5 Year Plan until Retirement

hall2056

Hi, I have just paid off the mortgage, and am planning on retiring in 5 years time at the age of 60.
I am fortunate to be in a final salary DB scheme, and I will have 40 years pensionable service at 60.
I am seeking advise on how to build additional savings/ pension over the next 5 years, to maximise my income when i retire?
Now that I have more disposable income, i can save 2000 per month, currently have been paying this into a stocks and shares ISA.
I would be grateful on advice for my 5 year retirement plan?
Thanks
Hall2056

BLB53

Have you considered a SIPP? The HMRC would add £500 to your £2K. Drip feed into something fairly conservative such as Vanguard Lifestrategy 40 and over 5 yrs you could build a nice addition to your final salary pension.

hall2056

BLB53 wrote: »

Have you considered a SIPP? The HMRC would add £500 to your £2K. Drip feed into something fairly conservative such as Vanguard Lifestrategy 40 and over 5 yrs you could build a nice addition to your final salary pension.

Thanks, I will research SIPP option. I also need to review if i decide to delay retirement to 61, i.e. 41/60ths if my DB pension will increase or is capped at 40/60ths.
Thanks
Hall2056

robin61

hall2056 wrote: »

Hi, I have just paid off the mortgage, and am planning on retiring in 5 years time at the age of 60.
I am fortunate to be in a final salary DB scheme, and I will have 40 years pensionable service at 60.
I am seeking advise on how to build additional savings/ pension over the next 5 years, to maximise my income when i retire?
Now that I have more disposable income, i can save 2000 per month, currently have been paying this into a stocks and shares ISA.
I would be grateful on advice for my 5 year retirement plan?
Thanks
Hall2056

Does your DB scheme offer an AVC option ? They work differently depending on the pension scheme but definitely worth looking into.

justme111

I suppose if posters understand your goals, tax, family, present savings and investments and income situation they will have a chance to give you useful info. As it stands I do not see what your concern is - you have £2000 spare now, in 5 years time you will get almost half of what you getting now - it looks like money would be about penultimate aspect of your concerns if they were arranged in order of importance.

dunstonh

I would be grateful on advice for my 5 year retirement plan?

Generically, the more you pay towards it, the more you get back later. The best way of doing it cannot be covered as we dont know enough to say.

maximumgardener

you really can't do retirement planning with a "broad brush" approach
everyone has requirements unique to them....its a good time for you to get IFA help.

Having said that ...your thinking in maximising S&S ISA's makes good sense
you should also plan to have a 1 -3 year cash buffer as well as considering a star alone personal pension .

consider family other members of your household ...what do they have /want ??

kidmugsy

BLB53 wrote: »

Have you considered a SIPP? The HMRC would add £500 to your £2K. Drip feed into something fairly conservative such as Vanguard Lifestrategy 40 and over 5 yrs you could build a nice addition to your final salary pension.

Many people would reckon a five year horizon a bit short for S&S investing. I incline that way myself.

I also have my doubts about how conservative an approximately 60% investment in bonds is likely to prove.

kidmugsy

How about paying into high interest regular savers for yourself and spouse? The Nationwide Flexclusive account pays 5% p.a. on up to £500 per month. First Direct and M&S also have 5% savers. Lloyds does a 3% saver on £400 per month. For all of these accounts you need to open a current account at the relevant bank.

This route offers far more interest than Cash ISAs and far less risk than a 5-year investment in S&S.


Maybe you could argue that some S&S investment might be wise because some of your money would be being saved for age 65 and 66. Maybe I could counter that you've already been filling an ISA for just those years.

P.S. if you are paying income tax at the higher rate, do make every effort to contribute to pensions to avoid that.

hall2056

justme111 wrote: »

I suppose if posters understand your goals, tax, family, present savings and investments and income situation they will have a chance to give you useful info. As it stands I do not see what your concern is - you have £2000 spare now, in 5 years time you will get almost half of what you getting now - it looks like money would be about penultimate aspect of your concerns if they were arranged in order of importance.

My main goal is to have a fairly large sum of money, to pay for traveling etc. when I retire. My circumstances are married with grown up kids, wife will have a small DC pension when she retires in 2022.
I am a 40% taxpayer, and DB pension is forecast to be around 35k per annum in 5 years time. I have £40k saved to date in S&S ISA.

BLB53

I am a 40% taxpayer

Even more reason to consider a sipp.

Many people would reckon a five year horizon a bit short for S&S investing.

The OP may retire in 5 yrs time but the investment could continue for the next 30 yrs. It may have built up to ~£200,000 and the OP can then look at options such as the 25% tax free lump sum and withdraw income of say £6,000 from the remaining sum indefinitely.

Certainly worth consideration in my humble opinion.