Advice for lone parent

[financialaffairs]

I have changed names for privacy and would really appreciate some genuine advice on my situation.

I am a lone parent with older children, one at uni, one adult, one sixth form. Due to widowhood I’m in a very fortunate position.

I do have a financial advisor but would appreciate thoughts from people who have lived experience.

My situation is this
£900k house mortgage free which doesn’t need any substantial work

£1.1m in investments currently getting a decent return

I have earmarked £300k of this for house deposits, £100k per child

60k annual salary
£12k in pension from late DH

I withdraw about £20k Pa to pay for uni living expenses (they have the min loan and I have no intention of paying the fees so no suggestions of that please)
I also use this for holidays, paying private healthcare and insurances

i will have a pension of about £15k plus the £12k I already receive and then hopefully state pension. Also plan on drawing down the dividends I currently reinvest which is another £20k or so

i am 15 years from retirement and this money has to last me for the rest of my life and I want to leave some for the children. I’m not prepared to live frugally if I am honest. I want to be able to run a car, have a couple of decent holidays a year, eat out, go to the theatre etc

The honest answer is I am completely burnt out, the last ten years have been incredibly tough. I doubt I can drop my days in my current role but I would love to be able to work say a couple of days a week and earn about £1000 a month from when I’m 55.

I can’t work out if this is reasonable and sensible. I’m petrified of touching more than the bare minimum and I never withdraw the capital for myself. I feel it’s money I should be saving for the children and that using it to live before I’m retirement age is flippant and it might run out

my parents are alive and well off. Even if they need care there will be some inheritance but my grandmother lived to nearly 100 so if my mum who is in perfect health at 76 goes the same way that inheritance is a long way off

Apologies if this feels boastful I appreciate my position but it has come at the cost of my beloved husband and I feel a huge responsibility to be cautious

How old are you now. Re your investments are they in pension accounts or other vehicles e.g. can you access them now? And how much income do you aspire to do you want to generate the equivalent of your current 60k salary?

I’m 52. They’re not in pensions. I have an excellent wealth manager and we took the view pensions were not the right option. I can access all of it when I want to. I’m trying to work out if I can afford to cut down work at 55. I’m currently getting around an 8% return but we work on 5%

Your 15k pension what age do you get that, age 67? Do you want to continue to generate the same gross amount you currently have access to ( e.g. husbands pension + salary, (£72k gross), + part of the £20k dividends?) Do you intend to pay for another 3 years total for the child at university + the 6th form child? E.g. 3 years of extra payments? When would you like to gift your kids £300k, in 3 years? I'm really sorry to hear about your husband OP, it must be very hard.

total of 4 years of uni support. I get £7k at 60 and the rest at 67. I would expect to give £100k in about 2 years, the next in about 6 years and the final tranche in about 10 years. Certainly no sooner for any of them. I’d expect to be able to reduce my income comfortably in 5 -6 years when youngest graduates

I would look at your pot as funding your income and kids deposits. You have a huge asset in your house so the kids inheritance will be large in any event aside from the fantastic support with deposits and I would suggest if much is left from investments when you pass that would be a bonus. Depending on your gross target income with the numbers you have you should be able to safely target a £70k gross income from age 55 if you bring in an additional £12k year from part time work up to age 60 without depleting your pot, given you have pensions coming in age 60 and by 67 you would have £39k from pensions at age 67 so drawdown would decrease dramatically at that point. With these figures e.g. targeting £70k gross uplifted by inflation each year you should still have a circa £500k pot left age 67. Good luck with whatever decisions are right for you and all the best.

Thank you so much. This is amazing advice I really appreciate it