Over 50s: what will you do with your tax-free cash?

helen_vasey

kittie wrote:

WM re property. It is good to spread assets into different baskets. You may already own your own home, so take that into account as a % of your total assets. Investing in property may take you into being too heavily skewed into property

We have always felt personal responsibility for our financial wellbeing and I am very happy to say that we are about to reap the reward of being prudent all through our lives. Four foreign holidays in the past 35 years and the benefit to come has been well earned. We have had very happy lives to date but always with a thought to the future

You are extremely lucky to be in this position, ( if a bit smug) my in laws did exactly what you have done, always saving and going without life's luxuries looking forward to the day when they both retired, then they were going to travel the world etc. the trouble was , my mil died at 57 from cancer so that money in their pensions and savings meant absolutely nothing. I'm afraid I take the opposite view and live for today (especially as my mum was killed by a drunk driver at age 50 when I was 5), sure we have made plans for the future, but not to the detriment of the here and now. If we want to do things we do them now, there might not be a tomorrow! :rolleyes:

margaretclare

helen_vasey wrote:

You are extremely lucky to be in this position, ( if a bit smug) my in laws did exactly what you have done, always saving and going without life's luxuries looking forward to the day when they both retired, then they were going to travel the world etc. the trouble was , my mil died at 57 from cancer so that money in their pensions and savings meant absolutely nothing. I'm afraid I take the opposite view and live for today (especially as my mum was killed by a drunk driver at age 50 when I was 5), sure we have made plans for the future, but not to the detriment of the here and now. If we want to do things we do them now, there might not be a tomorrow!

You see, it all depends on how you react to life's experiences - what happens to the people around you colours your thinking. Only it doesn't work exactly the same for everybody.

Like I said, I'm 70. I grew up in poverty - the sort of poverty that we don't see now, because there were literally no benefits at all. And that has made me fiercely-independent, determined to stand on my own feet for as long as possible. It also made me sh*t-scared of ever having to live in poverty again.

Helen, you mention 'going without life's luxuries'. Well, I am extremely fortunate. I have everything I need. I have a comfortable home, we have a car, we eat well, we're involved in different things. I'm happily married for the second time. Our lifestyle would be considered 'modest' by many people, but it suits us.

I could point to people I've known who didn't live long. My mother, bless her, who literally scrubbed floors for a living. She paid her stamps, retired at 60, was better off than she'd ever been, and died at 63. My first husband died at 58. My daughter died at just 39, 6 weeks after she started her dream job. All she worked hard for, her pension funds etc, her widower benefited from. And he would rather have had her beside him than the money he got from her life assurance.

I'm still saving because I like saving. I like the feeling of security. I like the feeling that, when there's a big project on - like the roof that needs doing this spring/summer - we can get it done, we can access the cash to do it. How would we do something like that if we didn't have the savings for it? That roof is 75-year old asbestos tiles and it won't last another winter. I'm also saving because I have a fair bit of disposable income, for the first time in my entire life, and I don't want to spend, spend, spend on 'stuff' just for the sake of it.

We've had holidays, we've travelled. Had 2 fantastic trips to North America, one was just after 9/11 and included a 3-night train journey from Chicago to Seattle. There's a lot that we want to see now that's much closer to home.

Margaret Clare

savingforoz

I agree with Margaret Clare. There's no reason why saving for the future has to mean not living happily in the present.

margaretclare

savingforoz wrote:

I agree with Margaret Clare. There's no reason why saving for the future has to mean not living happily in the present.

Thank you for the kind words. I couldn't have put it better myself.

' Doing without life's luxuries' - not everyone wants those luxuries. Would we be any happier or wiser if we lived in a big house with a swimming-pool, if we drove a Merc (each)? No, we would not.

Margaret Clare

savingforoz

My feeling is, if I save hard and invest wisely for the future, and yet still die young, then after my death I doubt that I'll be worrying too much about it anyway . However, if I don't save now and invest for the future, then there's no doubt in my mind that I will be worrying later on, as an impoverished pensioner. I have a modest home that's perfectly big/comfortable enough, a car that's ageing yet very reliable and cheap to run, and I indulge my love of foreign travel regularly. So what I'm saying is, my life is good at present, without the need to spend lavishly, and I aim to give it a solid base for the future by being prudent now. Reading "Rich Dad, Poor Dad" crystallised my current line of thinking into action.

