Bold leap into retirement

Cobbler_tone

katejo said:

Sarahspangles said:

The universe is conspiring against me. I need a ‘long appointment’ filling and literally the only time the dentist can offer is 11:30 on my first day of retirement. It had better rain!

I recently saw a comment on another forum from someone who had retired pretty recently but now finds that all their spare time is taken up with medical appointments. 

Anyone with parents knows that becomes standard!! As my old dad always says "when you reach 55, you'll always have a needle or finger somewhere." At the weekend our chat covered the prostrate and the term "dripping tap" was used. He does make me laugh. 

Doctor, eyes, hospital, dentist, feet etc....then you have Aldi's on a Monday, M&S Tuesday, town on a Wednesday etc. You don't have time to hold down a job too! 

cloud_dog

pterri said:

cloud_dog said:

pterri said:

I’ve done it, I’ve handed in my resignation. April tax year end….

I wanted to thank @pterri for posting their own thread on the Pensions Board, to help themselves to confirm their own position and the viability of their options recently.  Well technically thanks is probably due to the the other posters

The post and responses caused me to reconsider the method for how we will be funding our own early / retirement (ISA, SIPPs, DBs).  I had previously decided that I was going to take the main DB at NRA, as I wanted to try to ensure as large a guaranteed source of income as reasonably possible for our later stages of life, but having re-modelled the numbers it has given me cause to re-assess.

I’m not absolutely decided on how to fund the early years before NRA, it’s only three years though. Fairly sure I want to leave the DB until NRA but not sure that’s the best idea, I’ll think more once I’ve pulled the trigger. Does yours allow you to take a larger amount at NRA, dropping at SPA so evens out? Mine has a quotation but based on the minimum (.?) state pension so will actually be slightly more as I’ve got full SP due. 

Also, I’m wavering on dates. April 4th is official but MAY stretch to July if they can find me a low stress alternative for a few months, I’m bending toward April though.  

So, I had planned to take the main DB at NRA, and with taking the full PCLS.  The commutation factor is 16 but, based on the net income calculation this goes to 19.5(ish), so reasonable.  I estimate the full DB benefit to be c. £34k at 65, but with taking the full PCLS that drops to c. £24k.  Running the numbers for taking the benefit at 60 without any PCLS I am guestimating it could be c. £24k (funnily enough), possibly a little lower. 

I have requested a quote for taking the pension at age 60, 5 years early.  It is unclear from the booklet exactly how they calculate the reduced pension benefit, other than the listed reduction values; for me that works out at 77.4%, so a reduction of 22.6% for taking it 5 years early.

I'll wait on the actual quote to check my numbers and then go from there.  

cloud_dog

michaels said:

cloud_dog said:

pterri said:

I’ve done it, I’ve handed in my resignation. April tax year end….

I wanted to thank @pterri for posting their own thread on the Pensions Board, to help themselves to confirm their own position and the viability of their options recently.  Well technically thanks is probably due to the the other posters

The post and responses caused me to reconsider the method for how we will be funding our own early / retirement (ISA, SIPPs, DBs).  I had previously decided that I was going to take the main DB at NRA, as I wanted to try to ensure as large a guaranteed source of income as reasonably possible for our later stages of life, but having re-modelled the numbers it has given me cause to re-assess.

It is such a conundrum - in theory maxing guaranteed index linked seems like a no brainer for longevity protection, I can use index linked gilts to bridge to state pension age to remove any risk in that period

But, what about inverse longevity risk and inheritance?  For that DB is not heritable (beyond DW or special case DKs to age 23 if we both die in the next 7 years).  So spending DB and thus leaving more DC means more inheritance.

Similar consideration for whether to take the poor value PCLS (15 years of unreduced payments) from the DB.

We had discussed the inheritance aspect and had agreed that this was not going to be a consideration for us (I'm sure that becomes a more real focus in later life).  We are currently contributing to their ISA, LISA, and pension (out of surplus income), and our intention is that that will continue (until we can't).  This was part of the reason for opening a pension for them before they were 18, so that we could set up early contributions (gifting I suppose, although all out of excess income).  We are very unlikely to have IHT considerations but are mindful of the possible health provision requirement later on in life. 

nicknameless

cloud_dog said:

pterri said:

I’ve done it, I’ve handed in my resignation. April tax year end….

I wanted to thank @pterri for posting their own thread on the Pensions Board, to help themselves to confirm their own position and the viability of their options recently.  Well technically thanks is probably due to the the other posters

The post and responses caused me to reconsider the method for how we will be funding our own early / retirement (ISA, SIPPs, DBs).  I had previously decided that I was going to take the main DB at NRA, as I wanted to try to ensure as large a guaranteed source of income as reasonably possible for our later stages of life, but having re-modelled the numbers it has given me cause to re-assess.

I am 53, waiting with baited breath for vol redundancy decision, and have one DB with NRA of 60.

