Done with work - new retirement journey

older_and_no_wiser

I can't see any mention of how much you require to live on each year in retirement. This is really important in deciding how you withdraw and where from each year. Hopefully you've worked this out on a spreadsheet. Personally I have list of "needs" and "wants". The "needs" column is my essential expenses each year (utilities, groceries etc). The "wants" column is my nice to haves like new cars, holidays.

MarkCarnage

The annuity v drawdown question is certainly more finely balanced than it was a couple of years ago.....I also note that your existing fund was in a 'lifestyling' option which certainly explains the indifferent performance. Lifestyling in many cases, presupposes that an annuity purchase is the desired route, and essentially attempts to 'hedge' that in the run up to retirement by having a fund that moves towards fixed interest. 

To that extent, the relative attraction of annuity might be higher than otherwise, but from what you write, drawdown might be more aligned to your needs....there are halfway houses too.....no need to commit the full amount to either. The 5 year annuity you mention is presumably a level annuity, and with inflation still at 5%+ the real value of the initial amount in 5 years could be quite a bit less. 

Some people get comfortable with the concept of managing drawdown themselves, and some will need IFA support. Only you will know that. Perhaps initial advice is what you need, but IFAs will tend to be keener to sell continuing support......It helps that your husband has a decent DB pension too, and you have other savings, though these seem a bit too cash focused. Some good comments above on tax efficiency of TFLS and contributing now to a SIPP above too. 

Donewithwork1

older_and_no_wiser said:

I can't see any mention of how much you require to live on each year in retirement. This is really important in deciding how you withdraw and where from each year. Hopefully you've worked this out on a spreadsheet. Personally I have list of "needs" and "wants". The "needs" column is my essential expenses each year (utilities, groceries etc). The "wants" column is my nice to haves like new cars, holidays.

Hi, yes we know exactly how much we needed to live on prior to me giving up work and this will not change in retirement.  Basically expenses (DD's etc) equate to around £900 per month and we have around £1500 per month on top which we call our 'slush fund', this includes groceries and any other incidental things we buy during the course of a month, so around £2,400 per month.   This pays for most things but obviously excludes larger items such as holidays, major house repairs or refurbishments, new cars etc.  Sometimes we have little left from this amount each month and sometimes its maybe £300-£400, it just depends on what we spend.  We generally buy what we want, although within reason.   We aren't overly extravagant.

Donewithwork1

MarkCarnage said:

The annuity v drawdown question is certainly more finely balanced than it was a couple of years ago.....I also note that your existing fund was in a 'lifestyling' option which certainly explains the indifferent performance. Lifestyling in many cases, presupposes that an annuity purchase is the desired route, and essentially attempts to 'hedge' that in the run up to retirement by having a fund that moves towards fixed interest. 

To that extent, the relative attraction of annuity might be higher than otherwise, but from what you write, drawdown might be more aligned to your needs....there are halfway houses too.....no need to commit the full amount to either. The 5 year annuity you mention is presumably a level annuity, and with inflation still at 5%+ the real value of the initial amount in 5 years could be quite a bit less. 

Some people get comfortable with the concept of managing drawdown themselves, and some will need IFA support. Only you will know that. Perhaps initial advice is what you need, but IFAs will tend to be keener to sell continuing support......It helps that your husband has a decent DB pension too, and you have other savings, though these seem a bit too cash focused. Some good comments above on tax efficiency of TFLS and contributing now to a SIPP above too. 

Thanks Mark, food for thought.

af1963

How integrated are your finances with your husband's. Do you try to contribute equally or does it not matter if one or other of you is putting in more ?

Your 'regular' spend is about 30K, plus allow something on top for extras like holidays, repairs, cars - total maybe around £40-45K sound reasonable ?

Once both SPs start, you'll *already* have his 26K DB + 2* ( 10600 State Pension)  = 49K, minus tax for your husband, giving about £45K.  But most of it will originate from him. Does this matter to you ?

af1963

On another of your questions "where do I move them to":  if you did decide to transfer to allow drawdown, with that level of funds it's worth looking at SIPP providers that charge fixed fees rather than percentages.  A small percentage of £460K is still a big cost. (You're probably currently paying a percentage to SL and RL ). Even at 0.5%, that's £2300pa.

Donewithwork1

af1963 said:

How integrated are your finances with your husband's. Do you try to contribute equally or does it not matter if one or other of you is putting in more ?

Your 'regular' spend is about 30K, plus allow something on top for extras like holidays, repairs, cars - total maybe around £40-45K sound reasonable ?

Once both SPs start, you'll *already* have his 26K DB + 2* ( 10600 State Pension)  = 49K, minus tax for your husband, giving about £45K.  But most of it will originate from him. Does this matter to you ?

Hi, well if I went with FAD up to my personal allowance + 25% tax free on top and then state pension in 5 years this would be, in todays terms, £27,833 pa.  His would be £36,913 pa including state pension (in 16 months) so total income at state pension age for both of £64,746 before tax. This not including any income from savings or investments.

We are not bothered about everything being exactly equal as we spend from a joint account whats mine is mine and what's his is mine 

Donewithwork1

af1963 said:

On another of your questions "where do I move them to":  if you did decide to transfer to allow drawdown, with that level of funds it's worth looking at SIPP providers that charge fixed fees rather than percentages.  A small percentage of £460K is still a big cost. (You're probably currently paying a percentage to SL and RL ). Even at 0.5%, that's £2300pa.

Yes if I went that route I think I'd be looking at someone like Interactive Investor.  Tbh it's not so much which platform I struggle with it;s what (if any) investments I should shift to and what level of risk!

xylophone

whats mine is mine and what's his is mine  

Made me smile - an old gentleman I knew said that the definition of socialism was share and share alike and when my share is gone we'll share yours.....

af1963

Hi, well if I went with FAD up to my personal allowance + 25% tax free on top and then state pension in 5 years this would be, in todays terms, £27,833 pa.  His would be £36,913 pa including state pension (in 16 months) so total income at state pension age for both of £64,746 before tax. This not including any income from savings or investments.

If you continued doing drawdown after your state pension starts, yes.  If it turns out that you aren't spending at that level even including the 'extras', there may be no need to continue to withdraw from your pension, or to be taxed on it, once your SP starts. As long as you're both OK with it, you could have about £44K annual spending based on his £37K plus your £10.6K state pension.  And you could dip into your pension as and when needed for extras - or to make sure you use up your full annual allowance.