Retirement plan not going to plan.

bostonerimus

MEM62 said:

bostonerimus said:

OP you don't mention anything about your budget. There are two major components to a retirement plan: your sources of retirement income and how much you intend to spend. Right now things look bleak on the investment side for many people, but remember you probably have at least 20 years for your money to remain invested, so there could be some recovery. Also if going into retirement your pot is not as big as you hoped then you need to cut spending or find more income like taking a part time job. I would do a detailed budget and see where you can save some money to reduce your initial withdrawals. A retirement plan is not a straight road and you need to adapt to the twists and turns of the economy and your circumstances.

I am sure that there will be some recovery.  Likewise, over the period of my retirement there will be the usual market gains and losses - and statistically even a crash.  The budget is a bit simplistic in that we currently need £1K a month to cover all the basics.  As our income will be around four times that between the OH and I we haven't made a spending plan down to the last penny.  Our margin over the necessities is sufficient that working, unless I choose to, or cutting back on spending is not something we need to factor in.     

Well then I'd say you plan is actually working well. You've arrange things to give you enough income to live even in these tough times. You might not be doing as well as you hoped right now, but you have a robust enough plan to carry you through.

MEM62

So here we are six months or so down the line.  We completed on the property sale last week with it selling for £70K less than it was valued at in March 2016. There were numerous issues with getting the tenant out and selling the place and the legal fees were not insignificant.  As we could not complete before the end of the last tax year in April my CGT bill was also higher. 

That said we still came away with sufficient funds to clear the mortgage on our house, for me to pay £60K into my pension this year and still have a few quid left over.  Our current mortgage rate is 1.3% and we have another three years to run on our fixed rate.  I have therefore locked the cash away at 4.1% for two years and will clear the mortgage in the final year, which will be about the time I wish to retire.  (I was tempted to stick the money in shares but the window is too short for that to be a sensible risk) 

My pension funds have not moved that much but, as we stand today, I have just shy of £400K in two pots.  (£290-ish with 7iM and £100K in my Avia pension through work.  The Aviva pension being where I stuck the extra cash from the flat sale)  The total monthly contributions (employer and employee) into my company pension are £1,650 per month.  I have a DB pension that will pay £4,500 per year at 65.  I also have £55K in a Vanguard LS100 S&S ISA and £20K in cash in a Marcus account.   

I am just approaching 61 and would like to retire at 63.  Retiring may include working part time for a couple of years as a transition from working full time in a professional capacity to putting my feet up fully.  I think that it might actually be doable :-)

My wife is 5 years younger than me and we are planning on her retiring at 60 - two years after me.  Our IFA is just looking at her position to see if this is achievable but I expect that the answer will be yes.  Once the mortgage is cleared our basics will be covered at around £1000 per month.  Anything we have above that is fun money.             

     

    

Daffodil1234

Thanks MEM62, useful to see your updates.  All seems to be more stable for you now than when you last posted, good luck with making your final decisions about retirement age or part time work.