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    • mbee123
    • By mbee123 10th Jan 19, 1:39 PM
    • 142Posts
    • 35Thanks
    mbee123
    Potential Retirement at 51 Unplanned
    • #1
    • 10th Jan 19, 1:39 PM
    Potential Retirement at 51 Unplanned 10th Jan 19 at 1:39 PM
    Looks highly likely I'll be getting made redundant at the end of March with a payout of around £46k (£30k of which is tax free) at the ripe old age of 51 3/4, so I'm looking at the option of retiring early.

    My wife has a monthly income of around £1060 + £600 a month from rental properties.

    I have an elderly parent who needs daily care so will be claiming carers allowance - £280 a month

    Monthly outgoings are around £1200 plus another £600 for holidays and helping kids out at uni, most of which will hopefully end within the year.

    I've got £40k left on my mortgage, due to be paid off in 5 years. No other debt.

    Pensions
    BT DB pension worth £16k a year at 60 (will rise with rpi) which I've had a recent cetv offer of £440k
    Another DB pension worth £3k a year at 65
    DC pension worth £15k
    My wife has a DB pension and no plans to retire in the next 10 years or more

    Rough plan
    Live off redundancy payment up to 55 supplemented by carers allowance
    55 take BT pension early either drawing DB scheme or cash from cashing in CETV. Also have the option of using the DC pension amount
    At 65 (or earlier if I take a hit) draw the £3k a year from other DB scheme.
    67 state pension cut in.

    I may get casual work here and there as I am quite handy with DIY etc but looking at worst scenario and some assurances as to whether the above plan sounds feasible or other suggestions of making my money work for me, cutting down on tax payments etc
Page 2
    • kidmugsy
    • By kidmugsy 11th Jan 19, 10:55 PM
    • 12,480 Posts
    • 8,846 Thanks
    kidmugsy
    Jaguar Land Rover I guess....
    Originally posted by mgdavid
    Thanks. I wonder how long such perks will survive if the company is in the mire?
    Free the dunston one next time too.
    • DT2001
    • By DT2001 12th Jan 19, 10:16 PM
    • 86 Posts
    • 83 Thanks
    DT2001
    I think you have a good plan. Whilst, as some have already pointed out, covering expenditure is tight and dependent on rental income you have plenty of options to get from now to SPA when you’ll have surplus income. You have your £40k emergency fund, redundancy money, ability to work again, your small DB or DC fund at 55, drawing your BT pension from 55. I’d suggest you go for it and adjust your plans as you go.
    Have you got your up to date SP forecast to see how many more years you need for full amount?
    Is end of March date set in stone or could you go just in new tax year (I ‘moved’ my redundancy date to end of calendar year from August)?
    Can taxable redundancy money go into private pension?
    Is rental income all in your name and how do new tax calculation rules affect you?
    • redmalc
    • By redmalc 13th Jan 19, 7:19 AM
    • 1,311 Posts
    • 486 Thanks
    redmalc
    Retirement possibly looming
    Well where do I start,age 63 married and still working with things about to change in May.
    Wife 63 not working now but entitled to state pension at 66, House paid for value 450k, S&S Isa,s 220k,Cash Isa,s 150k,I have two private pensions 225k and 120K, shares 85K and NS&I 20K and general Bank accounts 25k.
    I need to fund three years living of approx 35k per annum to take us to the state pension age but not sure how to fund the three years,do I take the 25% from my pension now or fund it via my other investments,any advise would be appreciated.
    • Triumph13
    • By Triumph13 13th Jan 19, 7:33 AM
    • 1,433 Posts
    • 1,932 Thanks
    Triumph13
    Well where do I start,age 63 married and still working with things about to change in May.
    Wife 63 not working now but entitled to state pension at 66, House paid for value 450k, S&S Isa,s 220k,Cash Isa,s 150k,I have two private pensions 225k and 120K, shares 85K and NS&I 20K and general Bank accounts 25k.
    I need to fund three years living of approx 35k per annum to take us to the state pension age but not sure how to fund the three years,do I take the 25% from my pension now or fund it via my other investments,any advise would be appreciated.
    Originally posted by redmalc
    Can I suggest you post this as a separate thread as otherwise it's likely to get lost in the responses to the OP of this thread.
    • Triumph13
    • By Triumph13 13th Jan 19, 7:43 AM
    • 1,433 Posts
    • 1,932 Thanks
    Triumph13
    @mbee123 you seem to have the classic situation of trying to get by on a shoestring now when, relatively speaking, you'll have money coming out of your ears at SP age.
    When you both reach SP, if you haven't cashed anything in, you are looking at £17k from 2 SPs, £19k from your DBs and ?? for your wife's DB, plus income from the rental property plus anything freed up from downsizing.
    The question here is what can you take from the later spending and use earlier instead. The obvious candidate you don't seem to have considered is selling the rental property. Once the DBs and SP are in place you won't need it, but the proceeds would presumably bridge the gap nicely.
    • planteria
    • By planteria 13th Jan 19, 4:24 PM
    • 5,097 Posts
    • 1,141 Thanks
    planteria
    i see Triumphs point, but i would push yourself in the short term instead, and retain the rental property. i like this from michaels..

    If you have anyhting else to liv eon till 55 (even a loan/mortage extension?) it would be very tax efficient to pay your redundancy and as much as you can into your DC pension pot this year as you will get back a lot more due to the tax relief. So if you can bridge for 3 years you should get about 25@ more, drawn down as tfls and then your basic rate allowance each year till you have the whole pot.
    Originally posted by michaels
    the idea that HR have said you can't use the payment for your pension? surely you can use your own money to invest in your personal pension pot if you choose to.
    • mbee123
    • By mbee123 14th Jan 19, 12:07 PM
    • 142 Posts
    • 35 Thanks
    mbee123
    Originally Posted by mgdavid View Post
    Jaguar Land Rover I guess....
    Thanks. I wonder how long such perks will survive if the company is in the mire?
    Correct, it's Jaguar, Land Rover, think the perks will stay personally, I'm sure they are still making plenty of money out of a sale.

    Have you got your up to date SP forecast to see how many more years you need for full amount?
    I need another 5 years but if i claim carers allowance, I will qualify

    Is end of March date set in stone or could you go just in new tax year (I ‘moved’ my redundancy date to end of calendar year from August)?
    I am trying my best to push it back a bit, but the company want as many as possible out this financial year. I have been informed by HR that the redundancy payment gets paid at end of April, but I have also been told by a colleague that it still qualifies as a 18/19 payment and will be taxed appropriately, this doesn't sound right to me though.

    Is rental income all in your name and how do new tax calculation rules affect you?
    In my wifes name and still pretty lucrative for the outlay

    The obvious candidate you don't seem to have considered is selling the rental property.
    As above, 5 low value properties giving a good return for the outlay so would like to keep hold of them

    If you have anyhting else to liv eon till 55 (even a loan/mortage extension?) it would be very tax efficient to pay your redundancy and as much as you can into your DC pension pot this year as you will get back a lot more due to the tax relief. So if you can bridge for 3 years you should get about 25@ more, drawn down as tfls and then your basic rate allowance each year till you have the whole pot.
    I agree planteria, it sounds like a good plan.
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