# Retirement calculations - Can I ever retire ?



## kingrollo (28 Nov 2019)

I know I should seek professional advice - but would like some general advice here from those who may have experience

I will be 60 in 4 years and would like to start thinking about retirement

My pension income at 60 - will be approximately 50% of what I earn now - plus a lump sum - close on 2 years salary 

However my wife works part time and has next to nothing in a pension pot 

Both get full state pension at 67 

House is paid for - no mortgage - 2 live at home boys in early 20's - one at uni other in full time work

If retirement at 60 doesn't look feasible - I am wondering if to go part time now - any thoughts ?


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## derrick (28 Nov 2019)

Depends on lifestyle. Retirement is great if you keep yourself occupied without spending to much money. Mortgage free makes a big difference. I still do a bit of odd jobbing helps pay for beers and holidays. I retired at about 63. Loving it. The wife has a few more years to go before we are together 24/7.😂


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## kingrollo (28 Nov 2019)

derrick said:


> Depends on lifestyle. Retirement is great if you keep yourself occupied without spending to much money. Mortgage free makes a big difference. I still do a bit of odd jobbing helps pay for beers and holidays. I retired at about 63. Loving it. The wife has a few more years to go before we are together 24/7.😂


Although my wife works - she is disabled - I would feel bad about her still working while I don't. plus also I am the bigger earner.


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## cisamcgu (28 Nov 2019)

MoneySavingExpert forums are your friends -> Retirement planning

Some very knowledgeable people


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## derrick (28 Nov 2019)

kingrollo said:


> Although my wife works - she is disabled - I would feel bad about her still working while I don't. plus also I am the bigger earner.


Although my wife is younger than me. She really enjoys her job. She does not want to retire just yet. So who am i to stop her.


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## Dave7 (28 Nov 2019)

You can pay a lump sum to top up your wifes pension. We did it for Mrs D. Cant recall exact figures but for a small(ish) lump sum it bumped her pension up to 90%, a no brainer. We could have gone for 100% but the figures weren't attractive enough.
If you phone the pensions people they will quickly spell out the options.


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## MontyVeda (28 Nov 2019)

Do the boys pay you rent... if not, they should be.


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## oldwheels (28 Nov 2019)

You could find you spend less. Depends on circumstances but no travel costs to work ( unless you cycled of course) and no work related clothing as well as possibly canteen lunch. I was a bit concerned initially when I retired but found that in fact we managed very well. My wife did not have the full state pension and a couple of very small private pensions but we had enough for our needs without scrimping although not necessarily enough for our wants. Fortunately we did not fancy going off on world cruises although a bit more foreign travel would have been nice. We were fortunate to have family in Denmark and Germany so we housed them when they came to the UK in return for their hospitality.


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## kingrollo (28 Nov 2019)

Dave7 said:


> You can pay a lump sum to top up your wifes pension. We did it for Mrs D. Cant recall exact figures but for a small(ish) lump sum it bumped her pension up to 90%, a no brainer. We could have gone for 100% but the figures weren't attractive enough.
> If you phone the pensions people they will quickly spell out the options.



She is already on target for full state pension - is that what you meant - or pay more into her works pension ?


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## kingrollo (28 Nov 2019)

MontyVeda said:


> Do the boys pay you rent... if not, they should be.



The one who is working pays a little - I don't want to up that. I have always said there is a home for as long as he wants it - I wouldn't want to go back on that promise.


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## Cycleops (28 Nov 2019)

You need to reduce your outgoings are far as possible when you do retire which means getting rid of the car and anything else unnecessary to reduce costs. I think you will be okay but don't book the luxury cruises yet. Your lump sum if invested won't provide much of an income. Anything you can save now and put into investment plan will help so look into that.

I'm lucky as I live here quite cheaply and have a house in UK which I rent out. I opted out of serps in my twenties so that is now quite a tidy investment plan. I don't get the full state pension because of that but it's not much anyway. My wife still works.


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## Dave7 (28 Nov 2019)

kingrollo said:


> She is already on target for full state pension - is that what you meant - or pay more into her works pension ?


Ahh....misunderstood sorry. I read it as state pension.
BUT.....state pension for a couple is not far off £300 per week. So.... £15K a year tax free. Plus your private pension. Not a bad sum really.


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## kingrollo (28 Nov 2019)

Dave7 said:


> Ahh....misunderstood sorry. I read it as state pension.
> BUT.....state pension for a couple is not far off £300 per week. So.... £15K a year tax free. Plus your private pension. Not a bad sum really.


Yeah - the onlt fly in ointment is that we don't get that until 67 years old......


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## Archie_tect (28 Nov 2019)

I tried to retire but haven't quite managed it yet... I've cut back but still busy doing projects, though I only work with people I like- trouble is everyone assumes I like them so I have to be careful!


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## Archie_tect (28 Nov 2019)

Cycleops said:


> You need to reduce your outgoings are far as possible when you do retire which means getting rid of the car and anything else unnecessary to reduce costs. I think you will be okay but don't book the luxury cruises yet. Your lump sum if invested won't provide much of an income. Anything you can save now and put into investment plan will help so look into that.
> 
> I'm lucky as I live here quite cheaply and have a house in UK which I rent out. I opted out of serps in my twenties so that is now quite a tidy investment plan. I don't get the full state pension because of that but it's not much anyway. My wife still works.


Good advice... Kingrollo, if you have to rely on investing your lump sum for retirement income then don't take the lump sum and leave it in the pension as you'll get a better return drawing your pension then you ever could investing the lump sum unless you take a greater risk investing in higher return stuff which could collapse.


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## Dave7 (28 Nov 2019)

kingrollo said:


> Yeah - the onlt fly in ointment is that we don't get that until 67 years old......


That is true and is a real dilema.
No help to you.......I retired at 63, had a lump sum and got state pension at 65. Mrs D got her state pension aged 60.
I think my daughter has to wait till she is 70.
It does cause some real problems.


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## Donger (28 Nov 2019)

kingrollo said:


> The one who is working pays a little - I don't want to up that. I have always said there is a home for as long as he wants it - I wouldn't want to go back on that promise.


