Retirement Xmas 2020

redmalc

Well I have made the decision to retire Xmas 2020 and I will be Eighteen months from receiving my state pension,my wife will be two years from hers so we need to fund our living from the following.
I will have two personal pension pots totalling 400K, my wife does not have a private pension.
Savings are as follows, me cash isa 80K and S&S isa,s 140K,Shares 80K

My wife Cash Isa 70K , S&S Isa 70K and shares 10K .
My conundrum is do I take the 25% from my pension or fund our living from our Isa,s and advice would be appreciated.

Regarss

Albermarle

It will depend to some extent on your proposed spending levels post retirement i.e. modest with a view to never running out of money even if you live to 100 and/or leaving an inheritance OR do you plan to have a good time /new car/cruises etc for the first few years and not worry too much about after that .
Another more technical point is making sure you use up ( or mainly use up) you income tax personal allowances each year, if possible. Especially in the gap 18 months until you get your SP . From this angle it would make sense for you to take taxable income from your pension ( up to the personal allowance level ) in tax year 21/22 ( assuming that in 20/21 you will have used the allowance whilst you are still working . Caveat here is that once you take taxable income from a pension you are restricted in adding any more to a pension in future , which probably is not an issue for you though.

xylophone

Have you both obtained state pension forecasts?

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

Is your wife currently earning a salary?

Consider starting a pension for her and contributing as much as possible (if not earning then £2880 net) - you have time to get in this tax year.

Contribute as much as you can to your own pension while you have earned income, using carry forward if relevant.

Get the unwrapped shares into S&S ISAs as soon as possible - you and your wife should be able to do this within a couple of years if you use both your allowances.

My personal inclination would be to keep a good cash reserve for emergencies within cash ISA, then use savings to fund retirement, then consider how to withdraw from the pension.

redmalc

Xylophone many thanks for your response, myself and the wife are due to get Max state pensions, I am maxing out 40K per annum into the pension currently and my wife finished work five years ago.
I have booked an appointment with an IFA next week for a chat about our position and the best method of funding our retirement
Regards