[Misc] Retirement

[HalfaSeatOn]

May be on equity release it is when you take it out? The people we know have done it in their 70’s. It’s still appealing as tackles the asset rich, cash poor dilemma.

 

[HalfaSeatOn]

Reading here in envy as have 20 years before I hit sixty

Mortgage will be gone if not overpaid on my 60th, have around £9k per annum (index linked) previous final salary pension and putting away £12K a year into a new pension (current pot £40k) for me plus the wife’s c4k per annum.

No idea what the state pension will look like when our time comes

Might be the time now to ensure we are on the right track and seek the view of an IFA as have no intention what so ever of working beyond my state retirement age (67), ideally wrapped up before

I’m envious of you. You have more of the best asset of all. Time.

 

[Since1982]

I’m a bit of a nerd with managing our household expenses and therefore was able to make estimates of the income we needed in retirement using a fair few years of financial records - it’s largely proved to be fairly accurate over the last four years. It’s a really important part of planning for stopping work. Our drawdown income is more than the £30k others have mentioned. I don’t believe we have a particularly extravagant lifestyle other than spending over £4k per annum on private healthcare which will eventually prove unsustainable but proves the point about knowing what your real expenses will be.

 

[London Irish]

Reading here in envy as have 20 years before I hit sixty

Mortgage will be gone if not overpaid on my 60th, have around £9k per annum (index linked) previous final salary pension and putting away £12K a year into a new pension (current pot £40k) for me plus the wife’s c4k per annum.

No idea what the state pension will look like when our time comes

Might be the time now to ensure we are on the right track and seek the view of an IFA as have no intention what so ever of working beyond my state retirement age (67), ideally wrapped up before

You sound way better off re. progress than many your age I reckon!

 

[mikeyjh]

Hopefully………! I consider myself very lucky. I’m not well educated and sort of fell into a career that turned out ok and happened to pay reasonably well, plus we never got into the ‘keeping up with the Joneses’ stuff that is absolutely rife in banking, leading to ridiculous spending, huge mortgages (and often costly divorces). Also had kids relatively young so all the big commitments fell away which made stopping work viable.

Absolutely. I remember when I paid off my mortgage at 40ish one of my associates at a similar level at work was stunned. He still had a huge Mortgage and couldn't understand how his kids at Public school, Brand new very flash cars for him and his Mrs every two years and multiple Caribbean holidays at exclusive resorts and Skiing holidays in USA/Canada had effected his ability to do likewise

This and this - Drove me nuts when I gave up (at 47) that people thought it would be a struggle and somehow we'd been lucky (in fairness we were blessed in being paid well) but we have friends who spend up to £30k a year on holidays on lesser salaries, I think they're mental but heyho, each to their own. We've enjoyed ourselves, gone a few decent holidays each year but gone to Lanzarote or wherever for £1,500. Got obsessed with paying off the (modest) mortgage, from there it's kind of easy.

To Dazzer's earlier post, I think lots of long haul travel helps on that front, buggered if I can be bothered with a long haul flight for pleasure!!

 

[£1.99]

I think i really need to see a financial advisor as i have less then 2 years before i will be able to receive my state pension .
But after being lied to by my Lloyds bank manager when i applied for a loan in 2007 and he insisted i take out PPI which i am happy to say i got back, I have lost trust in the financial industry that they will only be looking after there own interests and not mine!

 

[A mex eyecan]

I think i really need to see a financial advisor as i have less then 2 years before i will be able to receive my state pension .
But after being lied to by my Lloyds bank manager when i applied for a loan in 2007 and he insisted i take out PPI which i am happy to say i got back, I have lost trust in the financial industry that they will only be looking after there own interests and not mine!

and there’s the big dilemma, finding a GOOD IFA, who you can trust. Always remember back in the 80’s financial melt downs public notices in the Arsegas had FA’s in significant numbers going bust personally! If they couldn’t look after their own finances they darn sure weren’t best positioned to look after other peoples.

Do your research, ask other people who they use, are they satisfied with what they do for them, and are the financial results satisfactory. Don’t just take the first one mentioned to you….

