Getting the house in order!

grey_gym_sock

mgdavid wrote: »

you say you've been given £70k by parents, I presume still alive as you called it 'early inheritance'.
What provision are you making in order to be able to pay the IHT if the gifting parent dies within 7 years?

hopefully, no provision. the estate pays the IHT.

atush

Iw ould open DC pensions for both of you, and whack in as much as possible (up to your total income under 40K, less th amt put into your DB pensions).

You could use this to retire w/o taking your DB pension early, esp in 2018 when your mtg is finished. You could use savings some of the inheritance etc. If using it in a few years, you could keep it in cash in the pension.

Is there any chance your doctors would say your arthritis is severe enough to retire under ill health? Can you go part time?

saver861

If you are in local authority have you looked into the chances of getting redundancy? The rate they are letting people might mean there is a chance. You would then might get the pension without reduction, depending on which scheme you are in.

However, if the health issues are ongoing you may have an ill health option - though that is considerably more difficult than it used to be.

Collecting your DB pension with reductions is not necessarily a particularly bad option. There is a breakeven point of around fourteen years or so - depending on circumstances, by which time you will then have your state pension. If you have a decent AVC pot then that will also help and of course that does not have any reductions to it. Seeing out your last working years in less than good health will be more difficult each year.

As for the £70K - if your brother in law is around his late 50's also, with no pension, then I'm not sure how much the £70k venture will help. Its difficult to see how you will get much of a property for that price and then make a profit on it. These DIY programs on the TV usually show the best side of these situations and rarely do you see people losing money on property development on TV.

I'd be inclined to sit down and work out how much you would have if you decided to retire. Your pension people should be able to give you all the figures. Combine that with your existing assets and debts and see how much you can bring in. Then decide if the difference is worth continuing to work.

The partnership with the brother is muddying the waters a little for you. I think you need to sort out your own circumstances first and once firmly established you look into the investment possibilities with they brother.

mgdavid

grey_gym_sock wrote: »

hopefully, no provision. the estate pays the IHT.

sure, as long as there's money left in the estate to cover it. Only mentioned it as it's sensible for both givers and receivers to understand the implications and not leave a messy situation for the younger generation to sort out (especially if they are executors)..

sqwiffy

kidmugsy wrote: »

[ You might start off by working out how much each of you could profitably contribute to a personal pension of some sort in this tax year and next. ]

I forgot to say that we both pay for another pension with the Prudential ( am I allowed to give names of firms? ). Hubby did when he was working for a company who didn't have a scheme, and I did it to top up from when I only worked part time when my children were little. His has a total value of £20,706 and mine is £3,113. He also has about £40,000 in his current company pension.

I'm not sure if I can, but I could find out. I did go to a talk once but a lot of it went completely over my head! I'm rubbish with maths stuff anyway and would have needed to ask lots of questions to really "get" it, which would probably have bored other people. Hopefully I will get the hang of things on here......

[/QUOTE What is your scheme retirement age at LGPS?
]

Do you mean, when can I retire? It's that 85 year rule thing, if that matters? I can retire anytime after 55, with reduced benefits of course.

Hubby has a Santander 123 account, and I have a Nationwide flexiplus, and today opened one of their regular savers.

Neither of us want any shares, as we are pretty risk averse. We lot quite a lot of money on trust funds in the past, yet they were sold as safer. That's apart form the Endowments, which we ended up having to cover and pay more money to change to repayments gradually.

I don't think hubby is really keen on the house business, and it would buy and sell, definitely not BTL.

Oh I think I need to read the basic stuff as to how to out things in quotes properly!

sqwiffy

mgdavid wrote: »

you say you've been given £70k by parents, I presume still alive as you called it 'early inheritance'.
What provision are you making in order to be able to pay the IHT if the gifting parent dies within 7 years?

There is another brother who moved back in with their parents. He sold his house and split the money between his brothers, and when the parents die, he will get their house. They've done it all through solicitors. I know you can never know what might happen, but I would be very, very reluctant for either of our parents going into a home. I helped to care for my father who died at 47 at home from cancer and an elderly aunt too with my cousins and sisters.

sqwiffy

grey_gym_sock wrote: »

so is 65 the normal age for your DB pensions? and presumably you'll get state pension at 66?

suppose you stopped working now, but don't start drawing your DB until the normal age. in that case, how much would your DB pensions pay? would that, in combination with state pensions, be enough (once you're getting those pensions)?

if it would be enough, then ideally leave the DB pensions until their normal age, and use all other resources to cover the intervening 8-9 years.

for instance, £70,000 could be kept in cash, and spent over 8 years, giving you about £9,000 per year. low-risk is the natural approach when you're only looking at an 8-year period. (though you could, as kidmugsy suggests, perhaps boost the value of this money by making large pension contributions while you're still earning, gaining tax relief, and drawing it out again over the next few years, using flexible drawdown.)

if you could work part time during these 8 years, then add in expected part-time earnings.

add in any other resources, and deduct any other expected outgoings, and see if it all adds up for the 8-year "gap". that would give some idea of whether you can retire now, or at least early.

