RetireSoonish
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Im using a subset of the MM questions below, but my query is all about whether my plan to retire early will work. I am tracking my expenses which are fairly low, and then adding extra spending for the "big" birthday years. Any advice appreciated, please be kind!
Personal details
Age: 48, Single, No kids/dependents, No debts, Own home
Income and expenditure
Annual gross income from employment or profession: 105k
Monthly take-home pay: 3.8k after pension and share schemes
Type of employment: e.g. Employee private sector
In general are you: Saver
Summary of Assets and Liabilities
PPR: guess €250k (mortgage free) no other property
Bank savings €200k in various regular savings, notice, term and demand accounts (thanks to best buys here)
Shares: 200k
Other investments: 60k mix of gold and funds
Pensions:
#1 PRSA - 200k (includes funds from a previous scheme that wound up)
#2 DB previous employer: €15k pa from 65yo OR 34k lump sum (based on previous %salary not 25% fund) and slightly smaller pension
#3 AVC fund tied to DB: 200k accessible from 65yo (I can use this for the 34k lump sum and keep higher DB pa amount)
#4 DC current employer: 80k (expect to grow to 100-120k before I retire per below)
Do you pay off your full credit card balance each month? Recently cancelled due to UB closure, always paid off each month
Other information which might be relevant
Life insurance: cancelled when mortgage paid off - now Death in Service only through work
Plan to retire in next 2-3 years, while also minimizing tax due and maximising PRSI credits for the State Pension, using TFLS & savings to cover any additional costs between retirement and DB pension kicking in at 65 and State pension whenever.
Steps as follows:
Retire around 50th birthday (summertime, so nice time of year to start off), organise TFLS (50k) from Fund#1 above for December that year and convert rest (150k) to ARF and begin a monthly drawdown from January of approx 15 -16k per annum (to stay under tax credit limit but also get 52 PRSI class S credits)
Expect this to run out within 10years, so around 60th birthday, organise TFLS (guess 25k) from Fund#4 above and move the rest (guess 75k) into my ARF and continue to drawdown as before 15-16kpa until that runs out in 5 years
65th birthday - DB kicks in, use Fund#3 to take TFLS (34k) and convert rest (guess 166k) to ARF, drawing down at least minimum withdrawal rate each year (4%/5%). At this stage I'll probably have to pay some income tax between DB & drawdown
Hang on long enough for State Pension (whenever) and the Centenarian Bounty (if I'm lucky!)
What specific question do you have or what issues are of concern to you?
Is the above plan feasible/possible to execute?
Is there a better order to draw each fund?
I've ignored fees/inflation and growth (hoping they cancel out) - is this too unrealistic?
Are there any hidden catches?
I've heard to access a pension fund from 50 I need "permission" from my employer - is this true even if the fund I want to draw from has nothing to do with the employment I'm leaving? Is this permission usually given?
Will the monthly ARF drawdown be enough to get the max PRSI contributions each year?
As the DB fund#2 and AVC fund#3 are tied together, I can only get 34k TFLS out if I leave them as is. However at 65, I might appreciate a bigger lump sum to spend, is there any merit in waiting until I'm close to 65 and then converting the DB transfer value and AVC into a different pension vehicle to get a larger lump sum and more flexible access to the rest of the fund (while giving up the guarantee of a fixed income at NRA)?
Thanks in advance!
Personal details
Age: 48, Single, No kids/dependents, No debts, Own home
Income and expenditure
Annual gross income from employment or profession: 105k
Monthly take-home pay: 3.8k after pension and share schemes
Type of employment: e.g. Employee private sector
In general are you: Saver
Summary of Assets and Liabilities
PPR: guess €250k (mortgage free) no other property
Bank savings €200k in various regular savings, notice, term and demand accounts (thanks to best buys here)
Shares: 200k
Other investments: 60k mix of gold and funds
Pensions:
#1 PRSA - 200k (includes funds from a previous scheme that wound up)
#2 DB previous employer: €15k pa from 65yo OR 34k lump sum (based on previous %salary not 25% fund) and slightly smaller pension
#3 AVC fund tied to DB: 200k accessible from 65yo (I can use this for the 34k lump sum and keep higher DB pa amount)
#4 DC current employer: 80k (expect to grow to 100-120k before I retire per below)
Do you pay off your full credit card balance each month? Recently cancelled due to UB closure, always paid off each month
Other information which might be relevant
Life insurance: cancelled when mortgage paid off - now Death in Service only through work
Plan to retire in next 2-3 years, while also minimizing tax due and maximising PRSI credits for the State Pension, using TFLS & savings to cover any additional costs between retirement and DB pension kicking in at 65 and State pension whenever.
Steps as follows:
Retire around 50th birthday (summertime, so nice time of year to start off), organise TFLS (50k) from Fund#1 above for December that year and convert rest (150k) to ARF and begin a monthly drawdown from January of approx 15 -16k per annum (to stay under tax credit limit but also get 52 PRSI class S credits)
Expect this to run out within 10years, so around 60th birthday, organise TFLS (guess 25k) from Fund#4 above and move the rest (guess 75k) into my ARF and continue to drawdown as before 15-16kpa until that runs out in 5 years
65th birthday - DB kicks in, use Fund#3 to take TFLS (34k) and convert rest (guess 166k) to ARF, drawing down at least minimum withdrawal rate each year (4%/5%). At this stage I'll probably have to pay some income tax between DB & drawdown
Hang on long enough for State Pension (whenever) and the Centenarian Bounty (if I'm lucky!)
What specific question do you have or what issues are of concern to you?
Is the above plan feasible/possible to execute?
Is there a better order to draw each fund?
I've ignored fees/inflation and growth (hoping they cancel out) - is this too unrealistic?
Are there any hidden catches?
I've heard to access a pension fund from 50 I need "permission" from my employer - is this true even if the fund I want to draw from has nothing to do with the employment I'm leaving? Is this permission usually given?
Will the monthly ARF drawdown be enough to get the max PRSI contributions each year?
As the DB fund#2 and AVC fund#3 are tied together, I can only get 34k TFLS out if I leave them as is. However at 65, I might appreciate a bigger lump sum to spend, is there any merit in waiting until I'm close to 65 and then converting the DB transfer value and AVC into a different pension vehicle to get a larger lump sum and more flexible access to the rest of the fund (while giving up the guarantee of a fixed income at NRA)?
Thanks in advance!