Would you retire really early and burn down most of your DC pension assets?

Amateurretiree

Totally agree with Shell, and as I’ve previously said, I never have to spend a single moment with anyone I don’t like!

We retired at 55 ( me) and 60
Hubby has SIPP, I have NHS DB which covers all essentials.

Up to now we’ve used the SIPP for a couple of long haul holidays every year and bits and bobs for the house, but to be honest due to the current situation we aren’t spending the money from the SIPP, so it’s proved to us how little we actually need.

However, we are obviously hoping normal service resumes next year and we want to get back on holiday while the hips and knees allow!

So DH now 63 and I’m 59, we will continue drawing from the SIPP until both State pensions are due, with a reduction in withdrawal when DHs state pension is due. 

There will still be a chunk of the SIPP left, as obviously one of us will be left on our own at some point with the associated loss of the deceased’s persons state pension.

But we will be spending a good chunk of the SIPP.

We are currently budgeting 30 000 a year ( but saving 12000 of that this year ) and will have about 36 000 a year with both state pensions.

nivag

I'm in the same boat as you OP, after years of saving it feels really difficult to go into drawdown stage! At the moment, we are still living off of cash balances, but I have intentionally set up all my ISA's, SIPP's and investment accounts to have the dividends as a cash balance (income rather than accumulation units) so that when the time comes to start withdrawing, we dont actually have to sell anything, just take the accumulated dividends. This will be fine to start of with (and these cash balances wont be earning anything), but in year 2 or 3 we will have to face selling!

michaels

It is hard - the recent run up in the markets means I could fire tomorrow and spend about 12k per year...more  than I spend now.

Having worked this out I has splashed out on a Disney+ subscription (obviously a discounted one) having had it free for 2 lots of 6 months - see, the give it away free for a while marketing does work.

There are obviously bigger choices regarding the fact that I dislike my job to be thought about as well....

cfw1994

ajfielden said:

shinytop said:

ajfielden said:

Thrugelmir said:

ajfielden said:

I've been doing some serious number crunching recently, well the software application I'm using has, and it's thrown up some really interesting things.

How many scenarios have you run? 

Just the extremes so far. 
My next step is to run some more scenarios at different ages, and see what the numbers/graphs look like. Fascinating stuff isn't it?

Of course retirement isn't just about money although that is important. As the Mrs said to me, what would you do with your days? And she's right, most people need some kind of structure and purpose, which a job does provide.
I mean drinking coffee and staring out the window at the world might sound great, but I think after a while you'd start to get mighty bored.

It is and you don't!!

Seriously, if you're really not enjoying work and you can afford it then you should consider going.  The trouble is, once you know you can afford to do it, work somehow becomes even more irritating/stressful/boring and the lure of jacking it all in becomes stronger.

Hehe! 
Correct, now I know I don't have to work it all seems that much more pointless.

I kind of know what you mean.  Loved my career, but spent about 3 years focussing on stepping away from it (after attending too many funerals 😳).
Stepped down before May, and whilst I am sure I will get bored at some point, I haven’t so far 🤣.  Work does indeed feel a distant memory already, even though I am still in contact with quite a few good friends still there.  I can’t say I miss it….
Also conscious that all retired pals I know comment how they don’t know how they had time to work.  It’s true!

I was also reminded of the fragility of life again yesterday, hearing about another former work pal who passed away.  He was a bit of a workaholic, a nice fella I got on well with…..but all the sums in the world can’t fight against Father Time.  

The majority of our funds will come from my DC pot, with 3 small DB schemes kicking in over the next 9 years plus fully-funded SPs later.  I feel we will be fine….but if the worst comes to the worst, well, we will find ways to manage.
A feel that being flexible is key to this thing!

Bimbly

Similar to you, I am 52 and plan to retire at 60. Would love to go earlier (I like my job, but I like being at home better!), but I spent a lot of money making my house a nice place to live, so funds dictate I wait.

One thought - is the DB an active pension? Giving up 5 years earlier means 5 fewer years paying into that which means your DB is worth less (for me, it would be 3,000 a year). But I'm sure you've thought of that.

pensionpawn

shinytop said:

ajfielden said:

Thrugelmir said:

ajfielden said:

I've been doing some serious number crunching recently, well the software application I'm using has, and it's thrown up some really interesting things.

How many scenarios have you run? 

Just the extremes so far. 
My next step is to run some more scenarios at different ages, and see what the numbers/graphs look like. Fascinating stuff isn't it?

Of course retirement isn't just about money although that is important. As the Mrs said to me, what would you do with your days? And she's right, most people need some kind of structure and purpose, which a job does provide.
I mean drinking coffee and staring out the window at the world might sound great, but I think after a while you'd start to get mighty bored.

It is and you don't!!

Seriously, if you're really not enjoying work and you can afford it then you should consider going.  The trouble is, once you know you can afford to do it, work somehow becomes even more irritating/stressful/boring and the lure of jacking it all in becomes stronger.

Tell me about it!

LV_426

Bimbly said:

Similar to you, I am 52 and plan to retire at 60. Would love to go earlier (I like my job, but I like being at home better!), but I spent a lot of money making my house a nice place to live, so funds dictate I wait.

One thought - is the DB an active pension? Giving up 5 years earlier means 5 fewer years paying into that which means your DB is worth less (for me, it would be 3,000 a year). But I'm sure you've thought of that.