 

[Weststander]

I’m a bit of a nerd with managing our household expenses and therefore was able to make estimates of the income we needed in retirement using a fair few years of financial records - it’s largely proved to be fairly accurate over the last four years. It’s a really important part of planning for stopping work. Our drawdown income is more than the £30k others have mentioned. I don’t believe we have a particularly extravagant lifestyle other than spending over £4k per annum on private healthcare which will eventually prove unsustainable but proves the point about knowing what your real expenses will be.

Are you both in good health and don’t really claim on the health insurance?

If so, self insuring by sticking the £4k in a separate savings account I think can be a good idea. It’ll soon mount up and might rarely be touched.

My 80+ year old Dad just had a full knee replacement with the physio sessions afterwards, £15k all in, including all the consultations. Just as an example of costs.

No need to worry about cancer treatment. Even during this pandemic, the NHS have provided very fast and effective care in prostate, skin and bowel issues in that area to close ones.

 

[thedonkeycentrehalf]

21 months to go. (Not that I’m counting down the days) Then I’ll probably get a PT job a couple of days a week, can’t wait.

Unless you really are incredibly young looking for you age would I be right in assuming that is a fairly early retirement and from a final salary pension?

 

[Eric the meek]

An IFA I knew a long time ago, said that ideally, you want to equalise your income in retirement with your wife, so that you maximise the efficiency of both your tax allowances. Good advice I thought.

Mind you, the same IFA advised me to sell a pension with Standard Life, and buy a new one with Aviva. I asked him how much his charges were, and he said, 'oh it's all in the paperwork'. That night, I went through the paperwork, and despite it being well-disguised, I found his charges would have amounted to about 10k, for transferring a 108k pension pot.

After that, he and I went our separate ways.

 

[Bodian]

I assume you're in the Arundel area going by your avatar? But, if you're in Brighton, or Hove actually, or somewhere nearby, PM me and I can get you involved in organised kick-abouts. I'm 66 and play proper football three times a week.
I also retired at 60 years old. Where the last six years have gone is a complete mystery. It's gone in a flash.
Initially, it was really strange, waking up when I woke up - no alarm clock any more, then wondering what to do. Once I sorted out a new routine, which took about three months, I've not looked back.
I look after a couple of friends' gardens, and generally just take my time doing all the things I used to have to cram in to a busy week. It's all about being content in your mind.
The best advice I was given is that you don't have to do anything. I used to think I had to be doing something, but you don't.
I've done a bit of volunteer work for Butterfly Conservation, including building huge bonfires and tree planting.
I just sloth around gently. It's great. I'm back on the French learning, I do a crossword every day and generally just enjoy doing not much. It is an art though, and I can understand people that might struggle having worked all their lives and then suddenly stop.
Hope you sort yourself out a new routine and enjoy yourself.

And you've got your camera.

Camera + Lightroom - and time seems to just vanish...

 

[Springal]

Good thread - I’ve been spending some time on this last few years despite being in 30s. Work pension is quite good in terms of contribution (9%+9%) Despite being PAYE, I’ve had additional tax due 3 out of last 4 years due to having a heavily commissioned job and generally being a higher rate tax payer and not paying enough attention to tax codings.

The last 3 years I’ve generally invested in a private pension to the amount to off-set my tax bill which has given me a healthy pot in a short space of time and now opened my eyes to what it could look like in 20 years with only moderate growth and further investment.

Did look at some IFAs but never felt confident with any recommended, or the one I did was retiring himself in 5 years and wasn’t taking new clients on except for one off advice.

Would definitely say to anyone in their 20s-30s as difficult as it is to consider something like this for any excess cash they have

 

[Paulie Gualtieri]

16K p.a. for the next 20 years is 320K. If that is being invested sensibly you should have around 400K to 500K in the pot in 20 years time. State pension will be around 1000 per month in today's money so around 1,300 to 1500, possibly.

Thanks

 

[Paulie Gualtieri]

I’m envious of you. You have more of the best asset of all. Time.

Good point!

 

[Since1982]

Are you both in good health and don’t really claim on the health insurance?

If so, self insuring by sticking the £4k in a separate savings account I think can be a good idea. It’ll soon mount up and might rarely be touched.

