Funds Insider - Opening the door to funds

Welcome to the Citywire Funds Insider Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error
How much did you retire with?
+ Reply to discussion
Options
MBA MBA
Posted: 11 February 2025 11:20:57(UTC)
#1

Joined: 16/12/2012(UTC)
Posts: 1,725

Thanks: 3475 times
Was thanked: 3599 time(s) in 1156 post(s)
I'm considering when I have enough for a middle of the run retirement but am struggling to identify how much I need by when. Like everyone else I don't want to have too little, nor too much only for my estate to pay 40-60% inheritance tax.

Care to share your details...either with your partner ie household finances or without

1) when did you retire? (age)

2) How much income did you retire with?

3) What was the source of that income? DC or DB pension?

4) If DC how much did you have in your portfolio?

5) When did you start getting the state pension?

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?
Back to top Quote
3 users thanked MBA MBA for this post.
Jesse M on 11/02/2025(UTC), Peanuts on 11/02/2025(UTC), Chalky W on 12/02/2025(UTC)
MBA MBA
Posted: 11 February 2025 11:28:28(UTC)
#2

Joined: 16/12/2012(UTC)
Posts: 1,725

Thanks: 3475 times
Was thanked: 3599 time(s) in 1156 post(s)
1) when did you retire? (age)
> currently 49, looking to stop working by 50-55. Plan is to deplete most savings above the £1m threshold for IHT before i get very old/unhealthy.

2) How much income did you retire with?
>If i retired today i could generate an income of £20kpa tax free (via ISA) from my ISA at a withdrawal rate of 4% but if I took £43k pa at a growth rate of only 3.5% it would last I calculate 18-19 years before getting to zero so taking me to age 66/67

3) What was the source of that income? DC or DB pension?

>At age 55-57 as things stand I can access around £16-17k pa index linked via a public sector pension.

4) If DC how much did you have in your portfolio?

>I have a SIPP of around £500k value currently which i can access at age 57 (they are increasing the age from 55 in 2028 I think)

5) When did you start getting the state pension?

>I wont get for another 18 years at age 67 (they're bound to increase that to 68-69)

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?

No

I should have added one more element to the above. I have a mortgage of around £520k + may need to find another £100k for private secondary schooling. Without the mortgage Im already there. However, Im happy to carry on running the mortgage for many years to come.
Back to top Quote
 |  Edit by user
3 users thanked MBA MBA for this post.
Sheerman on 11/02/2025(UTC), Jesse M on 11/02/2025(UTC), Peanuts on 11/02/2025(UTC)
OmegaMale
Posted: 11 February 2025 12:05:38(UTC)
#3

Joined: 02/07/2020(UTC)
Posts: 535

Thanks: 899 times
Was thanked: 1061 time(s) in 377 post(s)
1) when did you retire? (age)
55

2) How much income did you retire with?
£18K

3) What was the source of that income? DC or DB pension?
DB pension which only goes up by about half CPI

4) If DC how much did you have in your portfolio?
N/A

5) When did you start getting the state pension?
66

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?
Did get an inheritance which gave a nice buffer

From personal experience, I think £20K is just about enough to live on but will not cover significant holidays, car changes, etc. Do not underestimate Council tax, utilities, etc.

The crazy thing is that once 2 State Pensions and AlphaFemale's pension kicked in, our income tripled and we went from famine to feast. Our investment portfolio also almost quadrupled in that period (ie 55 to 66) too. We hardly touched it because it "might be needed" now a significant IHT bill looms.

Early retirement is great for all sorts of reasons but to really make the most of it you may well need a lot more than £20K/annum.

Learning to spend it after 40 odd years of making every penny count is a difficult challenge too.

