Sensible amount for retirement
Discussion
I have been trying to work out a sensible retirement fund target.
Firstly 2 of us, no kids will own our house outright in 4 years. Looking to retire as early as possible, based on age that’s 57 when I will be able to access my employer pension.
Currently predicting to have circa £700k by then.
Questions?
Is that enough? Assuming holidays and no crazy hobbies just lots of Golf.
How can I finish earlier and access the cash without being ruined by tax?
Ideally I’d have no money left by 85
Firstly 2 of us, no kids will own our house outright in 4 years. Looking to retire as early as possible, based on age that’s 57 when I will be able to access my employer pension.
Currently predicting to have circa £700k by then.
Questions?
Is that enough? Assuming holidays and no crazy hobbies just lots of Golf.
How can I finish earlier and access the cash without being ruined by tax?
Ideally I’d have no money left by 85
Is that £700k in just your pension, split across two people’s pensions. Or does it include other things as well. Eg ISAs / cash etc.
Ie what’s the tax situation going to be on accessing it?
In terms of is it enough - you need to work it out based on your spending plans.
I’d assume a 4% safe withdrawal rate initially £28k per year - is that enough?
Ie what’s the tax situation going to be on accessing it?
In terms of is it enough - you need to work it out based on your spending plans.
I’d assume a 4% safe withdrawal rate initially £28k per year - is that enough?
fat80b said:
Is that £700k in just your pension, split across two people’s pensions. Or does it include other things as well. Eg ISAs / cash etc.
Ie what’s the tax situation going to be on accessing it?
In terms of is it enough - you need to work it out based on your spending plans.
I’d assume a 4% safe withdrawal rate initially £28k per year - is that enough?
Ie what’s the tax situation going to be on accessing it?
In terms of is it enough - you need to work it out based on your spending plans.
I’d assume a 4% safe withdrawal rate initially £28k per year - is that enough?
4% assumes I never run out I want to run out at 85. No one has a calculator that does that.
700k is based on a 3% return on only my pension. I’m spending cash on racing so that’s a variable I can chop and change. I want to live for today as well!
Bertrum said:
Currently predicting to have circa £700k by then.
Questions?
Is that enough? Assuming holidays and no crazy hobbies just lots of Golf.
Indeed - as an example of parameters entered: If age 57 and retire this month, take no lump sum and assume 4% investment growth after charges and 3% annual increment, then drawing down £2,400/month will run out at 85 exactly
Of course, state pension will come on stream in about 10 years
And right now, annuities seem reasonably attractive at something over £5k/year per £100K, assuming 3% growth and 50% to surviving spouse
Of course, state pension will come on stream in about 10 years
And right now, annuities seem reasonably attractive at something over £5k/year per £100K, assuming 3% growth and 50% to surviving spouse
Kind of interested to get an idea what other people are doing. Always seems to be the extremes of FIRE or £1m + pensions at 68.
No one offers much on the jack it in at 57 on a reasonable pension going on a few nice holidays think exotic and a playing golf retirement.
Followed downsizing at 75 living off the state/dying from 85 + I have no kids so don’t want to be leaving all my money to the cats protection or whatever .
No one offers much on the jack it in at 57 on a reasonable pension going on a few nice holidays think exotic and a playing golf retirement.
Followed downsizing at 75 living off the state/dying from 85 + I have no kids so don’t want to be leaving all my money to the cats protection or whatever .
Puzzles said:
I'm going to guess yes
Me too. Retired on far, far less than that last year aged 56. Not having a mortgage (as OP), or other debts and in our case much reduced energy bills due to solar means our outgoings are small. It's surprising what I can manage on and I'm not even drawing my main private pension yet, which is a mere fraction of the OPs. However, the thread on enjoying retirement elsewhere on this finance section, shows that there is no right answer for everyone...we're all different. Being PH some will scoff at having less than my wife and I earned when working, let alone our (comfortable for us) retirement income. Reading another thread about how much a kid in University needs for spending money, or the one about 60% tax shows that I may be in the minority at least on here. It's still plenty for us to enjoy regular holidays and other treats, yet still not have to worry about money.
