Retirement

[DaveH]

Lad i work with has no mortgage. Single. Kids grown. He has over $1.3m in bank and says he needs another 4-5 years before he can afford to retire.
Guess it depends upon what you plan to do in retirement. If i had what he has i would be typing from home or a beach somewhere. Sadly i don't, so am in Texas!!

In the summer, I’d be quite happy rotating days between being out cycling, doing stuff in my veg garden and working on a project with cheap electronics stuff. That would see me spending next to nowt. £50 on bike parts per year, another £50 on seeds, perhaps as much as £100 on components, could be as low as £10. Not a lot to keep me busy, then food, bills etc.

Others might plan to be out on a yacht every day, sipping champagne. That would be more expensive.

 

[Shandy drinker]

Because I feel like they've taken the piss so I'm doing the same.

From about 1976.

See below.

Probably. I'd forgotten all about it until about 15 years ago when I got a letter from the pension company that they were closing down and transferring my pension to another company. For the next 12 years it stayed at £16 but then gained a massive £2 in the last 3 years. I've left it alone for amusement value really, where else could I get so much entertainment for so little.

1976
I paid into a British shipbuilders one for 6 years from 18 and currently have estimated salary of 8k a year!!

3 belter names on their board Earl Glasgow, George Peebles and Peter Coward

Sounds dodgy

In the summer, I’d be quite happy rotating days between being out cycling, doing stuff in my veg garden and working on a project with cheap electronics stuff. That would see me spending next to nowt. £50 on bike parts per year, another £50 on seeds, perhaps as much as £100 on components, could be as low as £10. Not a lot to keep me busy, then food, bills etc.

Others might plan to be out on a yacht every day, sipping champagne. That would be more expensive.

Not that much more
Yacht at roker marina
Lidl champagne
A proper 9 Bob millionaire

 

[Matt Hopkins]

Wrong on what? That the CETV hasn't fallen by around 40% or that I haven't lost close to that already (with more to come) in real terms?

Are you looking to transfer your DB pension to a DC one? If yes then your value may well have reduced. If no then the CETV is meaningless. All I'd say is if you're not happy or worried about a 40% loss then transferring to a DC will not be for you, even if you found someone who'd do it for you.

 

[3.142]

Are you looking to transfer your DB pension to a DC one? If yes then your value may well have reduced. If no then the CETV is meaningless. All I'd say is if you're not happy or worried about a 40% loss then transferring to a DC will not be for you, even if you found someone who'd do it for you.

I've both a DB and DC and reasonably switched on about finance, investments and pensions. I fully get that DC is volatile, but it's often overlooked that in some circumstances DB can have more downside. High levels of inflation with an annual cap on increases in benefits hasn't been an issue for a long while but it certainly is now. Hopefully we can agree on that at least.

 

[Matt Hopkins]

I've both a DB and DC and reasonably switched on about finance, investments and pensions. I fully get that DC is volatile, but it's often overlooked that in some circumstances DB can have more downside. High levels of inflation with an annual cap on increases in benefits hasn't been an issue for a long while but it certainly is now. Hopefully we can agree on that at least.

Yes. When you have taken the DB then high inflation could affect the spending power. You originally said your DB pension has gone down by 40%, if it's just a normal DB scheme then it just hasn't.
You'll know the DB is a guaranteed payout and that, for the majority of people, is worth it's weight in gold, but as I've said before everyone is different. Good luck with whatever you decide to do

 

[Guitar Man]

I have had a CETV - cash equivalent transfer value from my company for around the past 3 years and roughly it has been anything from double to 3 times the value of what your company pension statement says you have in your pot.
I Have just requested another as i due to be made redundant in January.
A lot of people are unaware they have this option to take a DB pension out of the company scheme for what is life changing amounts of money all be it a gamble once you transfer as your in the hands of investors and markets.
Definitely worth asking for one

Your 3 x CETV valuations over the last 3 years, have they decreased in value every year or are they holding their own ? .

 

[timeforheroes1]

FYI anyone in the. local government scheme the new factors have now been applied to the CETV so they have actually increased quite dramatically from the start of the year

 

[DaveH]

Anyone on here a USS member and use their benefit illustrator?

I’ve been looking at that on and off for a while and I’m convinced it is wrong. Their pension scheme is each year you earn an annual pension of 1/85 of your wage, and that is then added to what you have built up from previous years plus interest. The value they give is always ending in a £10. I think each month they round it down and the cumulative effect of that is a massive difference to what you actually get paid.

