Annuity FIRE
Burner account. Just wanting some input on my plan. M55, looking to stop the grind next year and focus on creative interests which could end up not making any £, but even if it does it'll be uneven. So let's assume £0 from that! Meanwhile I have DC pots totalling £500k and a stocks and shares ISA of £40k, plus about £10k in savings. At age 60 I have a small DB of £2.4k kicking in. There is another DB of £6.5k at 63. These are both inflation protected. Full SP to start at 67 (maybe!) My wife (F54) wants to stop work also next year, taking £15k per year from her SIPP (£100k) and ISA (£50k) until her £15k teacher's pension kicks in at 60. She gets another £4k DB at 67 along with full SP. She also plans to do a bit of part-time work maybe. We own our home mortgage-free. Kids grown up and moved out, and we would help them get on the housing ladder in a few years maybe by downsizing.
Basically we are burned out after doing our respective careers for 30+ years.
Now, here is a part I need input on. I am thinking seriously about buying an annuity with £410k of the DC money, to start next year when I finish aged 56. Rates are comparatively very attractive right now, and if I can get near the £29k to £30k I have been quoted, that will do me. That is a flat annuity that does not increase with inflation, so obviously it will be progressively worth less. But that is where the DBs and SP come in, and they are nicely staggered. Taking a flat annuity allows me to maximise what I get now to help bridge what seems like a scary gulf to the SP. Retiring at 56 also means more "go go" years so we get the financial benefit at the right time. (Saying that, we are frugal and do everything on the cheap as much as possible.) £410k is a big amount to hand over, but it would be a weight off my shoulders not to have to worry about markets.
What would you do? The annuity or drawdown? Or put the whole thing off for a few years?