When can I retire?

qwertywerty

I posted recently about ready made portfolios for pension drawdown and the comments here are really helpful. 

Here is my situation - I'm currently 50, in good health, married, partner stays at home and has full NI for state pension but little private pension. I'm hoping to retire before 60. Mortgage already paid off, house is worth 400k, not in a rush to move/downsize. Current income is 45k, 600k ISAs invested in 80/20 vanguard type portfolio, 350k DC pension, 100k cash equivalent savings, mainly premium bonds.

About 20k pension income will be from the state pension, and my spouse is currently 60, so will obviously get theirs before I get mine.

I'd like an income of over £30k in retirement.

When can I afford to retire? And should I use an annuity for my DC fund rather than assuming drawdown was better?

Thanks

penners324

Why so much in ISAs and cash as opposed to pensions?

I think at £30k a year that would last 35 years. 

Marcon

qwertywerty said:

I posted recently about ready made portfolios for pension drawdown and the comments here are really helpful. 

Here is my situation - I'm currently 50, in good health, married, partner stays at home and has full NI for state pension but little private pension. I'm hoping to retire before 60. Mortgage already paid off, house is worth 400k, not in a rush to move/downsize. Current income is 45k, 600k ISAs invested in 80/20 vanguard type portfolio, 350k DC pension, 100k cash equivalent savings, mainly premium bonds.

About 20k pension income will be from the state pension, and my spouse is currently 60, so will obviously get theirs before I get mine.

I'd like an income of over £30k in retirement.

When can I afford to retire? And should I use an annuity for my DC fund rather than assuming drawdown was better?

Thanks

When you can afford to. Trite as that answer sounds, it's also pretty accurate. A few vague numbers in a short post isn't enough to give any meaningful answers. What projections have you done about your future income - and, crucially, your expenditure?

molerat

About 20k pension income will be from the state pension,

2 full pensions is £23K so why only £20K ? 10% of your £30K.

Hoenir

qwertywerty said:

I'd like an income of over £30k in retirement.

Is that net of tax i.e. take home pay? 

Albermarle

- I'm currently 50, in good health, married, partner stays at home and has full NI for state pension but little private pension. I'm hoping to retire before 60

Will you be continuing to add to your pension/ISA, between now and when you retire? As a previous poster said why more in ISA's than pension. It is usually the other way around due to the pension tax benefits.
Your partner should be adding £2880 to a pension ( maximum allowed for a non earner) and gaining £720 in tax relief.

Linton

From a very quick calculation I think you could retire now.....

Required income £30K inflation adjusted.  Total savings/investments £1M, SP £22K

Age 50 put aside £240K =8 years @ £30K leaving £760K

Age 58, You can access your pensions, spouse gets SP.  £760K could reasonably generate say £25K/year inflation adjusted from age 58 which added to your SPs would take £36K/year,  £47K/year after age 68, (before tax) taking you well above the £30K/year retirement figure.

kempiejon

qwertywerty said:

Here is my situation - I'm currently 50, in good health, married, partner stays at home and has full NI for state pension but little private pension. I'm hoping to retire before 60. Mortgage already paid off, house is worth 400k, not in a rush to move/downsize. Current income is 45k, 600k ISAs invested in 80/20 vanguard type portfolio, 350k DC pension, 100k cash equivalent savings, mainly premium bonds.

.../
When can I afford to retire? And should I use an annuity for my DC fund rather than assuming drawdown was better?

If you do your sums you might well find you can retire now. If I had £1.05M and no rent/mortgage and I wanted to retire I'd do it.
But I really want to retire, I have better things to do with my time than go to work. Perhaps you love your job and it gives you purpose.
I'm hoping to retire sounds like you've not made an early retirement decision let alone a plan.
Run some numbers calculate your expenditure now and expected in retirement and start a plan.
How much does your invest wealth grow/yield annually and what's it been doing the past.

Albermarle

Hoenir said:

qwertywerty said:

I'd like an income of over £30k in retirement.

Is that net of tax i.e. take home pay? 

Also is that ' over £30K pa ' including a provision for large one off expenditures, such as a new car, holidays, home improvements, helping family members etc?
If not then in reality you might be spending significantly more than £30K pa on average each year. Probably more like £40K.
Alternatively you could set aside a pot for such expenditure, but then of course you would have less to fund the more day to day spending.

MEM62

qwertywerty said:

Mortgage already paid off, house is worth 400k, not in a rush to move/downsize. Current income is 45k, 600k ISAs invested in 80/20 vanguard type portfolio, 350k DC pension, 100k cash equivalent savings, mainly premium bonds.

About 20k pension income will be from the state pension, and my spouse is currently 60, so will obviously get theirs before I get mine.

I'd like an income of over £30k in retirement.

When can I afford to retire? 

Now.  ....

michaels

Is the 30k just for you or for the household?  Is it before or after tax?  What provision do you want for the surviving partner on the first death?

Rough rule of thumb: 
At retirement date work out how many years for self plus partner (eg 7+4) to state pension age and multiply by 11,500. 
Subtract the answer from your total assets that are for spending (ie not including house). 
Multiply amount left after filling the gap to state pension by 0.0325. 
Add this final figure to 23,000 and that will be your safe annual index linked gross income.