Pensions Planning: The NUMBER

MarzipanCrumble

pterri said:

LHW99 said:

Many here are spreadsheet nerds (I am) but many in the "real" world are not. What most people forget is that the likelihood of living to 100 is increasing, but unfortunately the likelihood of being in good health until that age is not rising as fast.

So the possibility of having to cover (high) care fees is therefore also likely to be increasing.

Retiring at SPA would be a retirement length of ~32 years, and 40 years from age 60. To look at retiring earlier would mean trying to fund (eg) a 50 year retirement from maybe 30 years of work. For many people that is just unrealistic, even for those on median, never mind minimum wage.

While I can see where you are coming from, I think many people need some sort of "Number" if only as a target. It can't ever be perfect, as life can always throw a curved ball. But for many it is at least a good starting point, and a way of ensuring they don't precipitously retire without sufficient to last them, but not discovering that until they are beyond the age where they are able to do something about it.

Sometimes K.I.S.S. is a useful approach.

Im so grateful for my impending DB pension. I’d be constantly on edge even if I had quite a large SIPP and other savings otherwise. It’s a personality trait I think, I read some research that suggested that those from backgrounds where their parents struggled (like me)  retain that fear even they are now financially secure (also me) 

Soooooo with #pterri.  I couldn't cope with the stress tbh to manage a DC pension.  My pension income is made up of widow's 50% DB, dead husband's annuity which benefits me by 4% p.a. having started at 50% of his annuity pension, my own 100% DB and my (enhanced by widowhood and by 10% interest for working longer and deferring) SP.

Yes, I have a SIPP not drawn down - it now falls into my estate so I need to think what to do with it in next 18 months.  Yes, I am one of those that falls into IHT - mainly due to house selling potential, tbh.  Should downsize and give away - is an option - but wouldn't free up much equity, I think.

PJM_62

With pensions now falling into IHT, it's something many folks in here may be thinking about.

I can recommend watching this excellent video on the subject by Pete Matthew.
Some of the potential tax scenarios will make your eyes water..

https://youtu.be/_6L2EoLM28U?si=-19XdjMe-LLWm-gm

Nebulous2

pterri said:

LHW99 said:

Many here are spreadsheet nerds (I am) but many in the "real" world are not. What most people forget is that the likelihood of living to 100 is increasing, but unfortunately the likelihood of being in good health until that age is not rising as fast.

So the possibility of having to cover (high) care fees is therefore also likely to be increasing.

Retiring at SPA would be a retirement length of ~32 years, and 40 years from age 60. To look at retiring earlier would mean trying to fund (eg) a 50 year retirement from maybe 30 years of work. For many people that is just unrealistic, even for those on median, never mind minimum wage.

While I can see where you are coming from, I think many people need some sort of "Number" if only as a target. It can't ever be perfect, as life can always throw a curved ball. But for many it is at least a good starting point, and a way of ensuring they don't precipitously retire without sufficient to last them, but not discovering that until they are beyond the age where they are able to do something about it.

Sometimes K.I.S.S. is a useful approach.

Im so grateful for my impending DB pension. I’d be constantly on edge even if I had quite a large SIPP and other savings otherwise. It’s a personality trait I think, I read some research that suggested that those from backgrounds where their parents struggled (like me)  retain that fear even they are now financially secure (also me) 

I think it extends further than that. People in the public sector with DBs, in my view, tend to be more reluctant to take risks than people in the private sector. 

I remember, early in my career, being told by one of the older members of staff.  "You're never going to make your fortune working here, but if you do your work, and keep out of trouble, you'll have a job for the rest of your life." 

LHW99

pterri said:

LHW99 said:

Many here are spreadsheet nerds (I am) but many in the "real" world are not. What most people forget is that the likelihood of living to 100 is increasing, but unfortunately the likelihood of being in good health until that age is not rising as fast.

So the possibility of having to cover (high) care fees is therefore also likely to be increasing.

Retiring at SPA would be a retirement length of ~32 years, and 40 years from age 60. To look at retiring earlier would mean trying to fund (eg) a 50 year retirement from maybe 30 years of work. For many people that is just unrealistic, even for those on median, never mind minimum wage.

While I can see where you are coming from, I think many people need some sort of "Number" if only as a target. It can't ever be perfect, as life can always throw a curved ball. But for many it is at least a good starting point, and a way of ensuring they don't precipitously retire without sufficient to last them, but not discovering that until they are beyond the age where they are able to do something about it.

Sometimes K.I.S.S. is a useful approach.

Im so grateful for my impending DB pension. I’d be constantly on edge even if I had quite a large SIPP and other savings otherwise. It’s a personality trait I think, I read some research that suggested that those from backgrounds where their parents struggled (like me)  retain that fear even they are now financially secure (also me) 

I am also fortunate to have a small DB alongside SP, and also was brought up in a one parent family with very little.

