scheme to appear at work. I will definitely be taking it this time as I regretted not taking it shortly after the date of application passed.

Good luck all!!!

Ah right good luck with it this time then.

robin61

kangoora wrote: »

Best of luck!

I applied for the last one in March and got turned down as 'my skills are still required' Then made a dumb move and passed my PPM assessment 1st time - probably should have failed deliberately to get put on the bench but couldn't deliberately fail an exam/test........

Just going to bang in a request and hope each time they offer one but they are critically short on PMs - they let too many go. Typical this happens after seeing 10 years of offers just as I decide to take the plunge

I heard that with the last one we had they didn't t accept anyone with a development needed performance rating and anyone with better than achieves standards mark had to have a special business case. Seems your best chance is to be average.

After plucking up the courage to press the button it must be very disappointing to be turned down. The only consolation being that you are still building up the pension. I do know of a few people who felt they had got themselves into a position where financially they could just resign and ended up doing just that although it must be awful to go early with nothing bearing in mind what others have gone with.

robin61

ex-pat_scot wrote: »

One (admittedly extreme) tactic might be to coast or deliberately underperform, so that you would be a high priority candidate for the "next round".
).

This is a high risk strategy. You might well end up on poor performance and being er ' managed out of the business' with nothing. On the other hand you don' t want to be indispensable either. Somewhere between the two is probably the best bet.

jamesd

May12 wrote: »

Hubby took the voluntary redundancy when the opportunity came up. So at 54 he just becomes a pensioner without pension. ... So at the moment, hubby will not draw the pension, we will wait and how it is going.

There's £720 of income a year available to a person who has at least £2,700 of unused personal allowance available, by making net pension contributions of £2880 a year and soon afterwards taking out the £3,600 that ends up in the pension after 25% is added for basic rate tax relief, even for those not paying income tax. You do have to be 55 to take it out so he's not quite there yet but the 2880/3600 is a per tax year number so good to do it this tax year even if he doesn't reach 55 until next tax year.

If he's still in the tax year in which he took voluntary redundancy the limit is his earned income in the tax year if that is higher than £36,000 gross. Up to £40,000 without using carry forward of the unused part of the £40,000 from the past three years. Contributions by employers count towards the £40,000 and they should have told him how much was used, or can if he asks, if he's close enough to the limit for it to matter.

A person who takes anything beyond the tax free lump sum from a money purchase pension has their annual limit for pension contributions reduced to £10,000 and can't use carry forward from the past three years any more. Exceptions for things like buying an annuity (a bad idea at his age).

Good for him not to take the defined benefit pension money yet but he should start to take money from the SIPP once he reaches 55 to use his personal allowance. He can invest in essentially the same things inside an ISA so all he's doing is taking money out tax free to move it to a place where it remains tax free. Though of course he may want to draw on some of it to supplement income, not just exploit his otherwise unused personal allowance.

He can also transfer some of his unused personal allowance to you so you can save some income tax on your income.

For yourself I see that in your earlier post you had no pension beyond the state pension. If you're anywhere close to 55 it's well worth using some of your savings and investments to get some tax relief gains for you. Assuming you earn £10,000 a year and are 55 or once you reach 55 you could put in and take out £10,000 gross a year using the same approach as I described for him. In your case, though, with only the state pension it's perhaps worth accumulating some money in a pension, just taking out the 25% tax free lump sum. This is because you'll probably have unused personal allowance throughout retirement so you'll be able to gradually take out the taxable part tax free within the personal allowance.

madeinireland_2

robin61 wrote: »

This is a high risk strategy. You might well end up on poor performance and being er ' managed out of the business' with nothing. On the other hand you don' t want to be indispensable either. Somewhere between the two is probably the best bet.

The thing is unless I get kicked out for something extreme (this may depend on your grade / position) I would still end up walking out with 6 months pay as a result of having a 6 months notice clause in the contract - although it would be taxed of course. Also it would take a fair amount of time to implement the poor performance process so in effect overall you would not get much less than if you got the 9 months package. So it's a no lose position anyway isn't it? - assuming you didn't need a reference for your next job.

melanzana

I got out at 56, company package. Best thing EVER.

I would advise while you are still working to get everything done to your house that needs it, overpay the mortgage if you still have one, and plan to have no debts on retirement day. I worked so hard to reach that goal, and I did, and it is absolutely wonderful!

Only thing left now is a bit of refurb in the kitchen after a leak from the upstairs bathroom. But insurance will pay for the majority of that thankfully.

