Pensions Planning: The NUMBER

cfw1994

crv1963 wrote: »

Son aged 22 at interview asked the panel about pension contribution from employer, was told he was the first young person ever to ask that of a panel at the company and why he'd asked it. His response to the panel was "When I reach your age I intend to have the option of retiring". Oldest interviewer was 44!

Good lad!

Did he get the job? Or were they overly offended at not thinking the same at his age.....:rotfl:

crv1963

cfw1994 wrote: »

Good lad!

Did he get the job? Or were they overly offended at not thinking the same at his age.....:rotfl:

He hasn't heard back yet. The company he currently works for are in his department at least very focused on pensions and early retirement, his current boss is 36 with a plan to go at 45, so he gets lots of encouragement to both live a life and plan a future without work.

I don't interfere with what my sons do for work but do encourage future planning- something I never really did at their ages, but have passed on the benefit of experience with money mistakes and planning!

Every generation has different issues, his is the problem with home ownership (by 25 everyone I knew was a home owner- then came the massive increase in interest rates and lots of people re-possessed), rising pension age (for SP) and Brexit. The constant I have learned is plan for your own future and take promises from the Govt with a pinch of salt, just use the chances available at the time.

MallyGirl

DT2001 wrote: »

I understand your position as my OH enjoys her work (and the social interaction that brings) and our total is enough to stop now.
As others have suggested on different threads couldn’t you borrow on your mortgage to cover until drawdown is available and repay with 25% tax free funds to effectively rebalance your pots? I know you say you’re happy with your approach but I wondered if you could reduce your hours/move earlier if you wanted?

When you state that your total is enough do you calculate on the basis of a particular SWR and personal tax allowance? With Boris in power it reminded me that my forecasts should provide not only for variable investment returns but also changing tax scenarios. I’m optimistic that we can vary our expenditure to cope with fluctuations.

I use SWR. I am borrowing on the mortgage to stuff the pensions full whilst still working.
Retiring at 55 with SWR of 3.5% we should have combined gross income of £50k.
Retiring at 58 this becomes £62k, whilst at 60 it rises to £71k
Both will get full SP at 67 as well.
Some would say 3.5% is too optimistic but the house is worth £1m and will be mortgage free on retirement (the earlier we go, the more likely we will need to use a bit of PCLS to achieve this). This is not factored in anywhere so we can always downsize at some point.
OH would argue that £50k is not enough for the early big trips we want to do so I suspect somewhere between 55 and 58 I will have had enough. Our salaries are similar with mine about 20% lower than his - reduced hours would just mean reduced pension contributions in the last years. Some big conversations to be had once we see what having a uni student DD feels like.

DT2001

A SWR is based on 30 year retirement? If I’ve understood correctly your income at 67 will get an index linked boost of £17k+ so the SWR will drop. I looked at desired income at 72 (as OH 5 years younger), took off SP x 2, small DB pensions and then calculated pot needed for SWR at 3%. The residual amount I divided to cover the interim period and found I had more than required. I didn’t factor in any growth on the untouched pot which now has another 13 years to grow. I just needed to come to terms with depleting capital at the start of retirement. Maybe this strategy might work for you at 55 or someone could tweak it. I liked the simplicity of splitting my total pots into a leave and grow pot and a ‘cash’ pot to ensure I met my income requirement when I hoped we’d be more active.

smutput

DT2001 wrote: »

A SWR is based on 30 year retirement? If I’ve understood correctly your income at 67 will get an index linked boost of £17k+ so the SWR will drop. I looked at desired income at 72 (as OH 5 years younger), took off SP x 2, small DB pensions and then calculated pot needed for SWR at 3%. The residual amount I divided to cover the interim period and found I had more than required. I didn’t factor in any growth on the untouched pot which now has another 13 years to grow. I just needed to come to terms with depleting capital at the start of retirement. Maybe this strategy might work for you at 55 or someone could tweak it. I liked the simplicity of splitting my total pots into a leave and grow pot and a ‘cash’ pot to ensure I met my income requirement when I hoped we’d be more active.

I worked out how much we want between 55 and various DB's and 2 x SP kicking in and took that off my DC/husband's SIPP. Whatever was left at aged 67(I assumed keeping up with inflation), if taken at a SWR and added to all the other stuff, roughly equals what we spend now. Job done.

Same as you but coming from the other direction

michaels

Trying to use cfiresim guyton-klinger but it doesn't seem to be working?

Any alternatives?

gadgetmind

A year into taking a 6% drawdown from my SIPP (don't worry, I'll back off come state pension!), I've got more pounds in there than I started with, but pounds ain't what they used to be!

crv1963

Bumping the thread up as I've suggested to a Newbie that they have a read of it. Apologies if I offend anyone but I seem to be unable to post a link- my carrier pigeon is on strike so I can't us my quill and parchment to copy it either!

Gatser

crv1963 wrote: »

Bumping the thread up as I've suggested to a Newbie that they have a read of it. Apologies if I offend anyone but I seem to be unable to post a link- my carrier pigeon is on strike so I can't us my quill and parchment to copy it either!

Thanks crv1963 ... it’s great to see this topic is still relevant as the years go by... Gosh! ... and it is 10 years since I posted that first comment.
It has worked well for us and continues to do so, we are now supporting our daughters to do likewise as they approach THREE-O, compound growth is a very helpful ally. Happy Healthy 2020!

JoeCrystal

JoeCrystal wrote: »

As for my NUMBER with thirty years to go until retirement is bit up in the air, but £22,000 would be rather nice indeed.

I posted that five years ago! Well, my planned retirement age went up by eight years now, although I live in the hope that I might be able to do it by 60. My number is now £26,400 due to various lifestyle creeps!