Semi retirement possible?

barnstar2077

@Albermarle, can you tell me the calculation that arrives at the £16,666 figure please?  I often see this number quoted as being tax free but in my ignorance I don't see how the numbers add up.  If you add on 25% to £12,500 you get £15,375.  If you withdraw more than that wouldn't you be taxed, what am I missing?  Thank you.

Dazed_and_C0nfused

You are approaching it from the wrong end.

You start with £16,666 and deduct the 25% TFLS.

£16,666 - £4,166 = £12,500.

Different figures (£15,000/£11,250) apply for married couples where one person has applied for Marriage Allowance.

barnstar2077

Dazed_and_C0nfused said:

You are approaching it from the wrong end.

You start with £16,666 and deduct the 25% TFLS.

£16,666 - £4,166 = £12,500.

Different figures (£15,000/£11,250) apply for married couples where one person has applied for Marriage Allowance.

Oh of course, thank you :  )

Dazza1902

So how is the 25 %defined?? For example if you had a 100k sipp you can take 25k as a lump sum. If the ta x free lump sum was taken as a series of mini events how would this work?
Can it work like this, £1666 a month 400 odd as a mini tax free lumpsum, can the rest be made up of other pension income, defined benefits, annuities? How would or could part time employment income fit into this?
Lastly if you pull multiple mini tax free lumpsums, iguess the total amount in my example would be to the value of 25k. Or is my thinking scrambled lol

Albermarle

Just regarding the pension part you have to get your head around uncrystallised and crystallised pension pots.
If you had an uncrystallised £100K pot and took £5K tax free, the £20K is crystallised . £5K is paid out tax free and £15K is left as crystallised funds . Any money taken from these funds at the same time, or later, is taxable.
Let's say you then do nothing for two years and the remaining uncrystallised £80K has grown to £84K . If you then crystallised the whole pot you would get £21K tax free and £63K would be added to the original crystallised funds of £15K , which had now grown to say £16K , so £79 K .
So to answer your question if you took lots of mini tax free lump sums from your original £100K , you would get more than £25K tax free if your investments grew in the meantime ( or less if they went down)

Dazza1902

Thankyou, this is indeed a journey of discovery. 

Albermarle

Dazza1902 said:

Thankyou, this is indeed a journey of discovery. 

Being a regular reader of this forum can help with this journey , it has certainly helped me !

Dazza1902

chucknorris said:

Dazza1902 said:

I would like to go to 2/3 days per week at 60 doing something different and not too bothered about what it pays.
Married both 56 early in the new year. Current joint take home £4400, mortgage free(450pm) in 6 months, one child though uni, second through uni in 2.5 yrs
, no debts. Saving about £1400 per month into a sipp. 
My wife a teacher says she loves her job and does not want to retire, while i think this is admirable i want to make plans in case this changes.
Our Pension provision is poor, im trying to play catch up. 
Me, db 5k pa payable at 60, sipp 90k.
My wife db in the pension protection fund of 1.1k pa  payable at 60 no indexing, lgps 1.3 k pa at 62 (1.7 at 67),average salary teachers pension scheme 6k pa at 62 (15k at 67) . Plus 42k in a sipp. No major savings 10k in an isa, 15k for emergencies. 
I have checked our state pension, we both have full state pension 18k.
I think we could live on 3k take home per month very comfortably.
Any tips or thoughts? 

I have not read the whole thread (so apologies if someone has already mentioned this), have you considered buying additional pension in the TPS (Teachers Pension Scheme)? I think that it is very good value, I have purchased the max allowed in the pre 2015 scheme, and I currently use all my part time salary to buy more in the current TPS scheme, which I will continue to do so until I reach state pension age (you can't buy it beyond that, and that may trigger my retirement). The cost depends on your age, the last purchase I made at 62 years old (a few months ago) was £16,520 per £1,000 of pension purchased, which is approximately half the price of buying a similar index linked annuity. I am not a big fan of annuities, but I would be if they were half the price.

I know this was open for the final salary scheme prior to 2015, not sure if it can be done for the 2015 average salary scheme. Also give the early retirement reductions are more severe for the new scheme does this give any flexibility in ility?? The smaller sipp in her name is to bridge the 5 yrs before state pension IF MY WIFE RETIRES early. 

chucknorris

Dazza1902 said:

chucknorris said:

Dazza1902 said:

I would like to go to 2/3 days per week at 60 doing something different and not too bothered about what it pays.
Married both 56 early in the new year. Current joint take home £4400, mortgage free(450pm) in 6 months, one child though uni, second through uni in 2.5 yrs
, no debts. Saving about £1400 per month into a sipp. 
My wife a teacher says she loves her job and does not want to retire, while i think this is admirable i want to make plans in case this changes.
Our Pension provision is poor, im trying to play catch up. 
Me, db 5k pa payable at 60, sipp 90k.
My wife db in the pension protection fund of 1.1k pa  payable at 60 no indexing, lgps 1.3 k pa at 62 (1.7 at 67),average salary teachers pension scheme 6k pa at 62 (15k at 67) . Plus 42k in a sipp. No major savings 10k in an isa, 15k for emergencies. 
I have checked our state pension, we both have full state pension 18k.
I think we could live on 3k take home per month very comfortably.
Any tips or thoughts? 

I have not read the whole thread (so apologies if someone has already mentioned this), have you considered buying additional pension in the TPS (Teachers Pension Scheme)? I think that it is very good value, I have purchased the max allowed in the pre 2015 scheme, and I currently use all my part time salary to buy more in the current TPS scheme, which I will continue to do so until I reach state pension age (you can't buy it beyond that, and that may trigger my retirement). The cost depends on your age, the last purchase I made at 62 years old (a few months ago) was £16,520 per £1,000 of pension purchased, which is approximately half the price of buying a similar index linked annuity. I am not a big fan of annuities, but I would be if they were half the price.

I know this was open for the final salary scheme prior to 2015, not sure if it can be done for the 2015 average salary scheme. Also give the early retirement reductions are more severe for the new scheme does this give any flexibility in ility?? The smaller sipp in her name is to bridge the 5 yrs before state pension IF MY WIFE RETIRES early. 

Because I know that I would not take early retirement, I have not looked into the consequences of doing so.