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Retirement

DrNo! said:
I've watched a few YT vids from Reeves. Seems like really basic advice they offer - All the vids I've watched are the same - consolidate your workplace pensions, diverisfy into low cost investments that match you risk tolerance, consider downsizing blah bla blah. Nothing anyone couldn't work out for themselves.

I'll not be paying an IFA for my retirement. Run your figures through a free compound interest calculator with a few different scenarios, get your head around withdrawal stategies to minimise tax. It's not too hard really.
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I think for me, the major decisions will be what to invest the mortgage payments in when that is paid off. Just an ISA or something different.

Then there is when to draw the pension. As soon as I retire, using a small amount of top up payments from investments, paying less tax, but taking the greater early retirement penalty. Or live off investments, and take the pension later at a higher amount with more tax.

There is probably lots of advice around for the first one and even if we went to an IFA, I would be reluctant to trust 100% without some research of my own, so do I really need one?

The second, the calculations are fairly straight forward . Basically what is the greater penalty at the time, tax or early repayment, and does interest in investments for 2 more years swing it either way?
 

DaveH said:
I think for me, the major decisions will be what to invest the mortgage payments in when that is paid off. Just an ISA or something different.

Then there is when to draw the pension. As soon as I retire, using a small amount of top up payments from investments, paying less tax, but taking the greater early retirement penalty. Or live off investments, and take the pension later at a higher amount with more tax.

There is probably lots of advice around for the first one and even if we went to an IFA, I would be reluctant to trust 100% without some research of my own, so do I really need one?

The second, the calculations are fairly straight forward . Basically what is the greater penalty at the time, tax or early repayment, and does interest in investments for 2 more years swing it either way?
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Many of the questions that I have are practical rather than strategic.

E.g. if I want to retire at 57 using £££ from a SIPP for 3 years, then how much cash should I have? Do I keep the cash in a separate account or money market funds in the SIPP. What is a good asset allocation in retirement or can you be flexible? I have read about the 3 buckets approach etc.

There seem to be a lot of different ways of ‘managing’ a retirement. Many people seem to use £££ from different investment vehicles depending on economic situations. E.g. live off cash if stock markets are low, sell equities when stock markets are high to replenish a cash buffer.

Etc. etc.

In hindsight I should have just stuck with the DB pension and spent the rest on filthy cars and fast women.
 
Fletch said:
Listened to a brief podcast about how trying to time the markets rarely ever works … especially for the long term
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I’ve tried it a few times in the past with a small % of my ISA/SIPP, and found that I then became obsessed with checking the markets at least once per day while waiting for an opportunity to buy back in at a lower price. I got lucky the last time I did this, as following the rise in the markets after Trump got in, the markets then dropped when the tariffs were announced in March/April time and I bought back in at a couple of % lower than I had sold a few months previously, but it really wasn’t worth the stress. Without the tariff induced fall I would not have had the opportunity and that was therefore just luck on my behalf - Lesson learned.

When people say they are selling up and waiting for a crash, when the crash finally happens it feels like armageddon and in general people are then scared to buy back in, as they are fearful that it is going to drop further. Recoveries often happen very quickly, and they then miss the chance to get back in at a rock bottom price.
 
Edinburgh Black Cat said:
I'm considering going down that route. Working to make businesses richer is pretty unfulfilling, and as I find myself more motivated to understand my own personal situation the IFA route starts becoming more appealing.


A lot of things can things can be discovered on your own but going down that route you may have to learn from expensive mistakes.

It's the niche rules and loopholes where they earn their fee, the ones where you deviate from 'conventional wisdom'.

For example, not many people realise the nuances around the minimum pension age increasing from 55 to 57. Many people will have clauses in their existing pension schemes that they can retain the 55 retirement age even if the government changes the rules, they may inadvertently lose that right if they leave that scheme to consolidate their pensions in a new workplace scheme - I bed loads of people do that withdraw realising. If you are later approaching 55 wishing you could retire, I bet you'd look bad thinking I wish I paid that £1800 rather than wait another 2/3/4/however many years.

That said, the route to becoming an IFA isn't difficult so the quality of the advice and advisor can vary drastically.
*look back

Edit: you don't always lose that right when you consolidate, it depends on the scheme details.
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My view on IFAs is undoubtedly coloured by the experience of my mates brother in the late 80s.

He had no experience of finance but set up in an office in Sunderland with flash company car, new house and he lived it large for about 18 months before the wheels fell off Thatchers economic dream bus.

He went bust but there was precious little mention of the customers and I often wonder how many people were taken in by his reckless bravado approach.
 
