Bold leap into retirement

barnstar2077

katejo said:

I wonder how many contributors to this discussion are, as I am,  solo so basing their retirement income just on their own earnings/savings? Interested to know. A colleague of mine thinks that our situation is completely different and doesn't think we can retire as early because of this. I sense that I am in a slightly better position than she is (even though she is more senior/earns more) but can't be sure. 

I think it really depends on house ownership, and how good with money any potential partner would be.

I own my own home, have a partner, but we don't live together.  I plan on retiring at 55.

I have total control over my finances atm.  If we live together in the future, then a lot more things will have to be negotiated. 

Yorkie1

katejo said:

I wonder how many contributors to this discussion are, as I am,  solo so basing their retirement income just on their own earnings/savings? Interested to know. A colleague of mine thinks that our situation is completely different and doesn't think we can retire as early because of this. I sense that I am in a slightly better position than she is (even though she is more senior/earns more) but can't be sure. 

I'm solo, but further off retirement than many people posting on this thread (currently 53). I am lucky to have a decent income and pension, but am also conscious that all basic expenditure e.g. heating the house, paying for insurance, will always have to come out of my income / pension.

It may not make a difference to the retirement age, but it may make a difference to the calculations of when there is enough to feel safe to retire upon. Also to the decision about what one is "retiring to" - slightly different considerations when there isn't an obvious life partner to build some of those decisions around. Not worse, just different.

huw01

I am contemplating in August not renewing my contract and looking to retire and not really work again if I can. 
Currently 51, single, in good health, mortgage free. So many friends have been inflicted with health conditions in the last 5 years that it has changed my outook on life.

225k in cash savings
330k in General Investment Account
82k in S&S ISA

LGPS deferred pension which will pay 12k per annum if taken early at age 55 along with a 20k automatic lump sum
LGPS AVC worth about 10k
Scottish Widows Workplace DC Pension 62k present

My plan is for the first three and a half years is to live off savings, drawing down 1900 per month should be more than enough for me to live and also travel which I want to do.

At age 55 is to start taking the LGPS and alongside the automatic tax free lump sum and AVC as a tax tree lump sum - these would top up the savings. I have asked the LGPS scheme as I will be 55 before April 2028 and the answer seemed to be that as long as I had started to take the LGPS then the rule changes to 57 wouldn't affect me. So for 10 year live of the LGPS and topped up by savings. THE LGPS would take the heavy lifting away from the savings.

Age 65 is to take 25% of the SIPP as a tax free lump sum and then at some point in the future the remaining 75% as either UFPLS, drawdown or annuity. Then age 68 all topped up by the state pension. My state pension forecast is now nearly at the full state pension.

Each year move 20k from the GIA to the S&S ISA, then take chunks out of the ISA as and when I fancy a splurge on something.

That is my thinking at the moment, life seems to short and unpredictable to be sat down wasting my time on someone else's priorities. Health and time is the only commodities that now seem important

barnstar2077

huw01 said:

I am contemplating in August not renewing my contract and looking to retire and not really work again if I can. 
Currently 51, single, in good health, mortgage free. So many friends have been inflicted with health conditions in the last 5 years that it has changed my outook on life.

225k in cash savings
330k in General Investment Account
82k in S&S ISA

LGPS deferred pension which will pay 12k per annum if taken early at age 55 along with a 20k automatic lump sum
LGPS AVC worth about 10k
Scottish Widows Workplace DC Pension 62k present

My plan is for the first three and a half years is to live off savings, drawing down 1900 per month should be more than enough for me to live and also travel which I want to do.

At age 55 is to start taking the LGPS and alongside the automatic tax free lump sum and AVC as a tax tree lump sum - these would top up the savings. I have asked the LGPS scheme as I will be 55 before April 2028 and the answer seemed to be that as long as I had started to take the LGPS then the rule changes to 57 wouldn't affect me. So for 10 year live of the LGPS and topped up by savings. THE LGPS would take the heavy lifting away from the savings.

Age 65 is to take 25% of the SIPP as a tax free lump sum and then at some point in the future the remaining 75% as either UFPLS, drawdown or annuity. Then age 68 all topped up by the state pension. My state pension forecast is now nearly at the full state pension.

Each year move 20k from the GIA to the S&S ISA, then take chunks out of the ISA as and when I fancy a splurge on something.

That is my thinking at the moment, life seems to short and unpredictable to be sat down wasting my time on someone else's priorities. Health and time is the only commodities that now seem important

Sounds like a good plan.  I couldn't agree more about the uncertainty of life.  My mum didn't make it to 70, plus have seen outwardly fit people in their 50's at work die of cancer, strokes or heart attacks.  Life can be a real lottery unfortunately.  It is still worth it to eat right and exercise though.

