[Misc] Retirement

[Triggaaar]

I really should see an IFA. I'm not sure that putting the pot on a game of football is sensible planning.

 

[Doonhamer7]

General consensus is to halve your age and put that much as a % into your "pot" (so if you're 40, then 20% of your salary into it).
Personally I'd say put as much as you can into it if you want to go before state pension age.
Also, pension advisors may set up your pension income as "£x for life" but in reality there will be phases to your retired life and you will need more money at the start (if going before SPA).
As a rough guide (and there are many other schools of thought) say you retire at 60 and you need/want £30k a year, you will need your pension to fund all of this until you're 67/68, after that the state pension means you only need to take £23k. After a certain age (I'm thinking 75) you won't want to do big holidays, you may give up your car (free bus pass, remember), probably go out less etc so your needs reduce to around £25k, which will be £16k from private pension and £9k from SP. After about 85 you wan't need nearly as much, say £20k
Adding it all up:
8 years @ 30k = 240k
8 years @ 23k = 184k
10 years @ 16k = 160k
10 years at 11k = 110k

So you're looking at a "pot" of around 700k.
Obviously everyone's different and if you're married then your spouse's pension(s) count too

Mrs H (59) and I(61) have a combined income of £26k from our pensions and we live comfortably on that (no mortgage/rent) but we have to dip in to our savings from time to time to pay for holidays etc. We take about £3-4k a year out which is pretty much what we planned for.
We have enough put by to cover things like replacing the car and house repairs.

What this doesn’t take into account is your pension (if under good mgt) should be increasing by 3+% a year above inflation so you’ll need a smaller fund and as Warren Buffett says - the 8th wonder of the world is compound interest

 

[LamieRobertson]

I think you need to set up a lifetime interest trust.

Without me googling…..what are they

 

[LamieRobertson]

I really should see an IFA. I'm not sure that putting the pot on a game of football is sensible planning.

My £2 on Bournemouth at 8/1 was amazing planning….until I decided on a double with Brighton beating Liverpool on similar odds

 

[A mex eyecan]

Without me googling…..what are they

my understanding is that you change your wills that when the first of a married couple dies that their 50% ownership of a house is left into a trust for other beneficiaries, eg children, grandchildren. The remainder is owned by spouse. Should the spouse then need care then the state can only take 50% of the house value, the other 50% is owned by the children and GC’s.

Or something similar to that anyhow

 

[LamieRobertson]

my understanding is that you change your wills that when the first of a married couple dies that their 50% ownership of a house is left into a trust for other beneficiaries, eg children, grandchildren. The remainder is owned by spouse. Should the spouse then need care then the state can only take 50% of the house value, the other 50% is owned by the children and GC’s.

Or something similar to that anyhow

Thank you

 

[Triggaaar]

Which? recently surveyed 5,200 retirees and semi-retirees, the average spend results were as follows. Remember that tax is paid out of income above £12,570 per person and therefore on top of these spending numbers eg to give the £44k. The first table includes tax.

View attachment 180349

View attachment 180350

Luxury of £912 a year for a couple on Alcohol. £17.54 per week for 2 people is luxury?

 

[timbha]

Luxury of £912 a year for a couple on Alcohol. £17.54 per week for 2 people is luxury?

Not everyone drinks alcohol

 

[dazzer6666]

Without me googling…..what are they

The LIT is an inherent clause in the will (which will usually be mirror wills), it’s not a separate thing that needs to be established. Wills ideally need to be rewritten at the same time the property ownership is switched to TIC.

Had a quick scoot online - don‘t know the firm at all, but for anyone interested their guidance page is very helpful.

Life interest trust | Winston Solicitors UK

Life interest trusts allow a person to benefit from a share in a property without actually legally owning that share in the property.

www.winstonsolicitors.co.uk

 

[dazzer6666]

Luxury of £912 a year for a couple on Alcohol. £17.54 per week for 2 people is luxury?

