Early Retirement Hopeful - Sense check and thoughts

Apricota

Hello, Long time reader here and would value thoughts on my plan:

Age 54, married but we are working through separate finances (he is all DB), two kids aged 21.
Am I able to retire at 55, end of next March?

Would like £3,500 a month after tax. Own our home and have no debts.

Pension pot W is DB from aged 65 at £4,292 a year.

Pension pot H is estimated total of £120k by end of March 2027. This is currently employment. 

Pension pot SIPP is £804k now, with £20k to add this year.

ISA is £242k.

Other investments are £57k, business to business.

Cash invested is £61k.I am currently employed, but have own single director own company with assets of £174k.

Full state pension due when I am 67, I have checked.

I thought to run own company monies down plus a bit of ISA for first two years (27 and 28) or possible three years, then start to draw SIPP until others come in which is at 65.

Would value thoughts, looking to reduce tax payments but still live nicely. 

JoeCrystal

Just to confirm, is that £3,500 a month net after tax is your half and all the assets there is your since you mention that you maintain separate finances? Frankly, have you thought about paying for advice? :)

But to answer your question, yes after a casual look. Maybe put a spreadsheet and exactly work out how to do it. Just find a way to bridge the state pension gap from 55 to 67 and you are pretty much done really.

Apricota

Hi, yes that’s £3,500 after tax for my side. He’s all covered. All the assets above are mine.
I’ve made a spread sheet, and frankly after last week at work would like to just leave.

Appreciate all input as wish to make the right decision😊

JoeCrystal

Then do it properly rather than asking this internet forum. You can just retire already. You can afford to pay for advices, rather than asking internet forum as a sounding board. Nothing stopping you buying an index- linked annuity and be done with it. It is £4,075 per £100,000 on HL Best Buy at the moment.

Only your potential IFAs will have all your details to help you to reach the right 'decision'

Triumph13

Do you have enough? Yes. Should you seriously consider professional advice? Definitely.

One thing that occurs to me is that you don't have enough in DC pensions to fully use the lifetime tax free cash allowance. I would therefore be looking at using most of the money in your company to pay pension contributions.

Marcon

One thing that occurs to me is that you don't have enough in DC pensions to fully use the lifetime tax free cash allowance. I would therefore be looking at using most of the money in your company to pay pension contributions.

OP is only 54. It won't take a lot of growth on their DC pension pots to ensure the Lump Sum Allowance is fully utilised (and if the DB pension has an automatic lump sum that needs to be factored in). Looking at one of their earlier posts there's no scope for carry forward, so the point is probably moot.

Am I able to retire at 55, end of next March?…frankly after last week at work would like to just leave.

Then why wait until March? You have non-pension cash you can access and live on now.

Would value thoughts, looking to reduce tax payments but still live nicely. 

The thoughts you'll get here can only be based on the minimal information provided. With over a million quid in assets, some proper financial advice from an IFA could ensure you could have an even more comortable and enjoyable retirement - and live not just nicely, but very nicely indeed.

daveyjp

On first glance it looks achievable. I would however do as much analysis of your spending as you have your pension pots.

Whilst you have stated £3,500 net is what you want, is it what you actually need?

With business assets involved some sdvice coukd be invaluable, especially as reducing tax is a key objective.

Apricota

I really appreciate everyone’s input, thank you.

@Marcon you're right I don’t have any carry forward having been putting 60/40k away for many years.

@daveyjp i could do with less but this effectively sits me just about where I currently am money wise in spends, after all bills etc.

it’s the being 54 now, 55 next March and the pot lasting me till the end, which is likely to be a nice long time. So don’t want to run out before I’m 100

QrizB

So don’t want to run out before I’m 100

A lifetime annuity won't run out, even if you live to be 120. You've got a big enough total DC pot to have ~£38k pa before tax, increasing annually by RPI, at age 55 even without considering your DB, ISA or various other assets.

Sarahspangles

Maybe it’s also time to consider things like whether you’ll want to assist your children with house deposits, and your eventual estate(s) in the context of inheritance tax.

webmasterpolo

A financial adviser would definitely be a good idea. You have a lot of potential for some great tax planning which would be part of what they would plan out for you. For example retiring well before the state pension kicks in gives you your personal allowance to use on pension withdrawals each year which is one of my favourites. 0% income tax on 12.5k is nice, then there is a little of your tax free cash and some icing on top from the ISA and you've pretty much got your whole income tax free for a decade or so, lovely.