Retirement Imminent - impact of coronavirus on your plans

DairyQueen

For those due to retire in the next year (or two), how has the pandemic impacted your plans? What actions have you taken to mitigate  the impact (if any)?.

Me: 61, retired, caring for aged parents. SIPP not yet in drawdown.
OH: 63, consultant (finance director ) self-employed via limited company. DB plus SIPP.

OH reached DB scheme NRA  last year and deferred taking pension courtesy of good late retirement factor. In Feb this year, pension administrator advised that late retirement factor was being reduced and reduction would be applied retrospectively. Cue: OH flipping out and threatening ombudsman for retrospective reduction. Plan was to take DB next year with two years of late retirement boost but Covid, plus loss of confidence in pension scheme's 'guarantees', equals OH taking DB this year. 

OH's income from self-employment initially reduced by 2/3rds on lockdown but has since recovered to 50% of projected income for this tax year. This means retained dividends will be approx. £60,000 less than anticipated in the run-up to retirement.

We are moving this year - selling two properties and buying one (retirement dream home). Lord knows how the property market will be impacted - suck it and see. We are hoping that any drop in value on the sales will be offset by a corresponding drop in our purchase.

We are fortunate that we have multiple sources of income. We are also helped by being overweight cash on our investment portfolio (20%). Nothing to do with foreseeing this black swan, the move to cash was catalysed by my view of inflated equity values early this year. 

I will also be drawing down on my SIPP sooner than anticipated. Drawdown front loaded to take advantage of personal allowance before SP kicks-in and to compensate for reduced retained dividends from OH's business.

At least we won't be hit by the dreaded sequence of returns risk as all SIPP drawdown for the next 5 years is currently in cash.

Other's views?

shinytop

I decided I needed to cut back on spending by foregoing holidays abroad for most of this year and cutting back drastically on eating out and weekends away. 

Seriously though, not much change here as most of my income is from DB sources and I have enough cash for 2-3 years.  I've left my investments as they are.  I am moving house as I type though but that was planned pre-pandemic.   

tigerspill

I retired at 53 last April.  My wife will retire at 55 next August.
We both have DB pensions - I am going to take mine in January, and my wife when she is 60.

We have been planning this for a while and have probably 7 years top up cash.  The rest is invested in fairly low risk investments for 8+ years out - we will sell some when the market is in better shape so we always have cash crystallised at a time of out choosing.
I do have AVCs associated with my pension - all in Equities.  Higher risk than I wanted, but I didn't have many funds to chose from.  I must sell these as part of taking my pension regardless of price so will need to buy back immediately into the market so as to reduce crystallised loss.
We moved to our "retirement bungalow" last year.
So TBH., our plans haven't changed as we have planned for this and put the necessary mitigations in place for investment problems.  Thanks to all the information on this forum!  
You could not pay for what you learn on here.
One impact will be travelling.  This is one of the things we wanted to increase.  May have to wait a while to ramp that up.  But that wasn't die to begin in earnest until summer 2021 when my wife retires.

cfw1994

Ah, work has got more fun now I am permanently in my home office  £10 on green material made my zoom backgrounds far more entertaining!

Might carry on another year now.  Our company has confirmed no returns to offices round the world until Oct at the earliest.  Don’t think I would fancy stepping down in winter....

Pensions are doing okay.....on the bright side, getting lots of cycling/walking exercise....our ‘kids’ are great cooks so have been eating well (I’m practically a vegetarian like them now, must be good for me!).  Extra volunteering plans kinda scuppered for this year: son has had good offers for his masters; daughter starts first job after she graduates in summer (bit of an anticlimactic end to her Uni life, sadly, but nothing anyone can do), so we will sit tight.
Missing pubs, pals and holidays, but had a fab VE Day in our street and now know more neighbours (& to properly speak with!) than we have for over 20 years!  So much so we had another minor bash last Sat (safely distanced of course!).  Also have a couple of small breweries serving take outs, so life is okay
Embracing the new normal.....it could be around a while......

crv1963

Covid-19 has actually had a positive effect on our plans! 

