Early-retirement wannabe

bluenose1

michaels wrote: »

Although with AVC you do get 'tax relief' on tax you never actually paid because of the personal allowance. And when taking the pension the fist 3k is likely to be tax free again due to the personal allowance which obviously helps those with small pensions proportionately most.

EG suppose you earn 11.5k and thus pay no income tax but manage to contribute 80k from income to your pension (2k pa for 80 years), this will be grossed up to 100k, take 25k as tfls and then draw down at 4% of the 75k and you pay no tax on the 3k pa either even on top of state pension.

True, but for some like myself I will continue to get the 6.25% tax difference on contributions over NMW but have lost out on the SS element which would have seen my return from my pension increase to 25% when I withdrew. I will have income over the Personal Allowance from other income so will pay basic rate tax.
Just glad I got my head around pensions before it was too late.

gadgetmind

VDOT47 wrote: »

I suppose the question is, are we better to get 40% relief on the way in and swallow the 20% tax on the way out

Above 40% there are 60%+ and 45% bands, so 40% is not worst case. Leaving some annual allowance until later is a big gamble and I *just* managed to avoid 60% until my last two years in work at which point I sailed right past, which was the right way to do it.

But don't think it terms of 20% on the way out. Assuming not hitting 40% and retiring before state pension age, it's 15% once personal allowance taken into account and around 12% once you figure in tax free lump sum.

or restructure things so that money also gets paid into a pension in OHs name now which will mean only 20& relief on the way in, but easier to get tax free on the way out by utilising personal allowances??

We paid 100% of my OH's earnings into her SIPP for many a year but she rarely earned above personal allowance. Tax relief despite no tax paid!

Marine_life

Over the last 2-3 years two things have happened on my early retirement journey.

Firstly, we reached financial independence or in actual fact we had probably been financially independent for some time but this was the first time we really wrote everything down and prepared a 30 year projection which showed that we had enough money to enjoy a very comfortable life with a legacy for the children.

Secondly, over a very protracted period I gradually withdrew from the world of work and negotiated a three day a week contract which potentially runs until the end of this year when I would sail off into the retirement sunset.

That relief of pressure has created a unique environment where I am literally free to choose my next path and do as I please, whether that be travelling the world for fun or sitting on the sofa eating doughnuts.

…and with all that time to reflect…

And old friend from my previous employer telephoned and asked whether I would be interested in a new overseas assignment. This has coincided with my own thinking that (a) I miss the intellectual challenge that my previous job offered; (b) I don’t have enough things to gainfully fill my spare time; (c) I’m too young to retire. There is a (d) in that the money on offer is super tempting but …well…that’s just the icing on the cake.

Of course there will be people who say “nobody on their death bed ever wished they had spent more time in the office” and I kind of agree with that but, people always say (as I have done myself) that we tend to regret the things we did not do rather than the things we did. That’s how I feel now. I could die tomorrow but I could also live for another 40 years.

Nothing is decided yet but provided things move on as they are at the moment I’ll be diving back into full-time….for two years.

A new adventure beckons.

vulcanrtb

It's like the final series of Lost.

melanzana

Retirement wannabe is right. I knew you had no intention of retiring and living on your investments. Fair enough, it is your life.

But I doubt you will ever retire early now. Or that you ever really wanted to in the first place.

I did, in 2014 and it was just such an amazing decision for me. I am happy out now.

Hope you will be too eventually.

I often wondered what you are chasing.

But I suppose your thread title of Early Retirement Wannabe might absolve you, since you appear to be still in the Wannabe stage.

Marine_life

melanzana wrote: »

Retirement wannabe is right. I knew you had no intention of retiring and living on your investments. Fair enough, it is your life.

But I doubt you will ever retire early now. Or that you ever really wanted to in the first place.

I did, in 2014 and it was just such an amazing decision for me. I am happy out now.

Hope you will be too eventually.

I often wondered what you are chasing.

But I suppose your thread title of Early Retirement Wannabe might absolve you, since you appear to be still in the Wannabe stage.

I might change the title to mightwannabe

melanzana

Marine_life wrote: »

I might change the title to mightwannabe

Whatever, you decide.

Who knows if you have been just winding people up so far.

I hope not, but I never really believed your posts, Sorry now. But anyway.

BoxerfanUK

I guess if you just took out a 25 or 35 year mortgage you could start a mortgage wannabe thread, so maybe this thread, started by the OP in 2010 may have another 16-26 years still to run :eek:

melanzana

That Marine life Troll lasted for years.

I spotted it from the start but was reluctant to say anything.

Honestly, what a joke. Hope he.she is ok now.

Marine_life

melanzana wrote: »

Who knows if you have been just winding people up so far.

I hope not, but I never really believed your posts, Sorry now. But anyway.

Do you really think so?

That would be a very, very long windup!