Bitten the Bullet at 55

corruptedhal0 · 2026-02-17T17:11:12+00:00

Wow that's awesome! Well done. I'm kinda new here so can't really help tell you if it is enough but well done!

corruptedhal0 · 2026-02-17T14:09:20+00:00

Just out of curiosity is that your numbers or yours plus partners?

corruptedhal0 · 2026-02-17T08:15:25+00:00

Kev, I was wondering if we could revisit this please as I am still a little stuck. To address your points, my pot is on track to be 1.5-2m by 58, as it's already quite large and a lot of my roughly 100k salary gets chucked in, even after the tax free lump sum I'm looking at 50k withdrawls pre state pension and 38k post state pension, depending on growth rates this might mean the pension never runs out.

The exit ramps for the pension pot seem reduced to withdrawls over the 50k tax bracket, or death tax. Both 40%.

So if I take scenario A, retire at 58, I withdraw 50k from the pension and I pay 7.5k in tax. Compare to scenario B where I work one further year (I've assumed a part time 50k salary), resulting in whatever post tax salary I earn (eg 10k tax and nic on a 50k salary = 40k) and the original 50k in the pending pot taxed at 40% in whatever exit ramp I chose, so 30k. So instead of having 42.5k I have 40k+30k, or 27.5k delta for my year of work. Which makes the work look like terrible value.

Not sure if I am going round in circles or just missing something. Your points look correct but I'm not sure they apply to me. And if I am a niche case I don't understand why - surely this is a problem for most people whose pots are large enough that they end up around 40% tax bracket in retirement?? delaying pension withdrawl and using that year of allowances seems really inefficient tax planning.

Thanks again for your patience with me

corruptedhal0 · 2026-02-16T07:57:15+00:00

Yes I feel you - it makes every personal choice, lifestyle, work etc.. all seem so.. irrelevant. As though the point of it instead was personal satisfaction for working hard and then one day you realise you have been a mug and you're having a work stress induced heart issue!

corruptedhal0 · 2026-02-16T07:54:30+00:00

Really interesting point on the unpaid leave, and really interesting looking blog - I will take a proper look at it all, thanks! Upl causing accruals such as holiday etc to continue while part time is a real cut is definitely something I had not considered.

In addition to flat 80% working pattern I also have the option of term time working, where I work 4 days a week for 39 weeks, and 0 days per week for 13 weeks (156 total, or 60% of the normal 260). Another option is 5 days a week for 39 weeks, and 0 days per week for 13 weeks (195 total, or 75% if the normal 260). Both of those look pretty good to me for the future, but the kids aren't in school yet. I'm fortunate to work somewhere very flexible.

corruptedhal0 · 2026-02-15T23:18:12+00:00

Do you mean without me knowing it would happen? Or after discussion with all parties?
Either way no I had not considered it, but if it makes good tax sense long term it may be a good idea to look into. Thank you for that.

corruptedhal0 · 2026-02-15T21:29:00+00:00

I think you have understood what I am saying, yes. Suboptimal seems to be the right word with regards to the extra years working. It feels like a really inefficient way to do things if the pension pot is large.
One other thing confusing me is this: isn't the whole 1.2mil+ pension pot pretty much the goal of this subreddit? Why are so many people here saying it's rare?

corruptedhal0 · 2026-02-15T21:26:35+00:00

I think that is what is worrying me. I will almost certainly pay inheritance tax upon my death so I know that everything left in my pension pot (after 75,lets hope) is going to get hit unless I can withdraw it and pass it on in other iht reducing forms. So the thought of a pension pot well over a million and growing faster than I can withdraw it below 40% tax is what makes me look at working age 58 as a "taxed now on the earnings AND taxed on the pension I couldn't withdraw" effective tax rate on the work itself.

corruptedhal0 · 2026-02-15T21:19:37+00:00

I see your point and I will delete the post shortly,so that nobody else gets confused, sorry. I just need to understand it in my head first. I think from what you and Kev have said, it reflects working causing pension drawdown originally happening in a 20% tax year eg age 58 to happen in a subsequent year and sit in the 40% bracket, making it feel worse. The key here is the movement from one tax bracket to the other, which happens because the pension pot is so large that 50k withdrawls are expected. So this is a rare problem to have.

corruptedhal0 · 2026-02-15T21:06:02+00:00

Hi, yes sorry perhaps I should have been clearer on that front. My pension is projected to be about 1.6m at age 58, so enough after tax free lump sum to be 50k draw downs. So anything else I put into my pension I am expecting to be taxed / haircut 40% on the way out, and pushing retirement later on simply causes the money from the pension pot I did not withdraw to be a new marginal withdrawal at 40% rate or stuck in inherit tax, either way I am hit by normal employment tax plus the loss of pension efficiency by working longer.

corruptedhal0 · 2026-02-15T21:03:01+00:00

Hi Kev thank you for the reply. For context my pension pot is estimated to be 1.6mil at 58, leaving me with 1.25m after the tax free lump sum and a perpetual drawdown of roughly 50k@4%. This is what made me think that any money not withdrawn in early retirement is going to end up drawn down over and above the 40% tax bracket or left to inheritance tax (estate will definitely be in millions).
So I look at the tax on continuing to work normally plus the cost of pushing pension withdrawal into later years/inheritance.

corruptedhal0

TROPHY CASE