The ever changing and adapting retirement plan

SilverOx

Good afternoon,

I'm looking to retire in 3.5 years time at 57 and wanted to share the basics of my plan for validation, other options or alternatives.

I understand everyone's plan is unique to the individual and I am potentially seeking advice from an IFA.

I haven't found another forum that supports the discussion for topics like this.

DC pension currently £230000 potentially worth £320000 at 57 (Currently flooding this company pension with expendable salary through salary sacrifice and AVCs. I'm a 20% tax payer)

Deferred DB pension worth 12k per year which can be taken at 60 with no penalties.

Full state pension at 67

Cash ISA currently 12k (Currently an emergency fund)

Stocks and shares ISA currentky 45k (looking to grow this for 2 years then switch to money market funds for stock crash fund. Ideally 2 years income)

Looking at an income of £2500 or 30k per year as a minimum. More if projections allow and are sensible.

57-59

Take 25% cash free lump sum 80k. Drawdown DC pension 12.5k (or tax threshold) every year and use the tax free cash to top up (17.5k)

60-66

DB pension 12k. Drawdown DC pension 18k every year

67-End

DB pension 12k. State pension 12.5k. DC pension drawdown 5.5k

Just bare bones with inflation, tax efficiencies and other factors not included.

MallyGirl

is the desired £30k post tax?

SilverOx

https://forums.moneysavingexpert.com/discussion/comment/82166415#Comment_82166415

Yes it is.

MallyGirl

in which case you need to factor that in to your plan from age 60 and see how long the DC pension might last.

SilverOx

https://forums.moneysavingexpert.com/discussion/comment/82166430#Comment_82166430

Based on inputs, the pot should last into my 80's worse case scenario of no growth.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82166441#Comment_82166441

I am not sure that "no growth" is actually the worst case scenario. Try 50% fall in year 1 and no recovery for 10 years.

Maybe also investigate an annuity - though your DB pension will do a lot of the job an annuity might.

Notepad_Phil

https://forums.moneysavingexpert.com/discussion/comment/82166441#Comment_82166441

Based on inputs, the pot should last into my 80's worse case scenario of no growth.

I'd suggest a more realistic worst case scenario would be an immediate big equity slump (e.g. 50%) followed by multiple years of inflationary growth. The more years you can survive with little growth after a big slump (which is going to happen at some time) the better.

SilverOx

https://forums.moneysavingexpert.com/discussion/comment/82166443#Comment_82166443

Yes. Wrong turn if phrase. I would have at least 2/3 years of salary to help ride out a stock slump.

SilverOx

https://forums.moneysavingexpert.com/discussion/comment/82166451#Comment_82166451

Yes. Wrong turn if phrase. I would have at least 2/3 years of salary to help ride out a stock slump.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82166470#Comment_82166470

Are you aware of the concept of Safe Withdrawal Rates for a retirement pot? It is only a rule of thumb, but from age 57 if you withdrew 3% a year ( increasing with inflation each year) , it is very unlikely the pot would run out before you are 90. Even then it would be unlikely to run out, and maybe the pot will be even bigger than when you started. It is a kind of safety first calculation.

Vitor

OP's plan has a solid foundation, particularly the DB pension, but the arithmetic needs revisiting. From 60, £30,000 gross provides only around £26,500 net at current tax rates. Meeting your £30,000 net target requires approximately £22,400 annually from your DC pension alongside the DB income.

After taking £80,000 tax-free cash, only £240,000 remains invested. Even assuming zero growth and ignoring inflation, that level of withdrawal creates significant sustainability concerns. Two or three years of cash reserves may cushion market falls, but won't eliminate sequence-of-returns risk. I'd model inflation-adjusted spending, taxation and adverse market scenarios before committing to retirement at 57.