Saving to retire early.

eskbanker

Seems to me that you need to decide and agree on whether you and your wife are going to make your own separate financial plans or if you're going to be able and willing to act together.  Either way, you need to get a handle on how much money you'll anticipate spending in each of the phases Digger outlines earlier, and back-calculating from there what sort of size of pot you'll need to fund that - you mention wanting/needing £400K for the seven years between 50 and 57 but then apparently anticipate funding life beyond 57 from a pot that's currently 'only' in £1m territory (which would be expected to yield no more than about £40K/year, perhaps £50K after growth above inflation in the next 12 years, assuming you don't fall foul of LTA).  Many would see these numbers as very generous, but if you're starting from a high base and a carefree attitude to spending then you may find it difficult to lower your expectations....

andys15

Yes but that million pound pot is my pension. I haven’t taken into account my wife’s final salary pension, which she will get at 57 too. 

I am not concerned for us  after 57. 

My only concern is funding for the years between 50 and 57 and what is the best way to save money that I will begin saving once my mortgage is clear in 9 months. 

kimwp

Have you considered property? I don't know the numbers, but with your disposable income, you could pay a mortgage very quickly and either rent or (hopefully) just let it go up in value.
I too am interested to know what you do that is so niche that your experience would count for nothing and you'd only have your GCSEs to count for getting a different job.

kimwp

I understand now, that is a pretty niche role! I do think you have a lot more to offer than your GCSEs, but it would be difficult to get to that salary in a different role starting from scratch (or even with a lot of years experience in most jobs)

barnstar2077

As long as you and the wife are on the same page then I think you will have a fantastic retirement.  Good luck to you! 

Thrugelmir

andys15 said:

Thanks digger. 

The point I am making about the death is that the pot I would have in a final salary pension goes with my wife and I. So if we die in a car crash a week after retiring then the pension is gone for my family. 

Whereas with it now being in a SIPP, the kids will get it. 

If you both live to 95. You may well have spent most of it and your children will be past needing it. 

Audaxer

andys15 said:

Yes but that million pound pot is my pension. 

Do you know what your million pound pension pot is invested in within the SIPP, and how it's going to be managed throughout your retirement? If it is a well structured portfolio, managed by an Independent Financial Adviser with reasonable fees, you could possibly withdraw up to 4% (£40k) per year, rising with inflation, without running out of money. Would that be enough along with the other pensions to fund your retirement?

andys15

Yes it’s with Investec. It is in a medium/high risk. It is doing well considering I have had brexit and COVID since I opened it. It is up 10% over the 3 years. 

But that is mainly due to the last few days. Although at one point a few months back it was over 20% down. 

Alexland

andys15 said:

I have had brexit and COVID since I opened it.

Catching both was unlucky - too late for a vaccine to relieve the symptoms of Brexit I suppose.

Audaxer

andys15 said:

Yes it’s with Investec. It is in a medium/high risk. It is doing well considering I have had brexit and COVID since I opened it. It is up 10% over the 3 years. 

But that is mainly due to the last few days. Although at one point a few months back it was over 20% down. 

That's good. Interested to know if you pay an advisor to manage the pension or do you do it yourself?