Itchy Trigger Finger

SouthCoastBoy

Albermarle said:

Yorkie1 said:

Really interesting to read all of these comments. I'm a few years away from likely retirement (53 now), but I suspect that I will also find it difficult to believe that whatever funds I have by then, will suffice. It's probably also relevant that I'm not in a long term relationship, so have only my own resources to fall back upon.

But these types of threads are also realy useful to start getting one's head into a psychological readiness for the next chapter!

Although you are probably better financially than someone with a partner with little resources, and having to fund the Bank of Mum and Dad at the same time !

They were my initial thoughts, if I was single I would be so much better off, I am the only net contributor in a family of four

OldScientist

rudebh0y said:

I plan to reitre in May 2025 when I will be 59. I have a DB pension that commences at age 65 and also have a SIPP with current value £370k. This SIPP will allow me to retire and be stop gap until DB and then State pension kick in .  I am starting to get a little nervous that the value in my SIPP  may tank (probably irrational but could happen) before next May and hence scupper my retirement plans and perhaps forcing me to postpone it.  One thing I am considering is taking full 25% tax free now so 92.5K and have about three years living money guaranteed. So if market was to tumble in next 10 months I could live off that.  But the popular advice is not to take full lump sum as you most likely lose out in tax free cash in long run which I understand and agree with.  So one hand I guarantee I can retire next May but other hand I'm losing money in long run.

Just wanting people thoughts on what they would do? Or is there anything else I may have missed.

From your description, your SIPP will be required to fund shortfalls in income for two periods

1) From retirement until you take your DB pension at 65
2) A smaller shortfall from 65 to 67 (assuming your DB pension won't cover all of your expenses).

It might be worth thinking about those two periods separately.

If your SIPP allows you to hold individual bonds, then constructing an inflation linked gilt ladder to cover the two periods would protect your income against both markets and inflation.

An alternative, as a number of people have suggested, is to move a proportion of your portfolio from shares over to short term moneymarket funds and, in order to match to the duration a bit better, perhaps a short duration bond fund (e.g., iShares UK Gilts 0-5yr UCITS ETF, IGL5 or IGLS). The bond fund will fluctuate in value, but is likely to give slightly better yields if cash rates come down. There is some inflation risk with this approach.

A final alternative is to consider a fixed term annuity (e.g., see https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/guaranteed-retirement-income-annuities-explained ).

pterri

SouthCoastBoy said:

I'm definitely in the struggle to spend my money camp. After 35 years of saving it is so difficult to change that philosophy and see the pot decrease in size.

And there are so many what ifs I need to worry about...

This is why I’m so grateful for the DB index linked pension as a good base. The SIPP/ISA is essentially a pot of money to use for the things over and above day to day. New bathroom, boiler going pop, big holiday every few years. 

I’ve read somewhere about ideas for future pension provision being thought about. DB pensions, all the risk is on the employer (and fund) DC all the risk is on the individual. Neither is desirable really, not sure what the answer is. My DB is I think 115% funded so in good shape, but who knows in 30years? Ironically it actually ‘made’ money from the Liz Truss calamity.

Yorkie1

Albermarle said:

Yorkie1 said:

Really interesting to read all of these comments. I'm a few years away from likely retirement (53 now), but I suspect that I will also find it difficult to believe that whatever funds I have by then, will suffice. It's probably also relevant that I'm not in a long term relationship, so have only my own resources to fall back upon.

But these types of threads are also realy useful to start getting one's head into a psychological readiness for the next chapter!

Although you are probably better financially than someone with a partner with little resources, and having to fund the Bank of Mum and Dad at the same time !

All very true, although being single now doesn't necessarily preclue the possibility of being Bank of Mum and Dad too!

FIREDreamer

pterri said:

SouthCoastBoy said:

I'm definitely in the struggle to spend my money camp. After 35 years of saving it is so difficult to change that philosophy and see the pot decrease in size.

And there are so many what ifs I need to worry about...

This is why I’m so grateful for the DB index linked pension as a good base. The SIPP/ISA is essentially a pot of money to use for the things over and above day to day. New bathroom, boiler going pop, big holiday every few years. 

I’ve read somewhere about ideas for future pension provision being thought about. DB pensions, all the risk is on the employer (and fund) DC all the risk is on the individual. Neither is desirable really, not sure what the answer is. My DB is I think 115% funded so in good shape, but who knows in 30years? Ironically it actually ‘made’ money from the Liz Truss calamity.

You could buy an index linked annuity with some of your DC pot for guaranteed income?