That's nice of you. Having a home for as long as he wants it is fine, so long as he is at least paying for his keep. He shouldn't be costing you money. You could always keep letting him pay less than the going rate for room rental so that he can save towards a deposit for renting/mortgaging, but don't let him take advantage and end up costing you money you can't afford.


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## kingrollo (28 Nov 2019)

Donger said:


> That's nice of you. Having a home for as long as he wants it is fine, so long as he is at least paying for his keep. He shouldn't be costing you money. You could always keep letting him pay less than the going rate for room rental so that he can save towards a deposit for renting/mortgaging, but don't let him take advantage and end up costing you money you can't afford.



Hes a good lad - studying for qualification and is buying a property as an investment - If he was out doing coke every night I wouldn't cut him so much slack !!


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## derrick (28 Nov 2019)

Cycleops said:


> You need to reduce your outgoings are far as possible when you do retire which means* getting rid of the car* and anything else unnecessary to reduce costs. I think you will be okay but don't book the luxury cruises yet. Your lump sum if invested won't provide much of an income. Anything you can save now and put into investment plan will help so look into that.
> 
> I'm lucky as I live here quite cheaply and have a house in UK which I rent out. I opted out of serps in my twenties so that is now quite a tidy investment plan. I don't get the full state pension because of that but it's not much anyway. My wife still works.


Getting rid of the car, i don't think so, a car is a real must for us, we run two of them, Only do about 5000 miles between us, i maintain both cars so cost is minimal.


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## neil_merseyside (28 Nov 2019)

We had some luck so stopped 'proper jobs' many years early, then worked 'seasons' in both winter and summer to keep us busy so we didn't have time to shop/drink/eat our nest egg away - in what would otherwise would have been lots of free time. My wife now gets a work pension and even though I'm now able to draw on my pension we don't, and instead let it sit there (was rising ever so slightly) so leaving it untapped for the moment (B word worries might change that).
We've both worked with many retirees who had returned to work to curb their spending - and to recharge their holiday/bike/whatever funds, some were on staggering 'full' personal pensions that way exceeded our previous joint incomes, but as they had carried on spending/consuming/wasting at their pre-pension rate had to return to work. Luckily neither of us is spendy/wasteful, but sometimes a call for money can just happen, better to build a really good buffer!
As has been mentioned working life outgoings have to reduce hugely for pension income, OK some of it will be dumping a car/train season passes/business suits/tools/whatever but the ability to just buy stuff on a whim is the biggest change we've seen being the issue.
I wouldn't bank on actually getting the state pension at 67 as that is only the proposed pension age... 
Oh and finally I'd make plans for both of you to stop work/reduce days at the same time just for the sake of fairness.


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## cyberknight (28 Nov 2019)

Due to The wifes health issues I am having to move house and having young kids one of whom isn't 18 till I'm 62 means I will be mortgaged till state pension age so I'm working till I'm dead


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## midlife (28 Nov 2019)

50% of earnings as a pension sounds like public sector. You can juggle lump sum versus pension for most schemes.


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## numbnuts (28 Nov 2019)

I was forced to retire very early without any warning so could not prepare for it, so you cut corners, make do and mend, but after a while you adjust to the amount of money you have coming in and surprisingly you find that your money is going farther than you first thought and then you can start enjoying yourself again.


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## Gunk (28 Nov 2019)

We met with our financial advisor this morning and although we both have a decent pension provision it still means some careful financial planning, my goal is to semi-retire at 60 (5 years time) and fully retire at 65. 

As we’ve been reasonably careful we won’t need to down size, just be a bit bit more mindful of our expenditure, however like others I would be prepared to carry doing some odds and sods to top up our income, I do enjoy working.


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## Dirk (28 Nov 2019)

derrick said:


> Getting rid of the car, i don't think so, a car is a real must for us, we run two of them, Only do about 5000 miles between us, i maintain both cars so cost is minimal.


We always used to run two cars.
We thought long and hard about cars when we retired five years ago.
We decided to go down to one car.
In five years there's only been two occasions when we could have used an extra car. On each occasion we either walked or got the bus.


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## Chris S (28 Nov 2019)

While we're on the subject, I'll be 67 in 2032. Will there still be a state pension then or will we just have the government-promoted workplace pensions that most people are now paying into?


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## Drago (28 Nov 2019)

Just gotta work out what your projected outgoing will be, and deduct that from your projected income. Thats the only way you'll ever know.


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## wonderloaf (28 Nov 2019)

Drago said:


> Just gotta work out what your projected outgoing will be, and deduct that from your projected income. Thats the only way you'll ever know.


This ^^
Mrs W & I both retired 8 months ago at 60 y.o. and this exactly what we did through our financial advisor. We had to do quite a detail breakdown for our expected outgoings to get an annual 'income' requirement from our pensions and savings and the advisor supplied a projection using this amount, telling us how long it should last for. We've decided to go for a drawdown pension (with a small regular annuity) as annuity rates are so low at the moment and hopefully this should last us until we are well into our 90's (fingers crossed).

Which? magazine did a study on how much you need in retirement and although we've only been retired 8 months our current expenditure rate is bang on their finding for a 'comfortable' lifestyle:
https://www.which.co.uk/money/pensi...how-much-will-you-need-to-retire-atu0z9k0lw3p


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## Dirk (28 Nov 2019)

Gunk said:


> .....I do enjoy working.


So did I when I was 55, but I found out that my lack of enjoyment accelerated exponentially with each each passing year.
By the time I was approaching 60, I had zero interest in it and started to resent having to do it.
God knows how I would have managed to do an extra 5 years up to 65.


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## Sharky (28 Nov 2019)

I was a bit worried before I retired, and stayed on for 3 months after my retirement age (65). But with less money coming in, you pay less tax, no NI and you have no travelling costs, no business suits and no expensive lunches, so it all works out in the end.

But be warned - you don't get any holidays when you are retired.


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## Landsurfer (28 Nov 2019)

I have a 23 year Military Pension .... 9% of gross contribution. 
Plus a works pension pot of just under 100k, thats mine and my wifes combined, plus both have 100% state pensions .... 
We have some mortgage left, about 60K and are considering equity release for the property .... 
I won't retire until 65 but the figures stack up to a reasonably supported retirement .....


