[Misc] Retirement

[Eric the meek]

What's also surprised me is how I've changed habits a little. We still have reasonably expensive mid-week breaks and meals out but when I go for a walk now I don't tend to add in a pub lunch and a few beers, opting more for some en-route snacks, enjoyed sat on a bench with a great view seems so much better, and then maybe grab a pint or not on the way home. A Sunday walk, with lunch for two, and a bottle of wine, could be upwards of £70, whereas now it's a packed lunch of my favourite things and a beer in The King's on the way home.

Yes agreed.

Another thing that has occurred to me, probably due more to Covid than retirement, is that we have changed our shopping habits. Rather than one big shop at Tesco, we now get it delivered. This means that we buy exactly what we want on our list, and don't get lured by the 'end of aisle bargains'. We get our fruit and veg from the Falmer farm shop as well. It lasts longer than the Tesco stuff and has that elusive quality called flavour.

 

[Weststander]

That statement is both true and false. I'll explain.

Around 20 years ago, well before today's regulated, compliance landscape, my sister-in-law worked for Lucas Rists in Accrington, who made the wiring harnesses for Land Rovers. She had a guaranteed, defined benefit DB pension, with employer contributions.

One day, we were talking and she came out with 'company pensions are rubbish'. I asked why she thought that. Long story short, she was trying to justify a decision she and her colleagues had made. Someone had spoken to the staff, and persuaded them all to give up their DB pensions, and take out his recommended DC pension instead, which of course was not guaranteed, and came sans employer contributions. She didn't understand that she had exchanged a guaranteed pension for one that was not guaranteed, voluntarily taken a pay cut, was paying front loaded commission, and had downgraded her pension's ability to grow for the rest of its life. I suspect the salesman (or possibly an IFA), was invited in by the company management. It would have been a relatively simple way to cut staff costs.

To them, it was almost certainly presented as 'free advice', but was quite possibly the most expensive advice I've ever come across.

Shocking and commonplace. The company also at a stroke removed all their DB scheme funding risks and there’s also a form of DC scheme where trustees aren’t required.

I know different and equally disgusting moves by IFA’s who were mates with employers.

One was the IFA ‘forgot’ what the “I” stood for. Almost all his new and renewal business was with Scottish Equitable, he became a wealthy man.

I totted up all the ers and ees contributions into a DC scheme from 1988 to about 2008, as well as redirected midband NIC contributions (contracted out of SERPS) and some tax relief paid by HMRC into the pot. The total matched the scheme value! So zero growth in 20 years, in real terms a huge loss to everyone. Digging also worked out the average AMC equated to 2.75% to 5%, think about the compound effect of that.

The inquisitive ‘trouble maker’, me, was not liked by the twattish duo who worked in tandem over the 20 years.

 

[Dawn Korus]

This is all really interesting stuff. I've just turned 51 and been with the same employer for 32 years. Have 3 different pensions with them as things changed by them over the years. 22 are Final salary and the other 2 average based pay pots. Getting to that age where pensions suddenly start to feel real

I'm now sitting here feeling like I'm going to be wasting the next 4 years before any chance of taking my pension - is that common wishing your working life away?.

The big wrestle for me is if I take it at 55 I lose 5% for every year I take it under 60. The dilemma is losing 25% but getting 5 extra retirement years.

 

[Paulie Gualtieri]

Mine doesn't go up to 92.5. I intend to die in Las Vegas, with a pile of coke and hookers aged 86. I've always been ambitious.

BTW, I absolutely agree with your bit about 'it's what you've got left'. That resonated with me!

Edit: I've just realised that reads like I want 86 year old hookers....

A logistical nightmare, unless the power of attorney is also present at the hotel?

 

[jakarta]

Pay off your mortgage and bang as much into your pension as you can while you are still fit and able.

Happily Mortgage paid off & I'm coming to the end of fit & able due to the nature of the site work I have done for the past 35 years.

We should be comfortable if not rich and I never saw the need to be rich, it doesn't seem to make you any happier...

 

[Marshy]

Enjoy your retirement

 

[Eric the meek]

Heads up for those hitting their 50s and thinking of retiring - the minimum age at which you can take a personal pension, is due to rise from 55 to 57 in 2028. I don't know the exact date.

https://www.pensionbee.com/pensions-explained/pension-rules/pensions-age

 

[A mex eyecan]

I haven’t yet paid mortgage off, for one reason.

It’s only a small amount and had about 3 years left to clear.

As I owned my business, so in effect employed myself.

I worked out how much my monthly mortgage actually cost gross, ie my personal tax paid, my NI paid and the employers NI cost to the company/me PA. I decided to stop paying through salary and instead to open another pension for the other half and paid in the full gross amount. The mortgage went interest only at 1.5%.