OTOH, if the DB pensions will give you substantially more than you will need, but you're having trouble funding the 8-year gap, then there may be a case for taking DB pensions a bit early, despite the reduction that will be applied.

DB pension? I know the press calls these gold plated so wasn't sure if this meant something to do with a mut? Went and had a read and think it's defined benefits I didn't realise you could just leave it all. One guy has gone part time and said he got his pension and is no worse off with the reduction in tax, but I think he's done more years than me. I will get £30,947.54 atuo lump sum and annual pension of £23,000 if I wait until I'm 66, or £109,827 maximum lump sum and reduced pension of £16,474. If you leave early, you can't take part of it I think. On a leaflet I have there is a guide that if you retire 5 years earlier you loose approximately 24% less pension and 14% less lump sum.

sqwiffy

We will have more than £70,000 as I added up money in different places. As well as the ISA's, I have £7000 in a Smile account, earning nothing. I was not sure whether to close this, but as it's my oldest account, thought it might be better to keep it. Although I could empty it. I have another £5000 in my Nationwide current account. We haven't used last years ISA allowances so might put them some in one soon, and then could top up at just before next years. I haven't worked out if this is better than putting money in the pension if we can?

sqwiffy

atush wrote: »

Iw ould open DC pensions for both of you, and whack in as much as possible (up to your total income under 40K, less th amt put into your DB pensions).

You could use this to retire w/o taking your DB pension early, esp in 2018 when your mtg is finished. You could use savings some of the inheritance etc. If using it in a few years, you could keep it in cash in the pension.

Is there any chance your doctors would say your arthritis is severe enough to retire under ill health? Can you go part time?

I don't know what a defined contribution pension is? Isn't that what the little Prudential pension is? If I can choose, isn't it better to put any extra money into my work one? Even though it's now paying 50/50, I think it's still more generous?

I don't really want to leave hubby working for years more than me. My ideal would be for me to stay as long as possible and us to retire earlier together. This is why I want to try and continue as long as possible full time to build up the savings or pension pot.

No, my arthritis is not bad enough to retire on health grounds and I'm not sure that's the same as it used to be. I have had one knee replacement, but after less than two years my kneecap (which was kept) went through some really bad flare ups, where I could not stand, and ended up in hospital 3 times in about 2 months. Sitting for long meetings was a nightmare and it's a bit odd when the chair has to keep standing up! At the same time, having lots of pain in my thumbs was causing problems in writing and typing. I think I got so stressed it made it worse. My boss has been very good, and I now have some voice activated software which I can use at home, and my pain relief is helping. I don't want to get to the point when I'm a complete mess so it has to be the balance, and I am more bothered about my quality of life than having loads of money.

My parents were never able to get out of the poverty trap but they were happy, and my mum manages with a state and very small civil service pension so I'll be better off than she was!

sqwiffy

Sorry, this is all a bit disjointed but I'll get the hang of it eventually, before you give me your brand of humour saver 861 .

asd

saver861 wrote: »

If you are in local authority have you looked into the chances of getting redundancy? The rate they are letting people might mean there is a chance. You would then might get the pension without reduction, depending on which scheme you are in.

Sadly no. There was a big redundancy over a year ago and my quote would have really good, it it had been a couple of years later, and I'd have been able to get it. The rider was that you could only go if your job was one they wouldn't replace, but with a statutory role that's not going to happen. I'm in a rare position where jobs were increased in the last few years and they are hard to recruit to. We were advised that only in exceptional circumstances would they be considered, so I didn't even try.

[/QUOTE

Collecting your DB pension with reductions is not necessarily a particularly bad option. There is a breakeven point of around fourteen years or so - depending on circumstances, by which time you will then have your state pension. ]

I don't know what you mean by a breakeven point?

The builder is younger but I agree that the chances of this being enough are slim. He said he might have to get a mortgage on top. But we won't do that.

[I'd be inclined to sit down and work out how much you would have if you decided to retire. Your pension people should be able to give you all the figures. Combine that with your existing assets and debts and see how much you can bring in. Then decide if the difference is worth continuing to work.

The partnership with the brother is muddying the waters a little for you. I think you need to sort out your own circumstances first and once firmly established you look into the investment possibilities with they brother.]

Thanks to you all for the advice. :A

It's given me the impetus to go and do a real sort out of my finances, get the money working for us, and even just know what we've got. In our thirties we said we'd like to retire when we were 50. Well, we just worked and worked but didn't actually think and plan for it like we should have done I guess. No good crying about it now I always saved when I wasn't working out of my shopping money and managed to pay for holidays or presents. Then I've gradually moved to better paying jobs but ended up working all hours so there's always a price for it. I'd like to have more time now, to enjoy my grandchildren, travel a bit, and do some creative things again. I have a list of hobbies that I want to get round to.