If you could go back in time, what would you do differently?

Alexland

Oliver1191 wrote: »

This appears to be a common theme. Although the suggestions have generally been to focus on pensions up to the age of about 45, there is a general view that housing should be paid off by 50...55 at the latest.

This is partly due to job insecurity from 55. The view seems to be get the best house you can as soon as possible. But pay off just enough so that the mortgage clears at a descent age. Then you have ypur pension lump sum as a back-up should you be financially off track.

It really depends on your circumstances and the core of the problem is that to get onto the property ladder and move up until you have a suitable property to raise a family usually requires your finances to be streched. So it's a balance of paying down enough mortgage to get a low rate (and avoid being vunerable to rises) and then increasing your long term retirement contributions while the remainder of the mortgage repays nice and slowly ideally concluding in your 50s while you still have some certainty of employment. Plus trying to maintain a tax efficient position throughout the whole period.

Not over 50 yet but I regret paying higher rate tax (42% inc NI) on some income in my early 30s while only getting basic rate relief (32% inc NI salary sacrifice) on my excess pension contributions in my 20s. With hindsight, knowing my income was likely to grow, I should have only put enough into my pension to get employer matching in my 20s and significantly increased my pension contributions as soon as I became a higher rate taxpayer.

That poor planning probably cost me around £15k of wasted tax relief over the years. We also missed out on the first year of child benefit as my income was registering as too high.

Alex

chucknorris

Oliver1191 wrote: »

Hi to anyone in their 50s contemplating retirement, or to anyone who has now retired.

If you could go back in time to your 30s, what would you do differently (from a financial perspective)?

What were your successes? What were your mistakes?

How did you make yourself financially secure? What concerns do you now have?

What do you wish you could have to enjoy retirement more?

Thank you for sharing!

I would buy more property, I did mainly invest in property, but after I became wealthy, I diversified to reduce my exposure to risk. I'm not really complaining or upset about it though, because I have made enough for the quality of life that I want.

Bimbly

I would have insisted that my financial advisor let me put in the level of pension contributions I wanted.

I was 23 and self employed and worked out I could put in £200 a month. Oh, no no no, said the IFA, you only need £45 contribution at your age. Look at this lovely demonstration at how much money you will have when you retire by just putting in £45. But I really want to put in £200, I said. He wasn't having it because he had a lovely chart and that chart said £45.

He failed to take into account that, as a woman, I might end up taking a career break to raise children. There could be periods of being out of work or suffering ill health, I might reduce contributions if buying a house, or I might like to retire early. Which you might have thought meant that putting money in early while I had it was a good thing. But no.

So I let him do what he wanted and put in £45 a month. I thought I'd let it run for a year and then up the contribution. A year later, I rang up the pension company asking to increase my contrbution and they told me I wasn't allowed unless I took financial advice. So the contribution level remained.

Twelve years later, I got a permanent job and transferred my private pension into their DB scheme. This bought me two years in the final salary scheme. If I had put into my pension the amount of money I had wanted in the first place, my fund might have bought something like eight years worth.

So I had started a pension at 23 and yet, at 35, it was as if I had waited until 33. I was ten years behind where I wanted to be and where I had tried to be.

Many years later, I am still angry about this. I should have absolutely insisted on doing what I wanted, but I was young and not so bloody minded as I am now.

Alexland

Bimbly wrote: »

So I had started a pension at 23 and yet, at 35, it was as if I had waited until 33. I was ten years behind where I wanted to be and where I had tried to be.

So what did you do with the £155 per month you had available to contribute? Surely that would still be worth something somewhere in your personal balance sheet? Although admittedly it might have been worth more if pension wrapped and transferred into a DB scheme.

If I was ever offered an opportunity to make an advantageous transfer into a DB scheme and I didn't already have a big DC pot to transfer I would consider opening a SIPP and making a lump sum contribution (limited by relevant earnings) for this very purpose.

But I am in the opposite position of having a couple of six digit DC pots and am keen to find an employer who would allow me to use one of them to buy into their well funded DB scheme - do such opportunities still exist? If so I might fancy a career change...

Alex

jerrysimon

As a public sector worker, I was fortunate in that my pension was started when I was 16 automatically and I retired last year, 40 years later at 56. My pension was reduced but I have absolutely no regrets about leaving early, given that this last year has proved that we have more than enough to live off.

I often wondered in the past why I bothered buying a house (mortgage worries) but only realised the benefit once I retired and now living in my own home with no rent/mortgage outgoing. My pension goes so much further because of that.

I found this forum a few years ago and perhaps SIPPs a little late. Although I took advantage of it for my wife (managed to get about 5K back in tax), when I paid off my mortgage with money my father left me when he died four years ago, maybe I should have used some of that money to top up a SIPP to the max of her income before she stopped working full time as she now has about 8K of tax free earnings available.

That said I would still have a mortgage and like others have said knowing there is no mortgage is a great feeling.

It would have been nice if maybe we had developed our pensions at the same rate i.e. both had pensions under the tax threshold and pay no tax. At the moment she will receive a 3K pension when she is 60 and we should both get almost full SPs in about 10 years time. Still wondering if we should cash her pension in and use it to maximise our income before SP ?

robin61

When my wife gave up work to look after our family I kept paying into her personal pension for a while but stopped. In recent years I started again and have been putting in the full £2880 per annum.

In hindsight I should have put more into her pension so that we can make full use of her personal tax free allowance when she retires.