Would I be able to retire at 55?

JohnD1970a

I am 51, single no dependents looking to retiring at 55, is this a possibility?

What I have

DB pension pot CETV 66k on leaving was it was worth £500 PA, currently valued at £1,500 PA from age 60 - should I cash this in?

Pension pot approx £550,000 in SIPP

DC pot currently £25,000 approx - contributing 6% employer 12% salary sacrificed

Full state pension if I contribute 2 years before I am 67

I am Basic rate tax payer, salary approx 35k

160k mortgage / house valued £300k fixed mortgage until 2026 at 0.99%

 

Do I have enough to retire at 55? Would taking tax free cash to pay off mortgage be good idea (only debt)  I would be looking at £1,500 to £2,000 pcm drawdown until State Pension Age then reduce drawdown to take into account the State Pension payments.

Albermarle

DB pension pot CETV 66k on leaving was it was worth £500 PA, currently valued at £1,500 PA from age 60 - should I cash this in?

There are numerous threads on this forum about cashing in DB pensions, so have a read of them . One issue is that the mechanics of transferring are not easy and will cost you probably a minimum of £3K in advice fees. Then it has to transfer to another pension , like a SIPP . You can not literally cash it in 

Your CETV value looks quite generous but as you already have substantial amounts in risk based investments in your SIPP, then hanging on to some guaranteed income could be better.

You do not mention any cash savings . Apart from possible emergencies /losing job , a good cash buffer helps when drawing down pension income , if there is a market downturn.

Otherwise your finances look quite healthy , but you have to think about how a big market slump would affect your Sipp/workplace pension and throw a spanner in the works .

ex-pat_scot

OK

DC pension total £575,000 + approx £25,000 further contributions between now and 55. That takes it to £600,000 plus 4 years' worth of investment returns. Mortgage approx £150,000 by then.

IF
1. assume no investment returns for next few years (market has had a really long recent run)
2. pay off mortgage, leaving c£450,000 in DC pot.
3. Your desired income of £1,500 to £2,000 pm translates into withdrawal of £18,000 to £24,000 after tax, which would mean the following:
- £1,500 pm net implies gross withdrawal of £19,375 and a withdrawal rate of 4.3% of the £450,000 DC pot.
- £2,000 pm net implies gross withdrawal of £27,875 and a withdrawal rate of 6.2%

Your WR doesn't have to be fully sustainable, as you note that you would have your DB kicking in at some point, and SP at 67(?).

In your shoes, I'd be comfortable with that approach, but others might consider this a little too punchy.