They’re all averages……..we don’t have private medical insurance so all that goes on booze as well

 

[Doonhamer7]

Which? recently surveyed 5,200 retirees and semi-retirees, the average spend results were as follows. Remember that tax is paid out of income above £12,570 per person and therefore on top of these spending numbers eg to give the £44k. The first table includes tax.

View attachment 180349

View attachment 180350

Missed this back in April and now the answer to how the f do you get to this level of spend now makes sense. I don’t know anyone giving £1k in charity donations, these people need to get on money comparison sites for broadband / phone, I won’t be having private medical insurance, what is health?, presents don’t top £1k at present (and I think we’re generous), just did Canada for 2 weeks and it didn’t cost £6k

 

[Weststander]

Missed this back in April and now the answer to how the f do you get to this level of spend now makes sense. I don’t know anyone giving £1k in charity donations, these people need to get on money comparison sites for broadband / phone, I won’t be having private medical insurance, what is health?, presents don’t top £1k at present (and I think we’re generous), just did Canada for 2 weeks and it didn’t cost £6k

I’m not so sure that I agree with the heavily publicised PLSA post-tax figures for retirement, for a couple:
£43k moderate
£59k comfortable

I suspect this very generously covered all bases and some.

With no mortgage/rent, groceries just for two, that’s a lot of money.

I’d prefer to work down outgoings in order of magnitude eg groceries, council tax, home energy, car running, water meterage. Do many 70, 75 and 80 year olds buy new cars on finance?

 

[dazzer6666]

Missed this back in April and now the answer to how the f do you get to this level of spend now makes sense. I don’t know anyone giving £1k in charity donations, these people need to get on money comparison sites for broadband / phone, I won’t be having private medical insurance, what is health?, presents don’t top £1k at present (and I think we’re generous), just did Canada for 2 weeks and it didn’t cost £6k

That’s the problem with generalising this type of thing - the final result will apply to virtually no-one. We spend way less than £43k on day to day living, but our trip to Canada last year cost about £30k. I change my car about every 5-6 years on average. BUPA quoted me £600/mth to continue my company coverage when I retired. **** that !

 

[North of Robertsbridge]

BUPA quoted me £600/mth to continue my company coverage when I retired. **** that !

PPP quoted similar, 4x what I was paying them the previous month for family cover as an employee.

 

[CheeseRolls]

I’m not so sure that I agree with the heavily publicised PLSA post-tax figures for retirement, for a couple:
£43k moderate
£59k comfortable

I suspect this very generously covered all bases and some.

With no mortgage/rent, groceries just for two, that’s a lot of money.

I’d prefer to work down outgoings in order of magnitude eg groceries, council tax, home energy, car running, water meterage. Do many 70, 75 and 80 year olds buy new cars on finance?

I think these figures include the occasional big ticket items.
Car purchase, Replacement windows, replacement kitchen etc.

As you get older you are also less likely to be up a ladder painting, fixing roofs etc. You might go out less, but there are also areas where you will need to pay for things you may do yourself at a younger age.

Then there is the risk of long term care at any age.

 

[albionalba]

I just wanted to write something on this post about the universal advantages of continuing to work beyond your state retirement date, provided your health permits. Sorry if covered before - I couldn't see anything much from this perspective. Perhaps there should be a 'not retiring' thread:

1. You can continue to pay into a pension scheme with the same tax advantages
2. You don't pay any employee NI contributions - you could pay these savings into your pension. It also probably means you have paid your lifetime dues to NHS etc so you are not a drain on services.
3. Your employer does pay employer NI contributions so (in addition to the tax you pay) you are further helping society by continuing to work. You will help even more after the latest budget! All nice if you have kids and grandkids too because they are benefitting.
4. It will probably be better for your mental and physical health generally (though I agree some would challenge that).
5. Yes, you will pay full tax on pension income but again nicer imho to be a contributor than a consumer.
6. The UK is nudging towards and around the statistical definition of 'full employment' so you are unlikely to be taking a job away from anyone.
7. If you are in a job that is useful to society in any way (doctor / teacher / garbage collection / hospitality etc) your expertise and time-served tacit knowledge will benefit all and there will be less shortages in key roles.
8. You still pay the lower 65+ ticket price at the Amex!

