Spend pension before state pension

[Manchester1966]

Im 57 and have 100 K private pension , 20 K in small work pension no debts or mortgage about 40 k in savings and my wife still works.

Im thinking about drawing down my pension for next 10 years and then living on my full state pension

Would this work ?

Nobody can answer that except you!
Only you know if it covers your outgoings.
Have you actually got a more specific question about it?

Impossible to know really, but do you honestly think that you will be able to meet 100% of your own living costs from £10k per year over the next 10 years (tiny bit more with investment yields added each year) and then just on the state pension alone. I know that some people manage to live on this little but it's hard.

Or were you planning on freeloading off your wife who still works, while you live a nice life of ease and luxury subsidised by her earnings? Is the plan that she contributes a lot more than £10k per year into your corporate living costs so that you don't have to work but don't have to face the consequences of that?

It will work if your outgoings are less than £16k per year and you are willing to accept a potentially lower income than that once you've exhausted those pots and only have State Pension.

What does your wife think?

With your private pension, is anything before 65 an actuarial reduction or did you purchase with a retirement age of 60 in mind.

On paper yes. But the reality…

Does your wife have a good pension that will fund you too? State pension really isn’t a lot to live on. Are you jointly planning your retirement?

It's certainly a "good" plan to avoid income tax, by making sure you have income each year to use up your tax free personal allowance. Better taking £10k per year for 10 years pre state pension to use personal allowance and then use personal allowance against state pension from then on. Pay less tax than not taking the private pension now and then taking both pensions together and paying tax.

Of course, it all depends on how much you "need" to live on during the next 10 years and how much you need to live on after state pension age.

It sounds like a straightforward DC pension, no actuarial reduction involved.

As other posters have said, it is totally dependent on your outgoings and what your wife is willing to bring in. You need to sit down with your wife and do a spreadsheet or get independent advice.
As someone who is retired, I would say that your retirement savings don’t seem like a lot. We would have to be frugal if we only had our state pensions.
If you retire now, you will not have enough contributions for a full state pension.
You can’t depend on just a state pension. The country is in such a bad way a the moment. We may not get pension rises and there could be massive inflation.

Sorry you need 35 years of contributions for the full state pension

Too many unknowns, your £120k in pensions might increase by 10% each year for the next 10 years, and if you draw £12k per year then you will still have £120k in ten years time.

The S&P500 USA Index has increased by an average of 9.5% a year for the last 60 years - before anyone says 10% a year is impossible.

Hi so pleased with all the helpful and honest comments. I have allready paid 38 years NI so im on full state pension regardless , Im quite a frugal person with no big expenditures and hopefully can get buy on £1000 per month .
I don't want to leave retirement to late as i do like to get out whilst reasonably fit.

I was wondering have people DRAWDOWN Their pensions earliier to retire in better health not not necessarily wealth

Im 57 presently , does 60 sound more manageable ?

Thanks -)

Hi my wifeis ok with my plan , she knows i have worked hard for the last 40 years and been reasonably prudent , i just wanted other opinions for advice and to sound out my idea on

I want be using my wifes money to rely on

I am a massive Mumsnet fan, but you'll get better financial advice from the MSE pensions forum, or from an actual financial adviser. You need to do some financial forecasting.

Many thanks i will check MSE for financial advice

Hi my wifeis ok with my plan , she knows i have worked hard for the last 40 years and been reasonably prudent , i just wanted other opinions for advice and to sound out my idea on

I want be using my wifes money to rely on

Why don't you try it for the next year and see how you get on? Don't use any of your wife's money - make sure you pay half of all bills, food, rent, days out, car repairs etc.

If you want to retire early to give you time to get out and do stuff while you're relatively fit and healthy - how much will doing this stuff cost? Take that out of the £1000 a month you're going to try and live on.

@Manchester1966 have you checked you are definitely entitled to the full state pension or just assumed 38 years is enough? Changes in 2016 mean it’s not as straightforward as having 35 years.

Retirement does not have to be a cliff edge. You could reduce the amount of work, you could have a hobby that produces a small income. In the early years of retirement, you need to be careful of sequence of returns risk - when markets are down if you can avoid taking from investments you give them time to recover.

There are books, podcasts, YouTube channels from UK based advisers which can be a great help in learning about retirement and issues that may occur.

The Retirement Cafe podcast is a great one. Meaningful Money does some things on retirement planning.
Retirement books like Die With Zero, Four Thousand Weeks, both of those may help you think about what you would do in retirement.

In your position I would struggle to do that on that money.

Instead I would look to drop down to the minimum hours possible (or change to a short patch of interim work each year or a couple of pub shifts a week or something) to bring in 12k a year.

There will be no tax to pay so you will get all of the benefit of the income, it’ll give you a chance to see how you manage living frugally. I’d use the savings to supplement when you need bigger purchases (eg house repairs) but save the pension for when you can no longer work.

I take it passing on an inheritance is not an objective?

They will get the house