Pensions review

harryhound

Hi Supernova,

There are factors about your personal life and aspirations that we don't know.
You need to consider these as part of the equation.
[BTW I'm a dozen years or so ahead of you and yes I've been put out to grass on a pension and investments that are pushing me into HRT (pun intended).]

A. How much money do you need to have a happy retirement? I am frugal and don't particularly want to swap beer for champagne.

B. Do you stand to inherit anything; an uncle leaving you a lock up garage in Chelsea might make a major change to your plans :-)

C. Have you any nearest and dearest, you would like to help during your retirement: spouse, children, grandchildren or make arrangements for them after you have gone?

D. Do you have a "retirement project" that is going to be expensive?

E. Will you subscribe to the theory that nobody has put "I wish I had spent more time in the office" on their gravestone OR will you miss the the buzz of "real life" that business, rather than living as a drone, can bring?

[Personally, I enjoy the freedom, but resent the suggestion that I'm over the hill. I'm OK for money but after a lifetime of good health, bits are starting to wear out. Aged 21 I inherited a load of debt (thanks dad, you didn't plan the final step very well) and now resent the idea of Gordon coming after me with 40 - 50 percent tax bills. I have some little sidelines on a self employed basis to keep me in touch with "real life", but with a powerful financial disincentive.].

That reminds me, I must get on with:

F. Deciding when to kick the bucket so I know how long to keep my pension funds tax free, it seems to get really difficult at the age of 75.
[You end up in that dribbling mess of having capital of over 16K while being imprisoned in a nursing home that is keeping you alive 'cos you are worth 1,000 ++ a week to them - seriously though one man in 5 and one woman in 3 ends up like this, with or without their last 16K].

Rgds,

Harry.

wotsthat

I agree with Harryhound in that there are other factors to consider but...

and now resent the idea of Gordon coming after me with 40 - 50 percent tax bills

...it's difficult to avoid these tax charges during working life but it's reasonably simple, with some planning, to avoid paying HRT during retirement.

That said, the focus should be maximising retirement income and control of capital rather than just tying to minimise tax.

Deciding when to kick the bucket so I know how long to keep my pension funds tax free, it seems to get really difficult at the age of 75.

I think GB would prefer anyone who reached retirement without pension provision to consider doing the decent thing and drop dead at 65. I would have thought those continuing to pay HRT into retirement would be tolerated a little longer.

Unfortunately the Grim Reaper can mess up the best of retirement plans. Death seems to make worries about tax seem trivial.

Supernova

Thanks very much guys. wotsthat you are right about the projected income bit and EdInvestor is right about it nudging HRT too.

I used http://www.pensioncalculator.org.uk/ to calculate. I adjusted the total fund figure for inflation but not the weekly income.

And thanks harryhound for the additional things to bear in mind.

I'd say I'm in a good position now but who knows if that will last until I'm 65 but then again inheritance may come into play too.

I shall ponder over the weekend and possibly opt for a mini fund/shares ISA before April 5th and a maxi next year.