took the leap

[SpokeyDokey]

I'd agree. For 10 years it's grown slowly, steadily, up to £55k (which as I said earlier, is still a very small amount in pensions terms). As it is, this year has seen it tumble by 20% ish and I see more uncertainty on the horizon...as do many if you read enough...so potentially more losses. Were I 45, 50, I wouldnt even be considering it, looking at the longer term but there's only 2 years till I retire , its a very modest pot threatening to reduce perhaps significantly in the short term...and with only 2 years till I think I will draw it, there's no time for it to recoup those big losses, hence my (not yet 100% decided) decision

FWIW 2 years is plenty of time to make a recovery imo.

We have quite a lot of money invested in SIPPS, S&S Isa's and share holdings and tbh we are still putting money in.

We do have more capacity to weather any storms than you to be fair but I think you are being it bit jittery tbh, however, if you are really negative about the next 2 years do you really need the money right at the moment that you retire: ie can you leave it in longer?

 

[Deleted member 26715]

As a wider part of the discussion and length of life and its impact on your retirement...my mum (92) has done ok with dad's military, state and private pensions but I always noticed, there comes a point, where the need for excess cash (over the normal bills and.living costs) diminish and almost disappear. She simply doesn't, can't, do much for the last 10 years, doesn't spend anything like the pensions she gets in (which aren't massive BTW, just better than adequate).and has banked, saved a fair sum instead.
In short, there comes a point where the need for a healthy pension that let's you live well...falls away.
Just one experience of course.

Taking the discussion even wider verging on OT my wife's aunt died a month ago at the age of 97, she had her pension, 50% of her husbands pension & the state pension, I'm not sure how much all of that was worth, but she lived very modestly in her own house.

She did however spend the last 8 months in a care home, that is going to take a sizeable chunk out of the estate. It appears these days it doesn't pay to be a saver. Also having no LPoA in place has made it very difficult for the family.

 

[SpokeyDokey]

Taking the discussion even wider verging on OT my wife's aunt died a month ago at the age of 97, she had her pension, 50% of her husbands pension & the state pension, I'm not sure how much all of that was worth, but she lived very modestly in her own house.

She did however spend the last 8 months in a care home, that is going to take a sizeable chunk out of the estate. It appears these days it doesn't pay to be a saver. Also having no LPoA in place has made it very difficult for the family.

And LPA's are easy to do yourself using the Gov' online service.

 

[Lozz360]

You say that with state and another pension you should get £450 per week? Do both you and your wife qualify for full state pensions? If so, that would be in the region of £185 per week each.

If I was planning to retire in two years, I would maximise my current employer’s pension to the most I could possibly afford. That way you get tax relief as your taxable income is reduced, your employer may increase their contribution according to their rules, the government add another 25% to your contribution, then when you come to withdraw at retirement you get 25% tax free! The result is by far better than any investment you could put your money into, including gold.

 

[jowwy]

You say that with state and another pension you should get £450 per week? Do both you and your wife qualify for full state pensions? If so, that would be in the region of £185 per week each.

If I was planning to retire in two years, I would maximise my current employer’s pension to the most I could possibly afford. That way you get tax relief as your taxable income is reduced, your employer may increase their contribution according to their rules, the government add another 25% to your contribution, then when you come to withdraw at retirement you get 25% tax free! The result is by far better than any investment you could put your money into, including gold.

hes only 64, so wouldnt get state pension yet....the only thing he is doing is drawing down a small pension pot and then in two years time it will just be his/wifes state pensions, and a smaller pension

 

[Jameshow]

You say that with state and another pension you should get £450 per week? Do both you and your wife qualify for full state pensions? If so, that would be in the region of £185 per week each.

If I was planning to retire in two years, I would maximise my current employer’s pension to the most I could possibly afford. That way you get tax relief as your taxable income is reduced, your employer may increase their contribution according to their rules, the government add another 25% to your contribution, then when you come to withdraw at retirement you get 25% tax free! The result is by far better than any investment you could put your money into, including gold.

Good advice!

I wasn't seriously suggesting gold, rather it being better than cash in the current climate.

 

[Lozz360]

hes only 64, so wouldnt get state pension yet....the only thing he is doing is drawing down a small pension pot and then in two years time it will just be his/wifes state pensions, and a smaller pension

OK. The way I read it was that when he retires at 66 in two years time, he and his wife would be getting £450 per week from state pensions and a small private pension. I was wondering if he and wife would be entitled to full SP which would be in the region of £370 for both of them meaning that the private pension would be paying just £80 per week (£450 - £370). The OP may be better off in retirement than he realises.

 

[SpokeyDokey]

OK. The way I read it was that when he retires at 66 in two years time, he and his wife would be getting £450 per week from state pensions and a small private pension. I was wondering if he and wife would be entitled to full SP which would be in the region of £370 for both of them meaning that the private pension would be paying just £80 per week (£450 - £370). The OP may be better off in retirement than he realises.

FWIW I read it the same as you.

Imo many people naturally get nervous as retirement aproaches as income (generally) dips and it probably feels a bit precarious if you do not have decent savings.

 

[Deleted member 26715]

Imo many people naturally get nervous as retirement aproaches as income (generally) dips and it probably feels a bit precarious if you do not have decent savings.

