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Striker
My plan is to pay next to no tax in the next 3-4 years. Just sold a house, I will be living off that while every penny of profit I make goes into the sipp, then I think that will be it for me.
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Retirement
- Thread starter Shieldsman
- Start date
Profit from what ? So you've packed work in and living off the house sale cash ?
I thought most of the schemes do that for you dont they?, the everyday names we all know . My Scottish widows one did .
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Select coaches
Striker
No I’m self employed so everything I earn, after my personal allowance will be bunged into the pension, while the proceeds of the house (which was a rental) will be what we live on for the next few years.
That’s the plan anyway until the Mrs sees the cash in the bank.
42
Striker
Depends what youre invested in. Most default workplace schemes do tend to be whats called 'lifestyling' and most will offer one. However, its been suggested that just going 100% equity is a better option financially (albeit more bumpy). So if you have greater control of your funds (more so if SIPP) you might choose higher risk investments
Edinburgh Black Cat
Striker
Really you only want to de-risk the element you want to access in cash any time soon.
If you plan to buy an annuity then on Day X, then you want to de-risk as you approach that. If you plan to use drawdown then you probably want to de-risk to the extent of having a year or two of cash withdrawals available in your pot as cash.
To @42's point though, that will depend on risk appetite.
I'd also be wary of assuming bonds are safer than equities. Both can be volatile depending on the driver of that volatility.
Barista
Midfield
Reduced down to about 50% equities across both SIPP and ISA in the 2-3 years before retirement and still there now at 2 yrs post retirement. I obviously would have made a lot more money if I had stayed with a higher equity % over the last few years, but this derisking has given me a lot more peace of mind and would do exactly the same again. Other people would happily keep a higher equity %.
The other 50% is in a mixture of cash (to cover several yrs expenses), UK gilts, US treasury ETFs, long term US treasury ETFs (in theory these will go up if there is deflation or an equity crash - especially the LT treasuries), and short term index linked US treasuries for inflation protection (TIPs). Also a little bit of gold ETF. The theory is that government bonds go up when shares crash, but no guarantees and bonds actually crashed post Covid when inflation and interest rates went up. Hopefully the different asset classes will all not fall at the same time if there was a financial crisis and if they did, I still have some cash to fall back on.
I enjoy managing my SIPP/ISA, but if you don’t want to do it yourself, something like a Vanguard Target Retirement Date Fund will have a similar asset mix to what I described above.
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Ned Land
Winger
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DrNo!
Striker
My attitude this is I make sure I have 3 - 4 years of money in fixed income funds like bonds and money markets to ride out a market crash. Once you have that it doesn't matter about the % of equities in your portfolio.
archiesdad
Midfield
When it comes time to start spending the pot I'd say 40% would be a good isa level to minimise tax but that prob depends on the overall pot size
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Sobering news for anyone here renting and looking to retire. Rent has increased dramatically over the last few years and continues to do so
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SydneyFan
Striker
Yep. It was always the cornerstone of any retirement plans I thought, to make sure you owned your own home. Then at least you always had control of a roof over your head.
I'm a tradie and I work with a few English lads all approaching or at retirement age and they never bought anywhere. I don't know their financial situations but looking from the outside I'd say they're fucked.Unless you have planned for this scenario specifically and pumped your super (pension) accordingly you're in trouble. Even then you're looking at $700‐$800 a week for an average 2 bedroom apartment where I am. That's only going to increase.
I'm about to turn 55 and working on myself and the wife retiring when I turn 60. I know one lad has already reached 67 and says he has no plans to stop as he can't afford to.
same, we've got friends who have never bought and never had well paying jobs. i reckon most of their pension will be spent on rent if they want to stay where they are (balmain, paddo etc), so they'll either have to move or try to find social housing (an impossible task). some could be getting an inheritance at some point, so may have some safety net to fall back on.
every year i'm paying a chunk off the principal off our mortgage to get it either paid off, or have minimal repayments by the time I retire. our lass will most likely work for a few years longer than me so we'll definitely have it paid off by the time she finishes up.
Also going to have solar panels fitted, remove the gas water heater and add a water pump to cut down on utility bills, which you can do when you own and generally not when you rent. i reckon once both of them are done we'll be a lot better off financially and have peace of mind that we can spend our money in retirement on other things instead of those 2 hefty bills.
SydneyFan
Striker
Yeah we got solar panels fitted a couple of years ago and I think we'll be looking to take up the heat pump option and probably a battery at some point. Fortunately we've pretty much paid our mortgage off now and are pretty happy where we are so no plans to move.
gazza.1990
Striker
This thread got me ploughing AVCs for the past 2 year and my work pension now looks back on track for a decent payout with a medium outlook, but sitting here at work inbetween xmas and new year, to go early i really need to plan and make inroads for the years prior to being able to access that work pension.
So S&S ISA is my main focus for the new year!
So S&S ISA is my main focus for the new year!
DrNo!
Striker
How old are you mate and when do you want to retire, if you don't mind me asking ?
gazza.1990
Striker
Coming up 36, i will be turning 55 when my daughter turns 21 so that's my current aim.
Realistically i'll probably not be able to touch work pension until probably 60 by then, so i need to get an S&S ISA going to see me for that 5yrs minimum.
Thats my current thoughts anyway! Mortgage hopefully gone by 45 if not sooner so although 19yrs to 55 is a long way away where anything can happen, it feels realistic now.
archiesdad
Midfield
Back to work next week and I've decided to explore some kind of settlement agreement to leave earlier than planned. I was going to work through to Oct or Dec 26 so hitting 57 but I just can't get motivated. I'm hoping they'll agree a package that gets me close to the earnings I'll miss by going early.
