[Misc] Retirement

[dazzer6666]

Nail on the head there, as I highlighted above in the quote. getting over the mental hurdle of starting to run down your savings.

This is a big hurdle and one I (meaning my wife) still struggles with. There is no point in saving for a lifetime for your retirement and then not spending it.
I have found that the actually monthly income needed for day to day living is not actually that great, being mortgage free.
To try and simplify things work out your simple day to day living costs and then see if your savings can cover the rest, holdays etc. for the next 10 or 20 years. You will probably be happy enough to just potter around and not be bothered spending too much by the time you reach 75.

My wife and I are both on full state pension and find this adequate for our daily needs including a couple of small holidays per year. The rest is bonus.

Spot on…….took a bit more thought and maybe a bigger spreadsheet at 54 but no regrets at all so far. Have had numerous discussions with colleagues of a similar age who jumped ship at the same time, all struggled with the same issue to some degree, and not a single one has wished they’d stayed working. I also think you’re right re 75 - that contributed hugely to my decision. I didn’t dislike my job, and the easy option would have been to carry on but when you’re employed, your time isn’t your own regardless of how flexible your employer is. We decided that having that precious time whilst we’re still well enough to actually enjoy it and do stuff was far more important than accumulating money for no particular reason. You can’t buy time - once it’s passed, it’s gone. Happy to forgo material possessions to have more of it.

 

[Weststander]

Spot on…….took a bit more thought and maybe a bigger spreadsheet at 54 but no regrets at all so far. Have had numerous discussions with colleagues of a similar age who jumped ship at the same time, all struggled with the same issue to some degree, and not a single one has wished they’d stayed working. I also think you’re right re 75 - that contributed hugely to my decision. I didn’t dislike my job, and the easy option would have been to carry on but when you’re employed, your time isn’t your own regardless of how flexible your employer is. We decided that having that precious time whilst we’re still well enough to actually enjoy it and do stuff was far more important than accumulating money for no particular reason. You can’t buy time - once it’s passed, it’s gone. Happy to forgo material possessions to have more of it.

Was commuting/the much longer day in having to do it, part of your overall thinking on precious time?

 

[dazzer6666]

Was commuting/the much longer day in having to do it, part of your overall thinking on precious time?

Made absolutely no difference at all. I worked from home a lot anyway (days weren’t any shorter, the commuting time was spent on Zoom), and didn’t mind the commute that much.

 

[Zeberdi]

It sounds like you may be his nearest living family, so the risk is that if he needs to go into care, the cost of that could eat up all bar about £14k of his net worth including putting a lien on his property to pay for his care after he eventually passes. This has just happened to my mum who had a severe stroke a year ago and since March has been living in a care home at £5k pcm. All her savings and premium bonds have gone now and if dad dies before her, they'll have the £600k house too.

A despicable situation most of us have seen grandparents or parents go through and will be facing ourselves too

Some changes coming in next year but dont see how it really helps anyone unless they are on benefits or dont own their own property -

Adult social care charging reform: further details

www.gov.uk

 

[Cheshire Cat]

If you have a physical illness the NHS treat it for free, often very well.

If you have a mental illness like dementia, the NHS and Adult Social Care regard it as a lifestyle choice, make no attempt to treat it, and fleece you for every penny.

 

[Harry Wilson's tackle]

I think there’s often a tendency to over-complicate it, but obviously some care is needed. In simple terms I started with a budget - ie listing all living costs, then added a separate bit for other discretionary things like holidays, car changes and house maintenance etc - all of which together gave me a rough annual income requirement. Against that, obviously tot up your income - pensions, investment returns, investment growth etc - the two don’t necessarily need to balance out (I found psychologically getting over the mental hurdle of starting to run down your savings a big step) but it’ll give you a reasonable idea of whether your pot + pension income is sufficient. This is where seeing a financial adviser will help to be honest - any decent one will have tools to help refine the calculations and projections - but there are several online calculators that you can put your numbers into that help. Most IFAs will give you an initial free consultation, and there may be some merit in them looking at your old pensions as they may not be the most efficient setup for you In their current state.

