What should I do with my lump sum?

frugal90

I retired from paid employment in summer 2018 after spending 34 years at the chalkface. I have used my SIPP to cover the last 4 years and that has worked well. Now almost fully draw down except for £50 .

My teachers pension will be £22830 and I will get a lump sum of £68490.

Some context, my wife is 54 and will not have any income for the next 12 months. After that she will drawdown her SIPP over 5 years then take her teachers pension.

Her pension will be about £18k per year with a lump-sum of £54k. Her SIPP is currently valued at £118k and is 50% in cash, the rest in a combination of CGT, VLS60 and VLS100.

We have ISAs between us currently valued at £420k, about 50% in passives and 50% income ITs

We also have about £40k cash

We spend about £2500 up to £3000 per month

We are now wondering what to do with my lump-sum?

Spend it all, invest some or a bit of both?

No kids so no need to leave anything.

Once heard the expression frugal until 50 then spend to the end!!! 

What would you do?

WYSPECIAL

You don’t need to invest it but equally is there something you would like to spend it on?

jim8888

New ISA starts in a few days, I'd stick some in there. If you don't know what to do with your lump sum, I'd invest it until you do. Given your details to date, I reckon you'll be joining the club who found it enjoyable and easy to work and save, but will struggle a bit when it comes to retire and spend!

Albermarle

If your wife had some income this tax year, has she maximised her pension contributions before April 5th ?

Spend it all, invest some or a bit of both?

You could consider giving some to charity , if you have no real need of it .

frugal90

We do give to charity.

We do everything we want to do.

Guess the only thing we really want is fitness and health as long as possible so that we can garde, cycle tour, climb mountains etc

wjr4

Why would you draw down your SIPP when it’s free of IHT whereas your ISAs aren’t?

frugal90

No kids, so IHT not an issue.

frugal90

The sipps were set up to cover the gap from retiring from teaching and drawing teachers pension at age 60. Mine is empty, except for £50. My wife starts drawing hers down when she hits 55 in a years time.

We'll probably keep doing the adding £2880 per year to get the £720, meaning £180 free for a few minutes work 

Pays the gym fees!!

dunstonh

We are now wondering what to do with my lump-sum?

Have you compared the option of not taking the lump sum or taking minimum lump sum?

Once heard the expression frugal until 50 then spend to the end!!! 

Probably when life expectancy was 20 years less than now.

What would you do?

It is unlikely that I (or anyone else) have the same spending pattern or plans as you.  You need to look at your plans and situation and forward plan from there.   Then decide what is best based on your needs.

Grumpy_chap

frugal90 said:

What would you do?

The most amazing holiday you can imagine!

With a life-time of dealing with little angels, not to mention their parents, it is the least you deserve.

Marcon

frugal90 said:

I retired from paid employment in summer 2018 after spending 34 years at the chalkface. I have used my SIPP to cover the last 4 years and that has worked well. Now almost fully draw down except for £50 .

My teachers pension will be £22830 and I will get a lump sum of £68490.

Some context, my wife is 54 and will not have any income for the next 12 months. After that she will drawdown her SIPP over 5 years then take her teachers pension.

Her pension will be about £18k per year with a lump-sum of £54k. Her SIPP is currently valued at £118k and is 50% in cash, the rest in a combination of CGT, VLS60 and VLS100.

We have ISAs between us currently valued at £420k, about 50% in passives and 50% income ITs

We also have about £40k cash

We spend about £2500 up to £3000 per month

We are now wondering what to do with my lump-sum?

Spend it all, invest some or a bit of both?

No kids so no need to leave anything.

Once heard the expression frugal until 50 then spend to the end!!! 

What would you do?

What I'd do isn't really going to be of any help to you, given we have very different life circumstances and doubtless different aims, interests and aspirations.

Surely it's a case of deciding what you would like to do (and then doing it - and hopefully you'll enjoy it thoroughly!).