Guidance needed after Life gave me a kick up the !!!!!.

dacdac

After recently suffering a heart attack at the age of 55 it has resulted in me reviewing plans and priorities.
Following treatment and life style changes the impact on life expectancy is minimal. It has however changed my focus from career and chasing the next promotion to being focussed on retirement and planning for the next phase of my life.
My current pension provisions are:

defined benefit 1
Normal retirement age = 65
Current pension payable at 65 = £6,095
Spouse pension yes (50%)
Not indexed linked as GMP

defined benefit 2
Normal retirement age =63
Current estimated pensionable pay at 63 = £9,384
Spouse pension yes (50%)
Indexed linked
Poor funding and likely to enter PPF

defined benefits 3
Normal retirement date =63
Current estimated pensionable pay £6,153
Spouse pension yes (50%)
Current funding ok

Defined Contribution Pensions:
Standard Life
Current value =£34,622
Fund = Standard Life Managed Pension Fund 14,701 units

Aegon
Current value= £121,311
Fund = Aegon Universal Lifestyle Collect RR 91,929 units

Scottish Widows
Current value= £81,467
Fund pens portfolio four x6,100 and pens portfolio three x 32,680 units
Currently contributing £1800 per month (including employer contribution)


Current DC pot total = £237,400

Estimated Pot at 60 = minimum £325,000
TFLS =£81,000
My estimate is that we will need £35k pa for a comfortable retirement and dip into drawdown pot for additional luxuries etc.

My current plan is :
From 60 take £25k per year from TFLS plus possible part time job till 63

From 63 take DB 2&3 pensions £15,500 plus £15k drawdown total = £30,500

From 65 also take DB1 pension £6,095 and reduce drawdown to £10k total = £31,595

From 67 take state pension @ £9k pa and reduce drawdown to £5k total = £35,595

I have £150k mortgage in a offset tracker with £35k of savings offset and am currently over paying minimum of £1k per month. Current property value is approx £700k
Plan is to down size/ relocate at 60-63 and pay off mortgage. If plans change then plan b is that I continue working until 63 and use TFLS to pay off mortgage.
OH pensions

DB1 pension = £3,500? TBC from 60
DB2 pension = £3000 TBC from 60

State Pension = £6,600 (could be £8,500 if additional NI contributions) @ 67

What I am seeking guidance on is :

1, Are my current DC pot funds sensible for someone hoping to semi retire in less than 5 years? Are there better or more appropriate funds with the same provider? I would say my attitude to risk is the lower side of medium. I take comfort from my DB pensions but would be happier with slightly lower returns and risk .

2, Sanity check my high level plan? Is it realistic? Have I missed anything obvious?

3, Should I be seeking a IFA review? If so when? Now or as I approach the time where I need consolidate pots ready for drawdown? I am not experienced with investments so am not against the idea paying for a review and ongoing management of my drawdown pot.

xylophone

defined benefit 1
Normal retirement age = 65
Current pension payable at 65 = £6,095
Spouse pension yes (50%)
Not indexed linked as GMP

Do you mean that the whole of the pension is pre 88 GMP?

State Pension = £6,600 (could be £8,500 if additional NI contributions) @ 67

Has your wife obtained a state pension forecast?

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

Does she have her own pension provision?


See also

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/topping-up-your-state-pension-guide.pdf

dacdac

Yes DB1 was from employment between 79- 84

Yes the figures provided are from SP forecast and she doesn't have any other provision apart from the two DB pensions I listed in my post for a total of £6.5k

Thanks for the link

kidmugsy

dacdac wrote: »

Current DC pot total = £237,400
Estimated Pot at 60 = minimum £325,000 ...

the time where I need consolidate pots ready for drawdown?

I wouldn't consolidate them. Current protection is £50k per pop, rising to £85k in April. In your shoes I'd prefer to keep them across two or three providers.

There can be, however, limitless protection for some sorts of insurance company products. dunstonh is the chap who understands these things. In your shoes I might decide to pay an IFA for advice, especially as you can get £500 towards the advice paid from your pension pots three times in your life.

michaels

You mention 'we need 35k' but only include you pension income in your calcs not including your partners 12k+?

xylophone

Your wife is a non earner?

Had she thought of opening a pension to take advantage of the "basic amount"?

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100#IDAN30KF

She (or you on her behalf) could contribute up to £2880 per tax year and the provider would claim up to £720 from HMRC and add it to the pension.

dacdac

michaels wrote: »

You mention 'we need 35k' but only include you pension income in your calcs not including your partners 12k+?

Yes I am still waiting for details of her two DB pensions so am currently basing plans on my pension only and have set a target of £35k accordingly . If they deliver as and when hoped that will be a bonus and will reduce the requirement on my drawdown pot.
My wife did not return to work after we had the kids so my strategy is to use her pension as a bonus income from 60 and 67.

dacdac

xylophone wrote: »

Your wife is a non earner?

Had she thought of opening a pension to take advantage of the "basic amount"?

She (or you on her behalf) could contribute up to £2880 per tax year and the provider would claim up to £720 from HNRC and add it to the pension.

She hasn't but I have 😄
I plan to do that and then withdraw and add to my pension and get the HRT relief as well. I just need to identify a suitable SIP that doesn't have prohibitive exit fees.

AnotherJoe

I have £150k mortgage in a offset tracker with £35k of savings offset and am currently over paying minimum of £1k per month.

You dont say what your salary is but even as a basic rate taxpayer you'd do better to put that £1k into a pension and then release that gradually over a few years once you retire/part retire aged 60, to pay off the mortgage. If you are a high rate taxpayer, you'd be barking not to.

xylophone

I just need to identify a suitable SIP that doesn't have prohibitive exit fees.

Do you plan to keep the SIPP in cash?

HL make only a small exit charge after a year.

No charge to hold cash and withdrawals are free.

justme111

To me it looks like you will have too much spare money after 67 - not sure why you insist not counting on your wife's pensions but factor in drawdown instead still from 67 onwards( even if you had to draw down 5k/year from 67 to the end of your life your DC pot remnant would be unnecessarily large for just 5 k drawdown . As in reality she has those pensions you will end up having too much money. Your wife is bound to have some SP as well , does not she? You have not included it in planning at all. And what about money freed by downsizing ? Do you really want to have that spare money in 12 years time for "luxuries" at a cost of working for 5 more years now at 55 ? As someone said running out of money is a chance, running out of years is a certainty ..
Others say that money is never too much which I suppose is right in itself ( although it may shift priorities at a detriment to really important ones or isolate people ) but one trades one's life to get money so just how detrimental is that trade to get money which is not needed?