Have I missed anything?

thevilla · 18 July 2018 at 10:47AM

I've been a lurker on this board for a while and thought I'd jump in.

I'm 56 and hoping to retire at 58 and this is my plan...

I'm a defered member of a DB scheme and also currently paying into a DC schema. DB will pay £20k p.a. at 60 (20% deduction as normal retirement is 65). I plan to draw down on the DC pot of £40k to bridge the gap from 58 to 60. I don't plan to take 25% from the DB scheme as the deduction in annual payment is 1:13 and we don't need the cash. I plan to take an AVC of £22k as tax free cash. There's no option to invest the AVC in the DB scheme.

I have some reduction on my SP as have been contracted out so will consider additional NICs after retiring.

Wife (59) is retired and non tax payer and receiving some of her pension benefits. She will also benefit from additional NIC. I am also thinking I should pay £2K(?) into a pension for her to receive tax benefits as found on this forum.

Between us we have about £70k mostly cash ISA savings and will have no mortgage.

So I wondered if all this seems sensible or have I missed something I should be considering? Reading the forum always throws up new considerations. I'm a mega cautious investor.

Thanks for your time.

MK62 · 18 July 2018 at 12:02PM

TBH, you should consider paying £2880pa into a pension both for your wife and yourself (HMRC will make that up to £3600 each).

As for the rest, it sounds feasible given the info you've given - as long as the numbers add up for your circumstances.

kidmugsy · 18 July 2018 at 12:17PM

I suggest that you ensure that your DC pot is all in cash - but as a "mega cautious investor" you hardly need me to tell you that.

One way to safeguard your future widow's position is that you could exploit her current non-taxpayer status with the money-go-round into SIPPs that you allude to, while building up more DC pension for yourself using the £2,880 (net) annual contribution after your DB pension has started and the AVC money is in hand.

If you die with this pension fund still in existence it will pass to your wife (or whomever you nominate) and thereby give her another potential source of income. If you are so considerate as to die before age 75 she will be able to withdraw the money tax-free.

As this might be money that won't be used for many decades (let us hope) it would be natural to invest it in S&S rather than hold it as cash. In fact, to hold it as cash for decades might be incautious.

Have I missed anything?

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