Can I throw in the towel now?

Zola.

Nice inheritance!

The general consensus would say if you have x25 your annual expenses then yes you can if you draw down 4% each year..

Brynsam

You've had 'horrific self inflicted debt' (well done indeed for getting out of it) and 'accidentally triggered the MPPA'. Suddenly a pot of gold appears...

History tends to repeat itself - and given your history, one of my priorities would be to ensure that some of the money is tied up long term to ensure that the temptation to 'just buy...' doesn't leave you penniless in a few years. The problem with large chunks of money is the false sense of security they can instil, meaning that you buy things you would probably be better not buying. A bigger, newer car; that fantastic holiday...we've got the cash! Trouble is you won't have for long if your spending habits creep back to the old ones.

Go and see and IFA for an exploratory meeting and don't be shy or embarrassed about admitting to the mistakes of the past. Their roles isn't to judge; it's to work with you.

Enjoy every penny!

JoeEngland

Sallyforth wrote: »

I have worked full time all my life in a fairly dull role to pay the bills and exist. At 57 with little retirement planning I am in the fortunate position of inheriting c. £450,000. No mortgage and husband retired on state pension only. Low maintenance property we intend to stay in making a few home improvements costing around £20k. I have so far maxed out premium bonds for us and invested in ISAs leaving around £300k when ch I need to consider. It is currently sitting in NS&I account. The question is really can I safely hand in my notice and survive?

It depends on how much money you want to live on, but if that was me I'd hand my notice in today and open a bottle of champagne! I'm planning to give up FT work when I'm 54 and will have less than the £750k you have, although we have a couple of small DB pensions.

Triumph13

Easy peasy. Your personal 'number' to live comfortably is £15k pa. In 10 years' time your combined state pensions will be £19k pa which is a nice margin above that. Backfilling your state pension for 10 years takes £85k. You have nearly £400k 'spare'.
I'd suggest that the key priority is making sure that you have sufficient income if and when your husband predeceases you. If you are in good health then deferring your state pension for say 5 years to get it up to £11k would be well worth looking at, adding about £42k to your 'bridging' cost.
I would then be inclined to invest say £300k in an equity-rich portfolio and hope to be able to draw close to another £1k a month, rising with inflation, from that (4%) to give you about £30k pa to spend - double your 'number'. The good thing is that you don't 'need' that additional income and so can afford to greatly reduce or stop it in a market downturn, which should make the 4% average eminently sustainable.

kidmugsy

Sallyforth wrote: »

So, we can live comfortably on say £15k net. I checked my state pension and I am 36p a week short of the maximum I can receive in 10 years when I turn 67. I guess that is sound?

Triumph13 has shown you that this projected expenditure means that you can undoubtedly chuck in your job if you want to.

The idea of spreading your wealth between risk-reducing assets such as Premium Bonds and savings accounts, and return-seeking assets such as stocks and shares, seems attractive to me. I might also diversify into a bit of gold, commodities and TIPS (US government bonds that are linked to inflation); your IFA may well discuss those with you. Be sure to work out with your IFA how best to minimise your tax bill - tax shelters include personal pensions, ISAs, and your husband. Avoiding tax is an excellent way to cushion the effect of any disappointing or mistimed investments.

(By the way: have you considered transferring some of your husband's Personal Allowance against income tax to yourself?)

One other thing: I have no hesitation about attempting to "time the market" - in your shoes I might well opt to make rather modest S&S investments to begin with, or at least to opt to invest in a couple of Investment Trusts that operate on the view that asset prices are unsustainably high at the moment. See post #4 at https://forums.moneysavingexpert.com/discussion/5902217/advice-on-lump-sum-pension-portion-please

Sallyforth wrote: »

I would need to think about what to do with the time. I am almost thinking a little part time office role with a smaller firm locally that offers a bit of income (holidays/treats) but without the 9-5 full time grind.

I've often wondered whether working when some other people find it difficult - say weekends and school holidays - might give you a decent ratio of income earnt to hours spent. The wife of a friend of mine used to work in a John Lewis store in the run-up to Christmas, which she found remunerative and enjoyable.

There are other possibilities e.g. move to a bigger house and take in a lodger. Many people wouldn't be interested but it's a good way of making a tax-free return on capital via the Rent a Room allowance. Or move to a bigger house and make some income by renting out a parking space on your drive. (Even install a recharging point for electric cars?)

AnotherJoe

JoeEngland wrote: »

It depends on how much money you want to live on, but if that was me I'd hand my notice in today and open a bottle of champagne! I'm planning to give up FT work when I'm 54 and will have less than the £750k you have, although we have a couple of small DB pensions.

You need to check your maths .

If you have £450k, place £150k of it in various accounts leaving £300k, you cant then add that £300k to the £450k making £750k It doesn't work like that

Dox

Sallyforth wrote: »

We don’t have expensive tastes or hobbies any more but I would need to think about what to do with the time. I am almost thinking a little part time office role with a smaller firm locally that offers a bit of income (holidays/treats) but without the 9-5 full time grind.

Indeed you would. People with spare time and cash are an explosive mix - you have so many more opportunities to spend money...and re-acquiring those expensive tastes and hobbies is just so easy to do...

Linton

As Triumph says with the addition....


Keeping all the money in cash, as it seems to be at the moment, would not be sensible because cash returns are unlikely to match inflation in the long term. The only available investment that should is equity, ie shares. But if you ignore inflation your £450K kept as cash would be sufficient to provide you with a lot more income than your basic needs. So you do not need to take great risks.


Given the amount of money and your requirement for inflation matching at low risk I suggest you consult an IFA who would be able to help you put together an appropriate set of investments.

bostonerimus

If we assume you can live on 15k net (you need to include taxes at some point) then you are golden. If you get two state pensions at 67 that's going to cover the majority of you income needs. So to bridge the 10 year gap you will drawdown from your 450k. If you put it into something like VLS60 there's a good probability that you'll be able to withdraw and inflation linked income of around 4% for at least 30 years.....so that's 18k. Do some savvy tax planning are there you go, 15k, and once the SP starts you will be able to cut the withdrawal rate to around zero.

atush

Keep_pedalling wrote: »

What is you situation with company pensions?

When you say you have invested in iSAs are you talking about Cash ISAs or S&Ss ISAs?

What is your current company pension like? You can put in up to your net earnings each year and can use up previous year's allowance if unused. TSo this could be a home to some of your money.

If you want to retire now, you will have to take some risk with the money so that it pays an income above inflation.