Retirement Decision

911abz

I’ve been a member here for a while and have enjoyed reading the various posts about early retirement. Now, I find myself at a similar crossroads and would really appreciate some encouragement and advice from those of you who’ve made the leap.

To start, I know that everyone's pension and financial situation is different, and I’m aware that mine is in a relatively strong position. However, I’d like to kindly ask for no sarcastic comments—I’m genuinely seeking thoughtful guidance. I’ve worked hard to get here, but I’m still feeling a bit nervous and uncertain about taking the next step.

Here’s my situation:

1. I’m 52 and planning to retire at the end of June.
2. My partner and I each own our own homes outright, with no mortgages.
3. My current pension and savings are as follows:
   - SIPP: £772k
   - Stocks & Shares ISA: £656k
   - General Investment Account: £253k
   - VCTs: £65k
   - Cash savings: £266k
4. I’ll be eligible for a full state pension at 67.

I’m planning to draw down between £50k–60k per year in the most tax-efficient way possible while still maximizing investment growth. My partner’s Defined Benefit pension, along with their state pension, will provide an additional £30k annually, and they have around £135k in savings.

We also plan to sell our individual properties and purchase a home together, using the combined proceeds from both properties.

I’ve worked with financial advisors, and their cash flow models, along with online tools like Guiide and spreadsheets I’ve created, all show that my cash should last—assuming markets behave as they have for the past 125 years. Still, for some reason, I’m feeling a bit apprehensive about it all!

If anyone has any advice on whether my approach seems reasonable, or any tips for managing the transition, I’d really appreciate hearing your experiences. Thanks in advance!

DRS1

Are you and your partner married or going to get married?  You at least are well into IHT territory.

May I ask why you hold VCTs?  Is it for the tax free income or the tax deduction?  Wouldn't the SIPP have been better for the tax deduction - or are you constrained on what you can put into it?  No-one knows the future but I would bet the capital value of the VCTs will fall.

Are you really going to spend the proceeds from 2 house sales to buy 1 house?  Most people when retiring buy a smaller house and use some of the proceeds of the sale to live on.

On a non financial note do you have plans for how you spend your time after June?  If you go from working full time to not working at all it can be a shock to the system.  Having a part-time job consultancy or a time consuming hobby can help.

And what about your partner - will they also retire?

Marcon

911abz said:

I’ve been a member here for a while and have enjoyed reading the various posts about early retirement. Now, I find myself at a similar crossroads and would really appreciate some encouragement and advice from those of you who’ve made the leap.

To start, I know that everyone's pension and financial situation is different, and I’m aware that mine is in a relatively strong position. However, I’d like to kindly ask for no sarcastic comments—I’m genuinely seeking thoughtful guidance. I’ve worked hard to get here, but I’m still feeling a bit nervous and uncertain about taking the next step.

Here’s my situation:

1. I’m 52 and planning to retire at the end of June.
2. My partner and I each own our own homes outright, with no mortgages.
3. My current pension and savings are as follows:
   - SIPP: £772k
   - Stocks & Shares ISA: £656k
   - General Investment Account: £253k
   - VCTs: £65k
   - Cash savings: £266k
4. I’ll be eligible for a full state pension at 67.

I’m planning to draw down between £50k–60k per year in the most tax-efficient way possible while still maximizing investment growth. My partner’s Defined Benefit pension, along with their state pension, will provide an additional £30k annually, and they have around £135k in savings.

We also plan to sell our individual properties and purchase a home together, using the combined proceeds from both properties.

I’ve worked with financial advisors, and their cash flow models, along with online tools like Guiide and spreadsheets I’ve created, all show that my cash should last—assuming markets behave as they have for the past 125 years. Still, for some reason, I’m feeling a bit apprehensive about it all!

If anyone has any advice on whether my approach seems reasonable, or any tips for managing the transition, I’d really appreciate hearing your experiences. Thanks in advance!

Do you have a protected pension age? If not, have you factored in that you won't be able to draw your pension at the end of June - minimum age (in normal health) is 55, rising to 57 in April 2028.

If you're not married, then getting married or civil partnered would be a huge help on the tax front (true romance...) and also simplify matters considerably when one of you dies. Just a nudge to check you both have valid and up to date wills...hopefully they won't be needed for many years to come, but there are far too many posts on this forum and others bewailing the fact that someone didn't make a will because 'they hadn't expected to die'.

akm2018

911abz said:

I’ve worked with financial advisors, and their cash flow models, along with online tools like Guiide and spreadsheets I’ve created, all show that my cash should last—assuming markets behave as they have for the past 125 years. Still, for some reason, I’m feeling a bit apprehensive about it all!

Easy, just instruct your adviser(s) and configure your own tools and spreadsheets with this simple idea: "less drawdown more annuities"

Of course, this isn't a magic spell, and the immutable laws of risk / reward will continue to apply...

911abz

Marcon said:

911abz said:

I’ve been a member here for a while and have enjoyed reading the various posts about early retirement. Now, I find myself at a similar crossroads and would really appreciate some encouragement and advice from those of you who’ve made the leap.

To start, I know that everyone's pension and financial situation is different, and I’m aware that mine is in a relatively strong position. However, I’d like to kindly ask for no sarcastic comments—I’m genuinely seeking thoughtful guidance. I’ve worked hard to get here, but I’m still feeling a bit nervous and uncertain about taking the next step.

Here’s my situation:

1. I’m 52 and planning to retire at the end of June.
2. My partner and I each own our own homes outright, with no mortgages.
3. My current pension and savings are as follows:
   - SIPP: £772k
   - Stocks & Shares ISA: £656k
   - General Investment Account: £253k
   - VCTs: £65k
   - Cash savings: £266k
4. I’ll be eligible for a full state pension at 67.

