Mortgage free. Now what.

andys15

MaxiRobriguez said:

General rule of thumb is minimum 5 years for investments, preferably ten.

So retiring in 5 years with cash that needs to last another 7 years on top definitely opens up the door to stocks. It's irrelevant if the pension is in stocks as well as you can't access for 12 years which definitely meets the "leave it for ten years" test.

Why not take a middle ground approach? 50% into savings, 50% into stock market for the next five years. If there's a crash, use the 50% savings to buy stock and profit from a rebound. If there's no crash, use the 50% savings as your expenses for the first 2-3 years of retirement. After a year, rebalance so you're still at 50/50.

Thank you. That sounds a good plan. I suppose also I could be flexible about retiring. If I expose some to the markets. If things are not working out, I could stay working for another 2 years say, then I would only need 5 years savings till I’m 57. 

MaxiRobriguez

FWIW you also have more than enough capital to warrant discussing your options with an IFA.

andys15

MaxiRobriguez said:

FWIW you also have more than enough capital to warrant discussing your options with an IFA.

I am actually meeting the guy who is the IFA for my SIPP today. I am planning on a little informal chat about my situation regarding my savings to him. 

Albermarle

andys15 said:

MaxiRobriguez said:

General rule of thumb is minimum 5 years for investments, preferably ten.

So retiring in 5 years with cash that needs to last another 7 years on top definitely opens up the door to stocks. It's irrelevant if the pension is in stocks as well as you can't access for 12 years which definitely meets the "leave it for ten years" test.

Why not take a middle ground approach? 50% into savings, 50% into stock market for the next five years. If there's a crash, use the 50% savings to buy stock and profit from a rebound. If there's no crash, use the 50% savings as your expenses for the first 2-3 years of retirement. After a year, rebalance so you're still at 50/50.

Thank you. That sounds a good plan. I suppose also I could be flexible about retiring. If I expose some to the markets. If things are not working out, I could stay working for another 2 years say, then I would only need 5 years savings till I’m 57. 

In any case retiring at 50 is pretty early and puts extra pressure on your finances . So some flexibility on this would be sensible. 

Eco_Miser

andys15 said:

MaxiRobriguez said:

General rule of thumb is minimum 5 years for investments, preferably ten.

So retiring in 5 years with cash that needs to last another 7 years on top definitely opens up the door to stocks. It's irrelevant if the pension is in stocks as well as you can't access for 12 years which definitely meets the "leave it for ten years" test.

Why not take a middle ground approach? 50% into savings, 50% into stock market for the next five years. If there's a crash, use the 50% savings to buy stock and profit from a rebound. If there's no crash, use the 50% savings as your expenses for the first 2-3 years of retirement. After a year, rebalance so you're still at 50/50.

Thank you. That sounds a good plan. I suppose also I could be flexible about retiring. If I expose some to the markets. If things are not working out, I could stay working for another 2 years say, then I would only need 5 years savings till I’m 57. 

You could also consider going part-time, or retiring from your current job and finding something 'easier' to cover any shortfall between what your savings provide and what you would like to spend.

Alexland

If you are paying an IFA an ongoing percentage of your £1.2m SIPP then it's not unreasonable to expect him to be helping you plan all your assets including the pot you will be building up to cover living costs before gettng access to your pension.

You say the pension is now in a SIPP and you will not get access until 57 and I assume this is based on the announced increase of the minimum pension access age from 55 to 57 in 2028?

What you might not know is that the draft legislation currently under review is giving members of pension schemes with an unqualified right of access at 55 a new protected access age at 55. Even better there is the opportunity up until April 2023 to transfer into such scheme. A few of us have been discussing it in the below thread.

https://forums.moneysavingexpert.com/discussion/6240982/increase-to-minimum-pension-age-from-55-to-57-february-2021-hmt-consultation/p1

xylophone

Have both you and your wife obtained State Pension Forecasts?

https://www.gov.uk/check-state-pension

Had you considered making as large a contribution as possible to your wife's pension?

Albermarle

If you are paying an IFA an ongoing percentage of your £1.2m SIPP then it's not unreasonable to expect him to be helping you plan all your assets including the pot you will be building up to cover living costs before gettng access to your pension.

Very good point .

OP - why ask questions to random strangers on an internet forum , when you already pay an IFA to sort all these things out for you ?

andys15

Albermarle said:

If you are paying an IFA an ongoing percentage of your £1.2m SIPP then it's not unreasonable to expect him to be helping you plan all your assets including the pot you will be building up to cover living costs before gettng access to your pension.

Very good point .

OP - why ask questions to random strangers on an internet forum , when you already pay an IFA to sort all these things out for you ?

It is a good point. I have met with him today as planned about my SIPP. 

I suppose I was asking in here to sound suitably informed when discussing things today. 

They wouldn’t charge me for advice, I assume because I have my SIPP already there and paying quarterly. 

He wants to take my wife and I out in a few months for a meal and to discuss our plans. What he was saying was very interesting. Discussing year 1,2 and 3 etc. 

My only change would be brokerage fees which I expected. 

barnstar2077

andys15 said:

Albermarle said:

If you are paying an IFA an ongoing percentage of your £1.2m SIPP then it's not unreasonable to expect him to be helping you plan all your assets including the pot you will be building up to cover living costs before gettng access to your pension.

Very good point .

OP - why ask questions to random strangers on an internet forum , when you already pay an IFA to sort all these things out for you ?

It is a good point. I have met with him today as planned about my SIPP. 

I suppose I was asking in here to sound suitably informed when discussing things today. 

They wouldn’t charge me for advice, I assume because I have my SIPP already there and paying quarterly. 

He wants to take my wife and I out in a few months for a meal and to discuss our plans. What he was saying was very interesting. Discussing year 1,2 and 3 etc. 

My only change would be brokerage fees which I expected. 

Just remember that you have already payed for the meal.