retirement plan

the_tony_soprano

I'm a 60 yr old, retiring in April.

I have £12,000 a year coming in from a DB pension, £180,000 in fixed term bonds and ISAs, and 30k in an instant access account.

I have expected outgoings of £24,000 this year. Goes up by less than 5% (checked several yrs bank accounts, although can't guarantee I guess).

No debts, no mortgage, no dependants, new car.

Risk averse plan is simply to run down bonds and ISAs until 67, taking interest and capital.

At 67 expect or want to have works pension with old age pension for living and have £50,000 plus for other things.

Wondering if anyone has done or is doing similar and what their experience has been.

QrizB

Have you checked your State Pension forecast? Does it show that you've already paid enogh NI to qualify for a full pension?

https://www.gov.uk/check-state-pension

Is your current DB pension index-linked? Is there any cap on the indexing?

Assuming that's all good:

• Once you get to 67, your £24k pa requirement will be met by DB+SP.
• From 60 to 67, you need an extra £12k a year. That's £84k total. You've got £210k, rather more than you need.

Unless you've made huge investment gains recently, you could probably have afforded to retire a couple of years ago, to be honest.

the_tony_soprano

Thanks for the comment.

The DB pension is index linked, and I do have enough contributions for a full pension.

I have come into a pretty large amount of money which has skewed things, but your comment has pretty much confirmed what I thought. Appreciated 

Linton

the_tony_soprano said:

Thanks for the comment.

The DB pension is index linked, and I do have enough contributions for a full pension.

I have come into a pretty large amount of money which has skewed things, but your comment has pretty much confirmed what I thought. Appreciated 

Is it fully index linked or is it capped?

the_tony_soprano

It's a local government pay scheme. It's fully indexed and has no cap.

thanks

Albermarle

Are the ISAs , stocks and shares ones ?

At age 60, it would normally be advised to have at least some of your money invested rather than just saved.

the_tony_soprano

Albermarle said:

Are the ISAs , stocks and shares ones ?

At age 60, it would normally be advised to have at least some of your money invested rather than just saved.

They are stocks and shares ISAs, and probably make up 20-25% of my total. They are rated as being medium to high volatility by the bank. 

This hasn't mattered previously as I could leave them to ride out the ups and downs, but now i'm not so sure.

Thanks

Albermarle

At age 60, you will on average live another 25 years. Plus you have a 25%chance of reaching your early 90’s.
So still plenty of time to ride out the markets ups and downs.

Yorkie1

Bear in mind that from April 2027, the rules will come into force to prevent under 65s from moving funds from a S&S ISA to a Cash ISA. If you were planning to transfer gradually into cash ISAs before reaching 65, you might be advised to do that sooner rather than later.