Took my DB Pension end April- had served notice end of January before the current situation became so serious. Plan was to retire and then either work agency full time or return to work part time so as not to fall foul of the Pension Scheme Rules and top up with agency part time. Covid-19 has changed plans- Emergency Act cleared me for a retire and return full time, plus continued overtime without impacting on my DB Pension.

Net result, I have usual income plus pension (first payment due 1/6/2020), so we're clearing mortgage with my TFLS and using the remainder for further work age proofing our home- we like where we live and so have no plans to move, although that had crossed our minds. Using income to save the same amount of wife net earnings into her SIPP, and opening a SIPP in my name to save everything that I get taxed at HRT. We plan to draw down whatever is in the SIPPs at a rate equal to our SP until SP starts. My SIPP will likely then be empty but Mrs CRV will likely have enough to carry on draw down just under start of income tax rate for a few years after starting getting her SP.

I took a view- a hunch- that likely fall out from the extra cost to the Govt. may be the TFLS getting some sort of tax laid against it in the future and likely tax relief for HRT will be reduced- things that are always mooted around budget time but I thought I'd mitigate in my own little way. Paying off the mortgage isn't the best use of the TFLS I am sure but the "peace of mind" it affords Mrs CRV is worth it. 

Not withstanding our personal increased risk of catching the virus- both frontline essential workers, it felt wrong to retire completely at the time our skills are required, a personal view I know but one echoed by several other colleagues who have either delayed retirement, retired and returned (like me) or returned from retirement. Personally spending has dropped quite a bit, mainly fuel for travel to work (increased commute) and "meal deals from Tesco". No spend on days out but that has a worse effect on my mother than me- I still get to travel all be it to work.

I have found that I am spending more on mail order plants/ soil delivery and garden supplies- most of which I in turn pass on to Mum- at 81 she is spending around 12-14 hours a day in her garden and now she is pleased it is so large! It also looks good and I post pictures on line for my Uncle (her brother) and other family to see and she feels this brings her closer to them when she is told their comments.

I do miss going down my local on my days off- usually twice per week for a couple of pints and a natter with friends. Lockdown has had no impact on Mrs CRV lifestyle, she has carried on her normal go to work, go home, order hobby supplies on line, do hobbies!

green_man

I am due to start drawdown Next Feb. Main fund is down around £100k, I am expecting that this may go lower as it looks like the market Is being a tad optimistic IMO. However I will stick to my main plan.  My fund has about 3 years of expenditure in cash, in hindsight it would be nice it that had been higher.

My main concern at this point is whether my ability to transfer plans/providers is going to be affected.  I need to transfer out of my work plan this summer to somewhere that provides drawdown. I am planning to transfer to Halifax SIPP.  The majority of funds will be going into HSBC Global Strategy balanced fund; then cash, Smaller global Companies and Emerging Markets forming about 30%.   I worry that I might be out of the market longer than expected due to reduced Halifax workforce, in a volatile period this is something I need to try to minimise.

[Deleted User]

I don’t  have a fixed retirement date but plan to leave main employment at some point in the next 5 years. At that point a small DB pension will start and I will refocus on making income from our hobby farm. 

My mental target was to reach 1.75M GBP net worth in assets (except DB pensions). Got close in February, within 4%. As of now net worth is about 8% down as it has partially recovered from the maximum drawdown in March. 

As a result I will try to carry on working for a bit longer but hopefully still “retire” within the next 5. The other part of this equation is that the job feels very insecure so might not be up to me. 