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## delb0y (28 Nov 2019)

Edging into this territory myself, too. My current pounds-in-the-pocket on payday is actually already less than 50% of my actual gross pay, what with tax, NI, pension payments, and mortgage. All of those things, except tax, will go when I retire, so to actually stay where I am income wise I actually need less than 50% of current gross pay. Need to factor in the wife's pay, too, but she earns very little. With my work pension, and both our state pensions (both at 67 - but I'm two years older, so this will actually occur when I'm 69) we'll be fine. It's getting to 69 that's the issue. I've calculated my lump sum, cut into chunks and added to the pension, should make it work... Alas, not for a few more years.


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## wonderloaf (28 Nov 2019)

Sharky said:


> I was a bit worried before I retired, and stayed on for 3 months after my retirement age (65). But with less money coming in, you pay less tax, no NI and you have no travelling costs, no business suits and no expensive lunches, so it all works out in the end.
> 
> But be warned - you don't get any holidays when you are retired.


Mrs W's current favourite saying is 'now we're retired every day's a Saturday' but I've never been busier, I've managed to get a few months work back at my old company, really I'm only going back for a rest .... although the extra money will come in handy for maybe a holiday .. or bike stuff .. car .. bike stuff .. new garden shed .. bike stuff.. (you can see where this is going ). Downside is there'll be less time for the bike but there's always Sunday for that and that'll never change!


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## Bazzer (28 Nov 2019)

Mrs B went early as her job (teaching) had become almost all paperwork and not bringing on kids. Personally I went p/t three or so years ago. I am lucky in that I enjoy my work and have a manager who stops or deflects most of the crap coming from the bean counters and non jobs, so think I have found a happy balance. - Or at least one which works for the time being.


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## DCLane (28 Nov 2019)

I'm nowhere near retirement yet but am aiming to stop at 60 with 28 year's of contributions - the current Firefighter's court case against averaged pensions rather than final salary will affect me as well as I'm on the Teacher's Pension Scheme.

If they win it'll mean TPS has to apply the same and I'm already on a final salary scheme at 60 up to 2015. Either way it means I can (probably) stop at 60 by losing part of my averaged NRA67 accumulation.

My intention is to work 2-3 days a week at most still doing the job I enjoy for a few years. I've a few other plans to use my 'alternative' retirement accumulations for the past 25 years of antique books, vintage watches and paintings and will learn to restore those before selling them on to support income. Oh, and I intend to trade more bikes than I currently do; I've a plan for a big storage set-up and workshop 

SWMBO has about 10 years to go as well with part-time work that has a pension contribution. Not sure about her numbers but I _think_ we'll be OK.


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## SpokeyDokey (28 Nov 2019)

kingrollo said:


> I know I should seek professional advice - but would like some general advice here from those who may have experience
> 
> I will be 60 in 4 years and would like to start thinking about retirement
> 
> ...



Some real life figures for you:

Decent sized detached bungalow (paid for). We eat well, drink well, house is always toasty (oil/coal/logs) decent social life, run one small decent new car (I say new but we keep our cars for 8-10 years these days as we only do c2-2500 miles pa). We don't spend a lot on clothes as we are mainly in the great outdoors in our leisure time and neither of us likes dressing up much so we spend our lives in outdoor gear (as do most of the people in the village in which we live.

Basic costs ie everything to run the house (utilities/council tax/fuel/insurance), food/drink, car fuel/servicing/tax (£20!) etc = £13000

Contingency costs ie dentists/opticians, small household items, hairdressers (Lovely Wife not me), entertainment (going to the pub etc) and all those piddly bits and pieces that you need as your life scrolls by = £2500

New car purchases, holidays and capital expenditure needed on the house we take out of savings which amount to around £5000 pa across the years. We don't do big holidays much these days as we got that out of our system years ago. Ditto big fancy cars.

So a bit over £20000 pa is all we need to run our lives. 

We fund this from a mixture of company pension and the investment income from a significant amount of savings which also spins off a decent positive cash-flow every year which balances off inflation plus adds a decent chunk to our invested capital. Our kids will be very lucky one day.

We have no mortgage, loans, credit cards etc and are 100% debt free.

We would be hard pressed to get through more than the c£20000 pa figure quoted unless we went daft on holidays, cars, fancy watches etc - we've done all that and it no longer floats our boat.

For some years now we have run a 20 year future cash-flow projection - it's quite a complicated spreadsheet these days as it's evolved over the years but is surprisingly accurate. All our income and expenditure projections are accounted for and we also use it (more so in the past) to model the impact of any major proposed expenditure.

When we first built this in around 2003/4 we were surprised at how little we would require to have a decent standard of living especially as we were preparing to quit the corporate rat race that was giving as a very high net income. It was a major sanity checking mechanism for us whilst preparing for a very different future - albeit a much better one.

I would suggest that it may be a good idea to model your finances yourself and you can then make the appropriate decisions regarding your future financial needs.

HTH.



Archie_tect said:


> Good advice... Kingrollo, if you have to rely on investing your lump sum for retirement income then don't take the lump sum and leave it in the pension as you'll get a better return drawing your pension then you ever could investing the lump sum unless you take a greater risk investing in higher return stuff which could collapse.



I took as much as I could out of my company pension and everything out of a couple of private pensions that I was contributing too. Pensions, especially with the low yields of today, can leave some very large amounts of your money in the accounts of the pension provider once you die.

I much preferred to invest those monies I could access into Tessas (back in the day) and then ISA's/Fixed Term Bonds/Managed Funds etc on the assumption that I could use this capital as and when required (not that we have had to so far and I doubt we ever will; although at the time I thought we would). 

Using a calculator something like this (ignore the fact that it is in dollars) can give some surprising (positive) results as to how long a sum of money will last with 'x' amount of withdrawals pa at 'y' interest rate.

https://www.calcxml.com/calculators/how-long-will-my-money-last?skn=

At today's low risk investment rates of around 2% (we currently average 2.21% on our low risk investments) a relatively modest sum of £100k would allow someone to withdraw around £5000 pa for around 25 years. This may be better than that offered by your pension provider. Pension providers are like bookies, their terms are stacked in their favour of winning the gamble although they portray themselves as oh so helpful entities that you cannot possibly do without. Obviously you need to balance this off against how long you think you will live (optimistic finger in the air time and all you are doing here is what the provider does) etc. And you have to manage this against the backdrop of the term of your investment(s) and any possible penalties should you ever need to terminate an investment prematurely. Worth thinking about imo.


