Thinking Early retirement , is it feesable

MinkeyMan

Not sure if this is the right forum

But as a 60yr old , I am considering retiring in Jan 2028. as is my wife also 60.(no pension to speak of)

I have tried to search online to see if it would be possible.. after banging my head.. I decided to create my own Predictions based on the following

Currently I have 242,000 in SJP polaris 2 pension ... i would look to put in another 4000 this year and 13000 each year for the next 2 years.  Calculating at 4% growth (hoping best case is 7%) and pensions fee's = 1.7%

also have a small final salary = 1100 per year from age 65 ( growing 2.5% each year to cover inflation , my assumption)

with my current savings and what I put in till Jan 2028. I would expect to have about 122,000 (no calculation on growth on this yet)

Outgoings (spend) I am looking at 30,000 per year to age 70 , reducing to 28,000 till age 80 , 26000 till 85 and 23000 there after. 

we own our own house outright and have no debt , all major maintenance has been carried out already , so not expecting anything major. House value currently 160,000.

we will both get our pension at age 67 and have calculated it to grow at 2.5% and based tax on threshold = 12250 and 21% (live in scotland)

I have looked at taking from my pension 17000, in the first year and then taking my 25% tax free in the 2nd year added into savings... from then still taking  around 17000 out till age 75 and reducing to 12000 there after. 

based on all this my prediction says, savings run out age 83 (2048) and pension 84 (2049).

does this sound right? or am I missing something significant.... ofc also do have my house to use if needed (we have no dependants and haven't used in my predictions yet) but unsure how to make best use of it.

here's how it looks looking out to 100... really my target life expectancy is 89 

any thoughts on all of the above would be greatly appreciated

Dazed_and_C0nfused

I would say this is your biggest problem 😳

Have you considered an alternative provider?  Why pay 1.7% to them 🤔

Currently I have 242,000 in SJP polaris 2 pension ... i would look to put in another 4000 this year and 13000 each year for the next 2 years.

MinkeyMan

note on outgoings , these value quoted as of today but are increased by 3.6% inflation

MinkeyMan

@  Dazed_and_C0nfused  yes realise that now... only recently consolidated all my pensions with them and accepted the advice of work colleagues who had did the same... locked in with them (exit fees) just now.. but as soon as I can . I will look at moving out.... hard lesson learned

Dazed_and_C0nfused

MinkeyMan said:

@  Dazed_and_C0nfused  yes realise that now... only recently consolidated all my pensions with them and accepted the advice of work colleagues who had did the same... locked in with them (exit fees) just now.. but as soon as I can . I will look at moving out.... hard lesson learned

If you understand that why would you add new funds?

There is nothing preventing you from having DC pots with different providers.

I'm assuming you don't have an agreement with SJP which covers money you haven't yet added to a pension.

Mark_d

There are a lot of pension estimator calculators out on the internet.  Not sure why you think your assumptions are any more accurate.

I think your 1.7% to pension bee is very high for the benefit you get. There are a good variety of SIPP providers whose fees are mush more reasonable.

I think 89 should be at the lower end of how long you expect to live.  100 is possibly more likely in my opinion.

I think your forecast outgoing are rather conservative.  Private medical costs, health & social care,  and 24/7/365 entertainment for you isn't necessarily going to be cheap.  For me to be confident I'd be comfortable in retirement, I'd want £200k per year.  That's several times more than what I live off at the moment!

MinkeyMan

Dazed_and_C0nfused said:

MinkeyMan said:

@  Dazed_and_C0nfused  yes realise that now... only recently consolidated all my pensions with them and accepted the advice of work colleagues who had did the same... locked in with them (exit fees) just now.. but as soon as I can . I will look at moving out.... hard lesson learned

If you understand that why would you add new funds?

There is nothing preventing you from having DC pots with different providers.

I'm assuming you don't have an agreement with SJP which covers money you haven't yet added to a pension.

Honestly quite new to this.. I don't think I am locked into anything with new money... I just assumed that having it in a bigger pot would grow more and seemingly (based on what other using them say) they deliver on good returns?

but what others are best to consider and what are normal fee's?

right now looking to see how an early retirement would look based on these assumptions I have made

MinkeyMan

Mark_d said:

There are a lot of pension estimator calculators out on the internet.  Not sure why you think your assumptions are any more accurate.

I think your 1.7% to pension bee is very high for the benefit you get. There are a good variety of SIPP providers whose fees are mush more reasonable.

I think 89 should be at the lower end of how long you expect to live.  100 is possibly more likely in my opinion.

