Savings and Investments thread

Rob7Lee

jamescafc said:

TelMc32 said:

Rob7Lee said:

TelMc32 said:

I’m in drawdown and the schedule is to draw my £268,275 by 75. So effectively, two tax free elements to my monthly income - the personal allowance and the tax-free pot - and then the rest from the main pot.  Keeping myself under the top tax rate band, but having to be careful with dividends.

Thanks, exactly my thoughts, just to decide on taking it out over what period. As I'm likely to retire early, withdrawal by 75 will be very easy. However there is one added point that will probably make me draw the lot in one go.

In December 2027 I reach 55 and can access my pension, in April 2028 the age you can access your pension moves to 57. I'm yet to get clarity, but from all I can read, if I don't touch my pension before April 2028 I'll have to wait until I'm 57 which is at the very end of 2029. That period is my concern if government were to change any rules (knowing my luck they would on April 7th 2028!) I could be in Limbo.

I'll probably just take the hit knowing that a bit of growth for a few years will be taxed, but I can minimise that to a degree.

Yeah, I retired at 55 so the tax free element is on a 20 year drawdown schedule. My advisor keeps me updated on what they expect to happen, but I went a couple of years before you, so I don’t have to worry about that 55-57 change.  Good luck. 

Out of interest, how do you reflect on retirement at 55?

I’m actually looking to do it a bit earlier but lots of people warning me not to, so curious for your views 

Think it depends what you've got going on in life, I've seen people retire at various ages who have no plan, boredom sets in. Whereas if you have things you want to do, whether more holidays, playing lots of golf/sports, helping out at the local food bank, gardening, whatever it may be. I do think it important to keep 'busy' in retirement. 

You still need something to get up in the morning for......... My plan was somewhere 55-57, various things at work mean I've committed to 57, almost 58, although I expect the last year will be a wind down.

Ashers

I finally retired at 58. The plan had always been to stop at 55 and my financial planning supported this but when the time arrived it just felt too early. Three years later it was just about right after a 40 year shift and two years into retirement I have no desire to return to working. At first it was good to wake up without much of a plan but that soon passed so I fully agree with the need to have structure and to plan ahead.

For what it’s worth, I took the maximum TFC when I retired. Between my wife and I we have since placed £120k into ISAs and with her tax allowances unused, coupled with some carried forward CGT losses (good old share save schemes working for a bank), there hasn’t been a tax hit. Perhaps it can be argued that this wasn’t the best financial planning decision but it felt right and I’m glad we did it especially with the subsequent removal of the IHT benefits for SIPPs.