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## Drago (28 Nov 2019)

No mortgage, modest rental income, Mrs D's pension, Mrs D's salary, my pension, my injury award, plenty of savings. A couple of years I'll be selling the current house, freeing up another XYZ amount of cash, bit losing the rental income as we go down to 1 gaff. 

The name of the game is to have more each month than the previous, even if it's only a fiver. That's inviolate - unless I need to buy an iron lung or organ transplant the savings don't get touched until Mrs D stops working.

The downside is that I have to do all the washing and ironing. As a consequence I haven't worn a garment that has been ironed since 2016.


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## lane (28 Nov 2019)

A couple of important things to factor in. First you pay no national insurance on pension and that makes a difference straight away. Second you won't be making any payments into your pension and that is also a saving. So straight away the difference is less than you think. Of course you will pay less tax as well. Work out your take home now versus take home on your pension - difference will be a good bit less than a 50% reduction. See what the actual difference is in £ and think about how you could economise to save the difference it's might be easier than you expect.


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## wonderloaf (28 Nov 2019)

I've been using various retirement drawdown calculators but this my favourite as allows you change the income withdrawal amounts at various future dates:
https://www.finalsalarytransfer.com/p/148/drawdown-calculator
We've assumed that as we get older we're going to get less active so our living costs will go down, so using this calculator you can factor in 3 income withdrawal changes in future years . We're both 60 y.o. at the moment but the plan is in a few years time we'll downsize the house, stick the money in the savings and use that to supplement our pensions, we're due to get our state pensions at 66 y.o. so our income requirement will drop quite significantly then and we've already factored this into our calculations.


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## Gunk (28 Nov 2019)

Dirk said:


> So did I when I was 55, but I found out that my lack of enjoyment accelerated exponentially with each each passing year.
> By the time I was approaching 60, I had zero interest in it and started to resent having to do it.
> God knows how I would have managed to do an extra 5 years up to 65.



I’m fortunate that I sold my business last year and took a much less stressful job which I quite like. If I’d been doing the same job for 25 years I might feel differently


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## byegad (28 Nov 2019)

Only you can decide. 
However.
I retired at 55, 10 yrs before I was due my OAP, my wife retired at 58. Both of us have modest works pensions and some savings, but not huge amounts. We can't afford to go away every other weekend, nor take foreign holidays every year. When we got our OAPs we stopped using savings for the holidays we take. We can run a nice car (and ran 2 for 10 yrs or more after early retirement). We go out for the day, or evening several times a month and do what we want to do. Friends worked longer, have much more money and go away for multiple weekends and take 2 or 3 foreign holidays each year. They are better off than us, but no happier.


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## screenman (28 Nov 2019)

I am often interested in the split between public sector and private secfor when it comes to early retirement, amongst my close friends and family the public sector members got out far earlier than the private sector one's, the self employed often later in life. Now I wonder if that is because the self employed get more pleasure from work, or because generally many have earned less so have not had the opportunity of saving.


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## lane (28 Nov 2019)

Final salary schemes astoundingly good compared to anything else. Not the preserve of the public sector by any means but over represented for sure. There are a lot of things to think about re retirement money is just part of it.


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## Drago (28 Nov 2019)

If youd been spat upon, stabbed, and suffered broken bones as a result of an assault you wouldn't been keen to carry on any longer than necessary. I was shot at more times as a copper than I was as a soldier. As it happens I wanted to stay on despote my injuries, but some nodder called Tom Winsor was made it very difficult for me so I went on the medical when I'd rather have stayed. The choice was largely out of my hands.

I actually bumped into a youngish bobby I know today, who had half his ear bitten off - I rather think he'd retire yesterday if he could. As it is he now suffers terrible PTSD and is stuck behind a desk.

When you've walked in our footsteps then you'll understand. There's no pleasure to be had doing it, but someone still has to. Fortunately there are still a few daft noble enough to do it, but when they've done their time they usually don't want to do any more. Even if they wanted to they couldn't go beyond 60 anyway, unless they were scrambled egg rank.

I did actually apply for a job recently, you may recall. The sods didn't even bother to contact me to say "thanks, but no thanks."


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## Beebo (28 Nov 2019)

Chris S said:


> While we're on the subject, I'll be 67 in 2032. Will there still be a state pension then or will we just have the government-promoted workplace pensions that most people are now paying into?


I’m about 12 years behind you, but I expect there will still be a state pension, just not sure how much it will be or when I will receive it. 
No government would have the balls to stop either the NHS or state pensions.


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## DCLane (29 Nov 2019)

Beebo said:


> I’m about 12 years behind you, but I expect there will still be a state pension, just not sure how much it will be or when I will receive it.
> No government would have the balls to stop either the NHS or state pensions.



No, but they might make the state pension means-tested. That would mess with my retirement calculations.


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## delb0y (29 Nov 2019)

I was in a meeting at work the other day with three twenty-somethings, and there's grizzled old me at 56. All three were seriously discussing opting-out(*) of the work pension scheme as the £90 or £100 they put in, could, in their eyes, be used for better stuff. I gave them the benefit of my immense wisdom on the subject ("Don't"), but I can't help but wonder if they don't have the right idea. If, in 40 years time, the state pension is means-tested and / or only paid to those who don't have other pensions, then why save for an other pension? I still think "Don't Opt Out" is the right advice, but I can see why it might be seen otherwise.

(*) Luckily, my naive 19 year old self didn't realise he could have opted out or I might have been tempted, too.


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## Gunk (29 Nov 2019)

I worked with a chap who was early ‘50’s good salary, large house, large interest only mortgage, Fancy car and holidays but no pension provision. There are lots out there like that.


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## dodgy (29 Nov 2019)

I work with a few guys who are prioritising paying off their mortgage over paying into their generous company pension scheme. I've tried to explain how much they're missing out 🤷‍♂️


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## Gunk (29 Nov 2019)

Especially when interest rates are so low and you get get tax relief on you contributions.


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## dodgy (29 Nov 2019)

Gunk said:


> Especially when interest rates are so low and you get get tax relief on you contributions.



Well, yeah, that's what I'm on about.


