Pensión 25% withdrawal
Discussion
Whilst I will be discussing with my IFA, I just wondered what other people’s thoughts were on my dilema and what you might do.
Aged 62 and retired with an old FS pension giving me £12k a year, wife also FS giving her £10k. A bit of extra coming in from bits of work we both do so combined £24k pa.
Expenses circa £30k pa including a couple of European holidays a year.
Have savings from lump sums etc now down to £60k having spent a fair bit (when we can) on travel as was our plans.
Also have a SIPP with a current value £160k which has not been touched - invested in balanced fund. Started off when i retired 4 years ago at £150k so not much growth seen.
My spreadsheet says we are fine even with some chunky spends but I am slightly concerned about the next few years with the recession looming (so we are told). Dont need SIPP funds until 4 years probably
My thoughts are to take out the 25% tax free from SIPP now to kind of de risk some of the funds, leaving the rest to accumulate hopefully. I am concerned that the SIPP may decline in value combined with increase in costs.
Thanks for reading
What would others do?
Aged 62 and retired with an old FS pension giving me £12k a year, wife also FS giving her £10k. A bit of extra coming in from bits of work we both do so combined £24k pa.
Expenses circa £30k pa including a couple of European holidays a year.
Have savings from lump sums etc now down to £60k having spent a fair bit (when we can) on travel as was our plans.
Also have a SIPP with a current value £160k which has not been touched - invested in balanced fund. Started off when i retired 4 years ago at £150k so not much growth seen.
My spreadsheet says we are fine even with some chunky spends but I am slightly concerned about the next few years with the recession looming (so we are told). Dont need SIPP funds until 4 years probably
My thoughts are to take out the 25% tax free from SIPP now to kind of de risk some of the funds, leaving the rest to accumulate hopefully. I am concerned that the SIPP may decline in value combined with increase in costs.
Thanks for reading
What would others do?
Mr Pointy said:
richardxjr said:
Not paid into SIPP since 4 years? I'd be looking to get that £60k savings into it, subject to recycling rules of course.
He's retired, how is he going to do that? £2880 net/£3,600 gross is the maximum the OP can contribute per year.To be fair, it peaked at £170k value which is when perhaps I should have taken some out………
supersport said:
LeoSayer said:
Are you entitled to state pensions? If so have you factored that in?
He's 62, so not yet.At that point, based on current figures we are projected to have a surplus of income v expenditure.
The issue is more whether I should take the 25% tax free now to “ de risk” my accumulated pension rather than potentially lose money which I may need in 3 years.
On the face of it, you have much more locked away than you will spend.
If it was me I'd want to dip into that with more fun things to do and places to go whilst I'm still fit enough to enjoy it.
An IFA can help to create a prudent cashflow plan to work out what you spend without running out of money.
If it was me I'd want to dip into that with more fun things to do and places to go whilst I'm still fit enough to enjoy it.
An IFA can help to create a prudent cashflow plan to work out what you spend without running out of money.
Carbon Sasquatch said:
What would you do with the 25% that would 'de-risk' it ?
Is it something that can't de done inside the SIPP wrapper ? There are lots of different investments you can make within a SIPP.
Fair point- I will check with my IFA whether I can switch the 25% to cash perhaps Is it something that can't de done inside the SIPP wrapper ? There are lots of different investments you can make within a SIPP.
LeoSayer said:
On the face of it, you have much more locked away than you will spend.
If it was me I'd want to dip into that with more fun things to do and places to go whilst I'm still fit enough to enjoy it.
An IFA can help to create a prudent cashflow plan to work out what you spend without running out of money.
O believe me we are trying…….. that’s why we are down to 60k cash - a trip to South Africa in Sept has taken a chunk out! If it was me I'd want to dip into that with more fun things to do and places to go whilst I'm still fit enough to enjoy it.
An IFA can help to create a prudent cashflow plan to work out what you spend without running out of money.
I am just very cautious with our money - getting the balance between enjoying life now and having enough for later………
LeoSayer said:
On the face of it, you have much more locked away than you will spend.
Interesting - my initial take was that you could do with a bit more considering it possibly has to last 30yrs. But I guess it depends on what you want to do. This is a topic that I’ve been thinking about a lot recently and I’m lost as to how much is the right amount of cash and pension to aim for so I’m personally interested in the views of others
fat80b said:
Interesting - my initial take was that you could do with a bit more considering it possibly has to last 30yrs. But I guess it depends on what you want to do.
This is a topic that I’ve been thinking about a lot recently and I’m lost as to how much is the right amount of cash and pension to aim for so I’m personally interested in the views of others
Try this thread - https://www.pistonheads.com/gassing/topic.asp?h=0&...This is a topic that I’ve been thinking about a lot recently and I’m lost as to how much is the right amount of cash and pension to aim for so I’m personally interested in the views of others
30 years, maybe, but not at the same rate. Consensus on the above thread is for front loading the spending for the active years.
fat80b said:
LeoSayer said:
On the face of it, you have much more locked away than you will spend.
Interesting - my initial take was that you could do with a bit more considering it possibly has to last 30yrs. But I guess it depends on what you want to do. This is a topic that I’ve been thinking about a lot recently and I’m lost as to how much is the right amount of cash and pension to aim for so I’m personally interested in the views of others
That £8k shortfall only exists for 4 years when his state pension kicks in and then his wife's kicks in a few years later. So he's got at least £100k surplus which could pay for an exciting Volvo at least.
I've been through a few iterations of working out the right amount of pension to aim for. The best starting place to work out what your annual spend will be in retirement. The link below might help.
https://www.retirementlivingstandards.org.uk/detai...
Once you have that, you can work out what you need to save to achieve it, or adjust your expectations.
PM3 said:
You also need to plan what is the financial implication of one of you dying unexpectedly early ( as in that state pension gone and presumably half of that persons Fs pension depending on terms).
Yup indeed - the SIPP monies can be used by my wife if I go first to top up her income. I would be Ok - the plan is to use the SIPP as little as possible although taking the 25% tax free ow is what I am looking at.I'd personally do it. It will give you that buffer up until you draw your state pension so peace of mind and a solid figure to draw down / use when you see fit.
Lets be honest now it's got to be used at some point, at least using it to bridge the gap you currently have is surely best use of it. Then reassess your position at pension age.
Lets be honest now it's got to be used at some point, at least using it to bridge the gap you currently have is surely best use of it. Then reassess your position at pension age.
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