[Misc] Retirement

[Weststander]

This is a great thread that I'm working my way through slowly. It's possible this question has been covered, and if so, I apologise. Unfortunately I can't search for "IFA" as 3-letter searches don't work.

We retired last year. After 25 years of careful financial management, we're very lucky to be comfortably off -- nice house, mortgage paid off + a decent amount in SIPP and savings and investments.

I've always made my own investment decisions (based on little apart from reading a couple of books plus the investment news in the papers) but thinking about the current volatility in the markets, I'm wondering if I should get some proper advice. I basically took fright and sold most of my investments over the weekend. I'm now wondering if I overreacted. Whether I did or not, I'm wondering if these decisions should be handed over to an IFA or wealth management professional.

What are people's experiences of IFAs? My main fear is that they'd just be doing roughly what I'd be doing, but creaming off a big chunk of cash in fees every year. OTOH, I'd have no objection to paying X amount per year if they were earning me twice what I would have done had I carried on making my own decisions.

My concern is that I don't have much of a strategy. TBH, no strategy at all. Has an IFA helped you a lot, taking into account how much they charge?

Thanks for any insight.

Edited to add -- I see that IFA advice has just been asked by @Mellor 3 Ward 4. The overlap is purely coincidental. It wasn't there when I started writing this!

After discovering that a popular firm of Sussex based wealth managers were costing me 1.95% per annum (not the headline 1%), I moved funds to manage my own. It’s gone well.

I’d say take your time to make the right decision, in the mean time earning a safe 5% with for example Royal London Short Term Money Market Fund Y Acc
GB00B8XYYQ86

It wasn’t straight forward to cotton on to the additional 0.95% cost. With that experience, perhaps look into the IFA recommendations made in this thread, then examine the small print such as platform charges.

 

[Birdie Boy]

Pension Bee is one option that equates to what I said earlier - essentially putting it all in a tracker fund….their charges are quite low (economies of scale) and their funds are all properly managed by blue-chip companies but you won’t get any advice from them.

Think you def need to get advice as I suspect your tax situation alone needs to be managed if you’re outside the UK. As before, most IFAs will give you a free initial consultation

At present my tax situation is that I am working tax free as I'm in Saudi Arabia but that may complicate things, I'm not sure...

 

[dazzer6666]

At present my tax situation is that I am working tax free as I'm in Saudi Arabia but that may complicate things, I'm not sure...

Don’t know……..would definitely have a chat with an IFA……

 

[el punal]

This 'retirement' thing is quite easy.
Just dropped off Mrs AR in Marlow for afternoon tea with her friend.
Then I'm off down for a long walk down the Thames.
Marvellous

A long walk down the Thames? You Jesus or summat? The next thing you’ll be getting a couple of bottles of Evian water and turning them into Côtes du Rhône!

 

[AmexRuislip]

A long walk down the Thames? You Jesus or summat? The next thing you’ll be getting a couple of bottles of Evian water and turning them into Côtes du Rhône!

Well you know, when in Marlow

 

[phoenix]

or better still, just turn off data while you are out of the house and that way the phone continues to work without all of the o

or better still, just turn off data while you are out of the house and that way the phone continues to work without all of the other distractions.

I Thought the idea was to not have any distractions at all except if he had a emergency so he could turn it back on again.

 

[LamieRobertson]

Same. I really like what I do and the idea of not doing it and having days with little to do fills me with dread. I have some way to go before I am of retirement age. I do not mind doing less days, maybe just a 3 day week, but I need real purpose in my life.

Yes i can relate to some of that ……unfortunately even though i qualify for state pension next year, i have no private pension (though a healthy ISA income) and being in a shared ownership situation next years joy of making the final instalment on the mortgage , is offset by the fact that I’ll only own a portion of the house and will be paying rent for the rest of my life on the balance and also responsible for the whole house re repairs….hence I’ll have to continue working into the foreseeable…basically until the body says no more (remember the old yellow pages advert for a gardener?) However, still working gives purpose/structure to the day ..opportunity to meet people if you r a billy no mates like me etc …..ideally 3 days, allowing time and energy for the grandkids whom i adore and pursing hobbies and the odd away game.

 

[Jim in the West]

Same. I really like what I do and the idea of not doing it and having days with little to do fills me with dread. I have some way to go before I am of retirement age. I do not mind doing less days, maybe just a 3 day week, but I need real purpose in my life.

