[Misc] Retirement

Arkwright · Feb 16, 2025

Sirnormangall said:
I sort of retired about 8 years ago, but found that I missed work (a bit) so got a part time job that I really enjoyed. My free time now far outweighs my working hours, so I have a lot of fun doing what I want (subject to spousal approval of course!) and also having an enjoyable part time job. So, if you get the right balance,don’t worry too much about continuing to work.

I know you are right, somehow I just need to get the right work, play balance.
I work for a small local company and the boss has struggled to find the right staff and has become very reliant on me.
I know for my sanity I need to drop my working hours.
Money has never been my king so I should be OK.

Tim Over Whelmed · Feb 16, 2025

Arkwright said:
I know you are right, somehow I just need to get the right work, play balance.
I work for a small local company and the boss has struggled to find the right staff and has become very reliant on me.
I know for my sanity I need to drop my working hours.
Money has never been my king so I should be OK.

Maybe if he’s so reliant on you, you could offer to commit, on reduced hours, for a set length of time, in return for some equity, giving you a nice little pension boost in the future.

If they say no, you may feel the “need / commitment” is a bit one sided?

Arkwright · Feb 16, 2025

Tim Over Whelmed said:
Maybe if he’s so reliant on you, you could offer to commit, on reduced hours, for a set length of time, in return for some equity, giving you a nice little pension boost in the future.

If they say no, you may feel the “need / commitment” is a bit one sided?

Nice idea, however the business is up for sale. We do have a potential buyer who is aware of my requirements to reduce my working hours.
I'm hoping to find out this week. My current boss is a lovely bloke but very driven by his own greed.
I'm fairly confident that it will work out.
I'm also hoping that Nurse Gladys will be able to drop some working hour's this year and we can ease ourselves into retirement over the next four / five years.

Tim Over Whelmed · Monday at 12:57 AM

Arkwright said:
Nice idea, however the business is up for sale. We do have a potential buyer who is aware of my requirements to reduce my working hours.
I'm hoping to find out this week. My current boss is a lovely bloke but very driven by his own greed.
I'm fairly confident that it will work out.
I'm also hoping that Nurse Gladys will be able to drop some working hour's this year and we can ease ourselves into retirement over the next four / five years.

Maybe there’s an opportunity with the acquirer?

North of Robertsbridge · Monday at 8:42 AM

Arkwright said:
Probably got a fund of about £200k which if I divide by the years I might have left isn't a lot per annum

The good news is that it doesn't work like that

If you retired today you'd have a pension "pot" of £200K which you'll invest with a pension provider. Assuming you don't want to take an immediate tax-free lump sum (say to pay off a mortgage or buy a car), then that can be expected at current rates of return to generate an ongoing annual drawdown income of around £10K, rising slightly each year for inflation (OK, an advisor would probably quote 4% or £8K/year, but that's a bit conservative)

So you'd have £10K a year, typically in monthly payments, of which 25% would be tax-free, and £7,500 taxed - leaving scope for another £5K of annual income before you pay any income tax at all.

And then at some point your state pension will kick in

As you say, you still have some time to add to your pot, especially if you can "sacrifice" a decent percentage of your gross earnings.

You'd need to find a pension provider that would provide that tax/un-taxed pension arrangement (I have one with Standard Life that works like that). That's something that an independent financial advisor can help you identify

Talking of financial advisors, it is certainly a good idea to get initial advice and recommendations about approach and choice of pension provider for your funds post-retirement. However, I would hesitate to enter into any arrangement that hands over a percentage of your pension savings to an advisor. Maybe pay for an occasional one-off review to confirm that you are still on course

banjo · Monday at 9:06 AM

I’m taking just below the tax threshold and re investing £2880 back into my pension saving pot, that gets topped up to £3600 which I didn’t realise. So FA’s are worth using. I’m on a medium risk investment wise which returned me just shy of £20k.

dazzer6666 · Monday at 9:49 AM

North of Robertsbridge said:
The good news is that it doesn't work like that

If you retired today you'd have a pension "pot" of £200K which you'll invest with a pension provider. Assuming you don't want to take an immediate tax-free lump sum (say to pay off a mortgage or buy a car), then that can be expected at current rates of return to generate an ongoing annual drawdown income of around £10K, rising slightly each year for inflation (OK, an advisor would probably quote 4% or £8K/year, but that's a bit conservative)

So you'd have £10K a year, typically in monthly payments, of which 25% would be tax-free, and £7,500 taxed - leaving scope for another £5K of annual income before you pay any income tax at all.

And then at some point your state pension will kick in

As you say, you still have some time to add to your pot, especially if you can "sacrifice" a decent percentage of your gross earnings.

You'd need to find a pension provider that would provide that tax/un-taxed pension arrangement (I have one with Standard Life that works like that). That's something that an independent financial advisor can help you identify

Talking of financial advisors, it is certainly a good idea to get initial advice and recommendations about approach and choice of pension provider for your funds post-retirement. However, I would hesitate to enter into any arrangement that hands over a percentage of your pension savings to an advisor. Maybe pay for an occasional one-off review to confirm that you are still on course

Would also add that delaying the drawdown (for example if still working PT and don’t need the income) means the pot will continue to grow, with compound growth.

A mex eyecan · Monday at 11:10 AM

dazzer6666 said:
Would also add that delaying the drawdown (for example if still working PT and don’t need the income) means the pot will continue to grow, with compound growth.

isn’t that minuscule amount and don’t you have to live a fair few years to get back what you’ve missed out on though?