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## BoldonLad (29 Nov 2019)

Dave7 said:


> Ahh....misunderstood sorry. I read it as state pension.
> BUT.....state pension for a couple is not far off £300 per week. So.... *£15K a year tax free*. Plus your private pension. Not a bad sum really.



State Pension is not tax free. It is added to any other income, including Works / Private Pensions, and, some benefits, and is then taxable in the "normal" way, if taxable income exceeds the personal allowance (£12,500 at present, I think).


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## BoldonLad (29 Nov 2019)

Having gone through roughly this scenario (ie retired at 60, when state pension age was 65), I would say...

1. Will your "works pension" pay out in full at age 60, or, will you have to take a reduction by retiring early? In my case, the "hit" on my pension was 50% for taking if five years early.

2. Having established 1 above, work out what your annual retirement income will be for the period 60-67, that is, works pension, plus any investment income you may have. Consider waving the lump sum, unless you really need it, and, it will increase your pension.

3. Spend some time working out your outgoings, be realistic, no point having to live on stale bread, on the other hand, there will be savings, ie no travel costs to work, no office collections.... etc. We also went down to one car. In 12 years, we have only once encountered a "car conflict".

4. Compare outgoings with income. Provided Income is equal or greater than outgoings, you have a chance 

5. Maintain control, as income falls, it is more necessary than ever to be in control of what you have. This does not mean being scrooge, it just means having a plan and monitoring it, making adjustments if necessary.

In my case, household income fell to 40% of "in work income", but, we have managed perfectly well. I can honestly say there is nothing we have wanted to do, which we have not been able to do for money reasons. The biggest difference I find is, if a fairly large, unexpected expenditure "occurs", then, I have to plan more carefully how to handle it. 

Good luck. Retirement is fantastic!


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## All uphill (29 Nov 2019)

Only you know what you will need to be content in retirement. There's no point denying it if you dream of big, long, expensive holidays, cars or meals out. 

If you love the simple things you really won't need too much money.


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## Jimidh (29 Nov 2019)

screenman said:


> I am often interested in the split between public sector and private secfor when it comes to early retirement, amongst my close friends and family the public sector members got out far earlier than the private sector one's, the self employed often later in life. Now I wonder if that is because the self employed get more pleasure from work, or because generally many have earned less so have not had the opportunity of saving.


This is interesting - I’m 53, have my own business and could if I sold up retire relatively comfortably if I wanted. But I still enjoy it and i think I would miss it. Plan to sell up in the next 4-5 but need to plan tapering off to being semi retired as I don’t think I could switch off completely.


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## Drago (30 Nov 2019)

Gunk said:


> I worked with a chap who was early ‘50’s good salary, large house, large interest only mortgage, Fancy car and holidays but no pension provision. There are lots out there like that.


Yep, and when someone else who had planned ahead is able to retire before they're elderly its exactly these eejuts who complain about the injustice of it all. Well, I also had the choice of a flashy new German car every 2 or 3 years or retiring and I made my choice, just the same as they made theirs.


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## Gunk (30 Nov 2019)

If you genuinely want to pack up work at 60 and don’t have the benefit of a non contributory final pension scheme, then you have to do two things, firstly start making contributions into a personal pension as early as possible and secondly live within your means. Unfortunately there is a whole population who have done neither but are enjoying expensive holidays and nice lease cars. It is worrying, we’ve become an odd society when we haven’t really learnt the lessons from the financial crash in 2007.


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## johnblack (3 Dec 2019)

I'm still a bit young for retirement, but planning for it now. I put as much as possible in to my work pension as the returns are pretty good and it reduces my tax (sorry Jeremy), also I get an annual bonus, which I don't take but stick in to the pension, again reduces my tax. 

My plan is to keep on sticking in as much as I can for the next few years and then drop my hours, not sure I'd give up the job as other benefits such as car, pension and healthcare are worth too much. 

They're the things that it's difficult to price when you jack it all in.


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## SkipdiverJohn (9 Dec 2019)

Fundamentally, if you want to retire (irrespective of age), you have to sort your finances out so you won't have any outstanding debt to service by the time you intend to pack in work. That requires you to live below your means when you are younger, get a paid-for roof over your head ASAP, and pay as little tax as possible so that as much of the money you earn as possible is actually benefitting *you*, not being handed over to muppet politicians to waste.
When I was younger, I concentrated on getting my house paid off early using my overtime earnings, whilst also putting some money into my work pension. Once the house was cleared, the overtime earnings went into tax-efficient vehicles, like taking a PEP/ISA out every year, employee share schemes, inflation-proof NS & I Index Linked certs, and putting some AVC's in my pension on top of the regular amount. I have had a cardinal rule of never paying the 40% tax, no matter how much I've earned. I've always diverted as much as necessary into share schemes/AVC's in order to keep my taxable income on the basic rate, when I had an exceptionally high earning year. I do as much as possible using salary sacrifice too, so I don't pay the 12% NIC's as well as saving the tax.
My unavoidable household outgoings have essentially hit a plateau now I don't have any debt to service, and I can easily live within my net earnings after deductions and pension contributions are taken out. I don't intend to work beyond 60, and hopefully will go PT a couple of years before that. Aim to be a receiver, not a payer, of interest. Don't pay to borrow other people's money - make sure they are the ones paying to borrow yours!


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## fossyant (9 Dec 2019)

My in-laws faced a very shaky retirement. Had their own business but had invested most of their spare cash in keeping the business going, which eventually got taken over. No pensions. Only by 'luck' did my MIL suffer health problems, and they were able to live off her disability benefits. Things weren't looking rosy when FIL passed away, but we managed to secure MIL's allowances. It's still not a great way to enjoy retirement, and now she's in a home, the house they bought is now funding her Nursing care to £50k a year.

Chatting with my own father, his private pension (AVC's and 40 years into a final salary scheme) plus what state pension he received, was still less than MIL's monthly benefits, and he had council tax to pay as well.

Unless you've got a pension or savings behind you, you are going to be in deep doo doo come retirement if still 'healthy'.

My mortgage is paid off, I'm still 17 years away from State Retirement, but will have 40 years in an 'average salary' scheme by the time I'm in my early 60's and I've also got two private pensions which I could draw down earlier than this. I'd rather not work until 67, but I see plenty of folk where I am still choosing to work past retirement. I think one of my colleagues is going to have to retire - working way too hard, suffered a heart attack recently. He's not far off state retirement age, but has a very large property (mortgage) and daughters in Uni. Time to downsize and 'relax'.


