Can I afford retire next year at 55 ?

michaels

When I take my gov pension I will look to assign some so that in the event of my first death my DW still gets as much as I would have done.

Figures are approx:
Pension at 55 DW getting 33% - 22k, with DW getting 100%, 20k. 
Add on 2 x sp if we are both alive of 1 x if only one of us is alive gives 39k (both of us) / 29.5k one of us which I think is much better than DW only having about 17k if I pre-decease.

p00hsticks

buyhighselllow said:

uss_tish said:

@buyhighselllow go for it! Life is short as I discovered at the age of 54 when my husband died. 

I then retired the following year aged 55 on a combined works pension and widows pension from husband pension scheme of £33k p.a. (both DB).  I am using my lump sums to supplement my additional living expenses (son through uni, holidays etc) until state pension age. I also have considerable equity in the house which can be released when I downsize. 

The hardest part, as so many retirees on here will tell you, is turning your mindset to spending in retirement, as all our working lives we are programmed to save.

I have not a single moments regret taking early retirement. It has given me precious time at home with my youngest before he heads to uni in September and time with wider family and friends.

Thanks. Yes I feel I'm nearly cooked in my main career, and TBF its not that much bigger a pension if I hold on another 5 years. We have no dependents so not really planning on leaving anything, plus there is the possibility of equity release either in moving somewhere cheaper or via a scheme later down the line ?

It's probably worth crunching the numbers to see if you'd be better off living of the savings for a few years before claiming the pension so as to get a smaller reduction ?

buyhighselllow

p00hsticks said:

buyhighselllow said:

uss_tish said:

@buyhighselllow go for it! Life is short as I discovered at the age of 54 when my husband died. 

I then retired the following year aged 55 on a combined works pension and widows pension from husband pension scheme of £33k p.a. (both DB).  I am using my lump sums to supplement my additional living expenses (son through uni, holidays etc) until state pension age. I also have considerable equity in the house which can be released when I downsize. 

The hardest part, as so many retirees on here will tell you, is turning your mindset to spending in retirement, as all our working lives we are programmed to save.

I have not a single moments regret taking early retirement. It has given me precious time at home with my youngest before he heads to uni in September and time with wider family and friends.

Thanks. Yes I feel I'm nearly cooked in my main career, and TBF its not that much bigger a pension if I hold on another 5 years. We have no dependents so not really planning on leaving anything, plus there is the possibility of equity release either in moving somewhere cheaper or via a scheme later down the line ?

It's probably worth crunching the numbers to see if you'd be better off living of the savings for a few years before claiming the pension so as to get a smaller reduction ?

Thats interesting. I have a retirement seminar in a few weeks so get to speak to NHS pension experts, can sound out that idea

SarahB16

Re crunching the numbers to see if you'd be better off living off the savings for a few years before claiming the pension so as to get a smaller reduction. I think you raise a really good suggestion p00hsticks as something to consider.   

Can I ask the pension experts on here.  If a person delays taking e.g. their DB pension by a few years in order to get a higher annual pension and instead lives off their savings for a few years instead they will not be using their tax allowance in those years. 

Can they carry forward that unused tax allowance to be used against future pension income which is greater than that year's tax allowance?  I'm thinking is this possible for say up to six years?      

DairyQueen

SarahB16 said:

Re crunching the numbers to see if you'd be better off living off the savings for a few years before claiming the pension so as to get a smaller reduction. I think you raise a really good suggestion p00hsticks as something to consider.   

Can I ask the pension experts on here.  If a person delays taking e.g. their DB pension by a few years in order to get a higher annual pension and instead lives off their savings for a few years instead they will not be using their tax allowance in those years. 

Can they carry forward that unused tax allowance to be used against future pension income which is greater than that year's tax allowance?  I'm thinking is this possible for say up to six years?      

'Fraid not. Use it each tax year or lose it.

Marcon

buyhighselllow said:

p00hsticks said:

buyhighselllow said:

uss_tish said:

@buyhighselllow go for it! Life is short as I discovered at the age of 54 when my husband died. 

I then retired the following year aged 55 on a combined works pension and widows pension from husband pension scheme of £33k p.a. (both DB).  I am using my lump sums to supplement my additional living expenses (son through uni, holidays etc) until state pension age. I also have considerable equity in the house which can be released when I downsize. 

