Another planning for retirement post

satrdayboy_2

I was in a final salary pension scheme which consistently gave good annual pension, lump sum and option of retiring at 60. That has now closed and i have applied for a final transfer value, its £475000, which if i left in the scheme woks out at 23 times what my annual pension would be at 65. I certainly don't want to work till I'm 65. I'm about to start talking to a number of IFA about transferring the pension out of the current scheme, because there is a danger of it going into the PPF and there are penalties for leaving scheme before 65.

My and my wifes current financial situation is this we have combined SIPPS of £40000, Combined S&S ISAs of 40000, cash ISAS of £25000. and my wife has a pension which will pay currently £7000 at 65. Im 53 next birthday, currently earn approx £37000 pa and in new pension scheme i pay 10% and employer pays 10%. we have also stopped overpaying on our small mortgage and between us pay £600 a month into our SIPPS.

What else can we do to achieve my plan to finish at 60 or sooner?

p00hsticks

satrdayboy wrote: »

What else can we do to achieve my plan to finish at 60 or sooner?

What annual retirement income are you aiming for ?

AlanP_2

Personally I would have serious 2nd & 3rd thoughts before I gave up £20k of guaranteed income from Age 65 in exchange for a higher risk transfer out. of £475k.

It sounds like you have 7 years of employment to go ideally so your new employer pension is likely to receive £50-60k of cash investment, when added to what you have in there now what would that give you?

2 Sipps should grow by a similar amount of new investment over the same period so that should make them ~£100k at Age 65 excluding investment growth.

Would that £100k plus your current pension pot be enough to live on for 5 years before drawing your Final Salary pensions?

Don't forget State Pensions - Worth getting an up to date forecast and putting a spreadsheet together and see how it plays out.

satrdayboy_2

p00hsticks wrote: »

What annual retirement income are you aiming for ?

Ideally £20000, anything above would be a bonus

satrdayboy_2

AlanP wrote: »

Personally I would have serious 2nd & 3rd thoughts before I gave up £20k of guaranteed income from Age 65 in exchange for a higher risk transfer out. of £475k.

It sounds like you have 7 years of employment to go ideally so your new employer pension is likely to receive £50-60k of cash investment, when added to what you have in there now what would that give you?

2 Sipps should grow by a similar amount of new investment over the same period so that should make them ~£100k at Age 65 excluding investment growth.

Would that £100k plus your current pension pot be enough to live on for 5 years before drawing your Final Salary pensions?

Don't forget State Pensions - Worth getting an up to date forecast and putting a spreadsheet together and see how it plays out.

i know its a bit of a dilemma, £20000 would be ideal, but if it goes into the PPF i will lose 10% straight away. And i wouldn't be able to touch it till I'm 65. Correct me if I'm wrong

satrdayboy_2

AlanP wrote: »

Personally I would have serious 2nd & 3rd thoughts before I gave up £20k of guaranteed income from Age 65 in exchange for a higher risk transfer out. of £475k.

It sounds like you have 7 years of employment to go ideally so your new employer pension is likely to receive £50-60k of cash investment, when added to what you have in there now what would that give you?

2 Sipps should grow by a similar amount of new investment over the same period so that should make them ~£100k at Age 65 excluding investment growth.

Would that £100k plus your current pension pot be enough to live on for 5 years before drawing your Final Salary pensions?

Don't forget State Pensions - Worth getting an up to date forecast and putting a spreadsheet together and see how it plays out.

I should have added that i have 2 children. If i should die my spouse gets 50%. If she should die the pension goes with her, there will be nothing left for the children

westv

Where does 65 come from? Wouldn't the option to retire at 60 still be available?

satrdayboy_2

westv wrote: »

Where does 65 come from? Wouldn't the option to retire at 60 still be available?

If i leave it in current scheme i can't touch it until I'm 65, without incurring a penalty, take it at 60 and you lose 5% a year back from 65, so i would lose 25% of my pension.

k6chris

satrdayboy wrote: »

If i leave it in current scheme i can't touch it until I'm 65, without incurring a penalty, take it at 60 and you lose 5% a year back from 65, so i would lose 25% of my pension.

The flip side of that is you are taking the lower pension for 5 extra years, so it's not quite the same as losing 25% as you get 5 more years of payment.

atush

satrdayboy wrote: »

I should have added that i have 2 children. If i should die my spouse gets 50%. If she should die the pension goes with her, there will be nothing left for the children

Dont either of your pensions have dependents pensions? This woud be common, or are they over 23?

satrdayboy_2

atush wrote: »

Dont either of your pensions have dependents pensions? This woud be common, or are they over 23?

thats a new one on me. one is 22 and the other 19.