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## dodgy (9 Dec 2019)

Anyone watch the 'pensions crisis' show on Channel 5? Quite interesting to see the aspirations of people who have essentially done no planning at all. I think there's maybe 4 or 5 episodes, but it's available on My5.

Perhaps it will serve as a wake up call, especially to those without final salary/military/LGPS/NHS/police etc etc pensions who have to take more ownership of their affairs.


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## lane (9 Dec 2019)

Problem is young people are skeptical of the "system". They think you pay in and the goal posts change and you get robbed. Not without reason.


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## SkipdiverJohn (9 Dec 2019)

lane said:


> Problem is young people are skeptical of the "system". They think you pay in and the goal posts change and you get robbed. Not without reason.



The majority of the working population have had the goalposts moved to some degree, whether it be the state pension age being pushed back a couple of years, or occupational pensions that have changed the rules to have staff retiring say at 65 instead of 60 unless they want to take a reduction.
If young people decide to reject the whole concept of retirement savings, they are going to be in for a nasty shock come the time they retire. What people need to remember is the basic state pension was only ever intended as a safety net to enable pensioners to survive, not to furnish them with a comfortable lifestyle. That's what SERPS/occupational/private pensions are for. The basic state pension only gives you the slice of bread. if you want some jam to spread on it, you have to organise that bit yourself.


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## lane (9 Dec 2019)

Organise it themselves but not necessarily through a workplace retirement scheme. Although whatever you do might end up with nothing.


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## rogerzilla (9 Dec 2019)

I know a few people who opted out of a very good final salary scheme when it was on offer. Unless they inherit a million quid from somewhere, they will have 20-30 years to regret it.


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## Drago (10 Dec 2019)

SkipdiverJohn said:


> Fundamentally, if you want to retire (irrespective of age), you have to sort your finances out so you won't have any outstanding debt to service by the time you intend to pack in work. That requires you to live below your means when you are younger, get a paid-for roof over your head ASAP, and pay as little tax as possible so that as much of the money you earn as possible is actually benefitting *you*, not being handed over to muppet politicians to waste.
> When I was younger, I concentrated on getting my house paid off early using my overtime earnings, whilst also putting some money into my work pension. Once the house was cleared, the overtime earnings went into tax-efficient vehicles, like taking a PEP/ISA out every year, employee share schemes, inflation-proof NS & I Index Linked certs, and putting some AVC's in my pension on top of the regular amount. I have had a cardinal rule of never paying the 40% tax, no matter how much I've earned. I've always diverted as much as necessary into share schemes/AVC's in order to keep my taxable income on the basic rate, when I had an exceptionally high earning year. I do as much as possible using salary sacrifice too, so I don't pay the 12% NIC's as well as saving the tax.
> My unavoidable household outgoings have essentially hit a plateau now I don't have any debt to service, and I can easily live within my net earnings after deductions and pension contributions are taken out. I don't intend to work beyond 60, and hopefully will go PT a couple of years before that. Aim to be a receiver, not a payer, of interest. Don't pay to borrow other people's money - make sure they are the ones paying to borrow yours!


I knew a copper, his other half was a nurse. They lived solely of her salary and ploughed all of his into the mortgage and paid it off in 6 years. Things were tight, be he reckons not that bad - the still ate well. had decent clothes, but they bought nothing on finance, no car loans, not even mobile phone contracts, all the things that suck money away for no long term return. They celebrated paying off the mortgage by buying a caravan.


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## fossyant (10 Dec 2019)

I just so happened to be talking to an academic colleague. Just discussing how pension contribution rises had added massively to our payroll bill. She then said she didn't have one. She's not a kid either. I just couldn't understand why she wouldn't pay into the scheme when her employer put's in another 23% on top of around 9% employee contribution. Our pay isn't great, but when you add in pension costs on top, it's not that bad. Well I can, it's the hit of £500 a month before tax flying out of your pay packet, but she's is probably leaving things rather late - actually I should have mentioned she's probably wasting money on tax as her salary would have been in the 40% bracket, paying pension would lower this.


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## lane (10 Dec 2019)

£500 sounds a bit high after tax with a 9% contribution would put her on over £100k which would be better than a not great salary!


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## cisamcgu (10 Dec 2019)

dodgy said:


> I work with a few guys who are prioritising paying off their mortgage over paying into their generous company pension scheme. I've tried to explain how much they're missing out 🤷‍♂️


I completely understand the logic, but there is something comforting about paying the mortgage off - perfectly understandable, and at least it isn't being wasted


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## dodgy (10 Dec 2019)

cisamcgu said:


> I completely understand the logic, but there is something comforting about paying the mortgage off - perfectly understandable, and at least it isn't being wasted


I pointed out that if they diverted the cash to their pension, there'd be enough surplus to pay off the mortgage at age 55 and still have a sizeable pot.


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## vickster (10 Dec 2019)

Personally I like having a large disposable income while I’m youngish and can enjoy it, rather than tying money up in pensions for an extended old age (I don’t want to live to a hundred)!


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## Gunk (10 Dec 2019)

vickster said:


> Personally I like having a large disposable income while I’m youngish and can enjoy it, rather than tying money up in pensions for an extended old age (I don’t want to live to a hundred)!



it arrives much quicker than you think!


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## lane (10 Dec 2019)

Quite a few early retirees in my cycling club. They seem to be enjoying themselves as far as I can tell.


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## vickster (10 Dec 2019)

Gunk said:


> it arrives much quicker than you think!


It’s fine. I’m stock piling cash


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## dodgy (10 Dec 2019)

vickster said:


> It’s fine. I’m stock piling cash



That you've paid tax on?


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## vickster (10 Dec 2019)

dodgy said:


> That you've paid tax on?