After 3 and a tad years her pension valued at approx double what the outstanding mortgage balance is, and continues to grow at a rate greater than the interest rate on the fixed rate of 1.5% mortgage payments.

I appreciate i was fortunate enough to be a position to do that, but boy I’m glad I did.

Until the balance of growth V’s interest rate paid tilts to be unfavourable I intend to leave things just as they are. Well unless the mortgage company decide they won’t extend the term any longer.

 

[Weststander]

I haven’t yet paid mortgage off, for one reason.

It’s only a small amount and had about 3 years left to clear.

As I owned my business, so in effect employed myself.

I worked out how much my monthly mortgage actually cost gross, ie my personal tax paid, my NI paid and the employers NI cost to the company/me PA. I decided to stop paying through salary and instead to open another pension for the other half and paid in the full gross amount. The mortgage went interest only at 1.5%.

After 3 and a tad years her pension valued at approx double what the outstanding mortgage balance is, and continues to grow at a rate greater than the interest rate on the fixed rate of 1.5% mortgage payments.

I appreciate i was fortunate enough to be a position to do that, but boy I’m glad I did.

Until the balance of growth V’s interest rate paid tilts to be unfavourable I intend to leave things just as they are. Well unless the mortgage company decide they won’t extend the term any longer.

Similarly, why make extra inroads into a mortgage charging 0.74% interest, when SIPP’s / ISA’s invested well in the medium/long term to build enough capital surpass that?

 

[A mex eyecan]

Similarly, why make extra inroads into a mortgage charging 0.74% interest, when SIPP’s / ISA’s invested well in the medium/long term to build enough capital surpass that?

This thread is interesting as to how many ways there are to maximise what you’ve got.

I’m not savvy enough to feel comfortable with Sipps, so I trust my advisors, who have delivered me decent (in my opinion) results and steered my right (in the main) over many years. I’m sure that if I had used Sipps and done things myself I could perhaps made bigger returns, but likewise I could just as well lost a fortune on making poor calls.

So, even though retired I intend to pay them their charges and hope they continue to see me right, and I can sleep peacefully in my bed.

 

[Weststander]

This thread is interesting as to how many ways there are to maximise what you’ve got.

I’m not savvy enough to feel comfortable with Sipps, so I trust my advisors, who have delivered me decent (in my opinion) results and steered my right (in the main) over many years. I’m sure that if I had used Sipps and done things myself I could perhaps made bigger returns, but likewise I could just as well lost a fortune on making poor calls.

So, even though retired I intend to pay them their charges and hope they continue to see me right, and I can sleep peacefully in my bed.

Apart from investing in ‘dog funds’ which are easily avoided with a bit of research, I sometimes wonder if over the longer term it all evens out.

I had well known local wealth managers overseeing my SIPP, when added both types of cost (theirs and the underlying funds) I established 1.75% a year was lost before a penny was made. The funds of funds they invested in were ….. were run by them, but by the back door with a portal based 200 miles away. But really all local to here.

I took over, sometimes I outstrip them and feel smart, then they catch up and vice versa.

So, I wonder instead if it’s simply best to invest in one of the Vanguard life choice funds plugged by many on here in the past? Steady growth, nothing amazing, won’t let you down. I haven’t yet.

Interestingly if you read the money pages of eg the Telegraph, their outside experts for a few years have heavily favoured funds or investment trusts such as by Baillie Gifford. The growth has been astonishing. Delving down, much of it is in Tesla, Google’s parent, Zoom etc. But in the last 6 months there’s been a huge correction and hit. Their experts rarely plugged steady Vanguard type investments.

Showing there’s no such thing as a free lunch?

 

[Springal]

So, I wonder instead if it’s simply best to invest in one of the Vanguard life choice funds plugged by many on here in the past? Steady growth, nothing amazing, won’t let you down. I haven’t yet.

Interestingly if you read the money pages of eg the Telegraph, their outside experts for a few years have heavily favoured funds or investment trusts such as by Baillie Gifford. The growth has been astonishing. Delving down, much of it is in Tesla, Google’s parent, Zoom etc. But in the last 6 months there’s been a huge correction and hit. Their experts rarely plugged steady Vanguard type investments.

Showing there’s no such thing as a free lunch?

Re my earlier post my private pension is with vanguard and it has performed a bit better than expected in its first year but should be at its ‘riskiest’ investment wise with 22 years left to go. But still feel like I’d like something a bit riskier / higher growth for a bit.

