Another planning for retirement post

satrdayboy_2

k6chris wrote: »

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.

I'm working in a heavy industry, believe me 60 is long enough!

Thrugelmir

k6chris wrote: »

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.

But the (compounding) effects of inflation will widen the gap over the years the pension is drawn.

AlanP_2

satrdayboy wrote: »

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

Not totally clear on how PPF works form that point of view but I think I have read that 65 (or State Pension Age?) is when you can access it, and a potential 10% haircut on it.

How likely is that though? Many firms have closed DB schemes and replaced them with DC schemes but they haven't then all gone into the PPF.

So worst case £18k from Age 65 + over £8k of State Pension plus your wife's pensions - Would that be enough?

If it is then you just need to fund the 60-65 years and if you have £200k+ in DC scheme and SIPPs that should be enough for £40k a year.

Hussel

True in £ terms but in % terms the difference should remain at about 25%, assuming the pension increases in payment.

Whilst early retirement factors are often simplified (i.e. a single rate per year early) and are not necessarily 100% neutral, there is usually a 'logical' basis for how they are determined. Got to consider people are more likely to die at age 65 than age 60 too.

justme111

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?

But you already have about 100k which with your requirement of 20 k annually enough for you to retire at 60 and last you till 65.
Besides if you take% reduction for taking it sooner it together with SP would probably give you 20+ k for life inflation adjusted (I assume it is inflation adjusted ).

jamesd

There are some worked examples of safe withdrawal income level calculations here, including for people considering defined benefit transfers.

Biggest financial stress will be lasting until age 55 on the £65k. Once you're sure that you will have enough for that you can use 0% for purchase cards for living, use the ISA money to increase pensions as much as possible then repay from pension tax free lump sums. This effectively saves you the income tax on a quarter of your pay, the part which becomes the tax free lump sum.

atush

satrdayboy wrote: »

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

It is up to age 23 if in full time education.

satrdayboy_2

justme111 wrote: »

But you already have about 100k which with your requirement of 20 k annually enough for you to retire at 60 and last you till 65.
Besides if you take% reduction for taking it sooner it together with SP would probably give you 20+ k for life inflation adjusted (I assume it is inflation adjusted ).

if i leave it in growth is capped at 1.5%, i believe. definitely not more than 2%.

Thrugelmir

satrdayboy wrote: »

if i leave it in growth is capped at 1.5%, i believe. definitely not more than 2%.

Worth confirming. Seems very low.

jerrysimon

k6chris wrote: »

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.

A point often overlooked and always well made. I took my pension this year at 56.5 years old with a reduction of 2.8K/year. However drawing my pension early meant I will have drawn 60.2K in 3.5 years which would take me 13 years (I would be 70 before being in credit) to gain back assuming I had carried on and left at 60. This includes added years and pension I would have accrued.

Jerry