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My husband gets £20k Pension now and I will get £10k Pension at 60.
We have about £10k income from properties
We will have about £70k in a DC scheme in 3 years when I am 55.
Assume the 4% rule doesn't apply to us. Not sure if there is a formula to use in my circumstances to decide when to retire.
Originally posted by bluenose1
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The 4% "rule" applies to any money you intend to draw down from an amount that
you want to last indefinitely. In your case you likely would plan to run it down to "fill the gap between age 55 and your £10k DB pension aged 60 so you wont be using the 4% rule.
The "formula" is not exactly brain surgery, just add your DB + SP plus whatever you think you need to burn down from your "pension pot" (which may include personal pension, ISAs and other savings) .
A few lines in a spreadsheet or if thats too difficult, on a bit of paper. One line per year, showing the different amounts coming in
eg
aged 55 £20k DB + £10k rent + say £10k from DC = £40k.
aged 56 £20k DB + £10k rent + say £10k from DC = £40k.
aged 57 £20k DB + £10k rent + say £10k from DC = £40k.
aged 58 £20k DB + £10k rent + say £10k from DC = £40k.
aged 59 £20k DB + £10k rent + say £10k from DC* = £40k.
aged 60 £20k DB + £10k rent + £10k DB =£40k
etc
and at age 67
aged 67 £20k DB + £10k rent + £10k DB + SP1 ?£8k + SP2 ?£8k = £56k
Is £40k enough to live on aged 55? If so you can retire. If not, you cant. Or you can "semi retire" and take part time jobs. Add those into the numbers.
*That leaves you £20k in DC as a fall back, eg 5 years at £10k out.