Seen an FA finally! This is the plan to retire early....anyone any opinions?

FIRSTTIMER

I had a realisation that I want to retire at the earliest age possible and wanted to know how to do it. This is what was decided after finding a FA who would tackle it.....I just wanted to see others opinions on it. Currently 35. This is all based on today obviously.


Retire 58 (change due to 10 year differential between NPA 68 and early retire age in the pipeline).


1. Pension (TPS/USS) - Pay in maximum - currently 18% for me per annum (includes Faster Accrual/3 year buyout). NPA will be 65 currently after 3 year buyout. This is projected to generate me circa annual salary of £35-£40k at age 65 includes potential increases and revaluations.
2. SIPP with Fundsmith Fund : £250 monthly
3. S&S ISA with Vangaurd 100 Fund : £250 monthly
4. Old Employer Deferred Defined benefit scheme, leave as is - current CETV value is £65k.


At 58, drawdown SIPP in chunks (after taking the max lump sum) so annual drawdown is the annual tax allowance yearly including looking at the CETV value of deferred benefit scheme and possibly transfer this into SIPP to boost the cash value and drawdown values between 58 and 65 (more than likely transfer it).
S&S ISA is just a cash boost where needed between now and retirement.
Review CETV of the old employer pension annually from around age 45-50 - as might need to transfer early to SIPP if it starts to drop significantly.


Take TPS/USS pension at 65 when SIPP may have ran out, but at 56/57 need to look at projected loss between 58 and 65 (7 years of no contributions to the TPS/USS scheme) and boost it with a cash payment from S&S ISA if needs be, therefore leaving it with the absolute maximum contributions allowed before departing (currently £6800 across all flexibilities). However, because I am paying around 20% of my salary into it for the next 24 years - I will more than likely reach that eventually.


I am hoping across the SIPP/S&S/Deferred Pension I have circa £250-300k to play around with at 58 for 7 years.


Ignore mortgage overpayments/future house moves as my rate is small and projected to pay off at 60 on every house buy situation/occasion anyway, just ensure the above is always happening.


That's about it


Hit me with it people...all advice appreciated.

wjr4

IFA or FA?

FIRSTTIMER

Independent Financial Advisor

wjr4

1) How much can you afford to save monthly? £500?
2) Why do you need the max PCLS at age 58?
3) Why would you transfer the old DB scheme? What income is this projected to pay?

FIRSTTIMER

1. £450 (£500 inc the tax relief)
2. Whats PCLS?
3. The old DB scheme is projected to pay out £4-5k annually at age 60. He said the rise is RPI up to max of 5% annually in my scheme. The CETV is likely to give me a much bigger return if say it!!!8217;s 100k in 20 years. If I was 60 taking 5k annually I would need to live well into 15-20 years to get the equivalent CETV value.

FIRSTTIMER

Ahh - he said the PCLS would need to be the max with the SIPP as he thinks to maximise not paying tax. I may end up paying too much tax if I take min lump sum out the SIPP and then an overlap occurs at 65 meaning I could be well into paying too much tax with two pensions running concurrently with a maximum annual pension instead of reduced annual pensions on both. Plus the SIPP/Deferred pension and the S&S ISA isn!!!8217;t my long termer - it!!!8217;s to pay for the 7 year gap in the most tax efficient way really.

kidmugsy

LISA rather than ISA until age 50?

Paul_Herring

This is the plan to retire early..

FIRSTTIMER wrote: »

Retire 58 (change due to 10 year differential between NPA 68 and early retire age in the pipeline).

I, personally, wouldn't consider 58 to be 'early' - was there no discussion of funding any years (outside of a pension) before 58 over the next couple of decades?

FIRSTTIMER

LISA is too restrictive. Pay into it until 50 and then get it at 60. What happens for 10 years? SIPP is much better as can drawdown from 58 (probably) and pay into it all the time and pay in more than 4K per year if needs be. The 5 percentage extra you get back on a LISA is not worth it.

FIRSTTIMER

I covered that in my list of things? I don!!!8217;t understand what you mean by funding extra years?
58 is the minimum age you can access pension funds and it!!!8217;s only 20-23 years away for me. I think that!!!8217;s very early for me considering I!!!8217;ve worked since 16. I!!!8217;m almost half way through my working life now then which I am happy with.

dunstonh

What happens for 10 years?

It carries on growing just as the same fund in the pension would.

SIPP is much better as can drawdown from 58 (probably) and pay into it all the time and pay in more than 4K per year if needs be.

Then you use the SIPP to fund the gap.

The 5 percentage extra you get back on a LISA is not worth it.

What 5%?