Retiring April 2021 - Second opinion on our plan please

ianthy

I have been following the posts/threads on this forum for many years and making a small contribution where I can.  I have learned loads from this forum. The clock is now ticking ... finally we will retire in April 2021. Unfortunately, my simple spreadsheets are in overdrive and we are wearing out the buttons on my calculator constantly checking numbers. I have used a couple of online tools but they don’t seem to answer the questions that we have. I think we should be ok in retirement but would value a sense check.

Me Age 58

Self employed for 20 years, I will liquidate my limited co in March 2021 - final payment to me £170k.

Ex DB pension transferred to SIPP in 2017, current value £950k self managed with AJ Bell with moderate growth of 4%. It has achieved abit more with 17% in 3 years. I plan to start drawdown in April 2021 at £25,000 gross per annum. I have already taken 25% TFLS and LTA limit was set at £1,250m in March 2017.

Fully funded state pension at age 67

ISA’s £117k in Equities.

Currently I spend £25k per annum and we use some income from BTL investments for holidays etc.,

OH Age 58

Employed with Civil Service pension, must be taken at age 60 = £16,500 per annum.

SIPP £200k self managed - drawdown from April 2021 £10,000 per annum. Hasn’t decided how to take the TFLS.

Fully funded state pension at age 67

ISA’s £78k in equities

Joint

We share 4 investment properties including a holiday home in Europe producing £60k net income after tax.

We jointly share £750k (mainly in fixed interest accounts and equities) from downsizing from our family home plus a misc account with £35k. We have no mortgage on our ‘new’ home valued at £1.5m, we live in London and we have no children.

Budget

We need approx £50k net a year to live how we wish. Some years we will travel more and for big longhaul trips we will splashout. We don’t need a new car at the moment and our ‘new’ home is undergoing a complete renovation, the costs are set aside separately from the info above. We are not expecting any big maintenance bills in the next 10 years. We hope this is our last home and to leave it feet first.

Questions

-  Am I drawing enough from my SIPP to avoid breaching  LTA ? The growth is targeted as moderate @ 4%.

- OH must take Civil Service Pension at 60. Are there any other options?

- OH SIPP TFLS – is it best to take 25% tax free in April 2021 or phase it each year? OH will not be adding any further contributions to the SIPP.

- is there anything missing? 

Thanks for reading and your comments. 

jimi_man

Just adding up the rough figures, not including the investment properties, you seem to have around £1.2 million in savings between the two of you.

Before SPA in terms of pension you've got just over £50k in pension (plus the £60k BTL), with another £18k after SPA, giving you £110k then around £128k after SPA.

I'm not too worried about you, I actually think you'll be ok. 

You have no-one to leave the money to I assume, so your biggest problem will be spending it. 
In terms of the Civil service pension, she can take it earlier - with a suitable drop for however many years earlier she takes it. I'm guessing it's the Classic scheme?

Linton

Something missing - With £60K/year from property and an income need of £50K/year what are you going to do with all that money in your SIPP, your SP, OH DB pension, OH SIPP and downsizing lump sum?  An annual luxury round the world cruise?

Bravepants

Hmmm...yeah I don't think you have anything to worry about! lol

kangoora

I make it circa £2.3m currently - 750k joint savings, 950k SIPP1, 200k SIPP2, 200k in ISA1 & 2, 170k co. sale & 35k miscellanous......... That doesn't include the value of the 4 investment BTL properties.

Add in 60k letting income, 16.5k DB pension, 18k (2 x SP at 67) - almost £100k/year BEFORE any drawdown at 67

With a required income of 'only' £50k in retirement I think the government and any beneficiaries in your will are going to be very, very happy when you pop your clogs.

You could probably have retired 10 years ago (at least 5) to be honest..........

In answer to your questions, why do you even care? You have enough assets and cash income that paying a little extra tax isn't going to make a slightest bit of difference to your standard of living

jimi_man

Mind you, bearing in mind the uncertainty of the markets - maybe another couple of years work? Just to be on the safe side? 

I wonder if we're being had over......?

Brynsam

If you've got all this cash, why aren't you taking properly informed advice from an IFA instead of relying on strangers coming up with thoughts that might or might not help? However knowledgeable the answers, they are based on a few paragraphs of information in your post.

Albermarle

I think the only thing you have to worry about is the potentially huge inheritance tax bill for your heirs,  which is one of those luxury problems .

Albermarle

Seems to me the OPs biggest mistake was not retiring years ago and wasting all that time working instead of enjoying life more

Perhaps he enjoys working , many people do .

TBC15

You could probably save about £1000 pa in fees if you moved your SIPP to Interactive investor.

Audaxer

ianthy said:

I think we should be ok in retirement but would value a sense check.

As your income needs in retirement will be £50k per year, and your joint income from 60 years old from SIPPs, DB Pension and Investment properties appears to be adding up to £111.5k, I'm absolutely sure you will be okay. That is not even taking into account the final payment from your limited company, ISAs and joint fixed income and equities.

However in view of the significant amounts involved it is probably worth paying for independent financial advice rather than sweat over spreadsheets if you still need answers.