Of course! Figure of speech, I'm not paid cash in hand!
Accountant tells me how much income and company tax to fork over to HMRC


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## Milkfloat (10 Dec 2019)

fossyant said:


> I just so happened to be talking to an academic colleague. Just discussing how pension contribution rises had added massively to our payroll bill. She then said she didn't have one. She's not a kid either. I just couldn't understand why she wouldn't pay into the scheme when her employer put's in another 23% on top of around 9% employee contribution. Our pay isn't great, but when you add in pension costs on top, it's not that bad. Well I can, it's the hit of £500 a month before tax flying out of your pay packet, but she's is probably leaving things rather late - actually I should have mentioned she's probably wasting money on tax as her salary would have been in the 40% bracket, paying pension would lower this.



23%  Wow, turning done that amount of free money is pretty crazy unless you don't understand what you are turning down.


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## glasgowcyclist (10 Dec 2019)

Milkfloat said:


> 23%  Wow, turning done that amount of free money is pretty crazy unless you don't understand what you are turning down.




A few years ago, after a pension advice seminar at work, my wife started whacking in the maximum her employer would allow which is around 49% of her salary. She can't buy any additional leave now, or other benefits, as it would take her below the threshold in take home pay.


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## johnblack (10 Dec 2019)

glasgowcyclist said:


> A few years ago, after a pension advice seminar at work, my wife started whacking in the maximum her employer would allow which is around 49% of her salary. She can't buy any additional leave now, or other benefits, as it would take her below the threshold in take home pay.


That's a tidy sum, she's a keeper!


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## dodgy (10 Dec 2019)

vickster said:


> Of course! Figure of speech, I'm not paid cash in hand!
> Accountant tells me how much income and company tax to fork over to HMRC



So if you'd put it in your pension, it would have been tax free.


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## sheddy (10 Dec 2019)

Can anyone link to an idiots guide (with online calculator) for pension transfer/drawdown ?

I need to start thinking about the Equitable Life thingy.


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## vickster (10 Dec 2019)

dodgy said:


> So if you'd put it in your pension, it would have been tax free.


I put plenty in just not all of it  once markets are hopefully less volatile, I may put more in (as the value of investments can apparently go up and down and further down...as pension statements have indicated over the last couple of years)

Quite a lot of the cash is in a company account. I don’t believe I as the director can siphon it all off. And as a contractor I would like to have access to money for lean non working times, in case of sickness, for holidays . I’m not PAYE employed any more.
That money will be available to me when I retire and close the company

You seemed concerned that I wasn't paying tax earlier, now you're suggesting how I should avoid it


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## glasgowcyclist (10 Dec 2019)

johnblack said:


> That's a tidy sum, she's a keeper!



I hope she keeps me!


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## Drago (10 Dec 2019)

cisamcgu said:


> I completely understand the logic, but there is something comforting about paying the mortgage off - perfectly understandable, and at least it isn't being wasted


Yep, once you own your own gaff you answer to no one. It's a great feeling.


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## dodgy (10 Dec 2019)

vickster said:


> I put plenty in just not all of it  once markets are hopefully less volatile, I may put more in (as the value of investments can apparently go up and down and further down...as pension statements have indicated over the last couple of years)
> 
> Quite a lot of the cash is in a company account. I don’t believe I as the director can siphon it all off. And as a contractor I would like to have access to money for lean non working times, in case of sickness, for holidays . I’m not PAYE employed any more.
> That money will be available to me when I retire and close the company
> ...


You completely missed my point I think. i was trying to say that any cash in your savings has had tax paid, but put it into your pension and you avoid that. There’s nothing wrong with avoiding tax. 
i was given advice that I once ignored. No going back now 😂


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## vickster (10 Dec 2019)

dodgy said:


> You completely missed my point I think. i was trying to say that any cash in your savings has had tax paid, but put it into your pension and you avoid that. There’s nothing wrong with avoiding tax.
> i was given advice that I once ignored. No going back now 😂


I pay about 8k a year into the pension I think. That’s ample for now


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## SkipdiverJohn (12 Dec 2019)

Drago said:


> they bought nothing on finance, no car loans, not even mobile phone contracts, all the things that suck money away for no long term return.



I don't buy anything on finance either. I didn't quite manage to pay my house off in 6 years, but it was still cleared in half the time most people are paying it back over.



fossyant said:


> I just so happened to be talking to an academic colleague...... She then said she didn't have one. She's not a kid either. I just couldn't understand why she wouldn't pay into the scheme when her employer put's in another 23% on top of around 9% employee contribution.



Just goes to prove what I have always thought about academics, namely that for supposedly "smart" people, a lot of them have got absolutely no common sense whatsoever.



dodgy said:


> I pointed out that if they diverted the cash to their pension, there'd be enough surplus to pay off the mortgage at age 55 and still have a sizeable pot.



Assuming the pension investments perform OK, and also assuming the employee does not lose their job in the meantime. Paying the house off first as priority makes sense because you can survive easier with no job if you have no mortgage/rent to pay, than you can with no job but loan interest still to service. 



Drago said:


> Yep, once you own your own gaff you answer to no one. It's a great feeling.



My attitude entirely. You don't have to take any shoot from guvnors at work who try to use the threat of not getting overtime if you don't bend to their way of doing things either. One idiot tried it on me once, so I said "bollox to you pal, I can live on flat wages, but you are the one who's going to be getting your arse chewed by the seniors when you don't deliver, because I assure you I won't be staying late to get things done" He soon got moved sideways, and normal service was resumed....


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## fossyant (12 Dec 2019)

SkipdiverJohn said:


> Just goes to prove what I have always thought about academics, namely that for supposedly "smart" people, a lot of them have got absolutely no common sense whatsoever.




You don't need to think it, most haven't, FACT.


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## Rusty Nails (12 Dec 2019)

I used to work as a pensions manager of a large company. One of the biggest problems we had around the time that allowing companies to make membership of their pension scheme compulsory was stopped in 1988 was trying to get over to people that they were unlikely to better our final salary scheme by joining a personal pension, especially if they been in it for a long time.

Many left and were sold the idea of personal pension schemes as "being in charge", whereas it really meant paying the salesman and new pension scheme a fee, and gambling on good returns. It was sad when people later saw the poor returns and tried to rejoin and were told their previous service no longer counted and that their transfer-in value would buy them far less years than they had taken out.

Some of the younger people saw it as a chance to reduce their pension payments, assuming they could just increase them later when they were nearer retirement. They could not be persuaded of the simple concept that a pound invested for 35 years is likely to grow a lot more than a pound invested for 20 years.