The hardest part, as so many retirees on here will tell you, is turning your mindset to spending in retirement, as all our working lives we are programmed to save.

I have not a single moments regret taking early retirement. It has given me precious time at home with my youngest before he heads to uni in September and time with wider family and friends.

Thanks. Yes I feel I'm nearly cooked in my main career, and TBF its not that much bigger a pension if I hold on another 5 years. We have no dependents so not really planning on leaving anything, plus there is the possibility of equity release either in moving somewhere cheaper or via a scheme later down the line ?

It's probably worth crunching the numbers to see if you'd be better off living of the savings for a few years before claiming the pension so as to get a smaller reduction ?

Thats interesting. I have a retirement seminar in a few weeks so get to speak to NHS pension experts, can sound out that idea

That assumes you haven't 'bought out' the early retirement reduction - something you might have chosen to do some years ago and possibly not at the forefront of your mind now?

gwynlas

Go for it. I was made redundant from NHS role at 52 but used lump sum to access pension, SP due next year which will be a bonus and could down size in the future if necessary. Enjoy yourselves whilst you can, part time work in any field could be interesting and give additionnal income.

Dazed_and_C0nfused

DairyQueen said:

SarahB16 said:

Re crunching the numbers to see if you'd be better off living off the savings for a few years before claiming the pension so as to get a smaller reduction. I think you raise a really good suggestion p00hsticks as something to consider.   

Can I ask the pension experts on here.  If a person delays taking e.g. their DB pension by a few years in order to get a higher annual pension and instead lives off their savings for a few years instead they will not be using their tax allowance in those years. 

Can they carry forward that unused tax allowance to be used against future pension income which is greater than that year's tax allowance?  I'm thinking is this possible for say up to six years?      

'Fraid not. Use it each tax year or lose it.

But you could do the old trick of turning £2,880 into £3,600 and then get it all back without paying tax if you have unused Personal Allowances whilst being a non earner.

Or even front load a personal pension  or SIPP whilst still working and then take larger amounts without needing to pay tax because you have a lot of unused Personal Allowance.

OldScientist

buyhighselllow said:

55 next year. Pension would be c20K. Savings would be 200K with minimum lump sum on retirement
I estimate we need 30-35K/year to give us the lifestyle we require, plus occasional one offs like a new car at some point
Will get close to full SP at 67, as will OH. 
May/may not inherit 70-200K , not relying on that in the figures, but £35k is sort of guaranteed.
Happy to do some low level PT work if I can find something agreeable as and when 2-3 days per week.
No debts.
Does this sound realistic ?

According to https://www.2020financial.co.uk/pension-drawdown-calculator/, drawing an inflation-adjusted £10k per year from a £200k portfolio invested in 50% UK stocks and 50% cash would have left about £80k (nominal) at the end of 12 years in the worst historical year (1911 - covering a period of horrible levels of inflation at the end of WWI). Trying to draw £15k per year would have run the portfolio down in about 5% of historical cases. So based on that somewhat limited analysis, your exact lifestyle requirement looks to be critical and is probably an area where it might be useful to spend some time trying to narrow it down a bit (i.e. have a very detailed look at your current budget over the last year or so).

One other thing to consider to cover your OH in case of your demise before they collect their SP is a term life insurance policy (I note that decreasing term policies have cheaper premiums and can still provide sufficient income from the lump sum, or, alternatively, for the same premium as a level policy they front load the pay out).

I did something similar when I retired (at 56), although we are fortunate that our lifestyle expectations are currently covered by my DB pension (but the life insurance was still necessary in case I die before my OH collects the SP - in my case, I took out two policies, a level term and a decreasing term).

buyhighselllow

Buying added years was very expensive. I did look at it a few years ago but dismissed it IIRC.
I'm trying to record all my spending this year to put myself in a position to gauge actual need but the variables seem to dictate you need a wide margin either way. 
The idea of deferring the pension is interesting as potentially it increases the lump sum at a rate greater than any cash savings could manage . If I got part time work and draw on the cash reserves for a couple of years or so I would pay no tax, which seems efficient.