It maybe an idea to double check your state pension entitlement before you pull the trigger.  I'm sure it will be fine, but no harm in double checking.  The 35 year rule people often talk about only applies if you earned all 35 years after 2016.

Check your State Pension forecast - GOV.UK (www.gov.uk)

You pretty much just need your state pension and LGPS to live on, so anything else that was still left over from making it to 67/68 would be a bonus.

I'm not jealous at all! :  )

huw01

barnstar2077 said:

huw01 said:

I am contemplating in August not renewing my contract and looking to retire and not really work again if I can. 
Currently 51, single, in good health, mortgage free. So many friends have been inflicted with health conditions in the last 5 years that it has changed my outook on life.

225k in cash savings
330k in General Investment Account
82k in S&S ISA

LGPS deferred pension which will pay 12k per annum if taken early at age 55 along with a 20k automatic lump sum
LGPS AVC worth about 10k
Scottish Widows Workplace DC Pension 62k present

My plan is for the first three and a half years is to live off savings, drawing down 1900 per month should be more than enough for me to live and also travel which I want to do.

At age 55 is to start taking the LGPS and alongside the automatic tax free lump sum and AVC as a tax tree lump sum - these would top up the savings. I have asked the LGPS scheme as I will be 55 before April 2028 and the answer seemed to be that as long as I had started to take the LGPS then the rule changes to 57 wouldn't affect me. So for 10 year live of the LGPS and topped up by savings. THE LGPS would take the heavy lifting away from the savings.

Age 65 is to take 25% of the SIPP as a tax free lump sum and then at some point in the future the remaining 75% as either UFPLS, drawdown or annuity. Then age 68 all topped up by the state pension. My state pension forecast is now nearly at the full state pension.

Each year move 20k from the GIA to the S&S ISA, then take chunks out of the ISA as and when I fancy a splurge on something.

That is my thinking at the moment, life seems to short and unpredictable to be sat down wasting my time on someone else's priorities. Health and time is the only commodities that now seem important

Sounds like a good plan.  I couldn't agree more about the uncertainty of life.  My mum didn't make it to 70, plus have seen outwardly fit people in their 50's at work die of cancer, strokes or heart attacks.  Life can be a real lottery unfortunately.  It is still worth it to eat right and exercise though.

It maybe an idea to double check your state pension entitlement before you pull the trigger.  I'm sure it will be fine, but no harm in double checking.  The 35 year rule people often talk about only applies if you earned all 35 years after 2016.

Check your State Pension forecast - GOV.UK (www.gov.uk)

You pretty much just need your state pension and LGPS to live on, so anything else that was still left over from making it to 67/68 would be a bonus.

I'm not jealous at all! :  )

Thank you. I have been checking my state pension, due to the transitional arrangements once they add in my contributions for 2023/2024 I would need one more year to get the full state pension. That though only seems to add in around an extra £5 per week and I am not planning on working until next April for the extra fiver. 

Mum died when I was 12 at the age of 52 and that has always been in my mind that there was so much she wanted to do but didn't get the chance.

I am currently just doing the minimum in work and it feels great knowing I won't have to deal with this corporate world in the future. 

I want to be able to go for a swim 3 or 4 times a week, walking / trekking, do some yoga, finally have time to concentrate on learning Spanish and maybe French and of course travel.

The longer I work the more I have less patience with the corporate world

cloud_dog

huw01 said:

I am contemplating in August not renewing my contract and looking to retire and not really work again if I can. 
Currently 51, single, in good health, mortgage free. So many friends have been inflicted with health conditions in the last 5 years that it has changed my outook on life.

225k in cash savings
330k in General Investment Account
82k in S&S ISA

LGPS deferred pension which will pay 12k per annum if taken early at age 55 along with a 20k automatic lump sum
LGPS AVC worth about 10k
Scottish Widows Workplace DC Pension 62k present

My plan is for the first three and a half years is to live off savings, drawing down 1900 per month should be more than enough for me to live and also travel which I want to do.

At age 55 is to start taking the LGPS and alongside the automatic tax free lump sum and AVC as a tax tree lump sum - these would top up the savings. I have asked the LGPS scheme as I will be 55 before April 2028 and the answer seemed to be that as long as I had started to take the LGPS then the rule changes to 57 wouldn't affect me. So for 10 year live of the LGPS and topped up by savings. THE LGPS would take the heavy lifting away from the savings.

