Ready for retirement

bostonerimus

Transfer values are currently tempting, but please consider the diversity and safety given by the combination of the FS and 250k personal pension.

The FS pension gives you inflation protection and longevity insurance. If you live 30 years and there is 3% inflation it's equivalent to a 4% rate of return. You could think of that as your fixed income allocation and invest your 250k aggressively in equities.

The 9k pension plus a couple of SPs will give you a nice guaranteed income.

Even if you do the transfer so you have a pot of 500k an 30k drawdown is too aggressive.

sandsy

stephen0002002 wrote: »

The 9K pa is what my F.Salary pensions would pay me "now" at 62.

And it will go up each year with inflation. £250k for £9k pa after TFC doesn't seem that great a transfer value, to be honest.

stephen0002002 wrote: »

Spouse gets 50% of F.Sal pension - ( but with a TV fund its 100% ).

So if you transfer, she'll get £250k if you pop your clogs the day after you transfer but if you die after spending everything in the pot, she'll get nothing.

stephen0002002 wrote: »

Yes FS is index linked.
TxValue (of £250k) in theory would last a long time.
I'm 62 so if it lasted 20+ years I'd be 82 then.
( Coupled with my PP of 250k - it is looking good )

Most men live longer than that. 50% of men will live beyond the average life expectancy of 86, 25% will reach 94. See: https://visual.ons.gov.uk/how-long-will-my-pension-need-to-last/
And your wife's equivalent numbers are 89 and 96.
Planning for a time horizon of 20 years isn't long enough. If you've used up those funds after 20 years and you are no more, what is she going to live on?

stephen0002002 wrote: »

A T.Value fund with reasonable growth would be good.
I'm asking what could I do with the "final salary" fund when I transfer it.

And I am wondering if index trackers with low charges is an option.

How do you feel about managing £0.5m? What do you consider to be reasonable growth? How risk averse or risk loving are you? Will you worry if it drops in value? Are you happy to pay other people to manage it for you?

ams25

http://monevator.com/the-most-important-goal-for-every-retiree/

Have a look at this article. Research "income floor" as part of retirement planning.

if you can construct retirement income with a risk free element (such as your FS) for essential expenses then you can take more risk with your other capital. Retirement experts like Wade Pfau (google him too, lots of insight) advocate this mix of risk free assets and investments if possible.

my deferred FS will (in 7 yrs) give me c.40% of my required expenses. After lots of reading and research...I will be keeping it. (even though the TV was a substantial sum).

There is much to learn on this topic and plenty of information on the internet. Good luck

Thrugelmir

stephen0002002 wrote: »

The 9K pa is what my F.Salary pensions would pay me "now" at 62.

What is projected to be at your scheme NRA?

kidmugsy

bostonerimus wrote: »

please consider the diversity and safety given by the combination of the FS and 250k personal pension.

The FS pension gives you inflation protection and longevity insurance.

The 9k pension plus a couple of SPs will give you a nice guaranteed income.

I agree. I go further. He should consider keeping the DB pensions and ask whether even taking a TFLS from the DB pensions makes sense - what would be the commutation rate? Moreover, he should check whether either offers "Allocation" whereby the pensioner surrenders some of his pension so that his wife will eventually receive a larger widow's pension.

stephen0002002 wrote: »

Do I take the full 25% int free - is that a no brainer?

It is for the personal pension.

stephen0002002 wrote: »

My wife (62) doesn't have a pension.

Well fill one up for her pronto. What an extravagant oversight that is.

stephen0002002

Thank you for your thoughts so far, appreciated.
I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.

I also factor in old age Pensions (OAP) @ 12k in 3-4 years time.

I've thought long about life expectancy. My own thoughts are. If we're lucky to actually both get to 75-80 (there no guarantee) then things slow down, so will our expectations (and costs), the old age pension itself is still there at least (hopefully). So thats' a happy place. We cut our cloth by then and be happy with what we have. Getting to a good age and hopefully healthy is a reward in itself.

I understand the £-balanced view, thank you for that, good folks.
But I do feel the next 10-15 years are worth living well in.
We can save up for ripe old age (which we may not get to) but why not live well now before we slow down the pace.

coyrls

stephen0002002 wrote: »

I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.

If you do transfer the final salary pension schemes, then growth will not be guaranteed no matter how important you feel growth is.

Silvertabby

I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.
Originally posted by stephen0002002

coyrls wrote: »

If you do transfer the final salary pension schemes, then growth will not be guaranteed no matter how important you feel growth is.

And the value could even drop.

bostonerimus

stephen0002002 wrote: »

Thank you for your thoughts so far, appreciated.
I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.

I also factor in old age Pensions (OAP) @ 12k in 3-4 years time.

Growrth of a drawdown pot is usually required to keep pace with inflation. If you keep the FS pension to give you an income floor you can be quite aggressive with your 250k personal pension.

I've thought long about life expectancy. My own thoughts are. If we're lucky to actually both get to 75-80 (there no guarantee) then things slow down, so will our expectations (and costs), the old age pension itself is still there at least (hopefully). So thats' a happy place. We cut our cloth by then and be happy with what we have. Getting to a good age and hopefully healthy is a reward in itself.

There is a a better than 50% chance that both of you will live into your mid 80s and a strong possibility that at least one of you will live into your 90s. So you need to plan for that long.

I understand the £-balanced view, thank you for that, good folks.
But I do feel the next 10-15 years are worth living well in.
We can save up for ripe old age (which we may not get to) but why not live well now before we slow down the pace.

Front loading spending is dangerous if you have a few years in down markets where your investments lose money. Things could work out well, but you must plane for the worst and when the best occurs you'll be doubly happy.

Triumph13

stephen0002002 wrote: »

Thank you for your thoughts so far, appreciated.
I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.

I also factor in old age Pensions (OAP) @ 12k in 3-4 years time.

I've thought long about life expectancy. My own thoughts are. If we're lucky to actually both get to 75-80 (there no guarantee) then things slow down, so will our expectations (and costs), the old age pension itself is still there at least (hopefully). So thats' a happy place. We cut our cloth by then and be happy with what we have. Getting to a good age and hopefully healthy is a reward in itself.

I understand the £-balanced view, thank you for that, good folks.
But I do feel the next 10-15 years are worth living well in.
We can save up for ripe old age (which we may not get to) but why not live well now before we slow down the pace.

You want to live well for the next few years and defined that as £30k pa. Others are pushing you to not give up the security of the FS scheme. My question is why is your state pension number so low because if you fix that you can do both!
Full state pension is £8,300 pa each. Have you got forecasts yet as even though you were contracted out some voluntary NICs should still get you up to £7,500 and you may well be able to get the Mrs up to full SP.
If you took the DB without any tax free (assuming this is an option) that would be £12k pa. Add in say £15k pa of SP between you gets to £27k pre tax / £25k post tax. £150k of your DC funds drawn down at 4% pa is enough to get you up to £30k pa post tax. It takes about £50k to back fill the gap between retirement and state pensions kicking in leaving the final £50k to pay those voluntary NICs and give you a decent emergency / luxury fund if you don't already have one.
If the DB insists you have to take some lump sum then simply defer the DB until it reaches a similar position, living on DC funds in the meantime and replenishing them from the lump sum when you do take the DB.
Simples!