Should u spend your pension before retirement

mingles

Hi

I am taking more of an interest in financial matters now and I have been speaking to a lot of people about pensions. I already have 2 work pensions which shoudl provide me with a reasonable income in retirement.

Thing is, one of my colleagues advised I draw my pension early and spend as much of it as I can before the state pension kicks in. Their reason for this is that I want to aim my pension to be just shy of the limit for credits so I dont have to pay for things such as rates, tax and a new boiler.

Is there a merit in this? I didnt think so but I was curious.

atush

I don't see how you could really. And why would you want to waste it? Are you sure you would be 'comfortable' if your money was low enough to get pension credits? This is like saying you are better off not saving at all and living on what the govt gives you and ending up retired but poor.

you can only take a pension 'early' at 55 with a 25% lump sum. The pot will be much smaller then than at 65. Then you can do a drawdown or buy an annuity. Neither of which will run it down completely as it must be a substantial pot to live off 'comfortably'.

I think you need to give specifics as to the current size of pots and projected income at retirment.

le_loup

mingles wrote: »

Their reason for this is that I want to aim my pension to be just shy of the limit for credits so I dont have to pay for things such as rates, tax and a new boiler.

Let me get this straight. You want to spend your money now so that I will pay your rates and new boiler?

Guess how that makes me feel? How would you feel about it?

dunstonh

Thing is, one of my colleagues advised I draw my pension early and spend as much of it as I can before the state pension kicks in. Their reason for this is that I want to aim my pension to be just shy of the limit for credits so I dont have to pay for things such as rates, tax and a new boiler.

So, in effect, you are planning to be poor in retirement and live on the breadline for about 20-30 years.

tanith

Your colleague is an idiot.. never heard such stupid plan, you can't even access most of your pension as the others have pointed out... your colleague needs educating as to how pensions work...

[Deleted User]

mingles wrote: »

Hi

I am taking more of an interest in financial matters now and I have been speaking to a lot of people about pensions. I already have 2 work pensions which shoudl provide me with a reasonable income in retirement.

Thing is, one of my colleagues advised I draw my pension early and spend as much of it as I can before the state pension kicks in. Their reason for this is that I want to aim my pension to be just shy of the limit for credits so I dont have to pay for things such as rates, tax and a new boiler.

Is there a merit in this? I didnt think so but I was curious.

You are entitled to your own moral code but is your life plan really to be a burden on your relatives and neighbours as well as the Government? Who is going to drive you to the shops? Who is going to buy you a TV when your old one packs up? Your brother, your sister, or a neighbour who takes pity on you?

Are your parents in good health or are they poor and suffering from the ailments common among the old? Are you caring for them as you hope others will care for you?

If you think being poor and old is a joke then try a little voluntary work in your local day centre. You will see those of them who can get to the centre. Remember lots of old people cannot do even that.

Now work out how happy you will be spending about 20 years living like that.

kidmugsy

Come the Revolution, Brother, the worthless parasites will be eliminated.

mingles

le_loup wrote: »

Let me get this straight. You want to spend your money now so that I will pay your rates and new boiler?

Guess how that makes me feel? How would you feel about it?

I know how it makes you feel as I feel that way now as a taxpayer against those who do not work. I raised 2 kids singlehandedly and when other mums just went to the local dole office to get a cot etc. I had to buy second hand and make do. I have never taken a penny in social security benefits and have never got anything for free.

You are all right this is a selfish idea! I think it make me query this because I dont think our pensioners should be paying tax or rates and they all should have the method of heating their houses. I guess it all goes back to providing for your own retirement.

My main asset for retirement is my home, I intend to downsize at retirement age and I have 2 pensions which should keep me going.

atush

AS long as you don't spend them lol.

Tell your mate he/she is a numpty ;-) And keep clear of them come retirement as they will be poor looking for you to pay for evertything as they will be too poor.

I feel sorry for the downsizers these days with the market being so slow. One day (maybe as soon as 5 years- as soon as I get the twins out of Uni) I too will be a downsizer.

Debbie_A_3

Hi Mingles,
I agree with you: it isn't a good idea to squander your pension. The means tested income level is pretty basic, and there is no guarantee that future generations will be willing to maintain it at even the present level. Prudence is best.

I can see where your friend is coming from: it is annoying to have to bail out those who have been irresponsible, but if we all decided to join the irresponsible then society would rapidly collapse into a heap.

Debbie

Loughton_Monkey

mingles wrote: »

....... I guess it all goes back to providing for your own retirement.......

Now that's a novel idea. Whatever will people think of next?