Final planning...

tgon

I recently read that mid-fifties is the start of the end for pension planning, that is to say I should have more than a fair idea what my pension end-game should be at [state] retirement. If so, I best start! But an additional challenge is that as a dual national (Australian/British) I'm undecided between the two where I want to spend my retirement and unsure how to consider / estimate my future retirement provision in each case. I've two dormant stakeholder and one civil service pension schemes running.

Is the mid-fifties advice true? Are there web sites or advisers sufficiently skilled and knowledgeable on sides of Au/UK pension schemes/transfer/State pensions/etc. Thanks

cyclonebri1

What happens if at 55 you have a serious issue that ends your earning potential??

That's the real world situation.
We can all plan but for every plan that goes to plan at least 2 don't.

Do it earlier rather than latter.;)

Loughton_Monkey

There is absolutely nothing 'magic' about mid-50's for pension planning. Indeed this age is far too late to influence it very much, and so by the time of 50, your (financial) fate is very much set in concrete. All you can hope to do, now, is influence it 'at the margin'.

That's not to say don't do anything. Far from it. The past is water under the bridge and you can only deal with where you are now. You need to do some hard calculations. Only you know the lifestyle you lead and what it costs. That's the key to it. It shouldn't be too difficult to map out the following:

1. All the financial resources you have now (savings, up to date pension values, other assets)
2. What you will earn in the future, and (because you know your spending) how much remains to be invested for retirement.
3. Make assumptions on 'growth' of these assets from now until retirement.
4. Given the total usable financial assets, what income will this produce for the rest of your life? [checlk out approximate annuity rates where necessary].

Once this is calculated, any action depends upon what you 'find'.

You can easily imagine the range of possibilities. There are basically three. It could tell you that the amount available to spend on 'lifestyle' after retirement will be exactly available after retirement. This is statisticall most unlikely.

The second 'finding' could be that you have more than enough pensions already, and that in fact even more money will be available when you add together all your pensions, state pensions, and savings. The 'cure' to this is either to do nothing, or even to ramp up your lifestyle a bit - or maybe retire earlier.

If, as for most people, you find that after retirement, you would (will) have to take a large "drop" in what you can spend on lifestyle, then the only 'cures' I can think of are (a) simply to take that 'hit' and change your lifestyle downwards the minute you retire (beans on toast option), (b) carry on working after 'desired' retirement age so that you can retire later, but with enough money, or (c) adjust your lifestyle cost now to the point where it can still be maintained at the same amount after retirement.

[There are potentially other ways, like taking extremely strong medicine..... here you would psych yourself up to 2 or 3 years of extreme deprivation where you lived literally on beans on toast, use gas/electric as if it were rationed. Forget holidays. Take the car off the road. Take a part time job......]

As to Oz or UK, I really can't say. Your British State Pension would be paid, but never increased. Your other pensions would normally be paid from UK, but would be tax free (here) but suffer a currency risk if you spend in Oz. There are ways of transferring them but that's not often a good idea.

dunstonh

I havent heard of "50s" being a special age. All ages are special with regards to planning. Typically, it starts getting much harder (per pound spent) from around age 40.

tgon

Thanks so far. I should have made it clear that I've tried to be a prudent planner and sought the best advise on these matters all my working life. I think I meant that now is time to look seriously at the end-game. If the die is already cast and my influence is in the margins then I need to envision the retirement life style l want and see which side of the pond most affords that vision. Means tested Age benefit in Au is an example of where the margins may influence my calculations but not my choice, so point well taken and applied Loughton Monkey.