Retirement Strategy

I would appreciate some thoughts on the best financial strategy for me as I approach retirement.  I am currently 65 and will take my fully state pension next year.   My wife is 60 so 7 years from a full state pension.

Some numbers:
Cash: £80k
Husband and wife ISA’s: £700k
My SIPP: £700k

General:
I need about £20k pa to live on
I have no other sources of income
OH does not have a private pension
I am happy to leave any remaining monies invested, and over the last 15 years these funds have grown by 10%pa (XIRR Calculation).

Comments:
I believe that the general advice would be to, each year, move money from the SIPP into the ISA’s.  Which I am happy to do.

I feel that I should hold on to the cash as an emergency fund.

I am just unable to formulate the best way to manage the funds/money for retirement and would appreciate your thoughts.

«1345

Replies

  • nxdmsandkaskdjaqdnxdmsandkaskdjaqd Forumite
    657 Posts
    Part of the Furniture 100 Posts
    ✭✭
    Assuming that the ISA's are all S&S ISA's

    I need about £20k pa to live on
    If you mean for both of you then this is pretty low . 
    You might want to consider loosening the purse strings a bit !
    Yes these are both S&S ISA's which have done extremely well over the last 15 years, with 10%pa return.  

    We have been self isolating for the last 20 months and this is going continue for years as I am extremely venerable.  So the world cruise is off the agenda.  Looking for a self build project but just unable to find a plot of land.
  • ukdwukdw Forumite
    218 Posts
    Fifth Anniversary 100 Posts
    ✭✭
    Would be worth considering IHT too as I presume you also have a property that is fully paid for too.  If so, you probably want to keep your estate below £1m if you can - to avoid your aires paying 40% IHT.

    If above £1m I would probably spend down the ISAs first to get down to £1m.   If below £1m, probably worth withdrawal at least the tax free allowance from your SIPP.
  • edited 23 November at 4:57PM
    cfw1994cfw1994 Forumite
    1.6K Posts
    Part of the Furniture 1,000 Posts Hung up my suit! Name Dropper
    ✭✭✭
    edited 23 November at 4:57PM
    Wowsa....once you have both SPs, you are virtually there, right?
    Might want to check you both have *full* SPs - logon to the site, check the detail.

    You have very few years to fill up with your £1.4m.   Just your ISA alone would provide 25+ years at 20k with inflation, I am sure.

    Sounds to me like you should perhaps have retired a few years ago, never mind putting more money into savings 👀

    Plan for tomorrow, enjoy today!
  • nxdmsandkaskdjaqdnxdmsandkaskdjaqd Forumite
    657 Posts
    Part of the Furniture 100 Posts
    ✭✭
    So given that we spend little each year, due to COVID and being CEV, what should my strategy be?

    (i) Leave the pension in tack and take any money needed from the ISA's. (ii) Take lump sums from the SIPP.   (iii) Take a sum that takes me to my personal tax allowance.

    I just don't know which is the best strategy.

  • nxdmsandkaskdjaqdnxdmsandkaskdjaqd Forumite
    657 Posts
    Part of the Furniture 100 Posts
    ✭✭
    ukdw said:
    Would be worth considering IHT too as I presume you also have a property that is fully paid for too.  If so, you probably want to keep your estate below £1m if you can - to avoid your aires paying 40% IHT.

    If above £1m I would probably spend down the ISAs first to get down to £1m.   If below £1m, probably worth withdrawal at least the tax free allowance from your SIPP.
    Yes the property is fully paid for and would be valued at about £800K.  So based on your thoughts, as the estate is over £1m, then withdraw from the ISA's first.
  • MallyGirlMallyGirl Forumite, Board Guide
    5.6K Posts
    Eighth Anniversary 1,000 Posts Name Dropper Intrepid Forum Explorer
    ✭✭✭✭
    There is probably a balance. I'd be withdrawing the nil rate amount from the SIPP (plus 25% tax free) as a bare minimum.
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to [email protected]
    Any views are mine and not the official line of MoneySavingExpert.com.
  • AlbermarleAlbermarle Forumite
    9.7K Posts
    1,000 Posts Third Anniversary Name Dropper
    ✭✭✭✭
    ukdw said:
    Would be worth considering IHT too as I presume you also have a property that is fully paid for too.  If so, you probably want to keep your estate below £1m if you can - to avoid your aires paying 40% IHT.

    If above £1m I would probably spend down the ISAs first to get down to £1m.   If below £1m, probably worth withdrawal at least the tax free allowance from your SIPP.
    Yes the property is fully paid for and would be valued at about £800K.  So based on your thoughts, as the estate is over £1m, then withdraw from the ISA's first.
    Yes that would seem sensible . It looks like you will leave a pretty big legacy , so make sure you have a will .
    One way to reduce IHT liability is to gift money now to your chosen heirs, and if you survive seven years there will be no IHT to pay . Also gifts to charities are exempt.


  • nxdmsandkaskdjaqdnxdmsandkaskdjaqd Forumite
    657 Posts
    Part of the Furniture 100 Posts
    ✭✭
    MallyGirl said:
    There is probably a balance. I'd be withdrawing the nil rate amount from the SIPP (plus 25% tax free) as a bare minimum.
    Based on the personal tax allowance (21/22) being £12,570 and state pension £10,400.  What is the amount that can be taken from the SIPP to include the 25% tax free? 

    UFPLS of £2,893 = £2,170 taxable income + £723 TFLS
Sign In or Register to comment.
LATEST NEWS AND GUIDES