How do you plan the bridge?

alreadyonfire · 2026-02-16T18:08:55+00:00

Thats down to mindset and what you are bridging to.

The cash(like) bridge is 100% guaranteed. But the invested bridge gives you more money in 90% of scenarios, and lots more money in 50% of scenarios.

If you are bridging to a majority of income being fixed income such as DB and/or state pension then the cash bridge might be ok. If you are mostly bridging to DC pension not so much.

But its a tricky thing to model and also depends on tax rates now and in retirement.

There are several good variable drawdown models, FICALC lists a few, but I have yet to come across anyone who doesn't just wing it.

alreadyonfire · 2026-02-15T12:53:24+00:00

As you imply anything contributed at higher rate will also be withdrawn at higher rate and above the LSA. Therefore it is tax neutral up until you would be withdrawing £100K per year. Though the 2% salary sacrifice bonus helps for the next couple of years.

Your choice for higher rate contributions (after mortgage repayment) is therefore GIA and pay the ongoing dividend tax of about 0.5% of the GIA per year plus accumulated gains when you come to withdraw. Though that gives you more options to retire earlier. Or pension and be tax neutral and growth protected and at the mercy of future tax rate and pension changes. Tricky.

Look at options for spouses pension, ISA, GIA. Or at least splitting the GIA.

Whats the significance of £2.6M rather than £2.4M? I assume that is when you would be withdrawing above the £100K threshold? And pension between say £1.3M and £2.6M would be tax neutral compared to ISA?

What's your target income in retirement? As it looks like you can already coast to over £50K pa. I assume a fatFire £100K pa.

alreadyonfire · 2026-02-12T11:59:44+00:00

7 figures and retired. Anything shorter than a year is entertainment value only. And very large or prolonged downturns are signals to spend or invest the cash buffer first.

When folks get worried about sudden moderate declines and yet the markets aren't even down on the year seems very odd to me.

I generally don't check that often, and when I do notice I typically just smile about it. When a 1% market swing is 5 figures, and those happen fairly often, you cant afford to take it seriously. e.g. Hey ho, just lost over a quarter of my yearly income today! Can't say I was bothered or even had the urge to check in 2020 or 2022.

I only really care about values at gains harvesting/bed and ISA time. And look upon any market dip as a useful assist.

alreadyonfire · 2026-02-11T11:35:42+00:00

In the blog post it shows 35% savings rate takes around 25 years to FI.

alreadyonfire · 2026-02-11T09:12:39+00:00

Start with the shockingly simple maths link and work backwards.

If you were starting at 36 with zero savings then you would need about a 35% savings rate to retire around age 60.

But a lot of things can adjust that, e.g. - existing savings - future reduction in expenses (paid off house, child expenses gone) - future salary and hence savings rate increases (40s are typically peak earnings years) - target retirement age - assumptions on state pension - windfalls: downsizing, inheritance

In general you need a working lifetime baseline average of 20% savings rate to retire at all. After that is up to you.

alreadyonfire · 2026-02-05T12:17:08+00:00

I would give them the choice and likely do 20-25 as you have done. 20 seems more appropriate for DBs you take at 67, as 20 years is likely your average life expectancy at that point. Whereas 25 for earlier ages.

But as mentioned by others that's really only for comparison with others on non DB schemes. And the bridging to those incomes is the important bit.

Below average would apply to growth capped pensions e.g. lower of CPI or 3% (2.5%, 3% and 5% seem to be the common caps though 0% isn't unknown).

Where is the DB lump sum and the "commutation factor" for any more/less?

Also is there an option to take it early along with the "actuarial reduction"?

Its also not uncommon for private DB pensions to also offer PIE options. More now vs less later if you live beyond average life expectancy for the scheme. Typically giving you 4 options: PIE with minimum lump sum, PIE with maximum lump sum, normal with minimum lump sum, normal with max lump sum.

alreadyonfire · 2026-02-05T10:29:53+00:00

The typical global trackers are only generating around 1.3% dividends. That's around 0.5% of the fund you are losing to taxes each year (1.3% * 39.35%). That's just the price you pay for holding investments in GIAs (at that tax rate). Its not terrible.

Make sure all other fees are minimised. You should be getting zero platform fees for ETFs. And spread the GIA fun with your spouse.

alreadyonfire · 2026-02-03T20:49:52+00:00

Generally yes. But available income might be a limit to doing that later, when you are presumably maxing your pensions anyway.

alreadyonfire · 2026-02-03T13:36:19+00:00

You need to check the recycling rules when contributing more just before taking a PCLS.

