Pensions Planning: The NUMBER

RenovationMan

Marine_life wrote: »

So how close are you - i.e. are you 34 years old or 61?

42, so another 25 years to go until state retirement age.

RenovationMan

peterg1965 wrote: »

Sounds like a good position to be. Downsizing house, however, tends to release less capital than you originally plan. Take into account Stamp duty/conveyancing/moving costs/Estate Agents fees, as a minimum and that will begin to eat into your captital.

The other point I would make is that for a lump sum of £200K, the last thing I would be doing at 65 is to buy an annuity, particularly with your other pensions making your position very comfortable. I would invest the £200K and drawdown an income from it. Giving to an insurance company in return for an annuity (at a poor rate) is akin to throwing most of it away. Although, I do recognise that every individual is different and that 'a one size fits all' approach isn't always appropriate.

I agree, the last thing I will be doing with either my released equity or private pension would be to buy an annuity. I have the guaranteed income from my company CA pension so will have the security from that to give me the confidence to put the rest of my investments into drawdown. With the equity that I have released I will be putting that into tax efficient shelters.

I also agree that the costs of selling the house will eat into the equity. I have a plan to buy some land and build my own super energy efficient retirement cottage. There is no stamp duty on land sales and new builds are free from VAT, so apart from getting a completely bespoke home, it will also be tax efficient.

Rainmaker_uk

Gatser wrote: »

What is the examiners question here please?
Just to check your calculations?
Are you seeking to use property value as part of your retirement income?

It was prompted by your comment

Gatser wrote: »

That does not seem a great return on investment, but perhaps I am missing something?
I think I would want around 7%+

This got me thinking and I wanted to check that I was not going down the wrong route or the correct route but doing it wrong!

I am planning on property providing a proportion of my retirement income so wanted to check my workings really and make sure I am not missing anything major out.

Gatser

Rainmaker_uk wrote: »

I am planning on property providing a proportion of my retirement income so wanted to check my workings really and make sure I am not missing anything major out.

OK Thanks.

I have read recently that BTL is looking a good bet in 2011-13 for cash buyers, with property prices stagnating but rental demand (and rents) on the increase.
Something to consider for the 25% lump sum perhaps?

Surely it will give better returns than cash deposits, and we are limited what we can put in ISA's anyway.

Gatser

It's a good idea to review your NUMBER every now & then.

I need to review ours...looking at recent TESCO bills!

What's your NUMBER breakdown in 2011?

Gatser

Looks like our NUMBER needs to change... University funding/support now required.

So Inflation is going to be at 5%, and we are all going to suffer?
(BoE) Pension planning is a constant challenge....

What's your NUMBER?

Food bills are continuing to put pressure on the figure.

Gatser

I read today:

The recession has had the effect of reducing expectations of what a comfortable income in retirement is likely to be, from £27,900 in 2009 to today’s figure of £24,300.

We all seem to be coming up with the same figure...
These austerity measures are having an impact on the NUMBER too!!

Moby

Gatser wrote: »

I read today:

The recession has had the effect of reducing expectations of what a comfortable income in retirement is likely to be, from £27,900 in 2009 to today’s figure of £24,300.

We all seem to be coming up with the same figure...
These austerity measures are having an impact on the NUMBER too!!

If you are a couple.... is the NUMBER your joint income on retirement?

Rob_192

Moby wrote: »

If you are a couple.... is the NUMBER your joint income on retirement?

The number is whatever you feel you need to live comfortably in retirement. For many (most?) it's not going to be their income on retirement.

For those following this NUMBER concept, establishing the NUMBER is very difficult. I know what we live on month to month, almost to the ppenny, but it's making alloowance for those big one-off expenditures (replace car, house maintenance etc) which I struggle to work out. Being a frugal type, I currently service our own cars and do all the maintenance on the house etc, but am I still going to be doing this when old and frail? I doubt it! Either I've got to get the kids trained! or start making some allowance for this.

R

kidmugsy

Well, I dunno. All these people who want to live off BTL. In retirement my plan is to live off BLT. Much more fun. More fun than nuts too.