Yep i'm there 62 now, no state pension until 66 1/3 very little in the way of private pension they are predicting £5k a year, so I have between now & then to save 40 years worth of savings I couldn't afford to do.

Those that advocate SIPP I know you get your payments increased by 20% but is it really better tying it into a pension rather having in normal stocks & shares.

As a for instance if I had £40K in stocks & shares I can get my hands on all £40K within 7 days to do what I like with it, if I out it in a SIP then it's locked in & I can only get at retirement age or am I missing something, I hate personal finance like this.

 

[SpokeyDokey]

Yep i'm there 62 now, no state pension until 66 1/3 very little in the way of private pension they are predicting £5k a year, so I have between now & then to save 40 years worth of savings I couldn't afford to do.

Those that advocate SIPP I know you get your payments increased by 20% but is it really better tying it into a pension rather having in normal stocks & shares.

As a for instance if I had £40K in stocks & shares I can get my hands on all £40K within 7 days to do what I like with it, if I out it in a SIP then it's locked in & I can only get at retirement age or am I missing something, I hate personal finance like this.

You can withdraw your SIPP funds at any time after age 55 - this rises to 57 in 2028.

First 25% of each withdrawal is tax free and the rest charged at the normal taxation rates.

My wife has a SIPP that is doing really well (almost 20 years in a commercial property fund) and she is now 59 so to minimise tax payments, ie nullify them, she will take it out in annual chunks prior to her 67th birthday (when State Pension kicks in).

Thie way she will do this is by utilising the first 25% free rule and then the rest will be drawn out to the value of her personal tax allowance; which will mean no tax payable in each year that she withdraws it. She will zero the balance prior to turning 67.

Obviously this would be affected by any income that you may receive in any one year - my wife has no direct income (kept woman - haha) but has other incomes covered by different tax rules (ISA's, dividends etc).

 

[Deleted member 26715]

You can withdraw your SIPP funds at any time after age 55 - this rises to 57 in 2028.

First 25% of each withdrawal is tax free and the rest charged at the normal taxation rates.

My wife has a SIPP that is doing really well (almost 20 years in a commercial property fund) and she is now 59 so to minimise tax payments, ie nullify them, she will take it out in annual chunks prior to her 67th birthday (when State Pension kicks in).

Thie way she will do this is by utilising the first 25% free rule and then the rest will be drawn out to the value of her personal tax allowance; which will mean no tax payable in each year that she withdraws it. She will zero the balance prior to turning 67.

Obviously this would be affected by any income that you may receive in any one year - my wife has no direct income (kept woman - haha) but has other incomes covered by different tax rules (ISA's, dividends etc).

I have a mental block here, I can see all the words, I understand what each word means, but strung together they don't make any sense,

I think I need to bite the bullet & go lay all the cards out on the table in front of an IFA & see what they say, I will be honest it irks me to have to pay £450 for that privilege although I also know they could save/make me far more than that in the long run.

 

[Jameshow]

I have a mental block here, I can see all the words, I understand what each word means, but strung together they don't make any sense,

I think I need to bite the bullet & go lay all the cards out on the table in front of an IFA & see what they say, I will be honest it irks me to have to pay £450 for that privilege although I also know they could save/make me far more than that in the long run.

Try the CAB?
Or golf course hole 19!🤣🤣🤣

 

[Deleted member 26715]

Try the CAB?

Thank you never thought of them, although locally I have not heard good things about them

Or golf course hole 19!🤣🤣🤣

I'm with Mark Twain on this one.

Another on a SIPP what happens to any residual on death?

 

[SpokeyDokey]

I have a mental block here, I can see all the words, I understand what each word means, but strung together they don't make any sense,

I think I need to bite the bullet & go lay all the cards out on the table in front of an IFA & see what they say, I will be honest it irks me to have to pay £450 for that privilege although I also know they could save/make me far more than that in the long run.

Sorry if I was a bit wordy.

How's this?

After the age of 55 you can withdraw what you want when you want from yourSIPP.

Whenever you withdraw any funds and let's assume that you want to withdraw the whole lot in one go:

The first 25% (of any amount) is always tax free.

You can then withdraw up to £12570 of any unused personal allowance free of tax. If you have earned, through employment, above this £12570 your drawings will be taxed; intially at 20% and rising as per the usual taxation bands.

If you have earnings below this amount you will need to take this amount off of your personal allowance - the remaining balance will be the additional amount that you can take tax free.

Examples £20k pot & let's say you want to withdraw the whole lot within a tax year:

Tax free = £5000

If you have no employment income you can take further a £12570 free of tax & the remaining £2430 of the pot is taxed at 20% ie £486. You will therefore receive £19514 net of tax.

If you have employment income of greater than £12570 then you will receive £5000 tax free and the balance of the pot (£15000) will be taxed at 20% ie £3000. You will therefore recive £15000 net of tax.

Etc.

Does this help?

 

[SpokeyDokey]

Thank you never thought of them, although locally I have not heard good things about them

I'm with Mark Twain on this one.

Another on a SIPP what happens to any residual on death?

Balance goes to your nominated beneficiary following death.