Yesterday, I wrote the most exciting one line
email anyone can ever send to their HR department
and that was, please accept this email as notification
of my retirement. So I'm 55 and I've done it.
I've actually told the employer that I'm leaving
to retire. Now earlier in the week, I also wrote
to all my defined benefit pensions. I've got
three different ones. And I wanted to start drawing
my pensions and claim all my pension commencement
lump sums. So the postman for our house has been
busy this week squeezing a ton of paperwork through
my letterbox. And now this weekend, I've got
the pleasure of filling them all in. Well, it's
definitely going to be worth it. So how did I
get to the decision that now is the right time
to retire? I mean, it wasn't... spare -of -the
-moment decision. I've actually been weighing
up my options now for about 12 months. What I
did is I collected all my pension details together,
and it was a bit of a mess to be honest at first.
I actually had eight defined contribution pensions
and three defined benefit pensions, so 11 in
all. The spreadsheets are put together laying
out all the different options for drawing them.
It was just really, really complex. And to be
able to truly trust that I had considered all
the options properly and that I'd interpreted
all the fine prints in them correctly across
all these 11 pensions was just so hard to do
really. And I just wasn't getting any confidence
in it all. So I decided then to simplify things
and I opened up a SIP, a Self -Invested Personal
Pension. What it is, I moved seven of my DC Pensions
into this new SIP. Now this helped me really
to understand where my income would come from
when I retired. Now, knowing how much you get
when you retire is actually only half the equation,
isn't it? The other thing you need to know is
how much you're actually going to need to spend,
how much you're gonna need to live on. Now, this
sounds easy, but to get to the level of comfort
that allows you to press that eject button from
your full -time job, you really want something
more than just kind of working out on the back
of a bank statement. So about a year ago, what
I did is I downloaded an app on my phone called
Snoop. I don't know if you've tried it, it's
pretty good, but this connects to all my bank
accounts, all my cards, all my different cards,
and for the first couple of months, you end up
telling it kind of everything that you've spent,
and it knows what you've spent, and you categorise
it for it. And after the first couple of months,
it kind of then knows everything, really, and
it puts everything that you spend in the right
kind of categories for you. And then you... pretty
much from that can work out how much you need
to live on. Now I've had the app installed and
I've been using it now for 12 months and I've
looked through all the reports it gives me and
I'm pretty confident, well really confident really,
but I know exactly what I need going forward.
So now that I've got this confidence where the
money's coming in and pretty confident on what's
going out as well, thankfully the numbers did
add up when I looked at them. So I have pressed
the button. Now, I enjoy the job I do now, but
I've got a lot of hobbies that I'm really passionate
about as well, and I just wish I had more time
to do them. So, after weighing up all the different
options, I decided it's the right time for me.
Now, Tracy, my wife, has decided she's not quite
ready to leave her job yet, but she's fully supportive
of me retiring first. Um, chill then. Follow
me out, retire when she feels it's exactly right
for her. So what happens next? Well, I still
need to serve my notice at work, obviously. You
can't just put your notice in on Friday and leave
on a Monday. And this gives me some time to sort
out my pension to make sure that I don't have
that earnings gap between when my last salary
payment comes in. And after simplifying my pensions
last year, I've now got a SIP, the company pension
for the organization I... currently work for,
and then I've got the three defined benefit pensions.
One of them is for an ex -employer, which is
PwC. One was for the local council that I work
for, and the other one was for my universities
that I worked four or five years for as well.
And the plan is to take the maximum tax -free
lump sums from each of these three defined benefit
pensions. And then what I'll do is I'll leave
my SIP invested to continue to grow hopefully
until I've kind of spent all my tax -free lump
sums. And at that point I may need some extra
cash to top up the money I'm getting from my
defined benefit pensions. Now, I don't expect
really to touch my SIP until I'm about 60. That
should keep me going. pretty much until I'm 67
when I start to claim my state pension. Now after
67, I'll have obviously my defined benefit pensions
I've just mentioned, plus my state pension, but
I'll likely have spent all my SIP. If I hadn't
done the planning over the last 12 months and
worked out... exactly what money I have coming
in and exactly what money I have going out, then
I'd never have the confidence to do this really.
And what I probably would have ended up doing
is continuing to work until I'm 57, 58, 59, maybe
even 60 purely because of my lacking confidence
from a finance perspective and knowing I have
the right amounts of money. Now, what I'm going
to do, I'm going to chart my journey. up until
the day to leave and well beyond as well. So
if this interests you and know how it all works
in finalizing retirement, don't forget to hit
that subscribe button and I promise I'll keep
you up to date. See you on the next one.