 

[The Lads]

I took particular note of my wife’s parents who were very social people- liked holidays, drinks etc. and no their social spending tailed off around 78 years old until her father died.
My point being, I have decided to budget to spend more of my dosh in the earlier years of my (soon) retirement to enjoy it while we can.

 

[ChrisK]

Your 3 x CETV valuations over the last 3 years, have they decreased in value every year or are they holding their own

I have never seen a decrease yet, but I am still employed and contributing member also each years service i put in will have an effect.
Never really took that much notice as my retirement was always a way off, but its coming round fast Now. So be keen to see latest figures

 

[Guitar Man]

I have never seen a decrease yet, but I am still employed and contributing member also each years service i put in will have an effect.
Never really took that much notice as my retirement was always a way off, but its coming round fast Now. So be keen to see latest figures

A few of my mates valuations are down 20 to 30k over the last 3 years .

 

[Town End Farmer Giles]

I took particular note of my wife’s parents who were very social people- liked holidays, drinks etc. and no their social spending tailed off around 78 years old until her father died.
My point being, I have decided to budget to spend more of my dosh in the earlier years of my (soon) retirement to enjoy it while we can.

I'm very much this. Parents, in laws, aunts, uncles etc very very few need a lot of money in their 70's, and the state pension kicking in mean most, even those with relatively small occupational pension, have no financial worries.

 

[GingerNick]

It's hard to predict really, I am 53, my mortgage is paid. So that the biggest outgoing already sorted. My pension will be about 24k a year if I take a smaller lump sum (about 30k). Wife says get the biggest lumper and have a smaller pension. I can trade 1 pound of an annual pension for 12 pounds into the lump sum
Her pension will be about 18k and a big lumper of about 70k

I fully intend to take phased retirement at work when I hit 55,
Got no kids so I fully intend to spend it all before I go

A guy at our place retired two weeks ago at 75, fell at the weekend , and died 8 days after finishing, don't want that to be me!

I am going to just fish all the time until I can't drive!

 

[Hair Flick]

It's hard to predict really, I am 53, my mortgage is paid. So that the biggest outgoing already sorted. My pension will be about 24k a year if I take a smaller lump sum (about 30k). Wife says get the biggest lumper and have a smaller pension. I can trade 1 pound of an annual pension for 12 pounds into the lump sum
Her pension will be about 18k and a big lumper of about 70k

I fully intend to take phased retirement at work when I hit 55,
Got no kids so I fully intend to spend it all before I go

A guy at our place retired two weeks ago at 75, fell at the weekend , and died 8 days after finishing, don't want that to be me!

I am going to just fish all the time until I can't drive!

Your 30k on top of her 70k is giving you a nice joint rainy day / bucket list slush fund of 100k with a decent annual recurring amount 42k between you.

 

[DaveH]

I'm very much this. Parents, in laws, aunts, uncles etc very very few need a lot of money in their 70's, and the state pension kicking in mean most, even those with relatively small occupational pension, have no financial worries.

My general life plan is:
Pay off mortgage at 50/51, perhaps relax funds a little for some fun now, but otherwise invest the mortgage payments into covering retirement
Consider part time/lower grade job at 58.
Retire at 60
60-67 live off private pension and investments (possibly delaying private pension by 2 years if it maximises output)
67-75ish private pension and state pension, plus what is left of investments, used for the more fun activities like holidays
75+ most likely be winding down by then and less likely to spend a lot, so private pension and state pension set to be more than enough.

The main thing is making sure I'm well covered for that period of 15 years from 60, where I can do some of those really big holidays (solar eclipse in central Australia just a few weeks after my 60 birthday, 14 years to go but already checked that one out!). I'd rather compromise on some of them than slogging my guts out till say 64 and then only perhaps having 11 years.

 

[cfg]

My general life plan is:
Pay off mortgage at 50/51, perhaps relax funds a little for some fun now, but otherwise invest the mortgage payments into covering retirement
Consider part time/lower grade job at 58.
Retire at 60
60-67 live off private pension and investments (possibly delaying private pension by 2 years if it maximises output)
67-75ish private pension and state pension, plus what is left of investments, used for the more fun activities like holidays
75+ most likely be winding down by then and less likely to spend a lot, so private pension and state pension set to be more than enough.

The main thing is making sure I'm well covered for that period of 15 years from 60, where I can do some of those really big holidays (solar eclipse in central Australia just a few weeks after my 60 birthday, 14 years to go but already checked that one out!). I'd rather compromise on some of them than slogging my guts out till say 64 and then only perhaps having 11 years.

