Hoping to retire at 58

Dizee123

First post so my apologies if I have missed out any crucial information. I have seen some great advice given on this forum and hoped that someone would spare a few moments to critique my thinking outlined below.
Current circumstances and aims
I am 56.5 years old living with a partner of 51.5 years (very long term relationship but never married and unlikely to do so unless I get a terminal illness - we both have life assurance/critical illness cover to cover death provision). I am hoping to retire at the end of Jun/Jul 2021 as becoming very disillusioned with work and want to spend more time on hobbies and with grandchildren. Our mortgage is paid off and we are happy where we live.
Current pension provision and savings
Me. I am lucky to have worked for the government for most of my working life (first in the armed forces and subsequently in the civil service - pension now all in Civil Service Classic scheme). My classic pension at 31 Mar 19 showed £22,350 (gross) with the standard lump sum of £67K. Now moved into Alpha, but for me there was little difference between classic at 60 and alpha reduced at 60 so expect this will probably grow to around £24K at 58-60. This will be CPI linked.
58-60 - Intend to live on AVCs of £34K with Standard Life and Legal and General.
Take tax free element in Aug 21, and then take out up to personal allowance in Apr 22 to tide me through to DB kicking in Jul 23 at 60. This should leave a little for contingency in this pot.
Supplement this from savings if needed (range of S&S, cash ISAs and other bank accounts which will be worth £175K by age 58) I am a low risk person.
67+ State Pension will kick in assuming I live that long, and should have a full pension if I contribute an extra couple years of voluntary contributions.
Partner. DC pension of around £100K and will likely contribute till he is 60. He also has other assets and savings currently worth around £200K and he is likely to work another 10 years+ perhaps reducing to PT when 60.
He will have a full state pension at 67 as has not been contracted out and worked all his life from age 16.
Outgoings
I have been keeping detailed spreadsheets of spend for the last few years.
Now that the mortgage has gone, my annual spend has settled between £21 - £22K and there is much scope to save on some categories (£5,600 on food - eeek!). Partner gives me £5,200 per year and pays for motorbikes, second car and towards holidays which balances out). So my contribution is around £16,400K or around £1,400 per month. Capital expenditure for new cars, new roof (if needed), new boiler, updating bathroom to come from my DB lump sum and partners savings. Would also like to provide children with £20K each towards a house deposit if possible.
I don't see my spend reducing by much in retirement, if anything it might increase by £1-2K each year as I find time to spoil the grandchildren with days out

My question is really, am I missing something that makes my plan unworkable, and how best to bridge the gap between 58-60. Any thoughts and alternative views would be much appreciated and I am not adverse to getting a part time seasonal job in the winters, but would love to keep summers free for days at the beach and tennis.

Albermarle

Have you researched the implications around inheritance tax/wills etc of not being married ?

crv1963

The finances seem to add up with both of you having a fair bit of savings.

A couple of questions- I agree with Albermarle over the need to explore further the tax implications of not being married. Whilst I wouldn't advocate marriage simply to avoid taxation it might be worth discussing?

Are you sure your partner will be happy working a minimum of 7 years after you retire? Would he not prefer to retire around the same time give or take a few months?

Could your partner move some of his savings into his pension?

Retirement is generally a joint venture when part of a couple- do you have joint plans?

Dizee123

Thank you for your replies and the good pointers on taxation.
I think we do need to look into tax planning, it has always been something that we put off thinking there would be lots of time to do it in the future (but the future has a way of creeping up sooner than you think). We do have wills in place, but these were done a while ago, and could probably do with updating. Its quite surprising how a share of the house and some savings can soon mount up to above the inheritance tax limit.
I think my partner would like to retire early, and might do if the opportunity arises (and his addiction to buying lots of motor vehicles ceases!). I believe he considers it a good trade off to work to be able to satisfy his more expensive hobbies, and he mostly enjoys his work. I think going part-time in a few years might be a good compromise.
We do have lots of joint plans as well, we love our short breaks in the UK looking round National Trust and English Heritage sites. We've done a lot of long haul holidays in our youth and thought we would leave Europe and city breaks for our later years. We have dogs and love walking them as we live near some lovely countryside.
Its not that we are anti-marriage, its just that after 30+ years inertia set in and we just never got round to it...might need to have discussions on these new civil partnerships.
Thank you again for pointers and that my figures seem to stack up - much appreciated.

DairyQueen

Being married/civil partnered is a big tax/financial advantage for couples or, should I say, not being married is a disadvantage. You can optimise investments, savings, income and inheritance by utilising otherwise unused allowances and tax-free transfers.

You cannot inherit each other's unused IHT allowance, nor claim the marriage allowance, nor inherit each other's ISAs tax-free. You can't make tax-free transfers to avoid CGT. You can't use each others' savings and dividend tax allowances to reduce your tax bill.

The other stand-out point from your OP is the separation of finances. Mr DQ and I headed speedily to the register office after calculating just how much we would save if we formalised our relationship and ran our finances jointly. Then in our 50s, the financial benefits made it a no-brainer.

RobinHill

Dizee123 / DQ, sorry to highjack this thread but I may need to understand more about the "formalised relationship / financial benefits". Will raise a new thread if required.

jamesperrett

If you are still working for the Civil Service it would be well worth asking your employer to send you on a pre-retirement course. Even if you aren't planning on retiring for a year or two it will give you plenty of things to think about and cover many of the issues raised here.