I had a chat recently with someone (IFA) recommended by a poster on NCS (sensible lad). The IFA said 'all looks jubbley, and don't crack open all your tax free allowance'. Since my main thing is to crack open my lump sum to get my lad on the property ladder, and it took me 24 seconds to work out I'd need to live another 15 years (unlikely) before the amount lost on my annual pension would exceed the amount lost by taking the max lump sum, I thought 'f*** it. I will do what I need to do when I need to do it'.

As it happens, work has been taken over by the worst type of do-rights, and I will be out the moment it appears that by retiring I will cause the fuckers the most amount of difficulty.

 

[dazzer6666]

I had a chat recently with someone (IFA) recommended by a poster on NCS (sensible lad). The IFA said 'all looks jubbley, and don't crack open all your tax free allowance'. Since my main thing is to crack open my lump sum to get my lad on the property ladder, and it took me 24 seconds to work out I'd need to live another 15 years (unlikely) before the amount lost on my annual pension would exceed the amount lost by taking the max lump sum, I thought 'f*** it. I will do what I need to do when I need to do it'.

As it happens, work has been taken over by the worst type of do-rights, and I will be out the moment it appears that by retiring I will cause the fuckers the most amount of difficulty.

 

[jakarta]

The Government is now mulling over bringing forward the date at which state pension only kicks in at age 68.

After having a state pension age of 65 when I started work, it was changed to 67 and now - depending on the specific timeframe change decided on - it looks likely to be 68.

Slavers.

Was told by my IFA years ago not to think of the State Pension as being anything except a (small) bonus as he could see what was coming.

Hence I have been piling in to my Private Pension Pot for 20 or so years!

 

[Weststander]

I had a chat recently with someone (IFA) recommended by a poster on NCS (sensible lad). The IFA said 'all looks jubbley, and don't crack open all your tax free allowance'. Since my main thing is to crack open my lump sum to get my lad on the property ladder, and it took me 24 seconds to work out I'd need to live another 15 years (unlikely) before the amount lost on my annual pension would exceed the amount lost by taking the max lump sum, I thought 'f*** it. I will do what I need to do when I need to do it'.

As it happens, work has been taken over by the worst type of do-rights, and I will be out the moment it appears that by retiring I will cause the fuckers the most amount of difficulty.

Based on the pension value you mentioned on nsc somewhere not too long ago, I think you’ll be fine. Sticking with the defined benefit route or the more risky alternative.

I love that mischievous last bit . Revenge is a dish best served cold.

 

[Eric the meek]

Was told by my IFA years ago not to think of the State Pension as being anything except a (small) bonus as he could see what was coming.

Hence I have been piling in to my Private Pension Pot for 20 or so years!

I confess I haven't listened to much of what IFAs have told me over the years (I shared this information once on here and @dazzer6666 quite correctly scolded me ). But one thing I did listen to, was 'ask yourself this question':

'Do you trust future governments to provide for you in your old age?'.

Put like that, it brings a clarity to the whole thing. You make your own luck and your own wealth. Don't rely on the kindness of strangers.

 

[Arkwright]

I'm sixty next year, my boss has just put the company up for sale so my working future looks a bit bleak. Hoping to get a bit of redundancy.
Got a pension pot of about £200k, plus a small pension from Surrey County Council worth about £150 pm.
Has anyone taken out an Equity Release? My wife I have no children and my intention is to blow the lot.
I've never been a big earner and reckon £20k per annum would be sufficient. Does this sound about right?

 

[Weststander]

I'm sixty next year, my boss has just put the company up for sale so my working future looks a bit bleak. Hoping to get a bit of redundancy.
Got a pension pot of about £200k, plus a small pension from Surrey County Council worth about £150 pm.
Has anyone taken out an Equity Release? My wife I have no children and my intention is to blow the lot.
I've never been a big earner and reckon £20k per annum would be sufficient. Does this sound about right?

If you can, try to work at least part time up until state pension age, health and happiness permitting.

It’s sometimes said (in the UK) that drawing 3.5% annually of the capital is a sound strategy that should see it last. £200k x 3.5% = £7k a year from the pot.

