When can I retire ?

Kim1965

57 single , require 18 k per year. 30 k for house emergencies. Mortgage free, last child at uni ( 1 1/2 yrs to go).
FS pension 8 k at 60,  (7.1 k now), Sipp 135 k, contributing 1.5 k per month, 10 k savings.
 Pension forecast, require  1 more year for full state pension, so this current tax year will achieve it.
 Planning to find a part time job 2 days a week to give structure but not be reliant on income.
 I'm pretty sure 18 k will suffice, monthly DD at retirement will be a paltry £550, I do not lead an extravagant lifestyle.
 

Workerdrone

I suppose it depends on how much you enjoy working and whether you want to go at 60 or hang on until SPA.

Personally I'd want to go at 60 so another 3 years myself. Putting myself in your shoes here's how I'd work it out.

At your savings rate +standard tax relief that should give you another 67k (Assuming neither loss nor growth due to a bear market). I'd assume by now you would have moved your investments to less risky options.

Also I would consider (And this is just me), putting the 10k savings into the pension even just to hold as cash right before you retire which would then attract the tax relief which you can then pull back out straight away.

Just playing with the figures

So say 135k+67k+12k=214k pot. (53k of that being a tax free lump sum)

Lets say 3% drawdown, gives you £6420pa
Add in your 8k FS gives £14420

So really based on that without taking the £6420 out of TFLS you are only paying tax on £1920 of earnings or about £384 a year.

Of course that's about £3500 less than the 18k you were looking for until SPA

I started messing around a bit more. Based on the above assumptions doing another 6 years at your current savings rate gets you to £16445pa

Im sure someone much cleverer will be along presently to point out the error in my thinking.

Kim1965

I don't enjoy working !!

Kim1965

If I put the tfls into an isa over a few years, could I take out 6k tax free ??

Workerdrone

Kim1965 said:

If I put the tfls into an isa over a few years, could I take out 6k tax free ??

I might me misreading the question but the Tfls is yours from 57 to do whatever you like with (except you can’t recycle it back into your pension) stick it in an isa, blow it etc. I assume you mean put it in an isa for growth. Yes it will remain tax free. The only issue being whilst it sits in your pension it is outside your estate for iht purposes. Not so in an isa. In fact I don’t see an advantage in you case in doing so, could you not just pick a suitable bond/fund/cash holding and keep it notionally separate within your pension wrapper

Albermarle

Normally best to leave TFLS in pension unless you have some specific reason to take it out . As said above just taking it out and putting it in an ISA gains nothing .
Depending on your exact situation , by taking it out over a period of time you can keep your income tax bill each year by taking out less taxable income. 

Retireinten

Probably need some clarity on your figures but I read it that you're paying £18k into your pension so value could be £189k assuming no growth at 60. 

From here you have a guaranteed pension of 8k so will need to drawdown 10k a year until 60 to get your £18k income. You could get this tax free by drawing down £4500 to take you up to the tax threshold then the rest  (£5500) from your tax free lump sum (instead of taking the whole 25% TFLS  - approx £47k- you leave it in your pension and crystalise enough to take the amount you want tax free from that each year)

At 67 you should have £110k remaining but guaranteed income of £8k +£9.5k =£17.5k less tax. You have plenty in the pot to top up any emergency fund and drawdown to get your income to £18k for many years as you should only need a small amount from drawdown. 


So by my calculations you are in a very good position to retire at 60 without needing to work in any capacity.  Is this early enough or was you hoping for earlier? 

Kim1965

Thankyou, no 60 is fine. Im hoping to find a pt job and perhaps not draw on my pension. Tbh I think im ready for a change, full time retirement might be too much of a shock. Just want to be in a position of not having to work. I think it will change my mindset. 
The db cetv is huge, but reading all the threads I quite frankly do not want the uncertainty of large dc pots. It seems thiose with large dc pots are getting a bit twitchy, also seems they have to overegg the savings to offset risk of a crash. 

AlanP_2

Kim1965 said:

 
The db cetv is huge, but reading all the threads I quite frankly do not want the uncertainty of large dc pots. It seems thiose with large dc pots are getting a bit twitchy, also seems they have to overegg the savings to offset risk of a crash. 

That has hit the nail on the head. With DC only you have to deal with all the RISK with a combination the risks you face are much lower.

Admittedly you might die with less money in investments but so what.

draiggoch

Does your DB pension increase if you defer it past 60. Some do some don't. This could be worthwhile if it is a generous increase.

Kim1965

No it does not, so I have to take it. I might just do some part time work, if i leave the sipp alone until my mid sixties I shall be fine.