Life's swerve ball - need to plan differently!

Rodders2409

Hello All,

I've not posted before but need to get some basic advice ahead of probably enlisting an IFA in the coming months.

To cut a long story short my better half is going to face some medical / life challenges in the coming years (PD) and we need to plan accordingly, so this is a first stab!....any and all advice very welcome.

Really want to know if I'm way out in thinking I can retire at 60, with the following parameters...

Me
50 yrs / M / Born 1966
Employed

Her
57 / F / 1960
Housewife...oldskool ..:)
Zero income

We have zero mortgage and no other borrowings

My pensions
Aegon - current company pension £169,341...only active one.
Friends Life 1 £66,998
Friends Life 2 £4,529
Friends Life Managed fund £14,341
Total pension pot (to date) £255K

Missus' pension
Prudential - £27,573...no contributions for >15 yrs

I have recently increased my personal contributions, in anticipation, to £1167 p/m excluding tax relief, and the company pay £205 pm into the same scheme.

I have a property which I rent out and get £7000 p/a net of all costs...and am looking to get this put into my other half's name if it's tax beneficial. This would form quite a big part of our pension plans I guess.

We aren't big spenders and have worked out, based on 2 years of trawling through statements etc, that we could fairly comfortably live on £28K pa.

Question is ...is that possible if I retire at 60?

Thanks to all who read this!

System

Maybe her pension can be accessed early on better terms given the medical condition?

Stubod

..insufficient information really as you don't say what your current income is and whether this exceeds your current outgoings (enabling you to save / invest anything else prior to 60), and whether or not you have any other savings / investments that you could live off post 60?

Also is you current pension a final salary scheme?

..a rough (very) calculation / projection suggests you could have a final pension pot (at 60), of at least circa £600K which may be enough to give you an inflation linked pension of £20k per year? (then add on your rental income of 7k, so maybe just enough subject to how you manage your tax. (eg rental house in spouses name if they have no other income so would be tax free?)..or take some extra drawdown in the early years pending your state pension kicking in at 66/67 which should then easily give you your £28+ target income.

Hopefully somebody who is more qualified can give you a more accurate answer...

intowhere

What do you do / have done that has allowed you to be mortgage free at 50 and with a decent pension?

I think its possible as you're state pension will kick in 6 years later/

Hope it works out for your wife and yourself.

Rodders2409

Many thanks Mathew and Stubod..

We will ask the Prudential if that's possible.

Salary is £please ask via PM...and we do not live outside our means so could possibly add more to the pension pot, but have kids in university so needed to balance the next 9 years till 60.

None of the pensions are final salary schemes.

We have some savings (£20K) but will probably look to keep this as danger money.

I had played with some on-line calculators that suggested with this level of pension and continued payments, at the rates I detailed, and the property rental income...plus her Pension kicking in at 66 with mine at 67...we should be OK. However I don't really know if the calculator is OK or not !!

xylophone

Missus' pension
Prudential - £27,573...no contributions for >15 yrs

Might be worth considering £2880 pa contribution to get tax relief added.

Have you both obtained state pension forecasts?

https://www.gov.uk/check-state-pension

Re property

https://www.taxinsider.co.uk/681-How_to_Correctly_Gift_Property_to_Spouses.html

All your current pensions are DC with no safeguarded benefits?

Rodders2409

Hello intowhere...

I was burnt back in the late 80's as anew mortgage owner at 20 yrs old and too many credit cards!
I ended up selling my stuff and moving into mates house whilst renting my place out.

Since then I've never owned a credit card, spent only what I earnt...that's not easy...and am handy so fixed most things from Cars to boilers and didn't pay for too many trades.

We had one of those offset Tracker mortgages on the family home and just paid all the spare cash we had into it as often as we could. There were a couple of lump sums from my parents (3-5K) which we shoved in there too...it was cleared about 5 years ago.

The rest is basically being a bit lucky with my job....working stupid hours...getting paid OK money and putting a decent % into the pot each month and forgetting it's happening!!

I'm not smart enough to have developed any kind of plan :-)

intowhere

gd luck to you.

Rodders2409

Thanks.

Yes we've logged on to the.Government site and I am eligible for the full £8K pluso...my missus will need to top up a little for her to get the full £8K plus....but it's worth it ....hopefully!

I'm not sure what DC or safeguards means.....can you please advise...

Mnd

I would agree with the suggest to pay the 2880 into your wife's pension fund for the tax relief she will get.
As she has zero income she will be able to take her money out tax free 25% and up to her personal allowance.

Good luck to you

BLB53

Looks like you will end up with a pot of ~£450K (conservative estimate) in 10 yrs which could provide a rough drawdown of £22,500 at 5% so including your rental income you should be OK at 60.