FIREDreamer’s Retirement Journey

FIREDreamer

jimi_man said:

FIREDreamer said:

jimi_man said:

So £37k in income (with RPI) until SPA then another £21k or so. £350k in a SIPP and a further £770k in savings. Only seven years to SPA. 

You don’t actually say what your Number is (which BTW is the most useful thread on here) - how much you’re going to spend or how much you need so these figures need some context, but with £37k for seven years and then £58k after that forever (index linked) and £1.1 million as a backup in savings, it sounds like you’ll be ok! 

Strangely enough, without the annuity guaranteed income, I probably would have “one more yeared” again.

So what is your Number? How much do you think you’ll need?

£50k so doable with the guaranteed income plus drawdown until SPA.

Bostonerimus1

FIREDreamer said:

Bostonerimus1 said:

That 24k RPI annuity must have cost a pretty penny, even with today's payout rates.

Approx £650k but worth it for peace of mind.

EDIT: and less investment management for my wife should I go first.

I think the OP's finances are an excellent example of having options. They've chosen to buy a "Rolls Royce" joint lifetime, RPI annuity that will pay off financially if the OP and spouse live long lives and will insure against inflation rises. But I think the most important thing it does for them is give them simplicity and the security of a guaranteed income. They still have considerable assets left over so they still have capital available for large purchases and maybe some care costs. Now that they have the income flow set they might think about gift giving and charitable contributions.

FIREDreamer

Bostonerimus1 said:

FIREDreamer said:

Bostonerimus1 said:

That 24k RPI annuity must have cost a pretty penny, even with today's payout rates.

Approx £650k but worth it for peace of mind.

EDIT: and less investment management for my wife should I go first.
I think the OP's finances are an excellent example of having options. They've chosen to buy a "Rolls Royce" joint lifetime, RPI annuity that will pay off financially if the OP and spouse live long lives and will insure against inflation rises. But I think the most important thing it does for them is give them simplicity and the security of a guaranteed income. They still have considerable assets left over so they still have capital available for large purchases and maybe some care costs. Now that they have the income flow set they might think about gift giving and charitable contributions.

Yes, the kids will be helped with property deposits and weddings, if applicable, when required.

Charitable giving is something to consider and I have a couple of regular good causes that I can give more too post retirement.

The ISA will be for any big ticket items but it is a bit of a mess / mish mash at the moment so will tidy up from 50 investments down to a maximum of 10 over the next few months for more simplicity.

enthusiasticsaver

That looks like a pretty good income in retirement.  Not too dissimilar to our set up  except we don't have an annuity.  We do have £45k in DB pensions between us though. 

FIREDreamer

enthusiasticsaver said:

That looks like a pretty good income in retirement.  Not too dissimilar to our set up  except we don't have an annuity.  We do have £45k in DB pensions between us though. 

Yes, I wanted a decent guaranteed income on top of my 2 DB pensions. I doubt I would have had the bottle to retire otherwise despite the annuity being lower than the oft quoted 4% safe withdrawal rate.

It rankles a bit that I paid an unnecessary (in retrospect) LTA charge last tax year when I didn’t need to crystallise over the LTA at that point really, but sadly I am not able to see into the future and thought an increase in any LTA charge was more likely given the nation’s finances. But then again I probably saved more than that by not being invested in bonds, so swings and roundabouts I guess and lucky with my annuity timing.

Not sure what happens to RPI linked annuities post 2030 when RPI ceases to exist.

michaels

FIREDreamer said:

Bostonerimus1 said:

That 24k RPI annuity must have cost a pretty penny, even with today's payout rates.

Approx £650k but worth it for peace of mind.

EDIT: and less investment management for my wife should I go first.

Interesting that you went for 50% spouse, I am thinking that I will aim for the difference between 2 and 1 as only being the lost State Pension (approx. 50k for 2 and 40k for either 1 in my case)

barnstar2077

Very impressive!  I would stop working immediately if I had your kind of assets!

Bostonerimus1

enthusiasticsaver said:

That looks like a pretty good income in retirement.  Not too dissimilar to our set up  except we don't have an annuity.  We do have £45k in DB pensions between us though. 

If you are lucky enough to be mortgage free and can come up with ~£25-30k in SP/DB/annuity index linked income you'll have the basics covered. So a couple of SPs would get you close and with £45k in DB you are in great shape. But many people take significant debt and housing costs into retirement and have little beyond SP and so will be in a far less secure situation.

My own plan involved taking a job with a DB pension towards the end of my career and the decision to pay into both UK SP and It's US equivalent at the beginning of my career. So I will get index linked income of £16k DB, ~£10k SP, ~ £25k US SP equivalent plus a non-indexed annuity of £4.5k. 

FIREDreamer

michaels said:

FIREDreamer said:

Bostonerimus1 said:

That 24k RPI annuity must have cost a pretty penny, even with today's payout rates.

Approx £650k but worth it for peace of mind.

EDIT: and less investment management for my wife should I go first.

Interesting that you went for 50% spouse, I am thinking that I will aim for the difference between 2 and 1 as only being the lost State Pension (approx. 50k for 2 and 40k for either 1 in my case)

Probably do 100% spouse annuity on my drawdown pot eventually, or let my wife inherit it as I doubt much of it will be used really - certainly not at 40% tax!