Bold leap into retirement

MallyGirl

cloud_dog said:

Just heard some sad news at work.  A younger colleague I've worked with on/off for 20 years passed away at the weekend.

Puts it all in context really.

It does - very sad.
In the weeks before Christmas my OH's best friend, aged 57, went into full time dementia care. You never know what is around the corner.

mrs_slapshot

Smudgeismydog said:

Huge congrats @mrs_slapshot,

In my last few months, I heavily utilised my pension salary sacrifice, to be as tax efficient as possible, but in effect practise living on my retirement income. Are you confident you know your number? (how much you need to cover fixed and discretionary costs?)

You might also want to think about any large purchases you need e.g. home laptop if you have a company pc, or company car replacement.

Have you considered accessing a higher withdrawal rate from your DC pot to allow you to delay the DB and avoid the early retirement reductions? or they might even have different reductions, so just take one early? If you post your numbers, I’m sure there will be some helpful insights. 

Keep posting and letting us know how you are, I certainly found it a rollercoaster of emotions after I handed in my notice. Absolutely zero regrets after my bold leap though
x

I am confident about my number; I've done a budget covering my fixed costs plus discretionary spend and it comes to £15k per year. My DB pensions would be £5k per year and 4% from my DC pot is around £11k. I've also run the figures through Guiide and done a detailed spreadsheet - I've looked at taking more from my DC pot in the years before state pension (67 - and I've checked, I have full entitlement) and that would work too. I've estimated annual earnings of between £6k and £10k as I'd really only like to work part of the year, and as I say that will be for my holidays and maybe to put some money aside. Mortgage will be paid off when I leave (currently have the money in savings and Premium Bonds) and I'll have a good chunk of savings (about £20k) to cover my first few months. Planning also to take out my max tax free cash from the DB pensions and hold as a cash buffer.

I know not all will agree with this, and yes it might make financial sense to delay my DB pensions and take more pension and less cash but in my circumstances (I am single, my young adult son lives in his own paid for home - due to inheritance), leaving my pensions to build up which may never be paid out (or only minimum payout to my son) does not make sense to me.

I own my own laptop, and my car is fully paid for and well looked after (I had it from new). House is well maintained but there are some jobs I want to get done in the next couple of months.

I'm feeling excited but of course a bit scared too!

mrs_slapshot

AlanP_2 said:

@mrs_slap

No particular advice for the last few months at work over and above filling your pot as efficiently as you can.


Once retired don't overlook the opportunity to contribute to your VG pension the higher of either £2880 Net / £3600 gross or what you earn in April.

In following year with no eared income you will be limited to 2880/3600 until age 75.


Also, make sure you withdraw taxable income from your SIPP to use your personal allowance up and reduce the draw from savings. Once you are taking DB and getting SP your withdrawals will be taxed.

Final point, check your SP forecast carefully and see if any additional NI years need to be purchased to get the maximum you can.

Thanks Alan - I'll have a look into contributing to my VG pot - and I'm hoping I will have some earned income each year for the following few years. SP checked and I have full entitlement.

mrs_slapshot

kipsterno1 said:

mrs_slapshot said:

mrs_slapshot said:

With that in mind, any thoughts on what I should do in my last few months of work (apart from save as much as possible!)?

Stock up on post-it notes and printer paper.

I remember when I was being made redundant a few years ago stocking up on pens and fancy notebooks!!

pterri

mrs_slapshot said:

kipsterno1 said:

mrs_slapshot said:

mrs_slapshot said:

With that in mind, any thoughts on what I should do in my last few months of work (apart from save as much as possible!)?

Stock up on post-it notes and printer paper.

I remember when I was being made redundant a few years ago stocking up on pens and fancy notebooks!!

Have to say, since Covid and WFH the standard of office stationary available to pilfer has plummeted. I blame Boris 

katejo

cloud_dog said:

Just heard some sad news at work.  A younger colleague I've worked with on/off for 20 years passed away at the weekend.

Puts it all in context really.

How sad! How old was the colleague? Was it really sudden? I came back from Christmas break to hear that a colleague's nephew had committed suicide just before Christmas and his father (her older brother) had died of a heart attack a week later. 

cloud_dog

katejo said:

cloud_dog said:

Just heard some sad news at work.  A younger colleague I've worked with on/off for 20 years passed away at the weekend.

Puts it all in context really.

How sad! How old was the colleague? Was it really sudden? I came back from Christmas break to hear that a colleague's nephew had committed suicide just before Christmas and his father (her older brother) had died of a heart attack a week later. 

49.  Wasn't expected.  Its one of his sons birthday today.  Never rains but it pours

Smudgeismydog

That’s so sad, I’m so sorry
Yes, it does put it all into perspective 

Smudgeismydog

mrs_slapshot said:

Smudgeismydog said:

Huge congrats @mrs_slapshot,

In my last few months, I heavily utilised my pension salary sacrifice, to be as tax efficient as possible, but in effect practise living on my retirement income. Are you confident you know your number? (how much you need to cover fixed and discretionary costs?)

You might also want to think about any large purchases you need e.g. home laptop if you have a company pc, or company car replacement.

Have you considered accessing a higher withdrawal rate from your DC pot to allow you to delay the DB and avoid the early retirement reductions? or they might even have different reductions, so just take one early? If you post your numbers, I’m sure there will be some helpful insights. 

Keep posting and letting us know how you are, I certainly found it a rollercoaster of emotions after I handed in my notice. Absolutely zero regrets after my bold leap though
x

I am confident about my number; I've done a budget covering my fixed costs plus discretionary spend and it comes to £15k per year. My DB pensions would be £5k per year and 4% from my DC pot is around £11k. I've also run the figures through Guiide and done a detailed spreadsheet - I've looked at taking more from my DC pot in the years before state pension (67 - and I've checked, I have full entitlement) and that would work too. I've estimated annual earnings of between £6k and £10k as I'd really only like to work part of the year, and as I say that will be for my holidays and maybe to put some money aside. Mortgage will be paid off when I leave (currently have the money in savings and Premium Bonds) and I'll have a good chunk of savings (about £20k) to cover my first few months. Planning also to take out my max tax free cash from the DB pensions and hold as a cash buffer.

I know not all will agree with this, and yes it might make financial sense to delay my DB pensions and take more pension and less cash but in my circumstances (I am single, my young adult son lives in his own paid for home - due to inheritance), leaving my pensions to build up which may never be paid out (or only minimum payout to my son) does not make sense to me.

I own my own laptop, and my car is fully paid for and well looked after (I had it from new). House is well maintained but there are some jobs I want to get done in the next couple of months.

I'm feeling excited but of course a bit scared too!

With regards to accessing your DB early, then you must do what suits your circumstances. You come across as organised and confident about your figures.

Sounds like you’ve got this!
x

MetaPhysical

I've dropped to four days per week from this week with next March as the big "R" 😃 when i'll be 58 years and 7 months.

The older I get the more I'm appreciating that, whilst we worry and discuss here the financial consequences of retirement - not surprising since this is a financial chat group - maybe we ought to be more concerned with our health, mental health and well-being doing jobs we may not like in a shrinking number of days we all have on this mortal coil that we could be spending doing things we love with the people we love.  Time and family is the most precious gift we have.