The link folk make between state pension eligibility and 'needing' to retire always seems an odd one given there is no legislative requirement for so doing.

 

[Weststander]

I think these figures include the occasional big ticket items.
Car purchase, Replacement windows, replacement kitchen etc.

As you get older you are also less likely to be up a ladder painting, fixing roofs etc. You might go out less, but there are also areas where you will need to pay for things you may do yourself at a younger age.

Then there is the risk of long term care at any age.

Looking at the source data it excludes care, that makes sense, going by nsc retirement cover decades prior to that.

The moderate category includes a £500 annual allowance for home maintenance help, whilst the comfortable category includes a new kitchen/bathroom every 10/15 years.

 

[Weststander]

I just wanted to write something on this post about the universal advantages of continuing to work beyond your state retirement date, provided your health permits. Sorry if covered before - I couldn't see anything much from this perspective. Perhaps there should be a 'not retiring' thread:

1. You can continue to pay into a pension scheme with the same tax advantages
2. You don't pay any employee NI contributions - you could pay these savings into your pension. It also probably means you have paid your lifetime dues to NHS etc so you are not a drain on services.
3. Your employer does pay employer NI contributions so (in addition to the tax you pay) you are further helping society by continuing to work. You will help even more after the latest budget! All nice if you have kids and grandkids too because they are benefitting.
4. It will probably be better for your mental and physical health generally (though I agree some would challenge that).
5. Yes, you will pay full tax on pension income but again nicer imho to be a contributor than a consumer.
6. The UK is nudging towards and around the statistical definition of 'full employment' so you are unlikely to be taking a job away from anyone.
7. If you are in a job that is useful to society in any way (doctor / teacher / garbage collection / hospitality etc) your expertise and time-served tacit knowledge will benefit all and there will be less shortages in key roles.
8. You still pay the lower 65+ ticket price at the Amex!

The link folk make between state pension eligibility and 'needing' to retire always seems an odd one given there is no legislative requirement for so doing.

Imho it very much depends on what you do, what day to day work entails.

If you face any of; work politics/backstabbing/bullying, a horrible commute or constant uncertainty, the lure of retiring when viable is obvious.

Whilst if you enjoy your work, the income, rapport with others and keeping a sharp mind, then carrying on or going part-time makes complete sense.

 

[dstanman]

Just about to go down to 2 days a week from 5. With pension and 2 days pay will be earning more than present and with less stress

 

[Bob!]

I just wanted to write something on this post about the universal advantages of continuing to work beyond your state retirement date, provided your health permits. Sorry if covered before - I couldn't see anything much from this perspective. Perhaps there should be a 'not retiring' thread:

1. You can continue to pay into a pension scheme with the same tax advantages
2. You don't pay any employee NI contributions - you could pay these savings into your pension. It also probably means you have paid your lifetime dues to NHS etc so you are not a drain on services.
3. Your employer does pay employer NI contributions so (in addition to the tax you pay) you are further helping society by continuing to work. You will help even more after the latest budget! All nice if you have kids and grandkids too because they are benefitting.
4. It will probably be better for your mental and physical health generally (though I agree some would challenge that).
5. Yes, you will pay full tax on pension income but again nicer imho to be a contributor than a consumer.
6. The UK is nudging towards and around the statistical definition of 'full employment' so you are unlikely to be taking a job away from anyone.
7. If you are in a job that is useful to society in any way (doctor / teacher / garbage collection / hospitality etc) your expertise and time-served tacit knowledge will benefit all and there will be less shortages in key roles.
8. You still pay the lower 65+ ticket price at the Amex!

The link folk make between state pension eligibility and 'needing' to retire always seems an odd one given there is no legislative requirement for so doing.

Nah.
None of that makes me think I made a poor decision in retiring