I just want mine to last maybe 15 years to bridge me between now and State pension in 9 years time and a few years beyond that. I have other smaller pensions that will continue with the SP and my wife is already on her SP and has private pensions too, but again nothing like the size of the OP.
You can use the online quotations such as L&G to work these figures out though, so it's not impossible to set the figures to suit running out when 85. I've been comparing annuities and drawdown and found I could set drawdown at around 7-8% and L&G's calculator suggests I'd run out at 76 given 'medium' (or 'low' or 'high') investment return rates.
You can play around with your figures and see what options you have for your size pot and age:
https://www.legalandgeneral.com/retirement/retirem...
(No connection to L&G, just that I found it handy to use rather than give out details and get pestered by sales people).
mikef said:
Indeed - as an example of parameters entered: If age 57 and retire this month, take no lump sum and assume 4% investment growth after charges and 3% annual increment, then drawing down £2,400/month will run out at 85 exactly
Of course, state pension will come on stream in about 10 years
And right now, annuities seem reasonably attractive at something over £5k/year per £100K, assuming 3% growth and 50% to surviving spouse
Interesting, think I need to work out how to taper the draw down..more initially and less later, not sure what I’d do with £2,400 per month at 80?Of course, state pension will come on stream in about 10 years
And right now, annuities seem reasonably attractive at something over £5k/year per £100K, assuming 3% growth and 50% to surviving spouse
IMHO if you own a nice house outright and have £700k cash it’s enough, if your house is of value you could also downsize to free up capital. You might also get bored especially retiring youngish so you could take on a little part time job, and at 67 the state pension comes in to play and that’s £10k each.
Holidays don’t have to be expensive we did 7 weeks in Asia this year for just over £6k between us all in and could do it cheaper but like to stay in nice accommodation.
Retirement only gets expensive if you have to fill your days with expensive activities, walking costs nothing! You could also to charity work, me and the wife help out in a charity shop.
Better to die in debt (the debt dies with you) than having money in the bank and a paid for property.
We also retired before 60 and don’t have a large nest egg or golden pensions, well I haven’t got one full stop!
Holidays don’t have to be expensive we did 7 weeks in Asia this year for just over £6k between us all in and could do it cheaper but like to stay in nice accommodation.
Retirement only gets expensive if you have to fill your days with expensive activities, walking costs nothing! You could also to charity work, me and the wife help out in a charity shop.
Better to die in debt (the debt dies with you) than having money in the bank and a paid for property.
We also retired before 60 and don’t have a large nest egg or golden pensions, well I haven’t got one full stop!
Edited by GT4P on Monday 17th July 22:30
Stating the obvious but given you must have 30 years or so of spending data to draw on that (I assume?) have been pretty linear given no kids, shouldn’t it be fairly easy to know if it works or not?
It wouldn’t be enough for many but likely beyond the wildest dreams of most.
What I would say with now having some relatives near 80 - don’t underestimate it. They’re still very active and aren’t doing much less than they were at 70 and all the costs that come with it. 90 and you’ve got a point but these days I think 80 year olds can still be in pretty good order.
It wouldn’t be enough for many but likely beyond the wildest dreams of most.
What I would say with now having some relatives near 80 - don’t underestimate it. They’re still very active and aren’t doing much less than they were at 70 and all the costs that come with it. 90 and you’ve got a point but these days I think 80 year olds can still be in pretty good order.
OldSkoolRS said:
You can play around with your figures and see what options you have for your size pot and age:
https://www.legalandgeneral.com/retirement/retirem...
(No connection to L&G, just that I found it handy to use rather than give out details and get pestered by sales people).
That’s super useful thanks. Totally failed to consider the value of the lump sum…blimey, based on that I wouldn’t need to draw anything for a good 5 years after 57. We live pretty frugally once you remove racing and the mortgage Easily live off £24k per year now. https://www.legalandgeneral.com/retirement/retirem...
(No connection to L&G, just that I found it handy to use rather than give out details and get pestered by sales people).
Edited by Bertrum on Monday 17th July 22:31
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