SkirlieWirlie · Monday at 12:53 PM

North of Robertsbridge said:
Talking of financial advisors, it is certainly a good idea to get initial advice and recommendations about approach and choice of pension provider for your funds post-retirement. However, I would hesitate to enter into any arrangement that hands over a percentage of your pension savings to an advisor. Maybe pay for an occasional one-off review to confirm that you are still on course

100% this. Unless your finances are complex, the need for an ongoing retainer with a FA has a significant impact on savings. Binned mine off after realising this a few years back and engage when needed as and when things change. Used to get a visit once a year, shiny report on how well my pension was doing (or not). Definitely felt trying to demonstrate value for the significant fee they were skimming off, when the reality was that nothing was changing year to year that needed that kind of spend with them.

And to be clear, I'm not saying independent financial advice is not worthwhile, it is, when you want to set out a plan, but once the plan is in place, unless something changes, no need for the ongoing cost year after year after year.

dazzer6666 · Monday at 1:07 PM

SkirlieWirlie said:
100% this. Unless your finances are complex, the need for an ongoing retainer with a FA has a significant impact on savings. Binned mine off after realising this a few years back and engage when needed as and when things change. Used to get a visit once a year, shiny report on how well my pension was doing (or not). Definitely felt trying to demonstrate value for the significant fee they were skimming off, when the reality was that nothing was changing year to year that needed that kind of spend with them.

And to be clear, I'm not saying independent financial advice is not worthwhile, it is, when you want to set out a plan, but once the plan is in place, unless something changes, no need for the ongoing cost year after year after year.

As always, this is dependent on many factors - it's not as black and white.

SkirlieWirlie · Monday at 1:44 PM

dazzer6666 said:
As always, this is dependent on many factors - it's not as black and white.

Yes agreed, hence my caveat around complexity or circumstances changing. If situation is relatively straightforward then little value (imo) in regular meetings to discuss same old thing year after year at considerable cost.

North of Robertsbridge · Monday at 4:56 PM

And if you want to get into pension recycling, as someone posted earlier, you'll want a good FA to crunch your numbers, as the tax penalty for exceeding the allowed limits is 70%

dazzer6666 · Monday at 5:37 PM

A mex eyecan said:
isn’t that minuscule amount and don’t you have to live a fair few years to get back what you’ve missed out on though?

Not really…..compounding accelerates.

Tim Over Whelmed · Thursday at 9:41 AM

On the subject of pensions I closely monitor the performance of my pensions in Scottish Widows, St James's Place, Dubai Property Fund & Smart Pension and one does better than the others from time to time but overall they do well. What surprises me is the rapidity of movement between the top and the bottom. By the way, at the moment, Dubai (8.34% YTD), Scottish Widows (4.4%), SJPP (3.76%) & Smart (2.69%).

Blue&WhiteSea · Thursday at 9:54 AM

I'm currently a big fan of passive investing with low cost global index ETFs so I have my SIPP in the vanguard all world fund which has a 4.78%YTD with a fee of just 0.22%, combined with the low £90 p/a fees from fidelity it seems pretty good value.

Would welcome arguements against though to counter the echo chamber of my usual information sources!

Tim Over Whelmed · Thursday at 10:21 AM

With all these ideas and knowledge we should meet up and have a Q & A session, ..... oh, and a beer!

dazzer6666 · Thursday at 12:08 PM

Blue&WhiteSea said:
I'm currently a big fan of passive investing with low cost global index ETFs so I have my SIPP in the vanguard all world fund which has a 4.78%YTD with a fee of just 0.22%, combined with the low £90 p/a fees from fidelity it seems pretty good value.

Would welcome arguements against though to counter the echo chamber of my usual information sources!

2025 to date

SJP - 3.95%
AL - 4.75%
ISA - 6.89%

Overall around 80% of the above in global equities (ex UK), AL has the highest UK element, my ISA has the highest risk profile

knocky1 · Thursday at 12:13 PM

The investment YTD returns are good reading for me with 10.38% across ISA (12.6%), SIIP and Portfolio.
My FA is a friend since school and giving him 0.5% on top of other commissions was a choice I made after messing about with my own share selections for years.
An example of my investments was Thomas Cook where I trebled my £18,000 and then lost the £54,000 when they went bust.
Very happy with FA's returns but as a friend will try and renogiate the commission to 0.25% as my stuff in my retirement year is now straightforward and he has FA to do. Definitely will not fall out over it. I can go elsewhere and he can tell me to go elsewhere.

serendipity · Thursday at 12:17 PM

Very late to this one. Everyone is in a different situation. My advice would be retire as soon as you have the option to do so. I know that it is a big step, but I can't believe the number of deaths that I have heard of, from my circle of friends, colleagues etc. about people that we knew, that had died at a much younger age then I am currently am (68). This includes one former Olympian that died before reaching 50. Saying that, I am still working, but that just involves sending a few emails, a few times a week, from my Spanish base. As long as that continues, I don't have to think about accessing my pension/savings. Really just continuing for the kids/grandkids but getting in a lot of travel, as well. Get to see all Albion games, live on DAZN. It isn't the same!

Tim Over Whelmed · Thursday at 12:41 PM

I agree, you don't need as much as you think and ultimately you'll discover sooner, or later, that you can't buy time.

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