Retire@56?

mspensionmonkey

Hi, I've followed this forum for a long time. The time to retire may be upon us. I'll be 56 in the summer. I have no dependants. I need a gross income of approximately £23k (adjusted for inflation in future years). 

I have -

-£50k in cash

-£15k in shares in my employer
-£87k in my stocks and shares ISA

-£560k in my SIPP

-£50k in my workplace pension

Approx £761k in total. Some is invested by me, some by my IFA. 

 
Give me the benefit of your wisdom. Am I good to go? 

Thanks. 

Dazed_and_C0nfused

Is it £23k just to SPA then c£13.5k thereafter?

Have you checked your State Pension forecast?

Anonymous101

A gross of £23k or a nett? If its gross how much do you need nett?

Either way I think you're fine.

Assuming its nett - £610k in pensions 26.5x your required 23k with 4.4x required (£102 in S&S ISA and company shares).
This is towards the comfortable end of the 25-30x income often banded around and doesn't include for State pension which will help further in the next decade or so.

When are you going? What are you going to do with your spare time?

Marcon

mspensionmonkey said:

Hi, I've followed this forum for a long time. The time to retire may be upon us. I'll be 56 in the summer. I have no dependants. I need a gross income of approximately £23k (adjusted for inflation in future years). 

I have -

-£50k in cash

-£15k in shares in my employer
-£87k in my stocks and shares ISA

-£560k in my SIPP

-£50k in my workplace pension

Approx £761k in total. Some is invested by me, some by my IFA. 

 
Give me the benefit of your wisdom. Am I good to go? 

Thanks. 

You refer to 'us' but don't give any details, so it's impossible to know. Your IFA has all the facts, so possibly their opinion is a better starting point than strangers with zero knowledge of your circumstances other than a couple of lines and a few figures. A recipe for misleading replies!

Hope things work out as you'd wish.

mspensionmonkey

Apologies, that's £23k gross. I know exactly what my IFA thinks but I'm interested to know others' opinions too. I have no partner, no dependants. I don't have an overwhelming desire to preserve capital to pass on. 

mspensionmonkey

Dazed_and_C0nfused said:

Is it £23k just to SPA then c£13.5k thereafter?

Have you checked your State Pension forecast?

Yes, I have a full new state pension entitlement which starts at 67.  c£13.5k thereafter. 

ex-pat_scot

mspensionmonkey said:

Hi, I've followed this forum for a long time. The time to retire may be upon us. I'll be 56 in the summer. I have no dependants. I need a gross income of approximately £23k (adjusted for inflation in future years). 
I have -
-£50k in cash

-£15k in shares in my employer
-£87k in my stocks and shares ISA

-£560k in my SIPP

-£50k in my workplace pension

Approx £761k in total. Some is invested by me, some by my IFA. 

 Give me the benefit of your wisdom. Am I good to go? 

Thanks. 

Simplistically the SIPP will give you £24,000 gross PA at a 4% safe withdrawal rate.
That on its own would be technically sufficient, not relying on the other funds.
Clearly the cash, er shares, ISA, GPPP give you a very strong additional reserve.
Also the SP kicking in after 11 years provides further support.
You have a great deal more than your base line requirement.

A couple of additional thoughts:
- why are you using an IFA? What value are you getting from them?
- have you looked into the kind of income you #could# realistically generate, above the £23,000 requested?
- simplistically you have £200,000 above your base line required capital, PLUS the full state pension.  You are frankly at a large risk of seriously underspending. What lifestyle shifts would you consider eg upsizing/ moving location / holiday cottage / extended travel?

Thrugelmir

What did your IFA say when you posed this question to them? 

Is your SIPP aligned with your immediate objectives? 

dunstonh

Retiring at 56 and using a 4% draw rate would be quite risky.  Probably more suitable to use 2.5% until well into 60s.

- why are you using an IFA? What value are you getting from them?

Good question as this is exactly the sort of thing that you expect the IFA to be modelling.

SouthCoastBoy

dunstonh said:

Retiring at 56 and using a 4% draw rate would be quite risky.  Probably more suitable to use 2.5% until well into 60s.

- why are you using an IFA? What value are you getting from them?

Good question as this is exactly the sort of thing that you expect the IFA to be modelling.

This is interesting, is the SWR in the UK considered to be 2.5%?

mspensionmonkey

My IFA is happy for me to retire whenever I like. I've got the cash flow report etc. As I said, I've followed this board for a very long time and there are several regular commenters who have excellent knowledge and points of view. I'm interested to see what they say. I pay my IFA to invest my SIPP because I'm uncomfortable investing that amount of money myself. Who knows, once I'm retired, I may have sufficient time to devote to increasing my investment knowledge and I'll go it alone. I've worked in financial services for 34 years (I'm a pensions writer!) and quite frankly have had enough of finances during the working day.