Retirement, how much?

[yello]

I'm envious, as I said up thread. I would love to be in a position where I had a trusted IFA. Their advice would be most welcomed. I can do basic stuff, sure, but (as I a!so said) personal pensions are beyond me. I have no idea what to do 'for the best'

And like with many things in life (diners out, cycling gear) if it does the Job to your unbridled satisfaction then you don't care about the price.

 

[oldfatfool]

If IFA's and pension managers only got paid on a % of the profits they returned, I would happily pay them 20% but as they all seem to want to get paid a % of my total wealth invested each year regardless of profit or loss the incentive to do well seems to be removed.

 

[mikeIow]

Because the amount he is charged is 0.85% of his pension pot.

Anything which is not part of that pot is no additional charge, so is effectively free.

Sounds reasonable…..I’m more concerned about the hugs, & PaulSB valuing that above the advice given 🤪

I’m not a big fan of paying advisors the % fees in general…..I get more attention from my dentist, accountant, plumber & mechanic than I think I would from an IFA, & pay them a fair hourly rate…..but in this case I suspect the lifetime care piece probably makes the payment worth every penny👍

 

[swee'pea99]

The trouble is, if a FA flouted their wealth in front of you, you’d be well annoyed that it was the rip off fees that you were paying that were funding such a lifestyle

Reminds me of some advice I once read to a young doctor in the US: If you're moving to a new town, beg borrow, steal, do whatever it takes, but make sure you arrive in a Cadillac: you'll definitely end up in one; make sure it's not past neighbours all thinking they helped pay for it.

 

[Drago]

Blimey, this makes my head spin.

I thought it easy, requiring only iron discipline. Save a load, shovel money into a pension, divorce a wealthy woman and receive a nice settlement, buy a house and then (not by design, but it's how it turned out) not live in it much save the rental income and then eventually sell it for 4 times its purchase cost.

Don't fritter it away, and when the time came for circumstances to pressure me out of work I ended up with an income 200 sheets more a month than when I was working and remain backed by a considerable liquidity.

Beyond a conscious decision to save very hard for bank/pension, and not to pith it up the wall on new cars and rubbish, I didn't really have a plan. It was pretty straight forward making sure thatneach monthnInwas better off than the last. I can't help thinking that if I'd started messing about with annuities and shizzle instead id not be able to afford to retire until the 3rd Tuesday after I'd died.

 

[Dirk]

Because the amount he is charged is 0.85% of his pension pot.

Anything which is not part of that pot is no additional charge, so is effectively free.

Effectively free is meaningless.
It's either free or it's not.
Someone is paying for it and you can bet it's not the financial advisor.

 

[ebikeerwidnes]

Although it is clearly not really free - it can be effectively free

If it is an included facility as part of something that you would be having, and therefore paying, for anyway - then the extras are effectively free

you do need to check that you REALLY would have it anyway - and that there isn;t a cheaper option available that has all the bits that you need - which is often the trap.

 

[Alex321]

Effectively free is meaningless.

I disagree, there is a meaning.

"Effectively free" means there is no additional cost to you for doing that over not doing it.

It's either free or it's not.
Someone is paying for it and you can bet it's not the financial advisor.

Well obviously, they have factored in to their overall charge for the "We'll look after ALL your finances" package, some idea of how much time they will spend on it, in order to receive what they consider a reasonable rate for their time & expertise.

 

[Dirk]

I disagree, there is a meaning.

"Effectively free" means there is no additional cost to you for doing that over not doing it.

In other words it's free - not effectively free.

Well obviously, they have factored in to their overall charge for the "We'll look after ALL your finances" package, some idea of how much time they will spend on it, in order to receive what they consider a reasonable rate for their time & expertise.

So, you are paying for it.

 

[Alex321]

In other words it's free - not effectively free.

No. It does NOT mean that. It means what I said. Your "In other words" has a very different meaning to what I said.

So, you are paying for it.

There is no marginal cost to you.

It makes no difference to what you pay whether that is included or not.

 

[Dirk]

No. It does NOT mean that. It means what I said. Your "In other words" has a very different meaning to what I said.



There is no marginal cost to you.

It makes no difference to what you pay whether that is included or not.

Whatever.

 

[PaulSB]

@PaulSB
Curious as to why you would pay someone to sort out your wife's State Pension. It's easy to do it yourself online, and if you have any queries the telephone operatives are very helpful.
MrsD just sorted hers out and applied with no real effort.

As @Alex321 says it is effectively free as I'm only paying based on the value of my pension and also I'm the client not my wife.

I've checked it all online and understand exactly what we have to do financially. You'll know each individual year has a date by which one must pay the additional year. We have five years to pay with last payment dates from 2022 through to 2027.

Mrs P get her SP in September. What I cannot fathom, and my FA is unsure, is do we have to pay all five years before April 2022 in order for her to receive the maximum SP from September or can we spread it over the five years. The website suggests it's a five year spread but when something is too good to be true it needs checking. My FA is doing it and we will be calling the Helpline as well. I'll want it in writing from the DWP.

Belt and braces I know but this is worth £1300pa so getting it wrong isn't an option.

 

[Dirk]

As @Alex321 says it is effectively free as I'm only paying based on the value of my pension and also I'm the client not my wife.

I've checked it all online and understand exactly what we have to do financially. You'll know each individual year has a date by which one must pay the additional year. We have five years to pay with last payment dates from 2022 through to 2027.

Mrs P get her SP in September. What I cannot fathom, and my FA is unsure, is do we have to pay all five years before April 2022 in order for her to receive the maximum SP from September or can we spread it over the five years. The website suggests it's a five year spread but when something is too good to be true it needs checking. My FA is doing it and we will be calling the Helpline as well. I'll want it in writing from the DWP.

Belt and braces I know but this is worth £1300pa so getting it wrong isn't an option.

Has your FA told you that the 2021/2022 year top up only gives you half as much extra per week than previous years? MrsD looked into this the other week. Previous top up years gave approximately 30% return on capital. This year is only 15%. She decided not to pay the extra £800 as it would take over 6 years to get the capital back and would only make about £2.50 a week difference on the SP.

 

[Oldhippy]

When I return to my home planet I intend to leave bugger all in the bank personally.

 

[Dave7]

When I return to my home planet I intend to leave bugger all in the bank personally.

If you have no 'close' family then that's the way to go.
2 years ago we intended to spend and enjoy as much of the kids inheritance as possible.
Sadly health issues and covid have bollixed much of that .