Retirement

[Barista]

So if you did have a cash buffer or were prepared to be flexible with your retirement age - why would you stick with default ‘target age’ fund that your employer puts you in which dips out or equities automatically and produces a poor return in the last few years of your working life.
I assume that individually you would also stick with the same level of risk with fund once retired.
Am I missing something here?
I recently checked through some of my companies L&G options and if you were in the target date 2045-2050 fund - the performance of that was lower than the FTSE100 which I found surprising.

I’ve never used target date funds, I always chose my own separate equity and bond funds/ETFs.
I knew I wanted the option to retire when I reached 55, so from about 50 onwards I gradually moved from about 80% equities vs bonds to around 55:45 when I gave up work. The benefit of having separate equity and bond funds is that when you need to liquidate to cash you can decide to to sell down one or the other. E.g. if equities crashed, bonds may have gone up in value so rather than selling equities you could sell some bonds. Alternatively if your equities have done well as they probably have over the last few years, you could decide to bank some of your gains. This is not as easy with target date funds as when you sell some you are selling both equities and bonds as they are combined in a single fund.

There’s nothing wrong with target date funds for people who are not so interested in managing their own pensions, but for me I enjoy it as a hobby.

 

[Mr B]

If able to do and not all can , you’re prob better off helping your kids with their first car and house deposits , rather than keeping any money back as an inheritance , give them it while they are still young themselves

Did that with our two. One was already renting and the other was looking at renting. Kept telling them that once they started paying rent, they’d never be able to save for a deposit. Ended up giving them both enough towards a small deposit to get them started and the pair of them have never looked back. Both have had a house now for 10 years, one has moved on to bigger and better, the youngest is planning to move in the near future.

If we hadn’t helped them out, they’d still be renting, the youngest is paying less than half for her mortgage than some of her friends are paying in rent for a property they’ll never own.

Probably one of the best things I have ever done for them financially.

 

[Fletch]

Did that with our two. One was already renting and the other was looking at renting. Kept telling them that once they started paying rent, they’d never be able to save for a deposit. Ended up giving them both enough towards a small deposit to get them started and the pair of them have never looked back. Both have had a house now for 10 years, one has moved on to bigger and better, the youngest is planning to move in the near future.

If we hadn’t helped them out, they’d still be renting, the youngest is paying less than half for her mortgage than some of her friends are paying in rent for a property they’ll never own.

Probably one of the best things I have ever done for them financially.

Much better than leaning inheritance money pot that you never get to see how was spent and the kids are now gettin old themselves so can’t use it as well as they could have when young

 

[gazza.1990]

I'm not sure that's right. There is a balance to be struck, of course, but lessons in saving have a lifelong value far in excess of any first car or starter home.

I know plenty of people about my age (mid 40s) who have never been weaned off the parental financial teat. Most of them will be screwed when their folks retire / die, because the support hasn't come from mighty pools of family wealth, but from the parents' incomes.

I'm torn with this right now, i was given nothing money wise at the start of my adult life and had to learn to save and value money myself, im doing OK now so have opened a JISA for my daughter, the battle i have with myself is how much I continue to add for her or do I let her make her own paths when the time comes and learn that way herself...

Im also scared she'll turn 18, meet a wrang 'un and blow the ISA money but hey ho. There are no age21 type accounts now I dont think, its all when they turn 18.

 

[Ned Land]

I'm torn with this right now, i was given nothing money wise at the start of my adult life and had to learn to save and value money myself, im doing OK now so have opened a JISA for my daughter, the battle i have with myself is how much I continue to add for her or do I let her make her own paths when the time comes and learn that way herself...

Im also scared she'll turn 18, meet a wrang 'un and blow the ISA money but hey ho. There are no age21 type accounts now I dont think, its all when they turned 18.

You could invest in your own/wife’s ISA and then gift amounts to your daughter?

My elder son just spunked the £££ from his JISA when he turned 18, so I started a junior SIPP for the younger son.

 

[stapler]

I'm torn with this right now, i was given nothing money wise at the start of my adult life and had to learn to save and value money myself, im doing OK now so have opened a JISA for my daughter, the battle i have with myself is how much I continue to add for her or do I let her make her own paths when the time comes and learn that way herself...

Im also scared she'll turn 18, meet a wrang 'un and blow the ISA money but hey ho. There are no age21 type accounts now I dont think, its all when they turn 18.

You might be able to structure a trust that might be able to keep it out of her mits until she is 21. But even then, it is uncertain because of an ancient legal doctrine typically called "the rule in Saunders v Vautier". Unless you're talking hundreds of grand, it is unlikely to be worth the cost of trying.

One thing I am doing with my son is trying to involve him in investing. He is currently reading a book called "Investing for Kids" and once he's done, we will set up a Junior ISA for him.

I don't mind him having a bit of wherewithal on me for when he turns 18. But I will say "It's for your education" so many times that it will be burnt into his mind, and I want the money to come with lessons like "not so easy come, very easy go", that kind of thing. If, despite my best efforts, he turns into a spendthrift then so be it. But I reckon by getting him involved, I give him the best chance of entering adult life able to handle money independently.

 

[elder]

Grand a week.

not just that but you have to buy the apartment, let's say $500,000. when you die (2 years, 5 years or 10 years later) the family get the money back but nothing more. then the care home sell it on to someone else for more money.

other examples... a friend's mam and dad were in a care home (separate rooms) where one of the charges was for 2 glasses of wine per day. neither drank but the care home wouldn't deduct it from the bill. money for old rope.