I looked into equity release ‘for a friend’ and it’s not a good time due to interest rates just now.

Hopefully your wife has some pensions too.

 

[dazzer6666]

I'm sixty next year, my boss has just put the company up for sale so my working future looks a bit bleak. Hoping to get a bit of redundancy.
Got a pension pot of about £200k, plus a small pension from Surrey County Council worth about £150 pm.
Has anyone taken out an Equity Release? My wife I have no children and my intention is to blow the lot.
I've never been a big earner and reckon £20k per annum would be sufficient. Does this sound about right?

It’s worth listing all your outgoings so you have a clear idea of what you need to ‘exist’…….then you can think about discretionary spending….£20k doesn’t sound unreasonable though for a couple living pretty sensibly. There are a lot of free help guides and calculators online that can help you work out what you need too. If you both have full NI contributions, your state pensions will be almost 20k pa anyway. Here’s an example calculator - https://www.abrdn.com/en-gb/personal/retirement/retirement-advice

I agree with @Weststander - equity release isn’t good value. Added to that you’re not really old enough to make it properly viable.

Plenty of available options around your pension pot including accessing it now (either as income or taking a tax free lump sum, or a combination of the two) to help bridge the gap until your state pensions kick in if you do stop work - wouldn’t do anything without speaking to an IFA though who will guid you through the options, calculations and implication.

 

[Weststander]

Equity release … here’s an unbiased calculator from the debt charity Step Change.

https://www.stepchange.org/how-we-help/equity-release-calculator.aspx

(Almost all the other weblinks are trying to get your business).

 

[jakarta]

Tax Free Lump Sum getting cashed in next year for an Arctic Cruise and a 350LC Yamaha (I will need a toy)

We have no kids, all our residual cash when we shuffle off will go to Mrs Jakartas Goddaughter & Family in Aussie Land so why the f*** not?

 

[A mex eyecan]

I'm sixty next year, my boss has just put the company up for sale so my working future looks a bit bleak. Hoping to get a bit of redundancy.
Got a pension pot of about £200k, plus a small pension from Surrey County Council worth about £150 pm.
Has anyone taken out an Equity Release? My wife I have no children and my intention is to blow the lot.
I've never been a big earner and reckon £20k per annum would be sufficient. Does this sound about right?

If your boss sells the company you have to be taken on by new owners, your contract and terms must remain at least as good as they are now. Otherwise if the new owners do not want to keep staff then have to make redundancies but based on your start date with the old owners and not when the new ones completed the purchase.

 

[Arkwright]

Many thanks all for your advise, once my work situation is clearer I will sit down with my IFA.
I wouldn't take out Equity Release until my cash starts running low but it's an option worth exploring.
It's all a hard decision but with age I'm starting to hate work, it should be get easier with age and experience but my workplace isn't an enjoyable atmosphere and the cloud of a potential sale casts even more doubt.

 

[sparkie]

Tax Free Lump Sum getting cashed in next year for an Arctic Cruise and a 350LC Yamaha (I will need a toy)

We have no kids, all our residual cash when we shuffle off will go to Mrs Jakartas Goddaughter & Family in Aussie Land so why the f*** not?

Under 8 months to wait now until my Lump Sum drawdown hits my bank account. Can't wait. Bread and Water and little fun until then, but a holiday once the cash is in seems a good idea.

 

[Cheshire Cat]

Many thanks all for your advise, once my work situation is clearer I will sit down with my IFA.
I wouldn't take out Equity Release until my cash starts running low but it's an option worth exploring.
It's all a hard decision but with age I'm starting to hate work, it should be get easier with age and experience but my workplace it's an enjoyable atmosphere and the cloud of a potential sale casts even more doubt.

Don't forget to allow for inflation. However much you are likely to need now will look very different in 10 or 20 years.

 

[Tim Over Whelmed]

Interestingly very few people talk about taking out an annuity, less popular now? I have a pension pot but have also been piling cash into ISAs, makes so much sense now, tax free interest will support the pension pot, which I'll invest and draw down as required. Haven't taken the lump sum yet and not sure when I will.