Sadly final salary pensions, especially for new entrants, have virtually disappeared.


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## dodgy (12 Dec 2019)

fossyant said:


> FACT.


Whenever I see 'FACT' at the end of a sentence, I am always assured that the person using it has done extensive peer reviewed research and is entirely correct.


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## BoldonLad (12 Dec 2019)

dodgy said:


> So if you'd put it in your pension, it would have been *tax free*.



While not disagreeing with the idea of Pension Contributions, the "tax thing" is a bit of swings and roundabouts (IMHO).

With Pension Contribution, you get tax relief on the Contribution (within limits), but, pay tax on the Pension, when paid. You could, instead, invest in Stocks and Shares ISAs (with taxed money), and, hopefully, withdraw the rewards at Pension time, tax free.

My personal choice was, a bit of each.


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## SkipdiverJohn (12 Dec 2019)

BoldonLad said:


> the idea of Pension Contributions, the "tax thing" is a bit of swings and roundabouts (IMHO).
> With Pension Contribution, you get tax relief on the Contribution (within limits), but, pay tax on the Pension, when paid. You could, instead, invest in Stocks and Shares ISAs (with taxed money), and, hopefully, withdraw the rewards at Pension time, tax free.
> My personal choice was, a bit of each.



If you use your loaf though, you can make sure you keep out of the 40% tax bracket whilst you are still working, then minimise your taxable income when taking your pension by having the max 25% lump sum out. You could then invest your tax-free lump sum in high dividend-yield shares within a stocks & shares ISA, and receive the investment income tax-free. I also do both pensions and ISA's, but not cash ones as the returns on cash are shite.


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## screenman (12 Dec 2019)

I do not mind paying tax, just wish everyone else paid as well.


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## BoldonLad (12 Dec 2019)

SkipdiverJohn said:


> If you use your loaf though, you can make sure you keep out of the* 40% tax bracket* whilst you are still working, then minimise your taxable income when taking your pension by having the max 25% lump sum out. You could then *invest your tax-free lump sum in high dividend-yield shares within a stocks & shares ISA,* and receive the investment income tax-free. I also do both pensions and ISA's, but *not cash ones as the returns on cash are shite.*



Quite, 

although I did not spell it out, that was pretty much my technique (the 40% tax bit).

The second point depends on the amount of the lump sum, there is a limit on how much you can pump into an ISA in any one (tax) year.

Agree re; Cash ISAs, yjey always appeared pointless to me, even more so now, with current rules on taxation of interest.


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## fossyant (12 Dec 2019)

dodgy said:


> Whenever I see 'FACT' at the end of a sentence, I am always assured that the person using it has done extensive peer reviewed research and is entirely correct.



I work with a few thousand, so have experience.


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## dodgy (12 Dec 2019)

fossyant said:


> I work with a few thousand, so have experience.


Fair one. It's just one of those trigger phrases used by a certain section of society like "end of" and "fact".


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## SpokeyDokey (12 Dec 2019)

SkipdiverJohn said:


> *If you use your loaf though, you can make sure you keep out of the 40% tax bracket* whilst you are still working, then minimise your taxable income when taking your pension by having the max 25% lump sum out. You could then invest your tax-free lump sum in high dividend-yield shares within a stocks & shares ISA, and receive the investment income tax-free. I also do both pensions and ISA's, but not cash ones as the returns on cash are shite.



I really do wish that was true. From the end of the 90's to early 2000's I was hammered on tax - it was just not possible to avoid higher tax rates although there were opportunities to minimise it.


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## DCLane (12 Dec 2019)

fossyant said:


> You don't need to think it, most haven't, FACT.



Erm ...



dodgy said:


> Whenever I see 'FACT' at the end of a sentence, I am always assured that the person using it has done extensive peer reviewed research and is entirely correct.





fossyant said:


> I work with a few thousand, so have experience.



But you don't work with me  However, given I keep buying bikes that may have answered itself.

My retirement plan has me going part-time from academic at 60 having paid a full term into the Teacher's Pension scheme (which is a decent one), with several 'alternative' pension support plans.


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## fossyant (12 Dec 2019)

DCLane said:


> Erm ...



I've met you, you passed. There is about 10% with comon sense !


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## JtB (14 Dec 2019)

We’ve always been a single income family, but with careful planning and living within our means the mortgage was paid off over 8 years ago and at the age of 59 we now have significant savings along with 34 years paid into good pension schemes (including 30 years into a final salary pension). I could easily retire now if I wanted, but I enjoy too much what I do and so I’m in no hurry. I also enjoy the fact that I’m now working because I want to rather than because I need to pay the bills.


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## screenman (14 Dec 2019)

JtB said:


> We’ve always been a single income family, but with careful planning and living within our means the mortgage was paid off over 8 years ago and at the age of 59 we now have significant savings along with 34 years paid into good pension schemes (including 30 years into a final salary pension). I could easily retire now if I wanted, but I enjoy too much what I do and so I’m in no hurry. I also enjoy the fact that I’m now working because I want to rather than because I need to pay the bills.



We have also been a single income family, bit of a rarity.


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## Gunk (14 Dec 2019)

screenman said:


> We have also been a single income family, bit of a rarity.



So have we, my wife never went back to work, we’ve managed fine.


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## screenman (14 Dec 2019)

Gunk said:


> So have we, my wife never went back to work, we’ve managed fine.



We got married aged 17 and 18, 45 years ago, single income since then.


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## Drago (14 Dec 2019)

Between me and Mrs D we have so many income streams it's hard to keep track. My pension, my injury award, rental income, Mrs D's pension, Mrs D's salary, Mrs D's PIP, Mrs D's business interest, all bringing in moolah on different days of the flipping month. Fortunately daughter #3 is an accountant and keeps tabs on that for me.

Still no new Bentley though


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## screenman (14 Dec 2019)

Drago said:


> Between me and Mrs D we have so many income streams it's hard to keep track. My pension, my injury award, rental income, Mrs D's pension, Mrs D's salary, Mrs D's PIP, Mrs D's business interest, all bringing in moolah on different days of the flipping month. Fortunately daughter #3 is an accountant and keeps tabs on that for me.
> 
> Still no new Bentley though



I also never got a Bentley, did have nice Roller for a while though back in my more stupid younger days.


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