Great that you enjoy what you do....and likewise, I dread having days with little to do. I retired from a pretty stressful job 6 years ago. Initially I did a Non-Exec role for four years to ease myself in, but have been "properly" retired for two years now. But I still Chair a small NGO, am a Parish Councillor in our village and have loads of projects on the go (one of which is learning Greek, which takes up quite a bit of time, as my memory is crap these days!).

I no longer earn a salary, but fortunately have a reasonable pension. The good thing about voluntary roles (the ones I do, anyway) is that most of the time I choose when I work. I'm still often answering emails and writing reports early in the morning or late evening....but that's because I've gone for a swim, or been up at the allotment during the day. Or like yesterday, I popped up to London to sort something out for one of our daughters.

My advice would be (a) ease yourself into retirement [your idea of going down to three days/week is ideal], and (b) find a few causes you believe in and volunteer - that will probably give you more of a sense of purpose than your paid employment.

 

[Doonhamer7]

This is a great thread that I'm working my way through slowly. It's possible this question has been covered, and if so, I apologise. Unfortunately I can't search for "IFA" as 3-letter searches don't work.

We retired last year. After 25 years of careful financial management, we're very lucky to be comfortably off -- nice house, mortgage paid off + a decent amount in SIPP and savings and investments.

I've always made my own investment decisions (based on little apart from reading a couple of books plus the investment news in the papers) but thinking about the current volatility in the markets, I'm wondering if I should get some proper advice. I basically took fright and sold most of my investments over the weekend. I'm now wondering if I overreacted. Whether I did or not, I'm wondering if these decisions should be handed over to an IFA or wealth management professional.

What are people's experiences of IFAs? My main fear is that they'd just be doing roughly what I'd be doing, but creaming off a big chunk of cash in fees every year. OTOH, I'd have no objection to paying X amount per year if they were earning me twice what I would have done had I carried on making my own decisions.

My concern is that I don't have much of a strategy. TBH, no strategy at all. Has an IFA helped you a lot, taking into account how much they charge?

Thanks for any insight.

Edited to add -- I see that IFA advice has just been asked by @Mellor 3 Ward 4. The overlap is purely coincidental. It wasn't there when I started writing this!

I was the same but decided my knowledgeable amateur (read much on finance, watched many YouTube articles but still felt I was ok) needed an upgrade to a professional. I had chats with 4 IFAs and chose the one that suited us. After great all round advice on what to do to maximise our position, moved DC pension out of company system (had too few funds), using up unused pension amounts for last 3 years, maximised using capital gains tax on company shares, ISAs, etc etc. we then moved into ‘wealth management‘ and yes I pay 0.5% fee per year but if they make 0.6% better than me then I make money. Didn’t go to to IFAs who wanted 1.5-2% fee.

so yes IFA appears in my mind a good move

 

[nevergoagain]

At present my tax situation is that I am working tax free as I'm in Saudi Arabia but that may complicate things, I'm not sure...

Assume that will impact your NI contributions for when/if you return?. I know they had an offer to buy into missing/incomplete years but believe that's passed now not sure but if there's an option to catch up (if you need to of course) then worth exploring.

 

[Professor Plum]

Assume that will impact your NI contributions for when/if you return?. I know they had an offer to buy into missing/incomplete years but believe that's passed now not sure but if there's an option to catch up (if you need to of course) then worth exploring.

The deadline was extended and I think is still available.

Important — if you’re working overseas you should pay your annual NI contribution each year. It’s actually very cheap compared with the cost of living/working in the UK. When I enquired it was only about £150 a year. This is an absolute bargain as it will help ensure you get maximum state pension.

 

[dazzer6666]

Great that you enjoy what you do....and likewise, I dread having days with little to do. I retired from a pretty stressful job 6 years ago. Initially I did a Non-Exec role for four years to ease myself in, but have been "properly" retired for two years now. But I still Chair a small NGO, am a Parish Councillor in our village and have loads of projects on the go (one of which is learning Greek, which takes up quite a bit of time, as my memory is crap these days!).

