If you retired before 60, how much pension pot did you have?

[tiredofthisshit21]

Just that, really. Aiming for 57 and trying to work out if I should try and stay on a bit longer but I'm so tired of working.

You need enough to cover your outgoings, not other people's outgoings. The only way to be sure is to do your own budget.

For a DC pension, the general rule of thumb is that you need a pot approx 25 x your annual outgoings (remember to include tax).

My situation is complex, because I've retired before pension access age and when I do get to pension age will have the bulk in a DB rather than DC pension. But my calculations are based on an annual spend of £27k after tax.

I have some in a DB, some 5.5k pa from 60. Plus full state pension at 67. So I'm thinking I front load my spending from DC pot.

How much is in your DC pot? Do you have a mortgage or rent? Do you want holidays or other luxuries or just the basics?

There will be around £440k in my DC pot after paying mortgage off. I have seperate savings for holidays. Targeting £24k a year income.

Does the 24k pa include the state pension? It doesn’t sound very much if you live 30-40 years. Think back 30 years to your food shopping, bills and what they are now. I work full time and am in my 60s with a final salary pension scheme, the later contribution years make a huge difference.

I actually had a pension consult on Friday. Slightly different set up as I work in the public sector in Ireland but the advice I got was that you'll need more money when your younger so prepare for that. My final salary will be approx 90k but my first year pension will be just 20k if i retire at 60 which is the current plan. Now we wont have a mortgage and my children will be financially independent hopefully but its still not a lot so no to plan to fill the gap.

How much money do you need to live on though? I earn £70k at the minute but even whilst paying a mortgage I put around 40% of that into savings. Bills & food costs I've worked out at less than £600pm so with £2k a month net after retirement, that still leaves me quite comfortable.

Only you know how much a comfortable budget is for you but remember to include occasional bills and one off costs like replacing a car or building work.

The rule of thumb regarding DC pots is you can maintain their value if they are invested well and you only draw down a minimal amount of 3-4% a year. 3.2% of your pot would be £14520. There are concerns we are in a lower growth phase so it's important to avoid unnecessary management fees on your investments and spread the risk by diversifying. The book, How to Fund the Life You Want, is very helpful on all this stuff. You can model your take home/ tax using listentotaxman.com. Good luck! I wish I was on track to retire at 57!

Thanks @dotdotdotdash. I do think the 4% rule is a little outdated especially if the need to draw on the pension pot lessens in later life when other pensions kick in, as per my circumstances. I've done a ton of modelling. I was just interested in others experiences.

4% is also modelled on a minimal depletion of capital which given that we've all worked hard for funds and pensions will go into IHT may not be what you wish to aim for.

Very good point. I want to spend it all, to be honest!

I've just finished at nearly 54, so not drawing a pension yet.

Current assets (not just pension pot) excluding house are around £1.5m.

We are hoping to retire at around 55 and 53. Aiming for total investments of around £3m and to take £120k a year gross. From 67 we’ll have two state pensions (barring any changes) and a £35k DB pension so at that point we’re hoping to start drawing down much less and to be able to give a decent amount of cash to DC.

So basically 4% rule ignoring the fact we’ll have additional income in the future, then using the (hopeful) excess this creates to fund inter vivos gifts.

I’m slightly wary of departing too much from this. We’ve had a period of strong returns so it’s easy to think it’s too cautious, especially as recent downturns have recovered so quickly. But crashes can happen and recoveries can be slow. I’d rather risk being slightly too cautious and having to give more away. Obv this is less of a factor if you’re not concerned about passing on your assets.

@Surgeonsattheedgeoflifethat's potentially a lot of IHT which will be paid.

I have a 13k PA DB pension and was retired early through ill health, worked FT for 20 years and PT for 10 years. I do have almost 400k in investments and savings. I have a DH whose pension is also DB and is 24k PA, he has a very similar amount of investments and savings. I made 20k returns on my investments and savings last year.