Early retirement- capital to regular income

mr_protector

Hi

I’m planning to retire in three years time when I hit 51. 

I’m hoping this can be to Cyprus but one of the rules there is ability to evidence regular income of £30k a year. 

I will have around £190k of shares to sell to fund the first 5.5 years in Cyprus until I hit 57 and can draw my pension. However, I don’t think Cyprus views shares (or savings in general) as a source of income. 

Does anyone have any ideas how I could solve this? I have the cash to cover 5.5 years of £30k but not in the format of a regular income’. Could I purchase an annuity for 5.5 years or something along those lines?

thanks in advance for any help or advice

Dazed_and_C0nfused

mr_protector said:

Hi

I’m planning to retire in three years time when I hit 51. 

I’m hoping this can be to Cyprus but one of the rules there is ability to evidence regular income of £30k a year. 

I will have around £190k of shares to sell to fund the first 5.5 years in Cyprus until I hit 57 and can draw my pension. However, I don’t think Cyprus views shares (or savings in general) as a source of income. 

Does anyone have any ideas how I could solve this? I have the cash to cover 5.5 years of £30k but not in the format of a regular income’. Could I purchase an annuity for 5.5 years or something along those lines?

thanks in advance for any help or advice

Your post is a bit confusing.

Shares and savings aren't sources of income, that's probably why they don't view them as income.  Dividends and interest received form shares and savings are income.

But you also say you have the cash to cover 5.5 years.  Do you have the cash and some shares or do you only have shares which could become cash if sold?

Have you considered Capital Gains tax liability?

You probably could purchase an annuity but if you want it pay from when you are 51 I think only a purchased life annuity would work.  And would Cyprus consider that to be income?

A normal fixed term (pension) annuity wouldn't go into payment until you are at least 55.

mr_protector

Apologies for the lack of clarity. 

I’m looking for ways to turn shares/savings into regular income to cover a 5.5 year period before I hit 57 and can draw my pension. 

I’ve included CGT in some of my ‘workings out’

Thanks for taking the time to reply 

mr_protector

…forgot to add. I have shares (that don’t provide dividends) and cash. I’d be happy to cash out all of the shares if there’s a financial vehicle I can use to hit my aim. 

jimjames

mr_protector said:

…forgot to add. I have shares (that don’t provide dividends) and cash. I’d be happy to cash out all of the shares if there’s a financial vehicle I can use to hit my aim. 

Shares that pay dividends will give you income. There are a series of "dividend heroes" that have paid a consistently increasing amount for decades but are paying around 4-5%. Even assuming 5% dividend that means you need £600k of capital to generate it. If you have £190k of shares and £165k of cash that's going to leave you about half of what you need. There are other companies paying higher rates but with less chance of getting your money back although that might not be important if you just need to show the income.
Beware that you might see various unregulated products on social media that guarantee to pay over 10% income but as they are unregulated the guarantee is essentially worthless.

QrizB

I suspect there are working-age investment products, like a purchased annuity, which are capable of turning capital into a regular income. Mostly these aren't available to retail investors. You might want to speak with an Independent Financial Advisor and see what your options are.