Bold leap into retirement

huw01

michaels 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

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

I hadn't even considered that was even a possibility, I'll look into it - thanks

NorthYorkshireWhite

Sarahspangles said:

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!

Sorry if I’m missing something obvious.  If the personal allowance is 12570 how are you able to draw down 16760 please?  Is that because you wouldn’t have taken a full lump sum tax free?

FIREDreamer

Not long now, will be officially retired on 1 July but finish work 2 weeks before that. Can’t wait. Nothing planned though.

MallyGirl

NorthYorkshireWhite said:

Sarahspangles said:

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!

Sorry if I’m missing something obvious.  If the personal allowance is 12570 how are you able to draw down 16760 please?  Is that because you wouldn’t have taken a full lump sum tax free?

yes - no upfront 25% lump sum, just 25% of each year's drawdown being tax free

Sarahspangles

NorthYorkshireWhite said:

Sarahspangles said:

With a standard personal allowance of £12,570 it’s possible to draw down £16,760.

Sorry if I’m missing something obvious.  If the personal allowance is 12570 how are you able to draw down 16760 please?  Is that because you wouldn’t have taken a full lump sum tax free?

I will be taking UFPLS from my SIPP*. Over a year I can take £12,570 that is taxable - but pay no tax - plus 25% tax free. The maths is £12,570 divided by three, multiplied by four.

* If you’re interested in doing this, probably best to read a proper description from a SIPP provider of what UFPLS means rather than have me confuse you!

Smudgeismydog

Hi FIREDreamer, I’ve just arranged to hand back my equipment on Thursday 20th June, I can’t wait either.

Nothing planned for me, well apart from the house move, so then there will be plenty to get my teeth into!

MetaPhysical

I've had a bad week at work with so many problems and so much !!!!!! and I was temped to just resign but resisted the urge in the hopes of a potential VR payoff possibly.  16 more months to go, irrespective of that and I will be gone.  I cannot stand the workplace anymore.

Smudgeismydog

I’m so sorry to hear that, do you think you can keep your head down for another 16 months?

MallyGirl

MetaPhysical said:

I've had a bad week at work with so many problems and so much !!!!!! and I was temped to just resign but resisted the urge in the hopes of a potential VR payoff possibly.  16 more months to go, irrespective of that and I will be gone.  I cannot stand the workplace anymore.

I am the same. With 20 years service I dream of VR and I would love to be paid to leave. I don't think it will happen but, having negotiated with OH to finish in 2 years time, I just can't face the thought of finding another job at age 57 so I hang in there. The camera stays off much of the time and I wfh so it is bearable.

Sarahspangles

MallyGirl said:

I hang in there. The camera stays off much of the time and I wfh so it is bearable.

Hand signals in Teams meetings?