My 80+ year old Dad just had a full knee replacement with the physio sessions afterwards, £15k all in, including all the consultations. Just as an example of costs.

No need to worry about cancer treatment. Even during this pandemic, the NHS have provided very fast and effective care in prostate, skin and bowel issues in that area to close ones.

Very specific health issues for both of us, would love to have good health! I spent three decades in the insurance industry, so far it’s a fair deal for both of us but that balance will tip soon. And it's a point well made.

 

[Eric the meek]

Good thread - I’ve been spending some time on this last few years despite being in 30s. Work pension is quite good in terms of contribution (9%+9%) Despite being PAYE, I’ve had additional tax due 3 out of last 4 years due to having a heavily commissioned job and generally being a higher rate tax payer and not paying enough attention to tax codings.

The last 3 years I’ve generally invested in a private pension to the amount to off-set my tax bill which has given me a healthy pot in a short space of time and now opened my eyes to what it could look like in 20 years with only moderate growth and further investment.

Did look at some IFAs but never felt confident with any recommended, or the one I did was retiring himself in 5 years and wasn’t taking new clients on except for one off advice.

Would definitely say to anyone in their 20s-30s as difficult as it is to consider something like this for any excess cash they have

Why do you need an IFA? They are expensive, and offer no service you can't do yourself. I ditched them long ago.

A work pension is always constrained by the Trustees' desire to return their members' capital, so contributions are put into safe havens, where the risk is low, but so are the rewards. Being in your 30s, you've got the time to get hold of that pension pot yourself, transfer it into your own SIPP, and truly diversify your investments by sector, region, risk, industry, growth/income, active/passive, capitalisation etc, rather than be stuck in the funds your pension scheme trustees would prefer you to invest in.

 

[Jack Straw]

I’m envious of you. You have more of the best asset of all. Time.

Remember - There is no present like the time.

 

[dazzer6666]

Why do you need an IFA? They are expensive, and offer no service you can't do yourself. I ditched them long ago.

A work pension is always constrained by the Trustees' desire to return their members' capital, so contributions are put into safe havens, where the risk is low, but so are the rewards. Being in your 30s, you've got the time to get hold of that pension pot yourself, transfer it into your own SIPP, and truly diversify your investments by sector, region, risk, industry, growth/income, active/passive, capitalisation etc, rather than be stuck in the funds your pension scheme trustees would prefer you to invest in.

Not sure I agree…….but if anyone has sufficient time, knowledge and experience to confidently manage everything then fair enough. Personally, I need help and I don’t mind either admitting it or paying for it, as a mistake could be hugely expensive (and I worked in banking for 36 years, and regulatory compliance for the last 20 or so). Also, if you want to cash in a DB pension you absolutely do have to have an IFA. If you don’t understand investing, how do you securely and safely diversify ? How do assess risk ?

-my SIPP is managed independently
-I have two other DC pots that remain with my employer’s schemes, but where I can choose the investments (within reason). These are low cost
-I manage our ISAs and other savings……mostly successfully but naturally including a few punts that haven’t been so good

Issues for me, and where an IFA has been helpful, include :

-how to manage a range of pension pots with differing rules and restrictions to ensure an overall balance of risk and reward
-how to maximise income and growth from those pensions relative to expected drawdown timing and amounts
-how to manage drawdown from my various sources to maximise tax efficiency
-how to structure things from an IHT perspective
-how to manage pension pots to limit the effect of the lifetime allowance
-how to write wills to minimise tax liability and protect certain dependents

It’s ****ing complicated !

 

[essbee1]

I’m envious of you. You have more of the best asset of all. Time.

For me, post of the year. Thanks. We only live on this planet for a limited time. Make the most of the
time we (you have).

 

[banjo]

Unless you really are incredibly young looking for you age would I be right in assuming that is a fairly early retirement and from a final salary pension?

Good genes. a small FS pension plus my pension I have now, company shares all help. I’ll be 58 so hence a part time job for a couple of years till I reach 60. mortgage will be paid off next year. As mentioned on here, don’t think you need as much money as you think to take the plunge.