Another CETV query !!

Notifbutwhen

Deep breath ......

I am 8 weeks away from 55, and the chance to change my/our way of life.

I currently have 3 Pensions :

1 with a CETV value of £388k
1 with a CETV value of £288k
My current Pension with a Pension pot currently of 50k.

Until about 12 months ago, I was of the opinion that I would have to work until I was 65 to be able to 'survive' in retirement. Since then I have taken an 'interest' in retirement and it has opened my eyes in terms of the possibilities !!

When I hit 55, I am reducing both my responsibilities and working hours, so that I will be working 27 hours over 3 days a week, but now with an annual salary of £27k.
My wife is 53 and currently has a salary of £28k pa.

I have a series of questions that I am hoping you will be able to give me clarity on what actions I should potentially be taking over the next few months.
I have seen an IFA, however I am always sceptical on the advice of someone who is ultimately out to make as money out of me as possible (always with a smile on their face).

1. If I was to take the CETV of both Pensions, I could have c£150k+ tax free.
We won't necessarily need the remainder of the money to live off for some time, so would it be possible just to put this into a 'savings account ' with very little interest or risk of losing it, or do I have to put it into a Pension 'Plan' with more interest and subsequently a greater risk of losing some/all of this money ?

2. Having read many comments on this Forum, there is a lot of mention of diversification, so should I just transfer the larger of the 2 Pensions and leave the smaller Pension to run, as it would be 'protected'?


3. If I were to take the lump sum from both Pensions, could I then draw from the 'remainder' of the pot, obviously paying the relevant tax ?
If so, is there a minimum/maximum monthly/annual amount ?

Many thanks.

dunstonh

I have seen an IFA, however I am always sceptical on the advice of someone who is ultimately out to make as money out of me as possible (always with a smile on their face).

The IFA earns the same whether they tell you to transfer it or keep it where it is.

1. If I was to take the CETV of both Pensions, I could have c£150k+ tax free.

Or phased flexi-access drawdown on some or all of it. Lots of variations possible.

2. Having read many comments on this Forum, there is a lot of mention of diversification, so should I just transfer the larger of the 2 Pensions and leave the smaller Pension to run, as it would be 'protected'?

What best fits your objectives and circumstances?

3. If I were to take the lump sum from both Pensions, could I then draw from the 'remainder' of the pot, obviously paying the relevant tax ?

That is one method. Not necessarily the best one. Especially if you dont need the capital (in full).

If so, is there a minimum/maximum monthly/annual amount ?

No. Although sustainability is usually the key. So, you need to sensible. You need to be accepting that your pension value is going to go down as well as up. Indeed, you could easily lose £100k in the pension value in one month and that is quite normal. So, you need to have a behaviour and understanding for when that happens.

mgdavid

you also need to remember that inflation can wreak havoc with your capital over a lengthy period - you can expect to live another 35 years, you need to be smart enough to maintain the value over this period.
Your DB pensions will have a useful element of inflation-proofing built in, whereas taking the CETV requires long-term investment of the funds which has a cost (both time and money) whether you use an IFA or DIY.