Bold leap into retirement

Sarahspangles

disgruntled1234 said:

Looks like I'm stuck with my nickname as I don't appear to be able to change it in my profile!! Oh well, I shall remain as disgruntled1234 forever more 

Thank you for all the suggestions though!

Maybe the tech guys can do it behind the scenes.

For completeness, I don’t think anyone has yet suggested Degruntled.

MallyGirl

Tis done! Final consultation meeting over by 9:15, big box of tech handed over to courier at 10am. 

The sun is shining 🤩

kipsterno1

MallyGirl said:

Tis done! Final consultation meeting over by 9:15, big box of tech handed over to courier at 10am. 

The sun is shining 🤩

Off to the pub then?

QrizB

kipsterno1 said:

MallyGirl said:

Tis done! Final consultation meeting over by 9:15, big box of tech handed over to courier at 10am. 

The sun is shining 🤩

Off to the pub then?

It must be beer o'clock by now 🍻

Smudgeismydog

MallyGirl said:

Tis done! Final consultation meeting over by 9:15, big box of tech handed over to courier at 10am. 

The sun is shining 🤩

Yes, the sun is out
It’s Independence Day, go and celebrate 🥳

HUSKYPAL

I've been following this post for a while, soaking up all the positive comments. I've been planning for retirement for the past 3 years, 55 now, and was expecting to be able to go at 59/60, but having read comments on here, I have brought that forward about 2 years. Now thinking I will leave some time between 31st March 27 and end Dec 27,  seems like a long time, and not all at once!

I have a £23k/a DB that is already being paid 
Likely SIPP by Nov 25 - £370k - going to take 25% without triggering MPAA to pay off my low interest 5yr mortgage (1.2%!) which expires in Nov 25 (about £90k left to pay).

Leaves about £280k in the SIPP (taxable eventually)

By early 2027 - should have about another £75-85k saved into SIPP 
We will take TFLS from this and use it as a cash buffer in case of unexpected expenses. 

Total taxable balance in SIPP would be £336k-371k depending on when I go.

Plan is to use about £270-280K of this to buy a fixed term 9 or 10 year annuity -  current 10yr pays £27k/a plus £100k back at the end. 

This would give me gross £50k/annum to keep within lower tax band and will be plenty until state pension kicks in at 67, when I also get the £100k back from the annuity. 

My wife will have a SIPP pot of about £80k - after TFA - we will probably use this to buy another fixed term annuity - probably about £7k/annum, plus a couple of small DB schemes that kick in at 65.

I know we won't struggle - we will basically still kind of receive a salary (DB/Annuity) so will have a fairly easy admin life, with no real concerns over how much to take out and what's happening to the balance if still invested in the market.

I like the simplicity of this way of working, we will still have cash reserves, and extra remaining in the SIPP if needed, plus about £40k in an ISA.

I've been tracking my costs/expenses for years, and know that we will have enough to take the plunge. I'll make the final decision on timings next year depending on how well the SIPP is doing and what the annuity rates are, but so looking forward to getting off the hamster wheel.

I WFH, so have control over my days, but I'm the only person it the company performing my role, so I'll give a fair amount of notice to let them seek a replacement (probably 6 mths+). 

I was toying with the idea of asking for part time, maybe 3 days - but to be honest, I know from experience, even when I'm on holiday I end up having things to sort out, so it's likely I'd take a 40% pay cut and still end up doing what I would have anyway!

Just sharing my thinking, I find this thread very therapeutic, and thought I'd chip in - I know fixed term annuities have been mentioned before, but not sure everyone knows you can specify a lump sum back at the end of the term

I think they are a good way to de-risk the decision.

I'll keep playing with the spreadsheet, hoping to bring the timing forward - the sooner the better as far as I'm concerned.

Smudgeismydog

Hello @HUSKYPAL,
It’s lovely to have you join us.

Sounds like you have a well thought out plan. I agree that the certainty of payments from the DB and annuity will make for a very calm, as you say ‘easy admin’ retirement. The fixed term annuities with a lump sum back at the end of the term are certainly looking very attractive right now, and for a lot of people they would appear to offer a great solution for bridging the gap until State Pension. Clearly rates can change in the interim, but so can investment performance, you’ll just have to re-calculate when you get there.

I guess you are planning to give notice either late 2026, or early 2027 then? I’m glad this thread has helped you work through your plans and realise you can bring your retirement forward by 2 years. 

snarffie

HUSKYPAL said:

Plan is to use about £270-280K of this to buy a fixed term 9 or 10 year annuity -  current 10yr pays £27k/a plus £100k back at the end. 

All sounds fantastic, but I don't understand this..

Smudgeismydog

snarffie said:

HUSKYPAL said:

Plan is to use about £270-280K of this to buy a fixed term 9 or 10 year annuity -  current 10yr pays £27k/a plus £100k back at the end. 

All sounds fantastic, but I don't understand this..

A fixed-term annuity with a portion of capital returned at the end of the term provides a guaranteed income for a set period, along with a lump sum payment at the end of the term.

At the end of a fixed-term annuity, the income payments stop, and you receive a maturity amount. This maturity amount is the original investment, plus any growth, minus the income already received during the term. You have several options for this maturity amount, including purchasing another annuity (fixed-term or lifetime), taking it as a lump sum, or moving it into drawdown

snarffie

Smudgeismydog said:

snarffie said:

HUSKYPAL said:

Plan is to use about £270-280K of this to buy a fixed term 9 or 10 year annuity -  current 10yr pays £27k/a plus £100k back at the end. 

All sounds fantastic, but I don't understand this..

A fixed-term annuity with a portion of capital returned at the end of the term provides a guaranteed income for a set period, along with a lump sum payment at the end of the term.

At the end of a fixed-term annuity, the income payments stop, and you receive a maturity amount. This maturity amount is the original investment, plus any growth, minus the income already received during the term. You have several options for this maturity amount, including purchasing another annuity (fixed-term or lifetime), taking it as a lump sum, or moving it into drawdown

I understand the principle (I think), but how can £270k fund a 10 year income of £27 p/a and provide £100k at the end?  Or am I reading it wrong (probably )