Help - 10 year countdown to retirement
Discussion
Appreciate these are 1st world problems but I could use the collective advice of this forum to give me some ideas.
I'm 45 and want to retire at 55.(or sooner).
Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.
[U]Savings:[/U]
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.
[U]Pension:[/U]
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a pension but much lower value.
[/]Outgoings:[/]
I'd say modest.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in extensive travel abroad.
All my other enjoyments are relatively inexpensive - fresh air, countryside walks with the dog.
So ... where am I going wrong? Or where should I be looking to maximize my chance of retiring at 55?
I'm 45 and want to retire at 55.(or sooner).
Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.
[U]Savings:[/U]
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.
[U]Pension:[/U]
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a pension but much lower value.
[/]Outgoings:[/]
I'd say modest.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in extensive travel abroad.
All my other enjoyments are relatively inexpensive - fresh air, countryside walks with the dog.
So ... where am I going wrong? Or where should I be looking to maximize my chance of retiring at 55?
Whatdoidonext said:
Appreciate these are 1st world problems but I could use the collective advice of this forum to give me some ideas.
I'm 45 and want to retire at 55.(or sooner).
Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.
[U]Savings:[/U]
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.
[U]Pension:[/U]
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a pension but much lower value.
[/]Outgoings:[/]
I'd say modest.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in extensive travel abroad.
All my other enjoyments are relatively inexpensive - fresh air, countryside walks with the dog.
So ... where am I going wrong? Or where should I be looking to maximize my chance of retiring at 55?
Not any help, but seriously, you let yourself down with “where am I going wrong” I'm 45 and want to retire at 55.(or sooner).
Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.
[U]Savings:[/U]
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.
[U]Pension:[/U]
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a pension but much lower value.
[/]Outgoings:[/]
I'd say modest.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in extensive travel abroad.
All my other enjoyments are relatively inexpensive - fresh air, countryside walks with the dog.
So ... where am I going wrong? Or where should I be looking to maximize my chance of retiring at 55?
Consider reviewing your asset allocation, as, on the face of it, more cash than investments looks the wrong way round to me. As part of this, take into account the level of funding of your final salary pension schemes and their security e.g. if they are fully-funded and associated with an organisation that is never likely to go bust, then perhaps you could take more risk with your other investments than if that wasn't the case.
Also review your state pension forecasts.
Also review your state pension forecasts.
Out of interest is there 'cash pot' equivalent for your final salary pension, either now or at retirement?
What does the DB pension pay out to spouse and/or family on death?
My pension (workplace DC + SIPP) isn't for me, plan is to leave capital to be able to pass to my son for his future. Assuming I die first that should sort my wife until she dies then go down to him.
What does the DB pension pay out to spouse and/or family on death?
My pension (workplace DC + SIPP) isn't for me, plan is to leave capital to be able to pass to my son for his future. Assuming I die first that should sort my wife until she dies then go down to him.
The guaranteed £48k from 55 is a huge advantage. With that and the £550k is cash and equities you could have an annual income for the rest of your life of more than £50k. If that’s enough for you (and it sounds like you don’t expect an extravagant lifestyle), you could probably retire as soon as you are confident about funding your son and repaying the mortgage.
Personally, I think you have too much of your savings in cash. I’d use this to invest in some sort of equity index tracker within your ISAs or your wife’s pension (depending on her income and marginal rate). Again, the risk-free DB pension (and possible inheritance to a lesser extent) gives you the comfort of being able to invest for the longer term and ride the ups and downs of stock market investing.
See the recent “Enjoying your retirement” thread for some other input on this subject.
Personally, I think you have too much of your savings in cash. I’d use this to invest in some sort of equity index tracker within your ISAs or your wife’s pension (depending on her income and marginal rate). Again, the risk-free DB pension (and possible inheritance to a lesser extent) gives you the comfort of being able to invest for the longer term and ride the ups and downs of stock market investing.
See the recent “Enjoying your retirement” thread for some other input on this subject.
trevalvole said:
As part of this, take into account the level of funding of your final salary pension schemes and their security e.g. if they are fully-funded and associated with an organisation that is never likely to go bust,
A really good point that had never crossed my mind - thanksTheraveda said:
JeremyH5 said:
You appear to be well provided for. Relax, it’ll all be fine.
What he says. I retired at 61 with a lot less than that and we're more than comfortable.Whatdoidonext said:
trevalvole said:
As part of this, take into account the level of funding of your final salary pension schemes and their security e.g. if they are fully-funded and associated with an organisation that is never likely to go bust,
A really good point that had never crossed my mind - thanksR.
I was thinking of starting a thread on this very topic, but here goes:
There is a 46ha (115 acres) block of land available in NZ.
As it is a cutover block, ie trees have just been cut down - if it is replanted carbon credits cannot be claimed for ten years - but then they can for another 40 years.
The number of carbon credits that can be claimed comes from government issued "growth tables"
It may be possible to purchase the block, replant, and pay the rates for ten years for 200,000 pounds.
If carbon credits stay as they are, the yearly income would be 46,000 pounds...for 40 years (on average).
Carbon credits could increase in value tenfold, if they are worth nothing, the trees should be worth about a 1,000,000 pounds (in todays money) in 2050.
I already have 170 ha of trees, and I'm 65.
You just need to lock up money for ten years.
Whatdoidonext said:
Appreciate these are 1st world problems but I could use the collective advice of this forum to give me some ideas.
I'm 45 and want to retire at 55.(or sooner).
Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.
[U]Savings:[/U]
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.
[U]Pension:[/U]
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a pension but much lower value.
[/]Outgoings:[/]
I'd say modest.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in extensive travel abroad.
All my other enjoyments are relatively inexpensive - fresh air, countryside walks with the dog.
So ... where am I going wrong? Or where should I be looking to maximize my chance of retiring at 55?
It's a solid base. I'm 45 and want to retire at 55.(or sooner).
Our home is estimated at £1,000,000 (with £175k owing on a 1.7% fixed rate for another year or so).
No other debts.
Own everything else, including cars, outright.
1 son, approaching 17, that we'll support through Uni if he goes.
One day - and I hope a long time away - we may inherit approx. £400k. But we're trying to get our folks to enjoy as much as they can themselves.
[U]Savings:[/U]
£250k in ISA, stocks and funds.
£300k in cash-based savings.
Not keen on owning buy-to-lets.
No time (or patience) for managing my own portfolio of shares.
No passive income.
[U]Pension:[/U]
Final salary. Estimated £48k at 55 (88%LTA). Would be £88k at 65 (but don't want to work that long and LTA would be over 155%).
Wife also has a pension but much lower value.
[/]Outgoings:[/]
I'd say modest.
No expensive hobbies, or subscriptions, except keeping a sports car on the road.
No interest in extensive travel abroad.
All my other enjoyments are relatively inexpensive - fresh air, countryside walks with the dog.
So ... where am I going wrong? Or where should I be looking to maximize my chance of retiring at 55?
The primary questions are whether you can live post retirement on just that pension income, how safe is it and does it increase with inflation? Plus, what do you plan to do all day when 56 for the next 30-40 years and how much will it cost?
Can you also run a SIPP and use any spare allowances?
£300k in cash equivalents is a bit odd at 45 and arguably has been wrong but the market is transitioning so no huge rush now to do anything with it.
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