No the DB is from the very early part of my career and I no longer work for that company. So it's a deferred benefits pension. I have a statement from the trustees containing a projected value at NRA.

pensionpawn

bluenose1 said:

There is a book Die With Zero, which makes interesting reading.  The concept is that when you have saved enough to retire you are wasting time working instead of using it enjoying the precious time we have left. 

I  feel jaded, fed up with work and the needless bureaucracy,  especially now I know I can more or less afford to go. Intend to retire in 11 months at latest age 56.

I think my biggest problem in retirement will be fitting it all in.  

Off top of head - 
1. Go to gym/ or run.
2. Shopping for healthy food.
3. Cooking new recipes.
4. Growing my own veg
5.  Swimming/ sauna.
6.  Reading 
7. Walking, plus join local rambling group
8. Meeting friends for coffee and meals.
9.  Decorating.
10. Volunteering at Park Run etc
11. Knitting more than snoods!!!
12. Long holidays, maybe touring Scotland  for 3 weeks etc.
13. Watching Netflix. Loving “Unforgotten” at moment. 

14. Listening to podcasts. 

Looking forward to not having the frazzled feeling after work, though even in retirement intend to keep my Cleaner. Going to need her so I can concentrate on above!!!

I read your posting thinking I had written it. Besides knitting and park runs I agree with everything you wrote. Me and my wife have a list of activities we want to do, mainly together, however we also have a separate interests too. However we're too knackered from work and don't have the time / energy. With reference to the OPs question, this is precisely our planning strategy. Why become the richest person in the graveyard? As soon as I believe that we've (both) accumulated sufficient funds to withdraw our PA pa we'll pull the trigger. We intend to whittle away our pots by 85 (and save / give to kids what we don't spend) as we both have full SP as a minimum income and plenty of equity in the house if really necessary. Why mortgage your most active "pensioner" years (55-65) remaining at the grindstone to push that pot larger when most could still enjoy a comfortable lifestyle on much less. Since our daughters have started to buy their own homes our running costs have collapsed and we don't need anything like our current net incomes to enjoy life. Tomorrow isn't promised. It would be sad beyond comprehension to work years longer because you've convinced yourself that you have to, only to check out soon after retiring. We're dipping our toes in the water by reducing our hours with my wife currently at 80%, reducing to 60% by Christmas, and I'm going to move to 70% in April for my last year or two.

LV_426

pensionpawn said:

bluenose1 said:

There is a book Die With Zero, which makes interesting reading.  The concept is that when you have saved enough to retire you are wasting time working instead of using it enjoying the precious time we have left. 

I  feel jaded, fed up with work and the needless bureaucracy,  especially now I know I can more or less afford to go. Intend to retire in 11 months at latest age 56.

I think my biggest problem in retirement will be fitting it all in.  

Off top of head - 
1. Go to gym/ or run.
2. Shopping for healthy food.
3. Cooking new recipes.
4. Growing my own veg
5.  Swimming/ sauna.
6.  Reading 
7. Walking, plus join local rambling group
8. Meeting friends for coffee and meals.
9.  Decorating.
10. Volunteering at Park Run etc
11. Knitting more than snoods!!!
12. Long holidays, maybe touring Scotland  for 3 weeks etc.
13. Watching Netflix. Loving “Unforgotten” at moment. 

14. Listening to podcasts. 

Looking forward to not having the frazzled feeling after work, though even in retirement intend to keep my Cleaner. Going to need her so I can concentrate on above!!!

I read your posting thinking I had written it. Besides knitting and park runs I agree with everything you wrote. Me and my wife have a list of activities we want to do, mainly together, however we also have a separate interests too. However we're too knackered from work and don't have the time / energy. With reference to the OPs question, this is precisely our planning strategy. Why become the richest person in the graveyard? As soon as I believe that we've (both) accumulated sufficient funds to withdraw our PA pa we'll pull the trigger. We intend to whittle away our pots by 85 as we both have full SP as a minimum income and plenty of equity in the house if really necessary. Why mortgage your most active "pensioner" years (55-65) remaining at the grindstone to push that pot larger when most could still enjoy a comfortable lifestyle on much less. Since our daughters have started to buy their own homes our running costs have collapsed and we don't need anything like our current net incomes to enjoy life. Tomorrow isn't promised. It would be sad beyond comprehension to work years longer because you've convinced yourself that you have to, only to check out soon after retiring. We're dipping our toes in the water by reducing our hours with my wife currently at 80%, reducing to 60% by Christmas, and I'm going to move to 70% in April for my last year or two.

Good man I wish you all the best. That is an excellent list of things to do, and I can see myself doing a lot of them. I also have musical interests, as I play trombone in a brass band, so I can devote much more time to practice, and also helping out with maintenance tasks in the band room.
A big thing for us really will be the purchase of a caravan. This is all built into my plan. I've already got a good towing car, and we'll be using it a lot for holidays all around the UK, and maybe even Europe.

af1963

For now I'll just bask in the knowledge I don't have to work. Think the freedom of being able to say just what you want

Joking, I'm not like that, but this may explain the behaviour of certain individuals I've worked with in the past

Also don't underestimate how it can change your attitude to work, knowing you're there voluntarily and not because you need to keep the job for financial reasons. You can pay less attention to the "politics" and "unreasonable people" that you mentioned in your original post , and depending on what the job is, you may be able to pick and choose assignments.  Reduce your hours if that suits you.  Then leave when you're ready.

Have no guilt about adopting this attitude, because good employers actually stand to benefit from having people who feel able to speak their mind and challenge things.