Age 65 is to take 25% of the SIPP as a tax free lump sum and then at some point in the future the remaining 75% as either UFPLS, drawdown or annuity. Then age 68 all topped up by the state pension. My state pension forecast is now nearly at the full state pension.

Each year move 20k from the GIA to the S&S ISA, then take chunks out of the ISA as and when I fancy a splurge on something.

That is my thinking at the moment, life seems to short and unpredictable to be sat down wasting my time on someone else's priorities. Health and time is the only commodities that now seem important

You seem to have, what I might consider an excessive amount in tax liable products (S&S GIA, possibly cash savings?), with relatively little in the workplace DC pot.  I appreciate that you may have not been contributing to the workplace DC pot for long, and I appreciate you are looking to stop work early (well in advance of the minimum pension age, which will be 57 for you in 2028), but I might consider the balance you currently have and it might prove more efficient to move some assets in to the pension whilst working?

Smudgeismydog

Thanks for posting and sharing your plans @huw01, it certainly looks feasible for you to take your ‘bold leap’ in August. I completely agree with you, in that health and owning your time to do as you please become more important, particularly when you were so young to lose your mum.

You have a high cash balance, as @cloud_dog suggests, do you have capacity to add to your workplace DC arrangement while you still have earnings?

huw01

Thanks, the GIA and S&S Isa have come from an inheritance from Dad in 2020.
The workplace pension DC, I have only been in with my current employer since 2021, so I have been salary sacrificing to the max to load it up. Prior to 2021 I was in the LGPS. I have no intention of trying to build up more in the DC Pension than I can up to this summer by working longer. I suppose once I am not working I can still build it up by 3600 per annum.

My plan is not to pay any tax if possible in the next few years by using the savings, I won't be receiving an income. 

Sarahspangles

huw01 said:

Thanks, the GIA and S&S Isa have come from an inheritance from Dad in 2020.
The workplace pension DC, I have only been in with my current employer since 2021, so I have been salary sacrificing to the max to load it up. Prior to 2021 I was in the LGPS. I have no intention of trying to build up more in the DC Pension than I can up to this summer by working longer. I suppose once I am not working I can still build it up by 3600 per annum.

My plan is not to pay any tax if possible in the next few years by using the savings, I won't be receiving an income. 

I’m planning to retire at the end of this tax year, so I maximised payments into my SIPP last year, and will repeat this year.

My spreadsheet suggests the best plan is to maximise tax free withdrawals from my SIPP each year, moving anything I don’t spend into savings. With a standard personal allowance of £12,570 it’s possible to draw down £16,760.  In a way I will be (partly) living off savings, as I couldn't have paid so much into the SIPP if I hadn’t used some of my existing savings. This way they’ve had a further boost from tax relief.

I don’t know whether I’ll contribute to my SIPP once I retire, because once my DB pensions commence I will be using up my personal allowance on those, and with things like inheritance and LGPS lump sums the priority may be to maximise the amount of savings that go into into ISAs and PBs.

Enjoy retirement!

michaels

huw01 said:

I am contemplating in August not renewing my contract and looking to retire and not really work again if I can. 
Currently 51, single, in good health, mortgage free. So many friends have been inflicted with health conditions in the last 5 years that it has changed my outook on life.

225k in cash savings
330k in General Investment Account
82k in S&S ISA

LGPS deferred pension which will pay 12k per annum if taken early at age 55 along with a 20k automatic lump sum
LGPS AVC worth about 10k
Scottish Widows Workplace DC Pension 62k present

My plan is for the first three and a half years is to live off savings, drawing down 1900 per month should be more than enough for me to live and also travel which I want to do.

At age 55 is to start taking the LGPS and alongside the automatic tax free lump sum and AVC as a tax tree lump sum - these would top up the savings. I have asked the LGPS scheme as I will be 55 before April 2028 and the answer seemed to be that as long as I had started to take the LGPS then the rule changes to 57 wouldn't affect me. So for 10 year live of the LGPS and topped up by savings. THE LGPS would take the heavy lifting away from the savings.

Age 65 is to take 25% of the SIPP as a tax free lump sum and then at some point in the future the remaining 75% as either UFPLS, drawdown or annuity. Then age 68 all topped up by the state pension. My state pension forecast is now nearly at the full state pension.

Each year move 20k from the GIA to the S&S ISA, then take chunks out of the ISA as and when I fancy a splurge on something.

That is my thinking at the moment, life seems to short and unpredictable to be sat down wasting my time on someone else's priorities. Health and time is the only commodities that now seem important

If you were able to transfer your sipp into your LGPS AVC then you might be able to draw it all tax free?