I’m planning to draw down between £50k–60k per year in the most tax-efficient way possible while still maximizing investment growth. My partner’s Defined Benefit pension, along with their state pension, will provide an additional £30k annually, and they have around £135k in savings.

We also plan to sell our individual properties and purchase a home together, using the combined proceeds from both properties.

I’ve worked with financial advisors, and their cash flow models, along with online tools like Guiide and spreadsheets I’ve created, all show that my cash should last—assuming markets behave as they have for the past 125 years. Still, for some reason, I’m feeling a bit apprehensive about it all!

If anyone has any advice on whether my approach seems reasonable, or any tips for managing the transition, I’d really appreciate hearing your experiences. Thanks in advance!

Do you have a protected pension age? If not, have you factored in that you won't be able to draw your pension at the end of June - minimum age (in normal health) is 55, rising to 57 in April 2028.

If you're not married, then getting married or civil partnered would be a huge help on the tax front (true romance...) and also simplify matters considerably when one of you dies. Just a nudge to check you both have valid and up to date wills...hopefully they won't be needed for many years to come, but there are far too many posts on this forum and others bewailing the fact that someone didn't make a will because 'they hadn't expected to die'.

I won't be able to draw on my pension but I still have £1.1M in cash, ISA & GIA that I can use instead. Hopefully that should be enough for 3 years  . Will consider marriage thanks 

Cobbler_tone

In summary, I reckon you are gonna be OK. "Sarcastic comments" aside, it sounds as though you have done your homework with advisors and what you are alluding to is the fear of accumulation to decumulation, which is very real. That said, I reckon you'll still be accumulating for some time!

At your age you may want to not think as a move to retirement at 52 'final'. Whilst you may not intend to work again (I'm sure you won't need to), you will have avenues if you so wish to add to the pots at some point.

It sounds as though you are pooling properties, so assuming not outlay there. So unless there is some significant unexpectedly outlay I am struggling to see how you are ever going to fail.

Depending what your career and interests are, definitely have a plan. Keep busy and don't waste too much time and energy trying to track your balance every day.
Good luck, well done, enjoy your hopefully long and healthy futures together....and put a ring on it.   

Exodi

You haven't mentioned how old you are - this is quite important as SIPP's aren't available to you until the NMPA (currently 55, increasing to 57).

Nonetheless, are you close to your beneficaries because from what you're looking at drawing down from what you have... you're going to be leaving a substantial estate and estate planning should form a large part of your financial plan (e.g. if you intend to leave money to your children or grandchildren, why not gift it now when they likely need it most).

EDIT: sorry, not only did you mention how old are you in the OP (52), @Marcon has already pointed out that you wouldn't be able to draw from your SIPP for several more years. You could either be really lucky or unlucky here if your birthday is on or after April 6th... More coffee needed me thinks...

Chewbecca

Well I wouldn’t put a ring on it tbh! Assuming you don’t live together currently and you are clearly the more wealthy part, you have a lot to lose should it not work out…

Some questions to contemplate, if you haven’t already:
Are you planning to move into one property? Will you own it 50/50? Will you spend all your property proceeds on the new property? 

Have you worked out your proposed joint annual outgoings? 

When is your partner’s DB pension starting?

What are you planning to spend your time on? A lot of travel? My experience is that I am 53, married and 2 years into early retirement & have tracked our spending closely. Our everyday costs (house, groceries etc.) have come to about £40k pa, but we have spent upwards of £40k pa on travel, and I don’t even consider we have been excessively luxurious, we definitely could have easily spent more! 

Albermarle

You have built up a very large war chest, plus later guaranteed income from DB pension and state pensions.
Assuming you will not be going crazy , buying Ferraris, drinking vintage champagne every night, then you will be fine.
Most likely from the sound of your personality, you will probably be too cautious in your spending and end up dying very rich, with a big IHT bill. 

Cobbler_tone

Chewbecca said:

Well I wouldn’t put a ring on it tbh! Assuming you don’t live together currently and you are clearly the more wealthy part, you have a lot to lose should it not work out…

Some questions to contemplate, if you haven’t already:
Are you planning to move into one property? Will you own it 50/50? Will you spend all your property proceeds on the new property? 

Have you worked out your proposed joint annual outgoings? 

When is your partner’s DB pension starting?

What are you planning to spend your time on? A lot of travel? My experience is that I am 53, married and 2 years into early retirement & have tracked our spending closely. Our everyday costs (house, groceries etc.) have come to about £40k pa, but we have spent upwards of £40k pa on travel, and I don’t even consider we have been excessively luxurious, we definitely could have easily spent more! 

Pre-nup Chewy. Very common these days for a bit of extra romance thrown in.

Albermarle

Chewbecca said:

Well I wouldn’t put a ring on it tbh! Assuming you don’t live together currently and you are clearly the more wealthy part, you have a lot to lose should it not work out…

Some questions to contemplate, if you haven’t already:
Are you planning to move into one property? Will you own it 50/50? Will you spend all your property proceeds on the new property? 

Have you worked out your proposed joint annual outgoings? 

When is your partner’s DB pension starting?

What are you planning to spend your time on? A lot of travel? My experience is that I am 53, married and 2 years into early retirement & have tracked our spending closely. Our everyday costs (house, groceries etc.) have come to about £40k pa, but we have spent upwards of £40k pa on travel, and I don’t even consider we have been excessively luxurious, we definitely could have easily spent more! 

There are a couple of retirement spending surveys regularly discussed on this forum.
They define a luxury retirement as spending around £45K to £60K a year. That includes holidays.
Many forum contributors consider these sums excessive, but I sometimes point out that for a proper luxury retirement, these sums are inadequate. ( although personally I am in that range)