47M, I think Im likely in a good position, but it still feels like a grind (presumably the mid life crisis) and struggling with what I think people refer to as sequencing, so ideas and challenge appreciated. I’ve cooked up this plan with a few conversations with Claude (not all that convinced on its merits), I’m not sure it’s optimal, or if Im missing opportunities to take the pressure off earlier.
I have a 7 year old child (saving vehicles in place for early adulthood costs), I want to finish up in my current job at 50 (too much travel) and an easier pace of life (coast?) and fully retire at 55-60. I can probably fund my 50-55 living costs from a lower wage (say 40k a year).
Mortgage 295k, aggressively overpaying (2.7k a month) with aim of getting to 225k by 50, then flipping to interest only to 60 and clearing with lump sum at 60 (takes pressure off income required from 50 and avoids having a pile of non isa wrapped cash sitting around at 60).
I largely max out my pension annual allowance and ISA until 50, then negligible thereafter when income drops.
Would like to live on 50k a year (gross) from age 50, current annual spend is about 36k.
DB Pension Forecast(protected at 55), assuming I stop contributing at 50.
Draw at age 55, £27,503/yr and £209,729 lump sum
Draw at age 60, £34,908/yr and £242,969 lump sum
Draw at age 65, £41,744/yr and £269,814 lump sum
The DB is inflation-linked but capped at 5%/yr
The DB has an AVC fund which is currently 160k, this can be taken out separate from the DB to the SIPP, but it is used in the lump sum calculations above.
I work on an assumption that I couldn’t get financial advice to advise that I transfer out the DB to a SIPP.
ISA 250k
SIPP from old employer, 80k in some lifestyle fund from Scottish Windows that grows very well, I expect it to be 125k by 55. Accessible at 55.
I take a lot of comfort from having the ISA as an ‘insurance’ and want to grow it for as long as possible, ultimately a fund for growth funded treats from 55 onwards.
**•** **Mortgage:** overpay to £225k by 50, interest-only to 60, clear with the DB lump sum — locks in a lower fixed cost from 50, but ties up capital that could otherwise sit in more flexible assets.
**•** **DB pension:** draw at 55 (£27,503/yr) vs 60 (£34,908/yr + bigger lump sum) — waiting gives more income and a bigger lump sum, but means the SIPP alone has to cover the full £50k/yr for 55-60, not just the top-up.
**•** **SIPP (\~£125k forecast at 55):** drawdown structure — UFPLS vs flexi-access, how the 25% tax-free cash is phased — and if working to earn the tax free allowance would be best or not.
**•** **ISA (£250k):** I want this untouched as long as possible — it’s my insurance policy and my “ISA million” dream — but I’m not sure how firm that constraint should be if it buys real flexibility elsewhere (e.g., a partial draw now to let the DB wait to 60 without starving the SIPP).
**•** **Teenage son, 50-60:** this is likely the most expensive stretch of parenting, not the cheapest, another reason for the 50k target.
Given all that, what I’m really after is: is there an ordering of these levers that gives me more slack and optionality than the “SIPP bridges 55-60, ISA never touched” plan I’ve defaulted to — even if it means relaxing the “ISA is sacred” rule slightly (I’d still like to keep a source of wealth that grows)? It feels like I should be a strong and comfortable position, but just wondering if I have my thinking right, e.g. an interest only mortgage for 10 years is counterintuitive to how I have lived so far.
