Will this work?

fatbeetle

I've asked similar questions here before, but it;'s getting close to the planning stage for us now, so I'm looking for thoughts and advice!

Our hope, and it is just a hope, is this; if my super has enough in it, and factoring in a proposal that we will work another year, then in Nov 2017, next year, we will retire. Sounds neat eh? I will be nearly 59 yrs old, and my missus will be 54.

We need enough cash in my superannuation to give us £25,000 a year to live on
If we have that, I will take my super as a lump sum, invest half of it in long term high interest accounts here in Australia, as Aussie interest rates are far better than the UK ones at present. Putting half into savings accounts means it’s not just sitting idly in a bank, but is actually earning interest for us.

The other day, thanks to information provided by here, I looked into whether or not I had any NHS pension from the years I worked for them, (1991 to 2003, with a small break.)

Turns out I have a small fund, which will pay £3463.00 pa and a £10,300.00 lump sum on hitting retirement age, or £3037.00 pa and £9,500.00 lump if I were to take it now. So that’s another handy £66.00 per week, once I hit 60 or so. We’ll probably leave this grow, and only use it if !!!!!! and fan collide.

When the time is ripe, we’ll pack up everything we own here, and get it shipped over to Blighty.

With the rest of the money in short-term, easy-access, saving accounts, I will move back to Cornwall in Feb 2018. Once here I will contract, and get a gutting and redesign/rebuild, of the interior of our house done, and possibly a conservatory put on the front.

The wife and the mutts will join me sometime during all this malarkey.

If we can survive on my superannuation lump sum until the wife hits 59, then her superannuation will kick in, and after that we’ll live like the proverbial pigs in ....

PS. If this sounds a bit smug or gloating, believe me it’s not meant to. Tell the truth we’re actually crapping ourselves at the risk of it all, as there’s so many factors that could muck up for us.

Your thoughts?

fatbeetle

Sorry, I realise I've waffled a bit there, (ripped it from my blog!)

Here's a more succinct version;

(I will be 59 my wife 54 when this happens, we currently live in Australia.)

We have cash in my superannuation to give us £25,000 a year to live on for 5 years.

I will take my super as a lump sum, invest half of it in long term high interest accounts.

With the rest of the money in short-term, easy-access, saving accounts, we will move back to Cornwall, (mortgage free house there.)

If we can survive on my superannuation lump sum until the wife hits 59, (in 5 years time,) then her superannuation will kick in.

This is a substantial size, and will pay the equivalent of £35,000 + pa.

When this kicks in we can live happily on that. (plus I will take my NHS pension at 60 giving us an extra £3463.00 pa, plus I get a UK pension at 66.)

Can anyone let us know the errors in our plan/thinking?
,

Apodemus

You've checked that there are no pitfalls/hurdles to retaining Aussie accounts when no longer resident and that tax treatment of the interest won't over-ride the benefit of the higher interest rate?

sandsy

The only thing I'd be wary about is exchange rate movements if Australian interest rates are so much better than UK ones.

My personal experience has been that where one country has much better returns than another, the benefit was subsequently cancelled out by the exchange rate movements over the investment period.

Also check out the relative tax treatment of returns earned on deposits invested in cash in the UK and in Oz. Presumably you will be resident in the UK for tax purposes. On the income you propose, you can earn up to £1000 of interest tax free in the UK but the same doesn't apply to foreign savings. In addition, you can also receive income on ISAs tax free as you will be resident in the UK for tax purposes.

fatbeetle

Thansk people.

We have dual citizenship, so we'll have to look into the tax implications of interest earned abroad. As far as we are aware, there is a reciprocal tax agreement between Aus and the UK which means we will only be taxed once in the country it is earned in.

As far as the exchange rate goes, tell me about it! :-) Since I moved over here it;s been as low as $1.00 = 32p and as high as $1.00 = 68p!! Try changing $10,000.00 at those two rates and the difference is heart breaking! (Currently $1.00 = 57.4p)

fatbeetle

I may be talking to myself here, but I thought I'd throw this into the mix!

Did a calculation here; https://www.calcxml.com/calculators/i-am-retired-how-long-will-my-savings-last

Using VERY conservative figures I calculate my super pot will last us 8.2 years.

That's far more than the number of years (6) we'll need, and not even factoring my NHS pension, and UK pension into the pot.

Then after 6 years my wife's super kicks in, and that's worth well over a $million currently.

Somebody please tell me why all this is sh!te and will not work, before I get too excited?

jamesd

Getting excited seems fine. Do have a look at cfiresim and better drawdown rules though.

fatbeetle

Thanks Jamesd!