[Deleted User]

November for me, 124 working days. Me 54, partner 49. She doesn't work, I have SIPPs and DCs and a DC with GMP, all being consolidated or will be.
Both good SP forecasts - mine slightly more, her slightly less
I had a figure I could live on and planned to sell the house next year, rent for 6 months then move abroad
Nothing that is happening now is worrying me, I have started to drip feed back into the market after being in 80-90% cash for 18 months.

happyandcontented

I was planning on finishing in July this year, but as I am now working from home as is DH and we can't travel then I will carry on until we are asked to go back in. I work in tertiary education so that could be September, or it could be later if online teaching continues into the new academic year.
DH was planning on finishing in June next year and probably still will if travel is possible again. If not, he will carry on as his company has indicated that those over 50 who can work from home will do so for the foreseeable future. Walking across the landing to the office is not as arduous as jumping into the car and travelling miles to work.

In terms of finances, we are doing quite well. A no spend travel year will save us c15k and we have had several unexpected cash injections by way of a PPI payout, car accident claim payout and I took my small lump sum from the civil service at 60 in March this year.

We have cash savings reserves which would last us 5 years if we spent wisely and our pension pot is circa1.3m, we will have full SP at 67, our house is mortgage free and we have two newish cars. Our three children are all grown up and have their own homes and good careers so the bank of Mum & Dad is mainly closed! However, we would like to move in the next two years so that will incur costs, as the house we have in mind would need completely redoing to suit our needs and wants.

If travel had not been an issue we would have had to balance that with the house purchase/renovation, but it appears that the adventures we had in mind might have to be placed on hold for some time so that dilemma is probably resolved.

We are actually enjoying spending quality time together and it has been a dry run for retirement, albeit without the outside or travel activities that will entail. I was not definitely decided on finishing in July before the lockdown as I felt I might not be able to fully occupy myself. However, being locked down has proven that I can happily while away several hours reading, sitting in the garden, cooking, pottering and generally keeping busy.  I am also finishing a Literature degree via the OU so that will keep me busy too. I am now quite happy to finish work as I know I will be fine and have so many cancelled activities to rearrange that I will not have time to go back to work!

We have also found time to really count our blessings and help in our local community. We have benefitted from great service from our local small shops. Going forward, we have decided to reduce our reliance on supermarkets and use the shops who went the extra mile for us by providing deliveries which helped us keep our elderly parents supplied with essentials when online shopping deliveries went crazy.

So, in many ways, Covid19 has been a positive experience for us and for our retirement plans, but we appreciate how fortunate that makes us and we don't take anything for granted, as it has also shown us how life can change in an instant.

cfw1994

You make a good point about local shops and community.  

We have discovered a couple of options for decent vegetables, a great tiny brewery opens up twice a week for takeouts, and the small local stores near us have been great for other essentials (incl. milk/bread/ice cream!): I fully intend to make more use of all of them in the future.  Items might cost a little more, but I hope will will think more about what we need and waste a bit less to counter that.....

DairyQueen

Deleted_User said:

I have SIPPs and DCs and a DC with GMP, all being consolidated or will be.
Both good SP forecasts - mine slightly more, her slightly less
...
Nothing that is happening now is worrying me, I have started to drip feed back into the market after being in 80-90% cash for 18 months.

First point... won't you lose the GMP protection if you transfer to consolidate? I ask as Mr DQ has a (very old) S32 scheme. It is pre-1988 so no indexation when in payment and the transfer value - always highlighted on the annual statement - was pretty small. However (a big however), the GMP underpin is worth the annuity equivalent of approx. three times the transfer value. Needless to say, the administering company never mentioned this (ahem) minor point. They also never mentioned that, thanks to an ombudsman ruling on a similar policy with a GMP underpin, Mr DQ would be able to receive the pension from age 63 and not the usual GMP age of 65. I have this forum to thank for educating me on the advantage of hanging-on to this particular policy when I consolidated our other DC policies into SIPPs.

Mr DQ turned 63 in April and received his very first pension payment, from any source, yesterday when the S32 monthly payment hit our account. OMG, I am married to a pensioner!

Second point... can I ask why you were so overweight cash and for so long?