After retirement at 61 I was offered work that continued to give me extra travel opportunities, used to go to South America, Brazil and Uruguay), Southern Africa, Malta, Mauritius and Japan to name a few countries and get lots of spare time to have a good root around plus had nice holidays with my wife. At 68 decided I'd had enough of travel plus my wife doesn't enjoy flying so now home birds. Also set up my own consultancy which I still do a bit and includes some travel occasionally. I'd be quite happy to never see an airport of airplane again. Each to their own. As long as you can cover your bills and afford to live plus have your health what more do you need?

I can say that having worked away from home all my normal working life including living in Texas, travel is imo overrated.

 

[DaveH]

After retirement at 61 I was offered work that continued to give me extra travel opportunities, used to go to South America, Brazil and Uruguay), Southern Africa, Malta, Mauritius and Japan to name a few countries and get lots of spare time to have a good root around plus had nice holidays with my wife. At 68 decided I'd had enough of travel plus my wife doesn't enjoy flying so now home birds. Also set up my own consultancy which I still do a bit and includes some travel occasionally. I'd be quite happy to never see an airport of airplane again. Each to their own. As long as you can cover your bills and afford to live plus have your health what more do you need?

I can say that having worked away from home all my normal working life including living in Texas, travel is imo overrated.

I suppose it is different when you have been away a lot.

In the good old days before children, we did a big Australia trip, honeymoon in Namibia with some trekking in the desert and a couple of years later South Africa, scuba diving off the coast then a week in Kruger Park with some trekking and camping amongst the wildlife. Those are the holidays I’ve missed and want to start doing again either with my kids now they are getting old enough to appreciate it or when I’m retired.

I agree, being on a plane is shit, and I’ve very little interest in cities.

 

[Roaring Chubby]

Lad i work with has no mortgage. Single. Kids grown. He has over $1.3m in bank and says he needs another 4-5 years before he can afford to retire.
Guess it depends upon what you plan to do in retirement. If i had what he has i would be typing from home or a beach somewhere. Sadly i don't, so am in Texas!!

Absolutely, totally depends on your expectations. If you want to retire at 60 and have a good quality of life (ie when you are retired your lifestyle doesn’t go to shit) I think you need to plan around at least 60% of your projected final salary. Likewise if you are happy to work till 67+, it’s massively easier as your time window of a healthy lifestyle is much lower and you another 7 years of contributions to add in.

 

[DaveH]

Absolutely, totally depends on your expectations. If you want to retire at 60 and have a good quality of life (ie when you are retired your lifestyle doesn’t go to shit) I think you need to plan around at least 60% of your projected final salary. Likewise if you are happy to work till 67+, it’s massively easier as your time window of a healthy lifestyle is much lower and you another 7 years of contributions to add in.

It depends on what you do with your current / final salary currently as to how much you need in retirement. Quite a significant proportion of my salary goes on mortgage payments, where we are paying close to double. I have just had a reasonable pay rise and we are looking at spending that on a garden office or extension. When the mortgage is paid off, that money will go into investing for retirement, but currently both are quite a significant chunk of my wage.

If someone suddenly took away those outgoings but also took away the expense, then I'd be the same. There is every chance that I'll have a couple of jumps up the pay ladder before I finish working, but as long as that doesn't lead to a more expensive lifestyle that I struggle to live without, then that works.

For me it is about disposable income, and about either keeping it the same or without significant loss. The actual value of extra incoming or outgoings doesn't actually matter if both are going away. It is the disposable part where you look at and decide if it can support the lifestyle you want.

 

[Roaring Chubby]

It depends on what you do with your current / final salary currently as to how much you need in retirement. Quite a significant proportion of my salary goes on mortgage payments, where we are paying close to double. I have just had a reasonable pay rise and we are looking at spending that on a garden office or extension. When the mortgage is paid off, that money will go into investing for retirement, but currently both are quite a significant chunk of my wage.

If someone suddenly took away those outgoings but also took away the expense, then I'd be the same. There is every chance that I'll have a couple of jumps up the pay ladder before I finish working, but as long as that doesn't lead to a more expensive lifestyle that I struggle to live without, then that works.

For me it is about disposable income, and about either keeping it the same or without significant loss. The actual value of extra incoming or outgoings doesn't actually matter if both are going away. It is the disposable part where you look at and decide if it can support the lifestyle you want.

Agree, it’s very personal. Just on the basis that many people live within their means ie they spend most of what they earn, retirement will feel miserable if your retirement income is a small fraction of your final take home pay. The thing on my mind is that work stops you spending money because you are working, if you have all your time as your own most activities cost money.