I can only say this. If you want to retire early you really do have to crunch the numbers, but sometimes it is handed on a plate. Get all the big ticket items out of the way, downsize if that suits you and blimmin well enjoy!

Best of luck.

robin61

madeinireland wrote: »

The thing is unless I get kicked out for something extreme (this may depend on your grade / position) I would still end up walking out with 6 months pay as a result of having a 6 months notice clause in the contract - although it would be taxed of course. Also it would take a fair amount of time to implement the poor performance process so in effect overall you would not get much less than if you got the 9 months package. So it's a no lose position anyway isn't it? - assuming you didn't need a reference for your next job.

I guess it's always nicer to have an amicable parting of the ways but yes that's a good position to be in if the worst comes to the worst (hopefully not though).

I'm a few months into hopefully a 2 year exit plan.

1) maxing out on AVC contributions to take my salary and taxable benefits to a bit under £43K per annum. I will get the max PCLS without reducing my pension
2) Transferring money from a cash savings account to a SIPP to get the 20% tax relief added. I am paying in more or less the equivalent of my remaining salary and utilising some unused allowance from previous years. Planning to use the SIPP to front run my DB pension and avoid the actuarial reduction.
3) My wife doesn't work so putting £2880 per year into her SIPP to get the 20% uplift
4) All this means I keep my child allowance etc - worth having. Plus there is now a tax credits situation and this helps me fund the SIPPs. I have not had these prior to this year.
5) I am getting £1050 of my wife's personal tax allowance as I am no longer a 40% taxpayer again worth having


So really if a deal comes up in March 2017 it isn't worth taking it with all this going on. I can only maintain funding the SIPPs to this extent for two tax years in terms of both cash and available annual allowance so I think come March 2018 if I can get out with a deal it's a no brainer. If not and I feel I cannot stand it anymore I'll have done well enough over these 2 years to make it do-able without a deal if it really comes down to that. So that would be my worst case scenario.

May12

jamesd wrote: »

There's £720 of income a year available to a person who has at least £2,700 of unused personal allowance available, by making net pension contributions of £2880 a year and soon afterwards taking out the £3,600 that ends up in the pension after 25% is added for basic rate tax relief, even for those not paying income tax. You do have to be 55 to take it out so he's not quite there yet but the 2880/3600 is a per tax year number so good to do it this tax year even if he doesn't reach 55 until next tax year.

If he's still in the tax year in which he took voluntary redundancy the limit is his earned income in the tax year if that is higher than £36,000 gross. Up to £40,000 without using carry forward of the unused part of the £40,000 from the past three years. Contributions by employers count towards the £40,000 and they should have told him how much was used, or can if he asks, if he's close enough to the limit for it to matter.

A person who takes anything beyond the tax free lump sum from a money purchase pension has their annual limit for pension contributions reduced to £10,000 and can't use carry forward from the past three years any more. Exceptions for things like buying an annuity (a bad idea at his age).

Good for him not to take the defined benefit pension money yet but he should start to take money from the SIPP once he reaches 55 to use his personal allowance. He can invest in essentially the same things inside an ISA so all he's doing is taking money out tax free to move it to a place where it remains tax free. Though of course he may want to draw on some of it to supplement income, not just exploit his otherwise unused personal allowance.

He can also transfer some of his unused personal allowance to you so you can save some income tax on your income.

For yourself I see that in your earlier post you had no pension beyond the state pension. If you're anywhere close to 55 it's well worth using some of your savings and investments to get some tax relief gains for you. Assuming you earn £10,000 a year and are 55 or once you reach 55 you could put in and take out £10,000 gross a year using the same approach as I described for him. In your case, though, with only the state pension it's perhaps worth accumulating some money in a pension, just taking out the 25% tax free lump sum. This is because you'll probably have unused personal allowance throughout retirement so you'll be able to gradually take out the taxable part tax free within the personal allowance.

kidmugsy wrote: »

4 bedrooms = own bedroom, guest bedroom, your study/design room, his study/hobbies room. If you're both around the house all day a bit of space is welcome. if you also expect visits from children and grandchildren it's even more welcome.

If you try to trade down to a two-bed you might clear less profit than you expect.

Anyway you're in good financial nick. Good luck.

Thank you for your advise.

I have not done the figure yet as we are busy enjoying free time. But I have started to put some money into SIPP for myself since the last year (about £10000 now), I will carry on to do so.

We still think about downsize because we don't want to spend so much time to look after it, we also want to release some capital.