However, everyone must live their life their own way - of course - and what's right for me won't be right for many other people. So living for the moment is fine too - horses for courses, I guess.

[Deleted User]

Helen my dad died of coronary disease when he was 49, leaving my mum to bring up 7 children in a little terraced house in a northern city and I was the oldest. Those days were very tough indeed and like MC, I learned that the only way to safeguard ourselves was to build up some savings and to look after our health ourselves. This aim carried all through our lives and we have had 35 fantastic married years. We have a nice house, we had horses, hobbies but we haven`t gone mad. We put a little money into savings or pension every month and like topsy, it grew. We looked after our health and I studied an alternative medicine course for 4 years and we have eaten organics and wholefoods for 34 years

I am looking into an escorted tour of america now and that is just the start. We know what is in the pension basket now. Like MC we will continue to save but at 58 we will also be spending. I wish there were more women like MC and me

Ok I suppose I do feel a bit smug now but MC and me, we made our own luck

tanith

I feel glad for those who have managed through their own endevours to secure their old age and have enough to enjoy their retirement...

But I also feel that there are those , me being one of them that through circumstance have not had the opportunity to save enough through their younger years..
I was busy bringing up children and took part-time work to supplement our finances , no spare money to save... and then divorced......

I have a small occupational pension but know that there will not be much disposable income in my retirement... I am sure there are many who will be worse off simply because through circumstance they were unable to make provision , however much they wanted to............

al_yrpal

50 is no age really, hopefully there is a long way to go for most of us. I do agree that you should live for today up to a point. If I were 50 again and short of money, I would have a bit of a treat - car, kitchen, cruise or whatever strikes you fancy. But I would also do what I did at 55, invest the rest for retirement my own way, avoiding the rottern return that the pension co would have given me.. The £15k that I invested in a second home at 55 (+a £35k mortgage now paid off with my pension lump sum) turned into £200 grand now, 9 years later. It needn't be a second home, it could be funds, investment trusts or shares in a High Yield Portfolio. If I wasn't confident in my investment ability I'd seek out a good IFA.
In my opinion, blowing it all, especially at 50, is just a dumb philosophy.

EdInvestor

Just a note to the posters who feel they face poverty in retirement.

Don't forget about the 2 state pensions, which you are credited with when you pay NI contributions, claim benefits, or stay at home looking after kids.

It's worth checking out how much you're going to get here and asking for a forecast every year.

Few people know that you would need a pension fund of almost 100,000 quid to buy an annuity for the same amount as the basic state pension, much less the S2P top up.:eek: This is a valuable benefit.

So keep an eye on it - and make sure they are crediting you with all the years you are entitled to.

We have an excellent poster in this forum called "CIS" who used to work in the Pensions Service and can help with any queries. So don't neglect this area, and don't listen to people who think the state pensions will be worthless when they retire.They won't.

margaretclare

EdInvestor wrote:

Don't forget about the 2 state pensions, which you are credited with when you pay NI contributions, claim benefits, or stay at home looking after kids.

Few people know that you would need a pension fund of almost 100,000 quid to buy an annuity for the same amount as the basic state pension, much less the S2P top up. This is a valuable benefit.

I couldn't agree more. It was well worth me paying full NI contributions all those years even though colleagues laughed at me - 'why not pay the married woman's stamp, don't you need the money now?' Apparently there's a minority of 17% of retired women who get SRP in their own right, and I'm in that minority. My DH gets approx £165 a week - that's SRP plus SERPS. I get some SERPS too, for the years when I wasn't contracted out into the NHS pension scheme. So because we both get state pension income independently and not as a 'pensioner couple' we're a lot better off.

Incidentally, it's just as well that I'm as solvent as I am now. I've just agreed to £850 of essential dental work. Luckily we're in HSA and can claim it back, but I have to pay it in the first place. So, if we were doing as some people think - live for the moment, spend all your income - I couldn't have this dental work done.

Margaret Clare