OM
Back to top Quote
12 users thanked OmegaMale for this post.
MBA MBA on 11/02/2025(UTC), mcminvest on 11/02/2025(UTC), Fuzzy Beats on 11/02/2025(UTC), MartynC on 11/02/2025(UTC), Sheerman on 11/02/2025(UTC), GARRY TAYLOR on 11/02/2025(UTC), Jesse M on 11/02/2025(UTC), Peanuts on 11/02/2025(UTC), Dexi on 12/02/2025(UTC), Chalky W on 12/02/2025(UTC), Alex Peard on 12/02/2025(UTC), Special Kloud on 12/02/2025(UTC)
MBA MBA
Posted: 11 February 2025 12:19:45(UTC)
#4

Joined: 16/12/2012(UTC)
Posts: 1,725

Thanks: 3475 times
Was thanked: 3599 time(s) in 1156 post(s)
OmegaMale;333920 wrote:
1) when did you retire? (age)
55

2) How much income did you retire with?
£18K

3) What was the source of that income? DC or DB pension?
DB pension which only goes up by about half CPI

4) If DC how much did you have in your portfolio?
N/A

5) When did you start getting the state pension?
66

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?
Did get an inheritance which gave a nice buffer

From personal experience, I think £20K is just about enough to live on but will not cover significant holidays, car changes, etc. Do not underestimate Council tax, utilities, etc.

The crazy thing is that once 2 State Pensions and AlphaFemale's pension kicked in, our income tripled and we went from famine to feast. Our investment portfolio also almost quadrupled in that period (ie 55 to 66) too. We hardly touched it because it "might be needed" now a significant IHT bill looms.

Early retirement is great for all sorts of reasons but to really make the most of it you may well need a lot more than £20K/annum.

Learning to spend it after 40 odd years of making every penny count is a difficult challenge too.

OM


v helpful. Thanks for sharing. are you planning to reaccumulate to reduce IHT liability or does it not affect you, you're not fussed about limiting your IHT exposure?

i think i could live on 20K pa inc c tax and utilities but wouldn't cover my ambition to travel and spend chunks of weeks of winter abroad.
Back to top Quote
ANDREW FOSTER
Posted: 11 February 2025 12:19:53(UTC)
#6

Joined: 23/07/2019(UTC)
Posts: 8,120

Thanks: 11360 times
Was thanked: 18229 time(s) in 5978 post(s)
MBA MBA;333910 wrote:
I'm considering when I have enough for a middle of the run retirement but am struggling to identify how much I need by when. Like everyone else I don't want to have too little, nor too much only for my estate to pay 40-60% inheritance tax.

Care to share your details...either with your partner ie household finances or without

1) when did you retire? (age)

54 semi retirement, 56 full retirement

2) How much income did you retire with?

Zero. Rely entirely on income from investments. Initially planned to live on £25K p.s. (no mortgage or other debts, tax free)

3) What was the source of that income? DC or DB pension?

Capital gains and dividends on investments. Initially had cash to burn through that delayed any drawdown on SIPP

4) If DC how much did you have in your portfolio?

N/A but my SIPP/ISA/GIA pot was about £450K at the time. Current 'pot' now grown to about £630K despite drawings.

5) When did you start getting the state pension?

Six years till to wait

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?

I assumed no inheritance, but as it turned out had some last year that boosted my pot by about 20%. This has taken my lifestyle for modest to comfortable.



Back to top Quote
2 users thanked ANDREW FOSTER for this post.
Peanuts on 11/02/2025(UTC), MBA MBA on 11/02/2025(UTC)
Newbie
Posted: 11 February 2025 13:50:38(UTC)
#5

Joined: 31/01/2012(UTC)
Posts: 3,818

Thanks: 6012 times
Was thanked: 7026 time(s) in 2603 post(s)
MBA MBA;333922 wrote:

i think i could live on 20K pa inc c tax and utilities but wouldn't cover my ambition to travel and spend chunks of weeks of winter abroad.

