My Pension strategy - please blow holes in it!
Comments
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i agree, we need to understand more about your husbands pension provisions.
Given you both have a PA you really need to both be contributing between now and retirement.
Although you are behind him, if you keep contributing you will be wrking more years.
24.5K for him really isnt very big. Have you found out if AD will let him keep the 75% in a drawdown? Some dont offer DD.
What are the costs for him to move his pension elsewhere?
I read it as £245,000 not 24.5k or is it 24.5k PA?0 -
I can't see why you are aiming to stay under the PA. Would you really prefer for both of you to be getting £10k a year rather than £15k? Yes you would have to pay a bit of tax in the latter case but you would still be better off.
Though going by the numbers in the OP you wouldn't have enough for the higher figure.0 -
foreversummer wrote: »We have a rather large house and it may be advantageous to downsize later but I don't want to rely on that at present.
Then worth planning now. Retirement is best approached in a phased fashion. Far easier to do this while you are both working. Still time to make financial adjustments.
Smaller house lower bills. Less mortgage interest to pay. Released equity can be invested.0 -
happyandcontented wrote: »I read it as £245,000 not 24.5k or is it 24.5k PA?
No, only 24.5k total value of fund I'm afraid.0 -
I can't see why you are aiming to stay under the PA. Would you really prefer for both of you to be getting £10k a year rather than £15k? Yes you would have to pay a bit of tax in the latter case but you would still be better off.
Though going by the numbers in the OP you wouldn't have enough for the higher figure.
We are not aiming deliberately below the PA threshold just trying to be realistic. Extremely unlikely we will get anywhere near enough in our pots to allow us to go above our PA.0 -
Thrugelmir wrote: »Then worth planning now. Retirement is best approached in a phased fashion. Far easier to do this while you are both working. Still time to make financial adjustments.
Smaller house lower bills. Less mortgage interest to pay. Released equity can be invested.
Still got two kids at home! One working full-time and contributing something but trying to save to buy a property for we are doing our best to help, the other at Uni so we are supporting him. So house still full at present!0 -
Quote:
Originally Posted by kidmugsy View Post
I'm a sceptic about downsizing - it seems awfully expensive. Of course if you plan to move somewhere else in the country, that's different. But if you are broadly happy with where you are it might be better long term to expect to use equity release rather than pay the cost of downsizing. Or, why not take a lodger and use the Rent a Room allowance? In fact consider that now.
Still got two kids at home! One working full-time and contributing something but trying to save to buy a property for we are doing our best to help, the other at Uni so we are supporting him.
I'd be a sceptic going from a 4 to 3 bed, or a 3-2.
But we will be going from a 5 bed 3 bath with 2 acres to a 3 bed bungalow somewhere. witht eh 2 of us we wont need that amount of space, nor the expense of runing a huge place. WE will save a huge amt in running costs plus bank a few 100K (in the end after renovations).0 -
Is your income sufficient that when DH retires you can live on his SP and your earnings and still pay the £150 pm into your pension?
If so, then a rough calculation suggests your combined DC funds of £27,700 could be expected to have grown to around £70 to £75k by the time you reach SPA. That should support your required £1,500 drawdown very easily - probably double that. As others have said, the big question is whether the surviving spouse has enough after the first of you goes and takes their SP with them.0 -
New tack: suppose that unless something radical changes then you will each in retirement depend largely on your State Retirement Pension. For the sake of argument let's assume that that will be £9k and that the Personal Allowance will be £13k. So you might have £4k of unused PA each. So each of you takes £2880 from your cash savings and contributes it to a pension. After some weeks to allow HMRC to pay the tax rebate to your provider you withdraw it all again. All the £3600 come out tax-free, £900 because it is TFLS and the £2,700 because it is less than the unused PA. So you each get £720 p.a. profit. Observe that £720 x 2 = £1440 which is near as damnit to your required £1500 p.a. So there's your problem solved, potentially.
This means that we can now concentrate on the point raised by others: what about building up a reserve to help cope after first death? I have a cunning plan and will recount it this evening if time permits.
It would help if you told me the approximate size of your husband's annual earnings.Free the dunston one next time too.0 -
Is your income sufficient that when DH retires you can live on his SP and your earnings and still pay the £150 pm into your pension?
If so, then a rough calculation suggests your combined DC funds of £27,700 could be expected to have grown to around £70 to £75k by the time you reach SPA. That should support your required £1,500 drawdown very easily - probably double that. As others have said, the big question is whether the surviving spouse has enough after the first of you goes and takes their SP with them.
Hi Triumph
Thank you for replying. Yes, indeed that is what I plan. I am quite happy to continue working whilst the old boy takes life a little easier! I enjoy my work thankfully even though it's not highly paid. So I will be able to continue to add to my pension and hopefully increase my contributions as and when.
Yes, I can see the loss of one SP is a hurdle. Will have to give that some thought.
Foreversummer0
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