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Earlier than planned retirement at 54.

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  • HedgehogRulez
    HedgehogRulez Posts: 126 Forumite
    100 Posts Photogenic Name Dropper
    Tbh I’d take a few months off to recuperate and charge batteries and then look for a new low stress part time job to cover your personal allowance for the next X years until you both want to retire fully together.

    This will limit your accessing your savings too much in these early years and provide you with some security.
  • wjr4
    wjr4 Posts: 1,306 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Thanks for all the comments. Plenty to think about there.

    I had composed a lengthy reply but it has disappeared into the ether!
    I have already completed a thorough breakdown of expenditure over the last 12 months.
    While my wife is still working drawing a net income of £25k would enable our current lifestyle.
    An annual target of £40k would be the ideal as a couple once my wife stops work.

    We are both eligible for full state pensions.

    I may still look for part time work until my wife decides to retire.
    Based on that expenditure, you don’t have enough money to retire now. Take some time off and then a job you enjoy, even if it’s a lot lower paid than you were earning before. Good luck!
    I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.
  • So I've just got 2 weeks left to go at work. I have stayed a little longer to help with the transition.

    The plan initially was to take some time out and get some jobs done around the house and garden before potentially getting a low stress part time job or a bit of freelance work.

    There have been a couple of developments with my wife maximising my pension contributions for the last tax year from taxable savings.
    We have also utilised our ISA allowances.
    The biggest development though is my wife will get a much larger DB pension than we originally thought. This will pay £35,000 at 65 without a lump sum or if she was to take it at 60 for example would be £25,000 without lump sum.
    This has dramatically changed our forecasts but now raises issues regarding future income tax and efficient ways to draw down.

    Does our situation now appear to warrant paying for one off independent advice re draw down strategy and getting a retirement plan?
    On these new projections and our current outgoings it seems we have more than enough to sustain our required income.




  • Marcon
    Marcon Posts: 14,453 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Combo Breaker

    The biggest development though is my wife will get a much larger DB pension than we originally thought. This will pay £35,000 at 65 without a lump sum or if she was to take it at 60 for example would be £25,000 without lump sum.
    This has dramatically changed our forecasts but now raises issues regarding future income tax and efficient ways to draw down.


    That's a huge jump from the £13.5K in your post of a few months ago. At best it's a projection, not a certainty - have you checked why there is such a big difference in what you thought then and what you think now?
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Marcon said:

    The biggest development though is my wife will get a much larger DB pension than we originally thought. This will pay £35,000 at 65 without a lump sum or if she was to take it at 60 for example would be £25,000 without lump sum.
    This has dramatically changed our forecasts but now raises issues regarding future income tax and efficient ways to draw down.


    That's a huge jump from the £13.5K in your post of a few months ago. At best it's a projection, not a certainty - have you checked why there is such a big difference in what you thought then and what you think now?
    My wife had looked at the wrong figures!
    It is a protected final salary pension from her many years working in the city for an international bank.
    It was only because we were going back over the numbers and I asked her to log in and check what the figures were for taking it at an earlier date.
    As an example she could take a cash lump sum of £168,000 at 65 but with our already cash heavy savings this doesn't seem necessary.
    Realistically she would look to start drawing earlier at 60 but even earlier if it helps the tax situation.
  • Albermarle
    Albermarle Posts: 27,896 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    Marcon said:

    The biggest development though is my wife will get a much larger DB pension than we originally thought. This will pay £35,000 at 65 without a lump sum or if she was to take it at 60 for example would be £25,000 without lump sum.
    This has dramatically changed our forecasts but now raises issues regarding future income tax and efficient ways to draw down.


    That's a huge jump from the £13.5K in your post of a few months ago. At best it's a projection, not a certainty - have you checked why there is such a big difference in what you thought then and what you think now?
    My wife had looked at the wrong figures!
    It is a protected final salary pension from her many years working in the city for an international bank.
    It was only because we were going back over the numbers and I asked her to log in and check what the figures were for taking it at an earlier date.
    As an example she could take a cash lump sum of £168,000 at 65 but with our already cash heavy savings this doesn't seem necessary.
    Realistically she would look to start drawing earlier at 60 but even earlier if it helps the tax situation.
    You will realise that an IFA can have no impact directly on occupational DB pensions.
    Of course they can incorporate the income into overall financial/tax planning, and advise on how to best invest the lump sum, but she is not taking that anyway.

    One of the most asked questions on the forum is 'it is worth paying an IFA' - in some cases it is an obvious yes , but the usual answer is 'possibly'. It depends to some extent on personal preference, as in do you like dealing with these issues yourself or not.

  • Thanks Albermarle.
    I guess the challenge is working out the most tax efficient way to draw income over the years. Obviously once the DB and SP come into play there will be unavoidable tax but the years before allow more flexibility.
    My wife ironically tends to shy away from the financial side of things but has a very good grasp of spreadsheets unlike myself.
    Definitely need to start work on inputting the figures.
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