Reply With QuoteNo specialist here, but I can look up annuity tables like anyone else.
Age 55, 3% escalation, single life is circa £2700 per £100k.
Bank on needing a minimum of £35k for what you want. So if you have a pot of around £1.3 million you’re good to go.
Any retirement specialists around ?
What size of pension pot would be required to retire at say 55 with a decent lifestyle?
Nothing too flash, couple of holidays per year maybe change the car every 3 or 4 years.
Talking Tenerife and a mid size SUV not the Maldives and a Porsche.
maseman
No specialist here, but I can look up annuity tables like anyone else.
Age 55, 3% escalation, single life is circa £2700 per £100k.
Bank on needing a minimum of £35k for what you want. So if you have a pot of around £1.3 million you’re good to go.
Buying an annuity would be staggeringly unwise.
You tease Adrian! Why would that be?Originally Posted by draftsmann
No less than 300 times your monthly expenditure ?
I was a public service worker so pension is a percentage of annual salary, so that was fairly easy to estimate if the pension was enough to live on. I have never had to worry about the size of the pot, but in general terms how does the pot translate into an annual pension payment and could that change over time.
I have been early retired now for 5.5 years now, but my pension payment is fixed, in fact just received a 3% increase.
This ignores the state pension (which I think is currently £8,546pa) which will shave £300k of your annuity cost.
As someone else has pointed out though, this probably isn't the way to go.
Not planning on an annuity, I have a SIPP which I am looking to consolidate my existing pensions into then have the pot invested in a fairly cautious manner.
Was i a final salary scheme but transferred out last year.I’m not buying an annuity either and will need less to achieve £35k p.a. by utilising drawdown from a personal pension
There was a thread about early retirement in April with lots of good info/advice.
May be worth looking back for it.
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Jim.
He’ll be 67 before the state pension kicks in, and assumes you have paid qualifying NI to get that the above amount.
He’ll have to fund a full 12 years of retirement before anything from the state comes his way.
Annuities do offer poor value for most people, however for some the security will suit as some just do not want any risk to capital, also possibly impaired lives, or that guarantees are now up to 30 instead of 10.
State pension isn't something I'd rely on, might now be 67, but how long before it's 68, then 69 and finally 70.
I also think that in time to come there's every chance the state pension could be means tested. We may be 20 or 30 years away from that but the 'automatically opting in' for employees the signs are there in my opinion.
'Pension freedom' is great for many, though I do wonder when some of the people that took the lot at 55 cry 'I've got no money, you should never have let me cash it all in' start appearing! That will be the next 'claims' company to appear.
How long is a piece of string ? its pretty vague question without knowing more information.
Will your drawdown pension be your only income (for 12 years till state pension)?
Partner income/retirement plans?
Is your mortgage payed off?
Do you have children that may need help through university & buying a home?
What is mid size suv ? a new Audi q5 or x3 every 3 years or a Hyundai Tucson ?
The general consensus seems to be 4%withdrawal rate on drawdown.I would definitely speak to a financial advisor.
I’m planning more or less the same. A safe withdrawal rate under drawdown is often quoted between 3% and 4%. For a comfortable retirement people say you need £30k+. Assume £35k at 3.5% withdrawal rate means you need a retirement pot of £1m. Knock off the state pension later and you would probably be comfortable from 55 with an £800k pot.
Don’t forget the option of taking 25% cash tax free, at current returns saving 20% in tax is definitely worth considering but talk to a financial adviser.
Both you and the OP need to talk to a financial adviser.
Most commentators have not taken account of potential care costs in later life.
I waited until I was 60 to actually retire. No mortgage and a mixed pension portfolio worth approx £ 1.6M. I can fund the lifestyle the OP talks of with this amount plus indulge a hobby.
Retiring at 55 and doing nothing is a recipe for disaster. Doing something in the voluntary sector costs money.
Talk to an IFA, look at the costs to fund your current lifestyle and do some cost projections.
Having retired last year debt free, I worked on the principle of having a pension pot of £1m, but not touching it until 2019 choosing instead to spend cash prior to commencing draw down. However what I have noticed is that I spend considerably less that I originally budgeted for. Hence 2019 has becoming 2021.
This should give me a max spend of approx £37k indexed linked until I am 100 (including state pension, inflation of 2% and an assumed annual growth of 3.5%) plus will enable to leave something for my son. I should add that my wife's final salary pension is not included because that her moneyplus I can also expect approx £1300/year (also index linked) tax free from my PV tariffs scheme which expires in 2036.
Auldfart is right about long term care, however that's like planning for a zombie plague and hence avoided (plus I have other plans to circumvent that).
FYI if your pension pot exceeds 1.03m and surplus will be subjected to an additional 40% tax unless you have got special dispensation from HMRC - which you will not get unless you already have it.
In conclusion, arguably you never have enough pension, but then the time available to you is also not infinite either - time spent doing what you like, when you like, is far more important than doing stuff you hate simply to gain more money/stuff which you might never live to enjoy. Personally if you can retire at 55 then do it. If you then need money later, downsize or flog assets.
Last edited by Andyg; 23rd June 2018 at 08:19.
Whoever does not know how to hit the nail on the head should be asked not to hit it at all.
Friedrich Nietzsche
Some great advice already given (especially about seeing a Financial Advisor!).
We are all different and all have difererent outgoings/way of life etc.
Personally? Im 58, I will retire at 60 on a final salary pension, I wont have any debts......I will have enough pension to live the way I want to live.
"Personally", Ive had some health issues (now thankfully all good!), which only reinforced my intention to retire early!!
Of course , you need enough money to retire and to enjoy retirement...................BUT........no matter how well off you are...you cant buy time!
I fully agree that the OP should seek financial advice from an IFA, not from a forum. I won’t go into details but I personally don’t need an IFA, although agree they are well worthwhile for the vast majority.
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