 

[Ned Land]

You might be able to structure a trust that might be able to keep it out of her mits until she is 21. But even then, it is uncertain because of an ancient legal doctrine typically called "the rule in Saunders v Vautier". Unless you're talking hundreds of grand, it is unlikely to be worth the cost of trying.

One thing I am doing with my son is trying to involve him in investing. He is currently reading a book called "Investing for Kids" and once he's done, we will set up a Junior ISA for him.

I don't mind him having a bit of wherewithal on me for when he turns 18. But I will say "It's for your education" so many times that it will be burnt into his mind, and I want the money to come with lessons like "not so easy come, very easy go", that kind of thing. If, despite my best efforts, he turns into a spendthrift then so be it. But I reckon by getting him involved, I give him the best chance of entering adult life able to handle money independently.

I tried to speak with my oldest son about passive index tracking over a long term, as the strategy has worked well for me.

But he rambled on about bitcoin and high risk individual company shares, so my advice went into one ear and out of the other. He might become a millionaire yet but I suppose I didn’t consider long term investments until I was in my 30s.

 

[Horatio Pugwash]

There seem to be a lot of people on this thread who know a damned site more about pensions than me.

What would you more knowledgeable chaps suggest for me to do to start the ball rolling for my grandson? He's only a toddler but if I can get the ball rolling early it has to be a good thing.

If that's allowed that is

 

[BILLY BUS PASS]

You can pay into a pension fund for kids eye
I saw something the other week that suggested for moderate Input the long term benefits can be staggering.
Probably one of the best gifts you could give him setting them up with a pension pot providing you can keep paying into it like and know the tax implications around pensions are changing.

 

[Matt Hopkins]

There seem to be a lot of people on this thread who know a damned site more about pensions than me.

What would you more knowledgeable chaps suggest for me to do to start the ball rolling for my grandson? He's only a toddler but if I can get the ball rolling early it has to be a good thing.

If that's allowed that is

I don't know anything about it but possibly a junior SIPP?
All I'd say is whatever you do is great and he will,eventually, appreciate what you have done for him Top grandad or nana

 

[stapler]

There seem to be a lot of people on this thread who know a damned site more about pensions than me.

What would you more knowledgeable chaps suggest for me to do to start the ball rolling for my grandson? He's only a toddler but if I can get the ball rolling early it has to be a good thing.

If that's allowed that is

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The difference in final value between 18 years of childhood contributions and 40 years of adulthood contributions at the same amount is jaw dropping. Compound interest is a powerhouse for investors.

 

[Horatio Pugwash]

Thanks for the top advice lads

He’s only five right now but after reading bits n pieces on here I reckon I’ll get sobering rolling

I’m not going to be putting a fortune in every month but something is better than nothing I reckon

Cheers

 

[Ned Land]

Thanks for the top advice lads

He’s only five right now but after reading bits n pieces on here I reckon I’ll get sobering rolling

I’m not going to be putting a fortune in every month but something is better than nothing I reckon

Cheers

I started a junior sipp via AJ bell when my own son was about that age. I actually reduced the amount that I was investing as his account value was exceeding that of my own stocks and shares ISA. I might increase the amount now that I’m thinking about it.

But if you can, invest the maximum amount for as long as possible. When you read about compound interest then it’s startling what can happen over 50+ years.

I pay monthly into a HSBC global fund and don’t tinker with it.

 

[Darlo1973]

There seem to be a lot of people on this thread who know a damned site more about pensions than me.

What would you more knowledgeable chaps suggest for me to do to start the ball rolling for my grandson? He's only a toddler but if I can get the ball rolling early it has to be a good thing.

If that's allowed that is

Even if you put a few hundred quid in now and then it wasn't touched for another 60 years then you would still benefits from decades of compound growth. You would just have to make sure that he knows about it just in case (in the unlikely event!) you aren't around when he retires.

60 years at 8% is about 100x compounded so about £10,000 for a £100 lump sum.

I have a pension from an old job which I haven't contributed to in the last 15 years but it has more than doubled in value in that time.

 

[Matt Hopkins]

Even if you put a few hundred quid in now and then it wasn't touched for another 60 years then you would still benefits from decades of compound growth. You would just have to make sure that he knows about it just in case (in the unlikely event!) you aren't around when he retires.

I have a pension from an old job which I haven't contributed to in the last 15 years but it has more than double in value in that time.

Reckon if it's his grandson he'll be long gone before he retires

 

[Darlo1973]

Reckon if it's his grandson he'll be long gone before he retires

I have faith in medical research!

 

[Derby Mackem]

I pay monthly into a HSBC global fund and don’t tinker with it.

This one out of interest ?
If so - me too

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[Horatio Pugwash]

Even if you put a few hundred quid in now and then it wasn't touched for another 60 years then you would still benefits from decades of compound growth. You would just have to make sure that he knows about it just in case (in the unlikely event!) you aren't around when he retires.

60 years at 8% is about 100x compounded so about £10,000 for a £100 lump sum.

I have a pension from an old job which I haven't contributed to in the last 15 years but it has more than doubled in value in that time.

Cheers mate

I doubt very much I’ll still be around when he retires

If I am I’ll be the old fart on the telly being interviewed by the Guinness book of records

 

[Ned Land]

This one out of interest ?
If so - me too

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No, this one. Up 75% over 5 years. 0.13% fees. Ps I live 10 miles from derby.

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