Retirement

[Swindon On Tour]

Thanks for the prompt response.

This is similar to the calculator figures I'd seen.

If I did a bit of part time work would that bugger my tax up?

Thanks for the prompt response.

It looks like I'll need to squirrel a bit more away for a slightly more comfortable lifestyle

One massive fundamental point is whether you are renting, have a mortgage, paid it off. Loans etc.
If you own your own home, no mortgage and no loans that alone is a massive positive difference. Equally consideration with kids and that position.

You would be surprised that just being a little more careful in not wasting money or shopping better you can ‘save” money.

You'll pay tax on everything over £12,570

However, if only on £12k you can earn upto £5k in interest tax free so might be worth using savings interest as part of your income

The most simple but important advice.

 

[Derby Mackem]

I'd be interested to hear from anyone willing to divulge some actual retirement numbers.

There are modelling tools to use but I've found these a little bit frustrating.

The pensions industry gives many statements and indications of what a retiree needs - in various forms - but what have actual retirees found?

I'm thinking of going into retirement early but wouldn't expect to have more than £250k in a pot with additional savings of £50k.

Has anyone else tried retiring at 60 with similar figures?

How has it lasted?

With the benefit of hindsight, would you have worked longer ?

Thanks in advance.

Everyone will look at this differently I guess.
The question that every IFA will ask is how much you think you need to have a comfortable retirement. Assume you take the 25% tax free amount from your pot then I believe the recommendation is not to take more than 5% yearly from the remainder.
However you could choose to take more and then drop down when state pension kicks in.

So putting aside any other savings then this is what you would have to play with.

Remember the tax is payable on what you draw down above your tax allowance.

So on the basis that a guilt edge scheme would give you about 60% of current income/salary then the challenge is to get as close to that as possible.

Everyone is different but a number of people I have spoken to try and aim as a household to retire with around 50% of current incomings.

It’s only a rule of thumb of course

Is your £50k in stocks&shares ISA’s ?

 

[Matt Hopkins]

so 62k in tax free from the pot, together with the £50,000 savings is less than 19k a year for the next 6 years

Not the best way to do it IMHO. You'd be missing out on using your tax allowance for 6 years.
If it was me and I had the amounts the op has and wanted £19k a year. I'd take £16760 from the pension each year which would attract no tax and top it up with my savings @ £5k/year.
So, without any growth or inflation taken into account in 6 years I'd have £150k in pension of which I could still take 25% tax free and have £20k in savings,
The way you've said I'd have £187500 in pension which will have to have tax paid on all of it and no savings.

 

[Fletch]

Working out this number is a head screw like, I read the Which numbers - £28k pa for a “comfortable” lifestyle, then the PLSA say £40k is a more accurate number.

Such a wide spectrum, I’ve worked out numbers that I think we’ll be wanting for our lifestyle when we hit 60. I guess until you’re living it though you’ll not know for sure.

I’d definitely recommend sounding out an IFA though (have a look at Unbiased website), optimising your finances seems absolutely key, getting some compound interest effects going, tax efficiencies. It’s interesting reading around the subject but I’m realising that expert guidance over the next 10 years will be crucial if I can make retirement at 60 a realistic option.

Maybes 28 was if single and 40 if a couple ? Just guessing

 

[wisemensaysteve]

Not the best way to do it IMHO. You'd be missing out on using your tax allowance for 6 years.
If it was me and I had the amounts the op has and wanted £19k a year. I'd take £16760 from the pension each year which would attract no tax and top it up with my savings @ £5k/year.
So, without any growth or inflation taken into account in 6 years I'd have £150k in pension of which I could still take 25% tax free and have £20k in savings,
The way you've said I'd have £187500 in pension which will have to have tax paid on all of it and no savings.

good advice

 

[Town End Farmer Giles]

Maybes 28 was if single and 40 if a couple ? Just guessing

The 40 was the PLSA, the pension fund industry body, trying to make people shit themselves about their pension arrangements.

 

[Matt Hopkins]

Not the best way to do it IMHO. You'd be missing out on using your tax allowance for 6 years.
If it was me and I had the amounts the op has and wanted £19k a year. I'd take £16760 from the pension each year which would attract no tax and top it up with my savings @ £2240k/year.
So, without any growth or inflation taken into account in 6 years I'd have £150k in pension of which I could still take 25% tax free and have £36500k in savings,
The way you've said I'd have £187500 in pension which will have to have tax paid on all of it and no savings.

I have of course done the maths wrong in my original post, worra thick head. I've altered them here

 

[DaveH]

Have you tried porn?

They said I was not attractive enough or big enough, so I had to stick with working in IT.

 

[cosmicchris00]

Is your £50k in stocks&shares ISA’s ?

Yes

 

[Helmerroids]

Any advice on deciding whether to transfer an existing company pension to a private provider?

I’ve had a few consultations with a private provider (TPO) I like what they’re proposing with some old pensions and will probably sign up with them.

Where I’m a bit undecided is whether I should initiate a process for them to transfer my current DC company pension. I guess they’re bound to advocate me doing this as it’ll generate more income for them?