A good mate of mine was an IFA, when he had his practice he wouldn't give me any solid advice because as he said he would need to know everything about my financial circumstances and to do that he would want paying for all the work involved. Him and his partner sold their business 3 years ago to retire and he still won't give any advice because he's no longer in that game.
 
Tuono said:
A good mate of mine was an IFA, when he had his practice he wouldn't give me any solid advice because as he said he would need to know everything about my financial circumstances and to do that he would want paying for all the work involved. Him and his partner sold their business 3 years ago to retire and he still won't give any advice because he's no longer in that game.
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That's not a " good mate" .
 
cosmicchris00 said:
My view on IFAs is undoubtedly coloured by the experience of my mates brother in the late 80s.

He had no experience of finance but set up in an office in Sunderland with flash company car, new house and he lived it large for about 18 months before the wheels fell off Thatchers economic dream bus.

He went bust but there was precious little mention of the customers and I often wonder how many people were taken in by his reckless bravado approach.
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Mate of mine went exactly the same way and is now a builder 😮

It wasn’t that long ago when the infamous Endowment Mortgages were touted all over and you were sold a policy that “at the end of it the funds will be enough to pay of the capital and you could have additional funds over and above.”
The commission driving the sales of these.
 
Swindon On Tour said:
Mate of mine went exactly the same way and is now a builder 😮

It wasn’t that long ago when the infamous Endowment Mortgages were touted all over and you were sold a policy that “at the end of it the funds will be enough to pay of the capital and you could have additional funds over and above.”
The commission driving the sales of these.
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Yes I took out an endowment mortgage in the 80s.Was promised that after 25 years it would pay off the mortgage and as a bonus a massive lump sum to buy a new car and a world cruise! After about five years it was obvious that it would not make nearly enough to cover the mortgage . Had to take out a repayment mortgage.
Carried on paying the endowment wasnt worth cashing in and had some life insurance cover.which twenty years later gave us a small lump sum...not enough to buy an old car!
 
Swindon On Tour said:
Mate of mine went exactly the same way and is now a builder 😮

It wasn’t that long ago when the infamous Endowment Mortgages were touted all over and you were sold a policy that “at the end of it the funds will be enough to pay of the capital and you could have additional funds over and above.”
The commission driving the sales of these.
Click to expand...
My mortgage broker had an 'in house' financial advisor who sold me an endowment mortgage (1989 IIRC)

It actually did okay and I even got a windfall when the company demutualised, but I had to cash it in eventually.

Some others deffo weren't so fortunate
 
Ned Land said:
Many of the questions that I have are practical rather than strategic.

E.g. if I want to retire at 57 using £££ from a SIPP for 3 years, then how much cash should I have? Do I keep the cash in a separate account or money market funds in the SIPP. What is a good asset allocation in retirement or can you be flexible? I have read about the 3 buckets approach etc.

There seem to be a lot of different ways of ‘managing’ a retirement. Many people seem to use £££ from different investment vehicles depending on economic situations. E.g. live off cash if stock markets are low, sell equities when stock markets are high to replenish a cash buffer.

Etc. etc.

In hindsight I should have just stuck with the DB pension and spent the rest on filthy cars and fast women.
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Quick reply to your example if it was me, and everyone is different so not advice.
At 57 for 3 years I would hold £51k inside the SIPP in STMM, I would then either crystallise either the £51k or £17k, so let's say I do £17k that would give me the equivalent of £1400/ month tax free for the year. You'll get £4190 paid immediately then £1047/month.

If that is enough for you then happy days, if not then I would top up from any other savings I had, so I would have 3 years worth of this extra money in cash.

If I needed the SIPP to keep funding me then every year I'd probably move some of it into the STMM, depending how markets have done, so I always had 3 years worth. Before 67 I'd always aim to take £12570 out of the SIPP.

People have said before build a gilt ladder, but I don't know enough about it and everytime I use a ladder builder it looks far too complicated and only seems to pay as much interest as my cash at the moment so I'll take the risk of lower interest rates.

FWIW I'm coming up to 59 I'm 77% equities 18% cash 5% bonds that's everything I have 👍
 
Matt Hopkins said:
Quick reply to your example if it was me, and everyone is different so not advice.
At 57 for 3 years I would hold £51k inside the SIPP in STMM, I would then either crystallise either the £51k or £17k, so let's say I do £17k that would give me the equivalent of £1400/ month tax free for the year. You'll get £4190 paid immediately then £1047/month.

If that is enough for you then happy days, if not then I would top up from any other savings I had, so I would have 3 years worth of this extra money in cash.

If I needed the SIPP to keep funding me then every year I'd probably move some of it into the STMM, depending how markets have done, so I always had 3 years worth. Before 67 I'd always aim to take £12570 out of the SIPP.

