Retirement plan sense check

fuelcrusher

kempiejon said:

fuelcrusher said:

Maybe. I guess you don't find out until you do. I certainly speak to many people approaching retirement who worry they won't have enough to do and are scared to make the jump on that basis. My gut feeling though is that I'm not going to be one of them. My concerns are more about being finacially ready, picking the right drawdown strategy, making the right tax decisions etc per my OP. I may of course find out I'm wrong.

I've given up work for extended periods a few times and have never struggled to fill my time and I too see what you've experienced people worried to jump because they don't know what to do. Or a recent example where a mate in their 50s has jacked it in and has turned into the stereotype of a teenager/student, they've idled much of the past year, getting up watching daytime TV, mid week drinking, staying up late, experimenting with drugs and sleeping all day. With a 50 year old's metabolism that's lead to weight gain. We've spoken about it and the realisation has dawned so there's time to change. Those early months away from the structure can be a shock.
I asked "What are you going to do?" because your finances look set, alert to tax, drawdown, sequence of returns risks etc your plan looks sound. Getting the impetus to leave can be hard so swapping work for something else rather than getting away from it is a better motivator.
By the way good luck and congratulations is getting there with your plan. 0.7 work is still most of it!

Yes indeed several already retired colleagues have said that they don't know how they ever found time to work.
You're right about the 0.7 still being a good chunk of work, part of me wonders whether I should have asked for lower. I can see how it goes and I'm sure my employer will be open to further reduction if it works out and doesn't have a negative impact on the department. Fortunately at the same time as I made the mental switch to request lower hours I also decided to stop doing the not-insignificant amount of overtime that I've bee doing for years. Realised that the money just wasn't worth it. This in itself will feel like a further hours reduction. Cheers.

fuelcrusher

michaels said:

Your pot, DB and SP (assuming you and DW have full provision) would support a gross income of about £67k for life.

I would definitely start drawing from your pension to the limit of the basic rate tax threshold as soon as you can.

Personally I would 'bridge' to the start of your SPs and DBs using a fixed term index linked annuity or an index linked gilts ladder. To give you a fixed income floor of 2x SP + DB from retirement date.  Then I would look to draw up to the higher rate threshold, putting any you don't spend into an ISA.

Beyond that you need to think about inheritance planning.

Thank you. Nice to see it might not be a crazy idea to purposely pay the lower rate tax from the outset. I might go back to the Voyant app and do a comparison with my previous idea of minimising tax. But then that'd be quite hard to model being as the main justification is to get the money out of the pension and give it away early rather than IHT.

I have considered annuities and gilt ladders a few times. Gut preference has been the gilts to keep the money available. An interesting idea of matching the value of the SP and DB I'd just been plugging in 10K or 20K to see the costs. I assume you would mean to buy these within the pension rather than using the ISAs etc. All I've used so far has been lategenxer's gilt ladder planner:
30k for 10 years suggests 239K cost not inflation linked and 294K inflation linked. I suppose it'd just be a case of replacing the money market funds and bond proportion for these. 
To be honest I may be more comfortable doing say a five year ladder (not sure why, maybe just the cost being scary) then extending as the years go. I haven't seen how you 'extend' a bond ladder though, let me know if you do. Probably more simple than I imagine.

kempiejon

As a gilt matures buy a new one - 5 years out for 5 year rolling ladder?

fuelcrusher

Cobbler_tone said:

I think your accumulated wealth is enough to enjoy your retirement at any point. Especially factoring in your circumstances, the future addition of state pensions and the ability to work (in any capacity) should you wish. I can see the complexity of not being sure what to take when and how.
That is a long time retired (fingers crossed), so the biggest watch out is the removal of routine and loss of connection with the working world.
I don't love my job, 55 and convinced myself I want to retire ASAP. The reality is that I don't really feel ready emotionally. Sometimes on a bad day, or listening to some corporate BS I do but whether it is the decumulation, or liking having lots of disposable income and the routine/purpose of work...possibly a combination of all. 
I was a 12 hour shift worker (days/nights/weekends) for over 20 years but been in a very sedentary day based role for the past 10. I think I will probably approach it but reducing down to a 3 day week next year to keep the connection to the pension and associated work benefits like healthcare. Ramping the holidays up too! 

Thanks. Yes, I'd considered moving to a day role as an option but just feel that it'd feel like more a trap than the shifts, even if I reduced the hours.
As soon as I started the conversation with my manager I got the quick impression that he was looking at finding something on days that I could move to. I shut it down real quick, I just don't feel I'd have the motivation to start a new role. He settled down a bit though when I only asked for the reduced hours, I think he thought I was handing in my resignation there and then.

fuelcrusher

Albermarle said:

One point not really mentioned so far, is ones family situation.

Many retirees still have ongoing ( maybe daily) family responsibilities. Such as looking after elderly or disabled family members, or grandchildren ( babysitting, picking them up from school etc )
This can be restrictive but also does mean many days have some routine structure.
For those without lots of hobbies and interests, this can be useful to stop you slipping into a inactive state.

Yes indeed. Of my two children still at home the eldest (15) is autistic and struggles academically at school. I do alot of work with him at home and he's managed to get to the point of sitting his Nat 5 level Maths and Pysics in May. I'm so proud of what he's achieving but it's taking a lot of time studying at home. I've felt so guilty having to go to work during the lead up to his prelims. It'll be so much easier come April / May with the reduced hours. Full retirement would allow me to help him next year with his literacy and then start building up with my younger boy (13) who has similar challenges. All in all I can see three maybe four years ahead of being a home tutor.

fuelcrusher

kempiejon said:

As a gilt matures buy a new one - 5 years out for 5 year rolling ladder?

Ha ha, see, maybe it is as simple as that. When I look at the gilt ladder planner the withdrawals are made up of coupons adding up over time from multiple gilts and gilts maturing to give the withdrawal sum. Hence I thought that extending it and throwing new coupons into the mix would mess it up. So, I don't know....