I no longer earn a salary, but fortunately have a reasonable pension. The good thing about voluntary roles (the ones I do, anyway) is that most of the time I choose when I work. I'm still often answering emails and writing reports early in the morning or late evening....but that's because I've gone for a swim, or been up at the allotment during the day. Or like yesterday, I popped up to London to sort something out for one of our daughters.

My advice would be (a) ease yourself into retirement [your idea of going down to three days/week is ideal], and (b) find a few causes you believe in and volunteer - that will probably give you more of a sense of purpose than your paid employment.

The volunteering bit works really well for me too……I started when I was still working but knew I’d be finishing within a year or so. Was initially thinking of looking for paid NED work so thought doing something voluntary would be a good start to get some experience but soon decided the voluntary role was far more rewarding than anything I’ve done before so have simply expanded my involvement there instead. Started as a trustee but now vice chair of the trustee board and a school governor, and on multiple committees (it’s a residential school for severely disabled children). It’s fairly flexible (meetings get organised around our availability), we have a nice group of trustees and governors and a great leadership team in the organisation and even though I went into it knowing little or nothing about health, social care or education I am constantly surprised about the transferability of some of the knowledge I have into that environment.

 

[AZ Gull]

The deadline was extended and I think is still available.

Important — if you’re working overseas you should pay your annual NI contribution each year. It’s actually very cheap compared with the cost of living/working in the UK. When I enquired it was only about £150 a year. This is an absolute bargain as it will help ensure you get maximum state pension.

I happened to look into this when I was back in the UK at Christmas time. It would cost me £824.20 per year going back to 2006-07 (I believe self-employed individuals would pay a smaller amount).

 

[alanfp]

Pension Bee is one option that equates to what I said earlier - essentially putting it all in a tracker fund….their charges are quite low (economies of scale)

I suggest check their fees and transfer costs carefully. Typically every time you transfer funds from one provider to another there will be a commission of some kind to be paid (by you, of course). So my gut reaction would be to leave things with the existing providers unless there is a clear advantage in transferring.
Their advertising seemed to concentrate on people's desire for simplicity rather than saying their fees were lower or their performance better. So if you're capable of reading 5 statements a year and adding up 5 numbers.....

 

[Doonhamer7]

I happened to look into this when I was back in the UK at Christmas time. It would cost me £824.20 per year going back to 2006-07 (I believe self-employed individuals would pay a smaller amount).

I think Martin Lewis said it is one of the best investments you can make

 

[alanfp]

I happened to look into this when I was back in the UK at Christmas time. It would cost me £824.20 per year going back to 2006-07 (I believe self-employed individuals would pay a smaller amount).

I think that £824 gets you about £328 p.a. (but I believe this is gross, not nett). You do the math.
Or go here

https://www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions/

(but I don't think this calculator takes account of the extra tax you will end up paying if your total income is above your personal allowance).

Apologies if I've got any of the detail wrong, but it is my understanding of what I can find from the official HM Govt's info.

 

[Seagull58]

Yes, it is quite scary when you put all that together and everyone must do what they think best, dependent on their timescale and attitude to risk. The last few days have made me a wee bit queasy, and at 76, I haven’t got a particularly long time horizon, but I am sticking with it for all the reasons I have stated before and we also depend on the tax free dividends in our ISA portfolios, so in the wise ? words of us Albion fans, I am keeping the faith. I hope that faith will be rewarded! I did take the opportunity of cashing in a large percentage of my Polar Capital Technology holding a few years back when they rocketed and I’m pleased I did.

Polar Cap is still up 26% in the last 12 months despite being down 15% in the last month.

 

[Triggaaar]

It’s great that you are fit and wealthy enough to do all this. I wonder what the equivalent thread on Middlesbrough’s chat room talks about…….

The great tour of British riots

 

[Seagull58]

At present my tax situation is that I am working tax free as I'm in Saudi Arabia but that may complicate things, I'm not sure...

One option, which I took, was to move my pension pot offshore into a QROPS (qualifying retirement overseas pension scheme). I believe you can move a SIPP offshore now without having to convert to a QROPS. You can still pay into a SIPP or QROPS when non-resident in the UK. I pay 2.5% tax on the pension income.
You can keep existing ISAs but you don't get the tax-free benefits and you can't buy any new ones.

 

[Seagull58]

Don’t know……..would definitely have a chat with an IFA……

Make sure it's an IFA that is knowledgeable about being non-resident in the UK.