I think your forecast outgoing are rather conservative.  Private medical costs, health & social care,  and 24/7/365 entertainment for you isn't necessarily going to be cheap.  For me to be confident I'd be comfortable in retirement, I'd want £200k per year.  That's several times more than what I live off at the moment!

well £200K per year for me , just isn't going to happen. without significant high risk investments... I have my wife to think about... we don't have a lavish lifestyle and right now our actual spend per year for essentails is around 17000 and our Holidays around 13000... not looking to change that.  ofc if my pension exceeds 4% say to 7% then I am will beyond the 100 mark...and i do still have 100% equity in my house as well

on the other emulators.. open to any you know of.. I can't find any that take into account my savings

MallyGirl

MinkeyMan said:

Dazed_and_C0nfused said:

MinkeyMan said:

@  Dazed_and_C0nfused  yes realise that now... only recently consolidated all my pensions with them and accepted the advice of work colleagues who had did the same... locked in with them (exit fees) just now.. but as soon as I can . I will look at moving out.... hard lesson learned

If you understand that why would you add new funds?

There is nothing preventing you from having DC pots with different providers.

I'm assuming you don't have an agreement with SJP which covers money you haven't yet added to a pension.

Honestly quite new to this.. I don't think I am locked into anything with new money... I just assumed that having it in a bigger pot would grow more and seemingly (based on what other using them say) they deliver on good returns?

but what others are best to consider and what are normal fee's?

right now looking to see how an early retirement would look based on these assumptions I have made

Pots grow based on what they are invested in, regardless of size. A £10K chunk of fund A will grow at the same percentage as £100k of the same fund.
people often consolidate their multiple pensions into one place for ease but rarely into one of the most expensive providers around. A quick search of SJP on here will tell you much.
People are likely to praise the choice they have made as to do anything else would lose face.
An IFA - where the I is for Independent - could be a third of the SJP fee.

MinkeyMan

MallyGirl said:

MinkeyMan said:

Dazed_and_C0nfused said:

MinkeyMan said:

@  Dazed_and_C0nfused  yes realise that now... only recently consolidated all my pensions with them and accepted the advice of work colleagues who had did the same... locked in with them (exit fees) just now.. but as soon as I can . I will look at moving out.... hard lesson learned

If you understand that why would you add new funds?

There is nothing preventing you from having DC pots with different providers.

I'm assuming you don't have an agreement with SJP which covers money you haven't yet added to a pension.

Honestly quite new to this.. I don't think I am locked into anything with new money... I just assumed that having it in a bigger pot would grow more and seemingly (based on what other using them say) they deliver on good returns?

but what others are best to consider and what are normal fee's?

right now looking to see how an early retirement would look based on these assumptions I have made

Pots grow based on what they are invested in, regardless of size. A £10K chunk of fund A will grow at the same percentage as £100k of the same fund.
people often consolidate their multiple pensions into one place for ease but rarely into one of the most expensive providers around. A quick search of SJP on here will tell you much.
People are likely to praise the choice they have made as to do anything else would lose face.
An IFA - where the I is for Independent - could be a third of the SJP fee.

Thanks Mallygirl... I should have done more background on them from the outset (i assumed , wrongly the partner was an IFA).. but as it stands I am locked in for at least 4 years... but as you and Dazed have mentioned I can look at my new money going in, to reduce the fee's ... just hoping that I can retire in the next couple of years with a comfortable retirement and as soon as I can move away from them.... lesson learned

bjorn_toby_wilde

MinkeyMan said:

Mark_d said:

There are a lot of pension estimator calculators out on the internet.  Not sure why you think your assumptions are any more accurate.

I think your 1.7% to pension bee is very high for the benefit you get. There are a good variety of SIPP providers whose fees are mush more reasonable.

I think 89 should be at the lower end of how long you expect to live.  100 is possibly more likely in my opinion.

I think your forecast outgoing are rather conservative.  Private medical costs, health & social care,  and 24/7/365 entertainment for you isn't necessarily going to be cheap.  For me to be confident I'd be comfortable in retirement, I'd want £200k per year.  That's several times more than what I live off at the moment!

well £200K per year for me , just isn't going to happen. without significant high risk investments... I have my wife to think about... we don't have a lavish lifestyle and right now our actual spend per year for essentails is around 17000 and our Holidays around 13000... not looking to change that.  ofc if my pension exceeds 4% say to 7% then I am will beyond the 100 mark...and i do still have 100% equity in my house as well

on the other emulators.. open to any you know of.. I can't find any that take into account my savings

Mmmm. £200k per annum is beyond most of us and the Retirement Living Standards survey suggests a comfortable retirement can be had on 1/5 of that. I don’t know where that figure was plucked from. Maybe the same place as the expectation that you would live to 100 when average UK life expectancy for a man is about 84.

SJP will undoubtedly be a drag on your pension growth with their high fees.  How long are you locked in for?