You mentions school fees of £100k.
Be wary if you have young (and more than one).
Fees are only the beginning ! There will be elements of fitting in
When children are grown up (if ever) then perhaps £20k but...
Also being 50 - think long and hard about the SP - it is 18 years (for now) away.
Today there was an article about how ministers salary is heading towards 6 figures - now extrapolate that further, do you think the stress on the state will ease?
At the same time do you think the civil service will go away at the expense of their golden retirement parachutes - I have a couple of friends who between have over £100k in NHS pensions alone (they also get SP's) and neither are doctors or in the medical profession as per se - They cannot spend what they get and manage to save over 50% of it even after multiple luxury holidays which is more than covered by their SP's (BTW they have benefited inflation).
My point is something has to give for SP's.
From observation and talking to friends £30k seems like an appropriate figure.
C Tax, Utilities, General expenses etc is likely to move to circa £10k alone imo
Back to top Quote
1 user thanked Newbie for this post.
MBA MBA on 11/02/2025(UTC)
mcminvest
Posted: 11 February 2025 14:14:22(UTC)
#7

Joined: 22/02/2018(UTC)
Posts: 1,195

Thanks: 6488 times
Was thanked: 1240 time(s) in 635 post(s)
Where are you getting the IHT bill from? Surely that is for the person who inherits?
Back to top Quote
1 user thanked mcminvest for this post.
Andrew1952 on 11/02/2025(UTC)
OmegaMale
Posted: 11 February 2025 14:39:52(UTC)
#9

Joined: 02/07/2020(UTC)
Posts: 535

Thanks: 899 times
Was thanked: 1061 time(s) in 377 post(s)
IHT is definitely a difficult one

Do you run down your assets (spending, gifting, etc) until you get inside the limit?

or

Do you adopt the attitude that I can double, treble, quadruple or whatever the investment pot so that although there is a stonking great IHT bill for the recipients, they actually get a larger amount. all the time of course hoping that Rachel from accounts and her "friends" are ousted and replaced by someone who makes the IHT regime more palatable.

1st world problems.

OM
Back to top Quote
2 users thanked OmegaMale for this post.
Sheerman on 11/02/2025(UTC), MBA MBA on 11/02/2025(UTC)
Harry Gloom
Posted: 11 February 2025 14:57:35(UTC)
#10

Joined: 01/12/2022(UTC)
Posts: 391

Thanks: 259 times
Was thanked: 1030 time(s) in 281 post(s)
1) when did you retire? (age)

57 - I retired 31st December 2024

2) How much income did you retire with?

£6K DB pension plus £27K drawdown from DC pensions to meet annual living expenses plus some lump sums planned for one-off expenses

3) What was the source of that income? DC or DB pension?

DB pension + DC pensions

4) If DC how much did you have in your portfolio?

£671,244.31 was our retirement portfolio balance immediately prior to first drawdown payment on 21st January!

5) When did you start getting the state pension?

Will get full state pension at age 67 and wife the same 3 years later

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?

Maybe, but inheritance is not factored into our retirement plan at all.

[/quote]
Back to top Quote
 |  Edit by user
4 users thanked Harry Gloom for this post.
OmegaMale on 11/02/2025(UTC), MartynC on 11/02/2025(UTC), Jesse M on 11/02/2025(UTC), MBA MBA on 11/02/2025(UTC)
Wheresthejam .
Posted: 11 February 2025 16:04:42(UTC)
#11

Joined: 27/01/2025(UTC)
Posts: 54

Thanks: 21 times
Was thanked: 53 time(s) in 32 post(s)
1) when did you retire? (age)
56

2) How much income did you retire with?
Drawing max of yearly personal allowance only from SIPP & DB - fortunately (unfortunately?) significant cash pot outside tax-free wrappers

3) What was the source of that income? DC or DB pension?
Both

4) If DC how much did you have in your portfolio?
530K

5) When did you start getting the state pension?
Not yet

6) Do you anticipate any chance of any significant inheritance or other event that will change the above financial details materially?
-Just to add will probably downsize from 4bed house to 2/3 so that may free up additional equity in a few years.
Back to top Quote
 |  Edit by user
2 users thanked Wheresthejam . for this post.
Jesse M on 11/02/2025(UTC), MBA MBA on 11/02/2025(UTC)
4 Pages123Next page»
+ Reply to discussion

Markets

Other markets