Ready for retirement

TBC15

pip895 wrote: »

I would talk to an IFA who can advise you regarding a DB transfer but keep an open mind - you may well be better off keeping both.

The transfer values don't seem that great. I have a DB pension that if I took it now would yield just over 9k/annum but the transfer value is over 500k. I am younger at 56 and female which would both tend to support the value, but even so its a big difference.

Unless you are totally risk intolerant transferring the money out sounds like a good idea on those numbers.

happyandcontented

What about a fund value of 825k v £20k PA now (59) or c25k at NRA (65) with no death benefits unless the pension has been claimed? It is index linked.

Currently, if the pension is not in payment a return of premiums would be the spousal benefit

Does that scream take the money on the bald stats?

IFA seems to be on the fence.

pip895

TBC15 wrote: »

Unless you are totally risk intolerant transferring the money out sounds like a good idea on those numbers.

I have decided to go ahead but it wasn't black and white. The Critical yield was in fact very high - in the end it is the fact that we are not reliant on this money for our living expenses that swung it in our favor. If this had ben an uncapped index linked policy then I would have kept it.

pip895

happyandcontented wrote: »

What about a fund value of 825k v £20k PA now (59) or c25k at NRA (65) with no death benefits unless the pension has been claimed?

Currently, if the pension is not in payment a return of premiums would be the spousal benefit

Does that scream take the money on the bald stats?

IFA seems to be on the fence.

The death benefit thing was the same with mine - I was advised that if it was a concern insurance wouldn't have been that expensive??

The other things my advisors found in support of the move was the provided benefits being a poor fit for my needs.
My wish/requirement for flexibility in payment
Our plan to use a substantial part of the policy for IHT management

If you express an interest/requirement for a larger tax free lump sum that is also a positive.

good luck with finding someone who will help you.

happyandcontented

pip895 wrote: »

The death benefit thing was the same with mine - I was advised that if it was a concern insurance wouldn't have been that expensive??

The other things my advisors found in support of the move was the provided benefits being a poor fit for my needs.
My wish/requirement for flexibility in payment
Our plan to use a substantial part of the policy for IHT management

If you express an interest/requirement for a larger tax free lump sum that is also a positive.

good luck with finding someone who will help you.

Yes, we are in the process of taking out insurance until we make a firm decision. It is ( for us) c £120 pcm for 500k, but for a fixed term till 65.

The larger tax free lump sum would be attractive as we intend to buy a smaller property close to where we live and rent it out until we decide to downsize. That is a given, as this property will become far too big in retirement and also some has accessibility issues for us even now, which, as we age will become worse.

All of the other points you mention do apply to us too.

Not an easy choice.

jamesd

happyandcontented wrote: »

What about a fund value of 825k v £20k PA now (59) or c25k at NRA (65) with no death benefits unless the pension has been claimed? It is index linked. ... Currently, if the pension is not in payment a return of premiums would be the spousal benefit ... Does that scream take the money on the bald stats? ... IFA seems to be on the fence.

Yes, that loudly screams take the transfer.

The UK 90% success rate safe withdrawal rate using the Guyton-Klinger rules is initially 5.5%.That's £45,375 now, with 100% spousal pension. GK adjusts that up or down based on actual investment performance.

90% success rate means that only the worst 10% of historic cases needed cuts greater than those built in to the GK rules. For the UK those are largely due to the cases where WW2 had a big effect.

jamesd

pip895 wrote: »

I have decided to go ahead but it wasn't black and white. The Critical yield was in fact very high

The critical yield is likely to be a really poor measure since it'll normally be calculated on the basis of you buying an annuity, not using drawdown. It's one of the built-in biases against transferring in the calculations the FCA wants done. State pension deferring is a good way for those with normal life expectancy to get extra guaranteed income.

sandsy

ffacoffipawb wrote: »

Being female should make no difference, transfer values may be gender neutral nowadays?

They're not gender neutral. The Gender Directive doesn't apply to occupational pension schemes.

stephen0002002

TY. Currently I'm tending towards ...
1) TV 1 FS pension and (poss) defer the other one until 65 (3 yrs away).
2) Looking for a good index tracker(s) for my TV sipp
3) Looking to do a small cash SIPP for wife (the 2880 equation) each year.
4) Monitor things fairly regularly and move as necessary in future years.

stephen0002002

Also I've now had a little look at index trackers. I like the sound of these. Vanguard life strategy series look quite interesting.
May consider these - with diversity and may be varied risk (for growth).