• The first stage of the forum upgrades has now been completed but they remain in a degraded state and are still being worked on. Normal posting/reading should now be possible.
    Please read this thread for more details.
    New user registrations are currently disabled.

Retirement

Ned Land said:
I’ve learned a lot from this thread so thank you to people for being really helpful.

It’s illustrated to me that even if I accumulate enough to retire at 57/60 or whenever that the management of the investment vehicles requires some planning and knowledge.
Click to expand...
This is absolutely key.

My dad went to an IFA who set up his lump sum in a scheme which he had to manage and he just did not get it. It was an odd one, because he was a very intelligent bloke and if he got interested in something he got obsessed by it, or he ignored it. And for some reason this fell on the ignore pile. If it had been the other way, he would have been checking stock markets and tinkering twice a day, driving my mam mad.

Something happened, either stock markets took a dip or a few of the areas he was invested in started to slide and his lump sum went down to half the value. But rather than ride it out or adjust his investment portfolio, he just pulled out completely and accepted half his lump sum was lost. With better understanding, it could have grown.
 

TAD said:
Quick question.
The first year if you take the 25% in a lump sum, can you also take that years 12k annual tax free allowance?
Click to expand...
Yes if that's your only income
DaveH said:
This is absolutely key.

My dad went to an IFA who set up his lump sum in a scheme which he had to manage and he just did not get it. It was an odd one, because he was a very intelligent bloke and if he got interested in something he got obsessed by it, or he ignored it. And for some reason this fell on the ignore pile. If it had been the other way, he would have been checking stock markets and tinkering twice a day, driving my mam mad.

Something happened, either stock markets took a dip or a few of the areas he was invested in started to slide and his lump sum went down to half the value. But rather than ride it out or adjust his investment portfolio, he just pulled out completely and accepted half his lump sum was lost. With better understanding, it could have grown.
Click to expand...
Just going off what you've posted here is this not an example of having a poor IFA?
 
Last edited:
DaveH said:
This is absolutely key.

My dad went to an IFA who set up his lump sum in a scheme which he had to manage and he just did not get it. It was an odd one, because he was a very intelligent bloke and if he got interested in something he got obsessed by it, or he ignored it. And for some reason this fell on the ignore pile. If it had been the other way, he would have been checking stock markets and tinkering twice a day, driving my mam mad.

Something happened, either stock markets took a dip or a few of the areas he was invested in started to slide and his lump sum went down to half the value. But rather than ride it out or adjust his investment portfolio, he just pulled out completely and accepted half his lump sum was lost. With better understanding, it could have grown.
Click to expand...
I think that I’d be terrified if I had to manage a DC pension pot for 20-30 years, you need to trust an expert or be confident in your own abilities.

I’m fortunate in that the DB pension should be enough for me until the state pension starts.

The SIPP and ISAs are a bonus really, hopefully so that I can stop full time work before 60. Any residual amounts would obviously be great and could be used for non-vital expenditure.
 
TAD said:
Quick question.
The first year if you take the 25% in a lump sum, can you also take that years 12k annual tax free allowance?
Click to expand...
Yes, the tax-free part of a pension (lump sum or regular) is tax-free in that it doesn't count as taxable income for income tax. The personal allowance applies to the first £12,570 of your taxable income.
 
  • Like
Reactions: TAD
Matt Hopkins said:
Yes if that's your only income

Just going off what you've posted here is this not an example of having a poor IFA?
Click to expand...
It might be. I don't want to criticise someone who I never met and did not hear the advice first hand. But certainly I would expect that part of the job was to set up a scheme and then the other part to make sure the customer understands the scheme. They certainly failed at the last part.
 
Ned Land said:
I think that I’d be terrified if I had to manage a DC pension pot for 20-30 years, you need to trust an expert or be confident in your own abilities.
Click to expand...
It doesn't have to be a black or white commitment. I plan to manage my own until I no longer feel capable or want the effort, then I'll hand the management of it over to an IFA. For now I'm really enjoying learning as much as I can about how everything works
 
Ned Land said:
I think that I’d be terrified if I had to manage a DC pension pot for 20-30 years, you need to trust an expert or be confident in your own abilities.

I’m fortunate in that the DB pension should be enough for me until the state pension starts.

The SIPP and ISAs are a bonus really, hopefully so that I can stop full time work before 60. Any residual amounts would obviously be great and could be used for non-vital expenditure.
Click to expand...
So are you saying you'll take a DB from 57/60 ? If so was your post this morning hypothetical or were you asking for a friend?
 
Ned Land said:
The plan is to defer the DB until 60+ as the reduction rate is lower.

I would like to finance an early retirement via a SIPP and cash/shares ISAs.
Click to expand...
👍 I just mentioned it incase you were thinking that you could take your DB pension and still take £12570 from your SIPP and not pay tax, which of course you can't.
Also remember DB or usually neutral (ish) over the time you will get them
 
Last edited:
Matt Hopkins said:
👍 I just mentioned it incase you were thinking that you could take your DB pension and still take £12570 from your SIPP and not pay tax, which of course you can't.
Also remember DB or usually neutral (ish) over the time you will get them
Click to expand...
I have a spreadsheet with some scenarios based on different retirement ages, also with what the potential income streams would be.

The plan is to spread out the income but the trick is not having enough or having “too much” if that’s possible. My F-I-L advised me to take DB pension and SIPP withdrawals at 60, probably because he won’t be around to fund his little Princess 👸 lolz
 
Does anyone know if when you transfer a pension pot into another, is there a period of time before you could then access the 25% tax free amount. TIA
 
DaveH said:
It might be. I don't want to criticise someone who I never met and did not hear the advice first hand. But certainly I would expect that part of the job was to set up a scheme and then the other part to make sure the customer understands the scheme. They certainly failed at the last part.
Click to expand...
possibly the FA deliberately kept it like that in the hope his dad kept him on a monthly retainer at x%
 
JJH said:
possibly the FA deliberately kept it like that in the hope his dad kept him on a monthly retainer at x%
Click to expand...
Always possible. I think it was a combination of bad advice/advice he didn't fully understand along with panic that caused him to lose quite a bit.
 
  • Sad
Reactions: JJH
Cee Jay said:
Always a nice feeling…think that’s when the real saving and financial planning can kick up a level.
Click to expand...
You are right but it depends on timeframes. E.g. if you are mortgage free and have e.g. £500 per month extra for 5 years then the stock market could be risky.

Cash can lose its purchasing power to inflation.

Gold, bitcoin????

It’s obviously still a great position to be in and there is some security.

We will have a mortgage remaining when I retire but the rate is low and I should be able to clear it with lump sums. If anything the council tax bill and house maintenance costs is more of a hindrance.
Swindon On Tour said:
Superb and nice one.
Biggest bill that you will ever pay is now gone. How good is that.
Click to expand...
The biggest bill is wife/kids :lol:
 
Last edited:
You must log in or register to reply here.
Back
Top