Any advice on how I can determine whether or I’d be better leaving my current pension as is or proceeding with CETV’s, info on transfer fees etc.

I wondered about impartial professional advice, seems as though Pensionwise wouldn’t provide this level of advice though?

Any advice appreciated.

 

[Matt Hopkins]

You say you have a DC pension then mention CETV's. They are for DB schemes, which one do you have?

 

[The]

You say you have a DC pension then mention CETV's. They are for DB schemes, which one do you have?

Might have a db underpin or may just mean the DC transfer val.

I’ve got an old one that’s meant to be DC but the transfer value dropped like a stone when the Trussenomic 1000 had a crack at ruining the economy. Been itching to move it but would be robbing meself.

 

[Helmerroids]

You say you have a DC pension then mention CETV's. They are for DB schemes, which one do you have?

Sorry, my bad - as you can see I’m getting up to speed with what’s involved in a transfer out of a company pension…

I guess the nub of my query is how can you best determine if you’d be better off doing this? Into a managed fund in my case, I’m happy with what I’ve seen from TPO (the company I’m putting my old pensions into). Surely TPO will advocate me transferring my current DC pot as well as they work on percentage of the overall invested funds as their fee?

 

[Matt Hopkins]

Sorry, my bad - as you can see I’m getting up to speed with what’s involved in a transfer out of a company pension…

I guess the nub of my query is how can you best determine if you’d be better off doing this? Into a managed fund in my case, I’m happy with what I’ve seen from TPO (the company I’m putting my old pensions into). Surely TPO will advocate me transferring my current DC pot as well as they work on percentage of the overall invested funds as their fee?

Don't take this the wrong way but you seem to say in one sentence that you trust this company but then in the next one it seems as if you don't. It is,as you are finding out, an absolute nightmare when it comes to pensions and something you really don't want to get wrong.
Are you and your company still paying into this pot that you're undecided about?

 

[Helmerroids]

Don't take this the wrong way but you seem to say in one sentence that you trust this company but then in the next one it seems as if you don't. It is,as you are finding out, an absolute nightmare when it comes to pensions and something you really don't want to get wrong.
Are you and your company still paying into this pot that you're undecided about?

Absolutely, and because it is so important I’m wanting to ensure I’m thinking through all implications, the company I’m transferring my old pensions to seem like they know their stuff, have good reviews, very approachable. They’re looking into my current provisioning (leaving some of my workplace pension to allow for employer contributions to continue).

As I mentioned, it’s lacking that trained eye to know if my workplace pension should be left alone.

I guess really I should be putting my trust in their professional judgement/management of my funds, it’s what I’ll be paying them to do.

 

[Matt Hopkins]

With my last work pension I don't think I could've done what you're thinking about i.e taking money out of it and putting it somewhere else while still contributing to it, plus I wouldn't have trusted them to do it right anyway
I'm just doing all mine myself so if it goes tits up I've only myself to blame

 

[Helmerroids]

With my last work pension I don't think I could've done what you're thinking about i.e taking money out of it and putting it somewhere else while still contributing to it, plus I wouldn't have trusted them to do it right anyway
I'm just doing all mine myself so if it goes tits up I've only myself to blame

I’m still to find that out tbh, have some digging around to do on the t&c’s of the pension.

One of those subjects where there are so many aspects to think about, fair play to you for handling it all yourself

 

[Matt Hopkins]

I’m still to find that out tbh, have some digging around to do on the t&c’s of the pension.

One of those subjects where there are so many aspects to think about, fair play to you for handling it all yourself

Said for ages, companies should get people in to inform employees on how the whole pension system works. The amount of people who I spoke to in my last place who had absolutely no idea, and I mean no idea, about their pensions was staggering. At least you're being proactive and looking to get things sorted

 

[archiesdad]

Said for ages, companies should get people in to inform employees on how the whole pension system works. The amount of people who I spoke to in my last place who had absolutely no idea, and I mean no idea, about their pensions was staggering. At least you're being proactive and looking to get things sorted

I agree with this, I'm one of them! We are looking to retire (Mrs for sure) in 2 years, at 57. I really need to understand more my options regarding taking money out of the various pensions and how to use the savings in combination. It's one thing saving it up but I'd guess there are ways to get it out and avoid excessive tax.

 

[DaveH]

Said for ages, companies should get people in to inform employees on how the whole pension system works. The amount of people who I spoke to in my last place who had absolutely no idea, and I mean no idea, about their pensions was staggering. At least you're being proactive and looking to get things sorted

If they keep it complicated and nobody really understands then they can make changes without anyone getting too upset, because nobody knows anyway.

At my last place, I found that nobody from HR could actually describe how it worked. I ended up sitting for ages working through the documents to work it all out. The pension company had an online calculator which give a different answer to the spreadsheet I had made. When I look a good look their core had a rounding error. It worked out the amount on a daily basis, rounding down to the nearest 10p. Cumulative over the many years a pension runs for, the difference was huge.

I got in touch and even pointed out their mistake. Their answer was they didn’t care as it was only an estimator. I reckon people have worked longer and paid in more because of that mistake, so they are quite happy about it. If people actually understand it, the pension company might lose out.