Retirement planning after major surgery

Golden_Horde · 10 December 2018 at 10:43AM

Hi all

I'm trying to formulate my retirement planning and like everyone else, I'm trying to guess how long I need to make the fund last.

I've just turned 48, but 6 weeks after my 40th birthday I had a quadruple heart bypass - a bolt out of the blue after I went for a checkup - no symptoms although a strong family history. I went back to work part time after recovery and now work alternate weeks of 4 and 4.5 days a week (office based).

Ideally I'd like to retire around 62 - my wife will then be 60 and able to draw down her DB pension. I currently have about €150,000 in my DC fund and now contribute €35k per annum to this between me and my employers contribution - so by 62 I hope to have a reasonable pot.

My main conundrum is how long I should expect to need to live off this. Ideally as long as possible - I go for annual check ups, run and generally mind myself. I reckon if I plan to 85 that should see me safe, but if I still had a large amount left in the DC pension then I probably should have retired earlier.

I appreciate none of us knows when our time is up, but I'm just wondering what the thoughts on retirement planning were when I know in advance that I'm prone to heart issues.

LHW99 · 10 December 2018 at 10:59AM

My main conundrum is how long I should expect to need to live off this

Worth considering yourself / wife jointly.

Bravepants · 10 December 2018 at 11:13AM

Theoretically, if you choose the correct annual withdrawal rate (depending on proportion of equities and bonds in your portfolio, i.e. your risk tolerance), it could last you forever, check out this blog post:

https://www.mrmoneymustache.com/2018/11/29/how-to-retire-forever-on-a-fixed-chunk-of-money/

You might also consider drawing only your annual allowance (adjusted for 25% tax free amount), caveat being that tax allowances don't change of course, thus minimising the tax you pay in retirement.

It seems without growth, between now and when you retire, you would end up with some £640,000 in your pot. At 3% drawdown that's £19,200 per year. But you could expect about 5% growth net of inflation (don't forget to take account of fund charges, which should be kept as low as possible), but you should be pessimistic about growth expectations.

greatkingrat · 10 December 2018 at 11:16AM

You could also purchase an annuity with some or all of your pot. With a history of heart problems you would likely be able to get an enhanced rate.

Golden_Horde · 10 December 2018 at 11:26AM

Thanks for the responses guys.

I suppose my conundrum, like everyone else, is that I'm better to retire earlier than leave a substantial amount in the fund. 2/3/4 more years in retirement beats leaving money behind.

I know that the dice are slightly loaded against me in that realistically I may have problems again in the future...although I prefer to think (hope!) that by getting checked regularly I won't have a ticking time bomb that someone else may be unaware of!

kidmugsy · 10 December 2018 at 12:21PM

If I were you I'd spend some time reflecting on this post and then looking back through the blogger's earlier posts. I think he's top notch.

http://www.theretirementcafe.com/2018/12/my-year-end-review-and-planning-regime.html

crv1963 · 10 December 2018 at 12:32PM

Golden_Horde wrote: »

Hi all

I'm trying to formulate my retirement planning and like everyone else, I'm trying to guess how long I need to make the fund last.

I've just turned 48, but 6 weeks after my 40th birthday I had a quadruple heart bypass - a bolt out of the blue after I went for a checkup - no symptoms although a strong family history. I went back to work part time after recovery and now work alternate weeks of 4 and 4.5 days a week (office based).

Ideally I'd like to retire around 62 - my wife will then be 60 and able to draw down her DB pension. I currently have about €150,000 in my DC fund and now contribute €35k per annum to this between me and my employers contribution - so by 62 I hope to have a reasonable pot.

My main conundrum is how long I should expect to need to live off this. Ideally as long as possible - I go for annual check ups, run and generally mind myself. I reckon if I plan to 85 that should see me safe, but if I still had a large amount left in the DC pension then I probably should have retired earlier.

I appreciate none of us knows when our time is up, but I'm just wondering what the thoughts on retirement planning were when I know in advance that I'm prone to heart issues.

I think you need to look at a couple of threads- Early-Retirement Wannabe and What's Your Number as well.

Work out what retirement income you'd be happy with jointly with your wife, then work out the earliest you can take it. If your wife is like mine and goes cold at the discussion about pensions planning etc, give her the headlines, X amount at age Y and we can retire together.

Given heart problems how long it will last (the pension pot) is a best guess, following my own heart attack and surgery I was actually told by the cardiologist that my life expectancy had increased and with the lifestyle changes made I would in his view exceed the life expectancy of my age group - as long as I don't slip back into old habits of long hours, stressful job, poor work/ life balance, poor diet, too much alcohol and the biggest/ hardest one smoking 20 cigarettes per day!

Retirement planning after major surgery

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