I did find Evestor recently which looks interesting

 

[dazzer6666]

This thread is interesting as to how many ways there are to maximise what you’ve got.

I’m not savvy enough to feel comfortable with Sipps, so I trust my advisors, who have delivered me decent (in my opinion) results and steered my right (in the main) over many years. I’m sure that if I had used Sipps and done things myself I could perhaps made bigger returns, but likewise I could just as well lost a fortune on making poor calls.

So, even though retired I intend to pay them their charges and hope they continue to see me right, and I can sleep peacefully in my bed.

A SIPP is just the vehicle, you can have the investments within it managed professionally

 

[raymondo]

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.

Brilliant post, good suggestions

 

[raymondo]

This is all really interesting stuff. I've just turned 51 and been with the same employer for 32 years. Have 3 different pensions with them as things changed by them over the years. 22 are Final salary and the other 2 average based pay pots. Getting to that age where pensions suddenly start to feel real

I'm now sitting here feeling like I'm going to be wasting the next 4 years before any chance of taking my pension - is that common wishing your working life away?.

The big wrestle for me is if I take it at 55 I lose 5% for every year I take it under 60. The dilemma is losing 25% but getting 5 extra retirement years.

Work out a compromise you feel happy with, as best you can. I took my company pension at about 52 years (cos I could those 15 years ago) - I did my sums and figured out I could survive even though the pension was reduced. Then, after an 18 month break, I got bored and took a part time job that I enjoyed...for 9 years!! It more than compensated for my loss in pension. So, have a broad base plan but things can evolve organically for you as they did for me.

 

[jakarta]

But still feel like I’d like something a bit riskier / higher growth for a bit.

3.20 at Kempton Park?

 

[Dawn Korus]

Work out a compromise you feel happy with, as best you can. I took my company pension at about 52 years (cos I could those 15 years ago) - I did my sums and figured out I could survive even though the pension was reduced. Then, after an 18 month break, I got bored and took a part time job that I enjoyed...for 9 years!! It more than compensated for my loss in pension. So, have a broad base plan but things can evolve organically for you as they did for me.

Thanks, thought provoking

 

[Tim Over Whelmed]

Yes agreed.

Another thing that has occurred to me, probably due more to Covid than retirement, is that we have changed our shopping habits. Rather than one big shop at Tesco, we now get it delivered. This means that we buy exactly what we want on our list, and don't get lured by the 'end of aisle bargains'. We get our fruit and veg from the Falmer farm shop as well. It lasts longer than the Tesco stuff and has that elusive quality called flavour.

Agree, and in a similar move, we've stopped buying as much supermarket meat and buying less but better quality meat from Charlie's Farm Shop over here near Bury.

 

[Tim Over Whelmed]

This is all really interesting stuff. I've just turned 51 and been with the same employer for 32 years. Have 3 different pensions with them as things changed by them over the years. 22 are Final salary and the other 2 average based pay pots. Getting to that age where pensions suddenly start to feel real

I'm now sitting here feeling like I'm going to be wasting the next 4 years before any chance of taking my pension - is that common wishing your working life away?.

The big wrestle for me is if I take it at 55 I lose 5% for every year I take it under 60. The dilemma is losing 25% but getting 5 extra retirement years.

I spent the year before retirement planning and preparing for it, I didn't know when I was actually retiring I just started to explore what it would be like and what I could do, it made me feel so much better.

 

[Sirnormangall]

Apart from investing in ‘dog funds’ which are easily avoided with a bit of research, I sometimes wonder if over the longer term it all evens out.

I had well known local wealth managers overseeing my SIPP, when added both types of cost (theirs and the underlying funds) I established 1.75% a year was lost before a penny was made. The funds of funds they invested in were ….. were run by them, but by the back door with a portal based 200 miles away. But really all local to here.

I took over, sometimes I outstrip them and feel smart, then they catch up and vice versa.

So, I wonder instead if it’s simply best to invest in one of the Vanguard life choice funds plugged by many on here in the past? Steady growth, nothing amazing, won’t let you down. I haven’t yet.

Interestingly if you read the money pages of eg the Telegraph, their outside experts for a few years have heavily favoured funds or investment trusts such as by Baillie Gifford. The growth has been astonishing. Delving down, much of it is in Tesla, Google’s parent, Zoom etc. But in the last 6 months there’s been a huge correction and hit. Their experts rarely plugged steady Vanguard type investments.

Showing there’s no such thing as a free lunch?

I agree. Very difficult to pick an “active” fund that consistently beats its benchmark and statistically most active funds underperform. Fund of funds introduce layers of cost, so I finally settled for low cost passive index trackers in my SIPP and overall I pay around 1% p.a. Including advice.