I plan to retire this year, take the DB at 55 (approx. 20% reduction).  All my modelling shows that this increases probability of success calculated via monte carlo, by smoothing sequence of return risk.  Survivor benefits are not actuarially reduced.

jouef

QrizB said:

Congrats to @cloud_dog and @arthur_fowler !

I'm not there yet (getting closer) but we did hit a milestone recently when Mrs QrizB checked her state pension forecast and got those magic words "you cannot improve your forecast any further" which means she's paid (or been credited with) enough NI

My online forecast said “You cannot improve your forecast any more” but the Future Pensions helpline got me an extra grand a year.

QrizB

jouef said:

QrizB said:

Congrats to @cloud_dog and @arthur_fowler !

I'm not there yet (getting closer) but we did hit a milestone recently when Mrs QrizB checked her state pension forecast and got those magic words "you cannot improve your forecast any further" which means she's paid (or been credited with) enough NI

My online forecast said “You cannot improve your forecast any more” but the Future Pensions helpline got me an extra grand a year.

Yours probably said you had to keep contributing (for 3 years?) to get there, though. Mrs QrizB's didn't.

jouef

QrizB said:

jouef said:

QrizB said:

Congrats to @cloud_dog and @arthur_fowler !

I'm not there yet (getting closer) but we did hit a milestone recently when Mrs QrizB checked her state pension forecast and got those magic words "you cannot improve your forecast any further" which means she's paid (or been credited with) enough NI

My online forecast said “You cannot improve your forecast any more” but the Future Pensions helpline got me an extra grand a year.

Yours probably said you had to keep contributing (for 3 years?) to get there, though. Mrs QrizB's didn't.

No, it did not say that. I just had the ‘please keep contributing as it pays for stuff’ message. I had pre 2016 and plenty of full years. I was contracted out for nearly all of them. Once my forecast updates, it will increase by 3 x £6.32 per week. So I have definitely ‘improved’ it.

michaels

Could one make pre 2016 contributions and along with serps/s2p be in a position of having an entitlement higher than the new state pension at the switch over date?  I thought such old contributions would now be time barred?

MallyGirl

nicknameless said:

cloud_dog said:

pterri said:

I’ve done it, I’ve handed in my resignation. April tax year end….

I wanted to thank @pterri for posting their own thread on the Pensions Board, to help themselves to confirm their own position and the viability of their options recently.  Well technically thanks is probably due to the the other posters

The post and responses caused me to reconsider the method for how we will be funding our own early / retirement (ISA, SIPPs, DBs).  I had previously decided that I was going to take the main DB at NRA, as I wanted to try to ensure as large a guaranteed source of income as reasonably possible for our later stages of life, but having re-modelled the numbers it has given me cause to re-assess.

I am 53, waiting with baited breath for vol redundancy decision, and have one DB with NRA of 60.

I plan to retire this year, take the DB at 55 (approx. 20% reduction).  All my modelling shows that this increases probability of success calculated via monte carlo, by smoothing sequence of return risk.  Survivor benefits are not actuarially reduced.

@nicknameless did you get VR?
2 of us do our rather niche role and they have just made the other guy redundant. Absolutely gutting as he didn't want to go and I would have done happily - our company doesn't 'do' VR  

MetaPhysical

Some great reading here!  My story folks.

I've told my boss informally that I am going March '26 - so just over one year - although I could go at any time from today if the BS thresholds from work meant it all got too much.  As I said in another thread, the stress of it all, combined with cost cutting and lack of resources is causing me anxiety issues and I could snap at any point and resign. My current salary is about 80k per annum working 4 days per week.  Me and my fiancee are definitely life partners, we've been through so much together.  I have been at work for 41 years and been continuously employed as a Chartered Engineer - Civil Engineer - for all that time.

I'd originally planned for July this year (2025) when I turn 58.  However, we are doing up my fiancee's house before we get married in 2027 and I'd rather pay as many of the expenses of that out of salary/bonuses rather than savings/pension.

Current position: No mortgage on my 550k house and £60k in ISAs.  Selling my house will realise about £400k in cash after fiancee's mortgage (on her 600k house) cleared (I am aware of the sequencing of this wrt to marriage and CGT/SLDT).  We will need about 150k-200k of that for extensions and home improvement to leave a net of about £250k-ish
 
On top of that:
DB pension of £30k per year from March 26 index linked
DC pot of £700k invtesd 3/7 risk factor.  One of the reasons I want to work "another year" (yeah, I know 🙈) is to build this up a bit more and take anything made on top of 650k as TFC.  I should be able to take sustainably 25k per year from 650k at aged 58.5 with a buffer of the TFC in the event of a market downturn.
Fiancee - same age as me - has very minimal pension.
Two full state pensions due at 67 in ten year's time.

I think I could take a private pension of around £55k per year and it be sustainable until state pensions kick in with all that cash on top - that we hope to spend!

Thank you for reading my story.  Any thoughts most welcome.