Using ISA to fund retirement

ashpan

I have the chance to retire 3 years early, in a couple of months, with an LGPS pension.
Im unsure as to whether to start taking my pension straight away, loosing around £1584 pa due to early retirement or to take what i need (£1k a month) for 3.5 years from my ISAs/savings and leave my pension where it is until im 66.  If i take £1k pcm (i can manage on less as i get an NHS pension of £500 pcm) that will take my income to around £18k pa before my SP kicks in, in 3.5 years.
All this is providing the gov don't move the goal posts again before my SPA (as they have done twice for me already) 

tacpot12

I doubt the government will move your goal posts again; having been hit twice, I think you will be spared a third hit.

Generally, taking your LGPS pension early is a bad idea, so if you can manage without doing so, it is probably a very good idea to do so. You should make sure that doing so doesn't leave you without any savings or emergency reserve. I'd suggest you should make sure you will have at least £12,000 left in savings before drawing on your LGPS. 

DiggerUK

Do the sums, if you can live on the decision you take, fine. 

If not, then you are retiring too early and will have to suck up to the grindstone a little longer..._

ashpan

tacpot12 said:

I doubt the government will move your goal posts again; having been hit twice, I think you will be spared a third hit.

Generally, taking your LGPS pension early is a bad idea, so if you can manage without doing so, it is probably a very good idea to do so. You should make sure that doing so doesn't leave you without any savings or emergency reserve. I'd suggest you should make sure you will have at least £12,000 left in savings before drawing on your LGPS. 

i know if can take 25% of my ISA without any penalties, is this a one off, or every yeara? Also am i best to withdraw from it on a monthly basis or put it somewhere else, naturally want to avoid any tax/penalties if possible?

Aceace

ashpan said:

tacpot12 said:

I doubt the government will move your goal posts again; having been hit twice, I think you will be spared a third hit.

Generally, taking your LGPS pension early is a bad idea, so if you can manage without doing so, it is probably a very good idea to do so. You should make sure that doing so doesn't leave you without any savings or emergency reserve. I'd suggest you should make sure you will have at least £12,000 left in savings before drawing on your LGPS. 

i know if can take 25% of my ISA without any penalties, is this a one off, or every yeara? Also am i best to withdraw from it on a monthly basis or put it somewhere else, naturally want to avoid any tax/penalties if possible?

There is no tax to pay on any withdrawals from an ISA. That's the whole point of it. It's tax free. 

Alexland

If you are going to delay your LGPS it might be worth cycling some cash in and out of a SIPP for some additional tax benefit to make good use of your personal allowance in those tax years between working and drawing the LGPS income.

Eco_Miser

ashpan said:

  If i take £1k pcm (i can manage on less as i get an NHS pension of £500 pcm) that will take my income to around £18k pa before my SP kicks in, in 3.5 years.

Money taken from your ISA isn't income, it's just your own money being moved round a bit. This means your actual income would be around £6k p.a. leaving another £6k Personal Allowance available for cycling a SIPP as Alexland describes above.

Another_Saver

I think the main question you have to ask yourself is will £1584 less a year affect your retirement? Will having £42k less savings affect your retirement? Which is preferable, which choice can you live with without regretting it too much?

sevenhills

I assume that once you get the state pension you will have plenty of funds, so would drawing funds early be a problem?