People have said before build a gilt ladder, but I don't know enough about it and everytime I use a ladder builder it looks far too complicated and only seems to pay as much interest as my cash at the moment so I'll take the risk of lower interest rates.

FWIW I'm coming up to 59 I'm 77% equities 18% cash 5% bonds that's everything I have 👍
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Sorry, what is STMM.
 
Matt Hopkins said:
Quick reply to your example if it was me, and everyone is different so not advice.
At 57 for 3 years I would hold £51k inside the SIPP in STMM, I would then either crystallise either the £51k or £17k, so let's say I do £17k that would give me the equivalent of £1400/ month tax free for the year. You'll get £4190 paid immediately then £1047/month.

If that is enough for you then happy days, if not then I would top up from any other savings I had, so I would have 3 years worth of this extra money in cash.

If I needed the SIPP to keep funding me then every year I'd probably move some of it into the STMM, depending how markets have done, so I always had 3 years worth. Before 67 I'd always aim to take £12570 out of the SIPP.

People have said before build a gilt ladder, but I don't know enough about it and everytime I use a ladder builder it looks far too complicated and only seems to pay as much interest as my cash at the moment so I'll take the risk of lower interest rates.

FWIW I'm coming up to 59 I'm 77% equities 18% cash 5% bonds that's everything I have 👍
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That’s really helpful - thank you.

As stock markets are high, I will start to move to money market funds in the SIPP to cover 3 years.

I read somewhere that if markets don’t crash within the first few years then retirement investment portfolios can switch to being more adventurous.

I should be able to do that when the DB pension pays out at 60.
 
Ned Land said:
Many of the questions that I have are practical rather than strategic.

E.g. if I want to retire at 57 using £££ from a SIPP for 3 years, then how much cash should I have? Do I keep the cash in a separate account or money market funds in the SIPP. What is a good asset allocation in retirement or can you be flexible? I have read about the 3 buckets approach etc.

There seem to be a lot of different ways of ‘managing’ a retirement. Many people seem to use £££ from different investment vehicles depending on economic situations. E.g. live off cash if stock markets are low, sell equities when stock markets are high to replenish a cash buffer.

Etc. etc.

In hindsight I should have just stuck with the DB pension and spent the rest on filthy cars and fast women.
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I think practical questions you can work out yourself imo .
Yes you can spend 11 hours a day making sure every pound is where it should be for as long as possible making the most and that each 1 you spend is from the least effective etc but personally I'd rather live . You can work out expected money you need to live. Draw it from your best option .mine was tf lump and then spend it slowly . Could it be making a few pounds a month more interest as I spend it in an account some ifa told me about ,maybe ,not a lot though . That pot is reducing each month as I live but the values of your other interests you are looking at have increased . Ie isa, sipps ,drawdown pot etc . Reading your posts I don't think it's the numbers you're talking .
I do an across the board count every month end. That's as interested as I get .
 
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JAZZMANB said:
I think practical questions you can work out yourself imo .
Yes you can spend 11 hours a day making sure every pound is where it should be for as long as possible making the most and that each 1 you spend is from the least effective etc but personally I'd rather live . You can work out expected money you need to live. Draw it from your best option .mine was tf lump and then spend it slowly . Could it be making a few pounds a month more interest as I spend it in an account some ifa told me about ,maybe ,not a lot though . That pot is reducing each month as I live but the values of your other interests you are looking at have increased . Ie isa, sipps ,drawdown pot etc . Reading your posts I don't think it's the numbers you're talking .
I do an across the board count every month end. That's as interested as I get .
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Thank you. I’m overthinking things and I will speak with people who have retired to learn how they approached it.
 
Ned Land said:
Thank you. I’m overthinking things and I will speak with people who have retired to learn how they approached it.
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The thought of the R word was overwhelming. Too much to think about how, when ,what if
So I just renamed it a soft retirement. Stop working , no plans to again , take a massive break, year at least then think about what you want. So it was ,how much do I need to pay bills?, Where's it coming from .?Set date .Bingo.
Work was crushing me . Now I'm sitting with a tea and toast looking at the garden
 
humbug said:
i have one as well but i was only in it for about 10 years. iirc, at 65 it pays out about 11 or 12k. was quite surprised really.
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Nice one, you must have been on a very decent salary, mine's 20 years (about a quarter of wage) and I thought my salary was decent, pays around the same amount.
 
Ned Land said:
Thank you. I’m overthinking things and I will speak with people who have retired to learn how they approached it.
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Remember, retirement is your present to yourself for putting all those hard years in.
Yes set things up the best you can but after that an annual review should suffice.
What's the difference between being 90% there and 100% with your investments?
About all your free time.
If you've got enough money to pay the bills great.
Get out and enjoy yourself.
 
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