However that has made me raher a conrol freak in terms of money matters, o I am very reluctant to pass that control over to another family member / IFA, even though it will undoubtedly be sensible as I get older.

MallyGirl

LHW99 said:

pterri said:

LHW99 said:

Many here are spreadsheet nerds (I am) but many in the "real" world are not. What most people forget is that the likelihood of living to 100 is increasing, but unfortunately the likelihood of being in good health until that age is not rising as fast.

So the possibility of having to cover (high) care fees is therefore also likely to be increasing.

Retiring at SPA would be a retirement length of ~32 years, and 40 years from age 60. To look at retiring earlier would mean trying to fund (eg) a 50 year retirement from maybe 30 years of work. For many people that is just unrealistic, even for those on median, never mind minimum wage.

While I can see where you are coming from, I think many people need some sort of "Number" if only as a target. It can't ever be perfect, as life can always throw a curved ball. But for many it is at least a good starting point, and a way of ensuring they don't precipitously retire without sufficient to last them, but not discovering that until they are beyond the age where they are able to do something about it.

Sometimes K.I.S.S. is a useful approach.

Im so grateful for my impending DB pension. I’d be constantly on edge even if I had quite a large SIPP and other savings otherwise. It’s a personality trait I think, I read some research that suggested that those from backgrounds where their parents struggled (like me)  retain that fear even they are now financially secure (also me) 

I am also fortunate to have a small DB alongside SP, and also was brought up in a one parent family with very little.

However that has made me rather a control freak in terms of money matters, so I am very reluctant to pass that control over to another family member / IFA, even though it will undoubtedly be sensible as I get older.

This is me - absolutely. I am now considering a one off review with an IFA once the IHT rules are confirmed. Making a mistake here could be very costly for us and our daughter.

barnstar2077

I guess I am in the minority, I am looking forward to the financial challenge of early retirement! :  )

I would rather spend my day visiting a few different shops to find a bargain than I would giving nine hours of my life up every weekday.  Especially as working conditions for many people seems to be getting worse these days (mine certainly are.)

I can't wait until my only worry is whether I should splash out on a Magnum on my daily walk through the park or not!

pterri

barnstar2077 said:

I guess I am in the minority, I am looking forward to the financial challenge of early retirement! :  )

I would rather spend my day visiting a few different shops to find a bargain than I would giving nine hours of my life up every weekday.  Especially as working conditions for many people seems to be getting worse these days (mine certainly are.)

I can't wait until my only worry is whether I should splash out on a Magnum on my daily walk through the park or not!

I’m as sure as I can be that I’ll be absolutely fine, still a bit apprehensive but I’ll get over it.agree about the working hours, it feels more and more like an imposition    

crv1963

I must be in the minority here. I retired and returned, I work a compressed week and find working four days a week in a job I enjoy is better (for me) than working 5 days a week in a job I don't enjoy. I am a realist and freely acknowledge that work isn't perfect and has it's moments!

pterri

crv1963 said:

I must be in the minority here. I retired and returned, I work a compressed week and find working four days a week in a job I enjoy is better (for me) than working 5 days a week in a job I don't enjoy. I am a realist and freely acknowledge that work isn't perfect and has it's moments!

I really don’t enjoy my job, even if it were one day a week. Having said that it’s a good employer and there are other opportunities, I really wouldn’t object to a chunky pay cut for a simple job to supplement a few years of SIPP/ISA before I claim my DB.dunno 

dont_use_vistaprint

LHW99 said:

Many here are spreadsheet nerds (I am) but many in the "real" world are not. What most people forget is that the likelihood of living to 100 is increasing, but unfortunately the likelihood of being in good health until that age is not rising as fast.

So the possibility of having to cover (high) care fees is therefore also likely to be increasing.

Retiring at SPA would be a retirement length of ~32 years, and 40 years from age 60. To look at retiring earlier would mean trying to fund (eg) a 50 year retirement from maybe 30 years of work. For many people that is just unrealistic, even for those on median, never mind minimum wage.

While I can see where you are coming from, I think many people need some sort of "Number" if only as a target. It can't ever be perfect, as life can always throw a curved ball. But for many it is at least a good starting point, and a way of ensuring they don't precipitously retire without sufficient to last them, but not discovering that until they are beyond the age where they are able to do something about it.

Sometimes K.I.S.S. is a useful approach.

If we planned for the worst case scanario we’d work far too long , sacrifice the now, and chances are we’d die with millions unspent. 

If we plan for the best case scenario,  we’d retire young, but might need to take part time job at Morrisons or downsize in later years.

Never in my life have I planned for or lived around ‘a number’ but ‘the number’ has impacted how I do things.