When to retire

jp2026

Looking for thoughts on my position and number. 

Currently 53, looking to retire at 55 (March 26 so will stay at 55) /56/57. Think I have enough for 55 but tempted to go longer and be in a stronger position. Quite a novice with all this as had been looking to my DB pension to sort everything but a bit of a lightbulb moment 5 years ago and a few bits of luck have led me to this position

DB at 55 = £30k per annum , will increase with inflation, no cap.

£85k TFLS at 55 in addition from DB.

SIPP - 183k will add about £20k to this before 55 so will be £203k plus any gains

S&S ISA 34k   

Other savings inc. Cash ISA , Premium bonds - £254k looking to add another £25k to this before 55 so £279K plus interest 

Possibly another £100k to add after a house move and some renovations by the end of this year.

Mortgage is very small £15k and ends Oct 27

Spending currently about £3200 without the mortgage. Quite a few holidays in that which I hope will increase.
Would like about 4k a month to be able to spend freely so £48k net. Probably a bit excessive but thought if I start high this may taper off over time.

Will have full state pension at 67

Working past 55 would mean more saving into SIPP and savings. As is comes closer I think I will do another year etc. Asking myself is it because I don't want to start spending the savings!!

NoMore

Is the DB pension 30k at 55 after actuarial reduction ? 

You have a lot of cash, I think people are going to advise maybe reducing that and moving some into investments.

Are you currently still paying into the DB ?

There's scope for putting more into your SIPP from your other savings, depending on your Earnings and other pension contributions, this is more tax efficient than ISA. I would be looking to maximise that.

Your the same age as me, so are you aware of the Pension access change from age 55 to 57 in 2028, this may affect you if you don't choose to access at 55, you may have to wait another two years to get access. 

jp2026

Thank you, just the sort of questions I need.
Yes, DB is after reductions.
yes, still paying in, DB calculations are done taking that in to account.
Up to max in terms of pension contributions from DB and planned SIPP contributions.
Up to max in terms of ISA and premium bonds so will need to wait until each new tax year
I have looked at 55/57 issue and I seem to just miss this as my birthday is in March so I would be 55 March 26.

NoMore

Up to max in terms of ISA and premium bonds so will need to wait until each new tax year

Is that in response to my suggestion to move more of your cash to investments ? You can transfer between your Cash ISA and S&S ISA at anytime and does not use up any of your allowance as long as you use the transfer procedure.

jp2026

Yes. Ok, thank you. Hadn't really considered that.

barnstar2077

You seem to be in a great position.  As said above, I would switch to putting everything that I could into pension before stopping at 55.  Two things to consider.  If you work later, you will never get those years back again, and make sure you have some plans / hobbies etc to retire to (and regular meet ups with friends and family for lunch etc so you don't get cabin fever :  )

crv1963

jp2026 Do you have a spouse/ partner? If so what is there position?

If not a couple of things to think of- as barnstar2077 points out you don't get years or time back. Make sure you know what you're retiring to, even if it's seems mundane. Well done and good luck with it all.

LHW99

On the other hand, staying till October 2027 would have cleared the mortgage before you go, which means a bit more free income.

SarahB16

Have you considered putting all this into a spreadsheet and then working backwards, i.e. net income required of £48k per annum and then how this will be met each year.

For example when you are 67 the majority of this will be met by your DB pension and the state pension so less reliance on your other funds.  

However, for your earlier years you will need to use more of your other funds to fund the £48k. 

Then you can see what you feel comfortable with, i.e. how much of your other funds are required and it will help you to decide when you feel that you can afford to retire.  

AlwaysLearnin

Back of a fag pack calcs:

£30k DB pension = ~£26.5k after tax, requiring £21.5k to get up to £48k p/y, for 12 years to age 67 = £258k

Savings:

£85k TFLS + £172.5k SIPP (being the £203k after 20% tax of the 75% taxable, which you manage) + £34k S&S ISA + £279k cash etc = ~£570k

£570k - £258k (i.e. funding 55-66) = £312k

From 67, £30k DB + £11.5k State Pens = ~£35.5k net, requiring an additional £12.5k p/y to make up to £48k

£12.5k is ~4% of £312k

The £100k from downsize (less £15k to factor in O/S mortgage?) provides further buffer/comfort if required.

Doesn’t look bad, especially if your £48k target is flexible. Congrat’s.

I would be thinking about:

How best to draw down the SIPP, e.g. most tax efficiency etc

Your investment strategy, particularly for the longer-term amounts, e.g. getting the 67+ amounts invested in the best tax efficient wrappers, to (hopefully) grow and sustain withdrawal when it’s needed.

phlebas192

jp2026 said:

£85k TFLS at 55 in addition from DB

Does the scheme allow this to be converted into additional pension? This can sometimes be at lucrative rates that reflected annuities available back when higher interest rates were the norm. It doesn't look like you need any additional cash so it is an option worth exploring.