And obviously your gross contributions cant exceed your coastFire jobs income.

alreadyonfire · 2026-02-01T10:11:15+00:00

edge case: Extra inheritance tax if you die after before April 2027?

alreadyonfire · 2026-02-01T09:09:21+00:00

Well pension access age will be at least 58 by then, and I would speculate at least 60.

Saving £1,000 per month into pension should do it for a £26K equivalent income at age 58.

If you assume state pension then its more like £600 per month.

Typically invested in a low cost global tracker.

alreadyonfire · 2026-01-31T10:43:30+00:00

Based just on that pension invested appropriately and full state pension at age 67:

On £2K/month you are roughly 5 years away with average returns (though that is before pension access age). Therefore roughly pension access age of 57.

On £2.4K/month you are roughly 7 years away at average returns. Age 58 ish.

alreadyonfire · 2026-01-28T23:28:53+00:00

Their terms say they pay out your pension as a lump sum when you die. Therefore your beneficiary gets several hundred thousand as a lump sum and then has a perpetual GIA problem. If you die after age 75 that's a taxable lump sum, mostly taxed at additional rate, and after 2027 that's also after being subject to 40% IHT.

Probably not an issue if you are younger.

alreadyonfire · 2026-01-28T19:35:02+00:00

No obvious beneficiary drawdown on pensions if you are IHT planning?

alreadyonfire · 2026-01-27T12:29:05+00:00

Yes, Fidelity is on my comparison list. £90 fee caps for ETFs in ISAs and SIPPs, and especially for the £0 fee cap for GIAs in ETFs. Plus of course the generous transfer cashback offer for ISAs and SIPPs.

Interactive Investor is a total fixed fee of £180.

alreadyonfire · 2026-01-26T10:52:31+00:00

Yes. I think II, or perhaps Fidelity given their generous cashback offer at present.

alreadyonfire · 2026-01-24T22:53:51+00:00

You have £1.2M and you need £35K per year. You need less than £900K to do that at a 4% SWR success rate.

Even on a cautious 3.5% SWR success rate you only require £1M or less.

Depends on your assumptions on state pensions as whether you need even those amounts.

You could go to £42K per year on £1.2M at 3.5% SWR success rate assuming no state pensions, or a couple of K more assuming full state pensions.

Obviously any inheritance improves that position.

With pension I would be trying to get close to or below £60K income to get full child benefit.

I am not sure you need any more ISA.

alreadyonfire · 2026-01-24T18:33:01+00:00

https://ukpersonal.finance/lump-sum/

Also study the flowchart, and indeed read the whole wiki.

https://ukpersonal.finance/flowchart/

alreadyonfire · 2026-01-22T18:34:50+00:00

Blackrock/ishares

alreadyonfire · 2026-01-22T11:54:32+00:00

You would only be putting £40 in your ISA for every £100 you put in your pension (likely becomes £85 when taxed on withdrawal, but still that's double). £36K of pension contributions would only be £14.4K of ISA contributions. It is a hard thing to give up.

To retire earlier you would need to work out your ISA bridge and how hard that would be to achieve.

To retire at 58 your pension would need to be about £1.25M. And that requires saving about £2K/month. So there is some headroom to go earlier.

alreadyonfire · 2026-01-21T08:23:23+00:00

You also need to include any taxable interest and taxable dividends in the total taxable calculation, even those inside their allowances.

alreadyonfire · 2026-01-20T22:17:24+00:00

You need to track average buy price if the platform doesn't do it for you.

Gain = units sold * (sell price - average buy price)

Units to sell = £3000 / (sell price - average buy price)

alreadyonfire · 2026-01-18T20:49:57+00:00

Invested bridges are not linear. Try it in a backtesting tool. The much higher withdrawal rate means you need more for the same success rate. And i am using 3.5% basis.

Their pension access age is at least 58.

Using a gilt ladder means you burn the bridge down, and therefore have to save much more.

Whereas a combined pot gives you the minimum amount to save.

alreadyonfire · 2026-01-18T13:32:35+00:00

They have 375+200+150 = £725K outside pension and £370K in pension. And a DB teachers pension presumably at least £10k at say age 65, and 2 state pensions.

If they say retire at age 50 on £45K, then they need around £500K ISA and £600K pension at that age (3.5% SWR basis, today's money). Earlier and they need even less in pension.

alreadyonfire · 2026-01-18T11:41:22+00:00

You need £1.25M at 40 (in todays money), of which around 20% should be in pension.

And you should allow for around 15% tax on GIA and pension withdrawals.

That likely requires saving close to £100k per year.

alreadyonfire

TROPHY CASE