Early retirement planning

dave23

I am 54 and thinking about the possibility of retiring of 60. I have deferred DB I can take at 60 with no reduction which should be worth £8.5K by then. I have two other DC pots approx £100K total and contribute 10% salary to my current employers DC pension. We currently spend about £16K a year. At the moment I am saving around £650 a month into various high interest current accounts.

So where should I continue to save my money? I have a S&S ISA I started a few months ago in LS60 so should I put more into it, open a SIPP, put more into works pension or just continue putting cash into bank accounts?

I would like to be in the position at 60 where I could stop work if I wanted.

simonfitba

If you're prepared to wait until 60 before retiring then overpaying into the pension rather than the ISA would be better because of the initial tax boost.

Otherwise the ISA is better because it gives you access to the money.

I'm assuming you're mortgage-free and have an emergency fund of at least six months' expenses.

dave23

The mortgage has three years to run but balance is less than £8K and I could pay off now if I wanted but I am on a base rate tracker at 1.25%. yes already have more than 6 monthly emergency fund.

simonfitba

Pension it is then. You get 20 or 40% added on to contributions depending on your marginal income tax rate.

bigfreddiel

I retired at 62, got bored after six months, went back part time.

Be careful what you wish for!

dave23

The main thing that puts me off putting more into the company scheme is that I cannot see what it is doing. You can only increase contributions once a year and also only get a yearly statement. There is no online access. That's why I was thinking of possibly starting my own SIPP. I am not sure I will retire at 60 but I will definitely retire by the time I am 65 and my wife is 2 years older so it would be good to retire together.