Retirement calculations - Can I ever retire ?

[vickster]

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

 

[Milkfloat]

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.

 

[glasgowcyclist]

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.

 

[johnblack]

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!

 

[dodgy]

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.

 

[sheddy]

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

I need to start thinking about the Equitable Life thingy.

 

[vickster]

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

 

[glasgowcyclist]

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

I hope she keeps me!

 

[Drago]

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.

 

[dodgy]

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

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 😂

 

[vickster]

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

 

[SkipdiverJohn]

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.

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.

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.

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....

 

[fossyant]

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.

 

[Rusty Nails]

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.

 

[dodgy]

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.