Pensions Planning: The NUMBER

bluenose1

Korkyb said: The problem I may have is that the work I do attracts unsocial enhancements (NHS) & for the last 12 months I've worked night shift almost exclusively so my reckonable salary over the last year is likely to be significantly higher than normal. (unsocial enhancement payments count towards my reckonable salary).

When I reduce hours I'm not sure if the ratio of unsocial hours will still be as high as recently so it may be that I'm currently working my "best year".

I will of course check year by year what my reckonable earnings are & if I don't need to take the pension early then I'll leave it longer. (will probably have to get the calculator & back of a fag packet out to check out if I should jump or not).

I'd be happy to leave it longer as while working part time I shouldn't "need" the income that the pension would provide & if I do need more than my part time wage provides then I can dip into my savings.

Just wondering if you did have to take your pension early would it be an option for you to consider inverse commutation, depending on if your pension scheme allowed it. Depends on if you want all the lump sum or more guaranteed annual pension.  If you take your pension can you start a new one and potentially increase contributions that way. 

Korkyb

bluenose1 said:

Korkyb said: The problem I may have is that the work I do attracts unsocial enhancements (NHS) & for the last 12 months I've worked night shift almost exclusively so my reckonable salary over the last year is likely to be significantly higher than normal. (unsocial enhancement payments count towards my reckonable salary).

When I reduce hours I'm not sure if the ratio of unsocial hours will still be as high as recently so it may be that I'm currently working my "best year".

I will of course check year by year what my reckonable earnings are & if I don't need to take the pension early then I'll leave it longer. (will probably have to get the calculator & back of a fag packet out to check out if I should jump or not).

I'd be happy to leave it longer as while working part time I shouldn't "need" the income that the pension would provide & if I do need more than my part time wage provides then I can dip into my savings.

Just wondering if you did have to take your pension early would it be an option for you to consider inverse commutation, depending on if your pension scheme allowed it. Depends on if you want all the lump sum or more guaranteed annual pension.  If you take your pension can you start a new one and potentially increase contributions that way. 

I do get the choice of larger pension or larger lump sum when I take my pension.

From what I've read unless an early death is anticipated taking the larger pension is by far the best deal (unless you have a specific reason for wanting the larger lump sum - which I don't).


I did wonder if I might be able to take my 1995 scheme pension & leave the 2015 one running but it looks as if that isn't something the scheme allows (I am aware of the McCloud judgement & the "deferred choice" I will now have when I take my pension).


I think taking out another pension may well be my best option to minimise the tax I pay on my part time salary / pension income.

It may even be worth me starting the new pension before I "cash in" my current one?

That is if I'm allowed to have 2 pensions running with both having a positive impact on the tax I pay??

 

NedS

Korkyb said:

I think taking out another pension may well be my best option to minimise the tax I pay on my part time salary / pension income.

It may even be worth me starting the new pension before I "cash in" my current one?

That is if I'm allowed to have 2 pensions running with both having a positive impact on the tax I pay??
 

Yes, you can have as many pensions as you like. You can certainly open and contribute to a SIPP alongside your works pension scheme. You are only limited by personal and annual allowances which limit contributions to your relieveable earnings, or £40,000 annual allowance, whichever is lower.

cfw1994

This thread seems to have wandered off to questions/discussions that I would suggest merit their own post/thread.

A reminder of the origins of this, from the first post around a hundred years ago:
    The NUMBER is how much income you need to "live comfortably"
    So What's your number?
    Very important for pensions planning, to know what you are aiming for.

Mick70

Our combined number , as at present day figures ,  ideal combined pension of 45k ,  but if could get 40k that would be fine .
would rather have slightly less and be able to retire at 58  (56 was original plan ) than have to work into early 60s as my spouse is nearly 3 year older than me.
Currently I have a DB pension , triggered at 50, that is paying me £26.9k rising rpi , as my spouse has very little pension provision I am hammering my works DC pot (I am still in employment full time) and going without some other things in life

Gatser

cfw1994 said:

This thread seems to have wandered off to questions/discussions that I would suggest merit their own post/thread.

A reminder of the origins of this, from the first post around a hundred years ago:

Well said CFW! 

But who are you suggesting is 100+ years old? 😂

MallyGirl

Mick70 said:

Our combined number , as at present day figures ,  ideal combined pension of 45k ,  but if could get 40k that would be fine .
would rather have slightly less and be able to retire at 58  (56 was original plan ) than have to work into early 60s 

me too - OH thinks we should stick it out till daughter graduates and we will be 59. He doesn't do the finances so he doesn't know that he is likely to hit LTA at 58 - I won't but will be 2/3rds of the way there. It will be enough (plenty). I have told him before but he glazes over. I now just say 58 on a regular basis in the hope that he will come around. I did make a joke about doing a happy dance if I was made redundant (54 this year) and he just said 'what would you do all day if I was still working'?

swindiff

We are looking at a joint income of around £55k from 60-67, dropping to £45k at 67
I've calculated our pretty generous number at around £35k
I am just a month older than my wife so retiring at 60 for both of us works out quite well.

FloraandFauna

The problem I have with working out my number, is not that I don't know roughly what my bills will be - I've been keeping records for a while now - it's the 'what will I want to do in retirement' amount.

I need:
Minimum £9k to exist, eat and pay bills (but no spare money to replace e.g. a roof)
Another roughly £3k for 'stuff' - bird food, wine, socks, presents, books, and just random desires

And frankly, that's about it for data at the moment, since I've either been saving hard for a house deposit, saving for retirement, and paying a high mortgage by myself (single household). I have a list as long as the Haley comet of things I want to do (like learn to ski) and places I want to go (like St Petersburg), but not having done anything like that in the last 10 years or so (see saving above, plus lack of time) I have no yardstick for how much of those things I will want to do, how often, and how much it will cost. 

Will I spend a month at a time lounging around Wengen? Stay at the Ice hotel for a week? Spend two months every winter in the...er... Seychelles? Or find travel is a chore, and prefer to potter around the garden?

On current projections, there will be around £15k a year spare to do some of these things once I hit 60, but is that wildly too much and maybe I could relax on the savings a bit? How do people work out the number for things they have no intention of deciding on 13 years in advance?

westv

cfw1994 said:

This thread seems to have wandered off to questions/discussions that I would suggest merit their own post/thread.

On another forum I post to the thread police would have come along well before now and carted off to prison all posts that weren't directly on topic and interrogated all offending posters.