Mind the 'age' gap: retirement planning

Northamptonblue

Whenever I am asked, I have a simple reply:

If your employer is adding funds then do it.
If you are a 40% taxpayer then do it.
If you are still young then do it.
If you already have decent pension savings then stack them while you can.
If you are close to retirement and have no pension then you are probably going to have to throw yourself on the mercy of the state.

Massively over simplified I know but most people have little interest and need it simple and straightforward.

crv1963

We talk a fair bit in the office about retirement- age range mid 20s to early 60s staff wise, a minority roll their eyes and say they'll cross that bridge when it happens, most just say they'll just stick with their current (good DB scheme), only one other is like me looking at ensuring that they and their spouse can go together at least 10 years before SRA.


One has a husband who's retired at 50 but she likes what she does so is waiting until she's 60 before going even though she could go now if she wanted, so although retirement before SRA is a common aim on here it isn't for everyone!


But amongst my personal friends I to "get the look" and am told often it's a nice idea but not doable unless you earn megabucks, and there's little discussion about planning as people glaze over and shut the conversation down. I've given up talking about it to most, but a colleague (approaching 40) did ask me to e-mail him info about this website and suggestions for how to save so he can discuss going earlier with his wife, so maybe the penny has dropped with another!

Cottage_Economy

Well, these last few days I have had an interesting glimpse into how retirement with an aging husband could be. DH has torn a leg muscle and it is going to take months to get it right.

Guess who tried to insist within three days his leg was ok and he could go into work/start doing chores on the smallholding :mad:

I had to sit him down and explain the implications, from possible DVTs to re-tears if he tried to do too much too soon. He stropped like a proper 'Kevin the teenager' until i had stern words with him and told him to knock it off. He's finally accepting he has to take it slow and steady to recover, and is now catching up on a lot of books and TV programmes while waiting for the ok from the physio to return to work. I can tell getting him to do his exercises is going to be a real pain in the butt. His father was exactly the same.

atush

If you are close to retirement and have no pension then you are probably going to have to throw yourself on the mercy of the state.

There will be no mercy of the state as the new SP is going to make pension credit a gonner.


What you will have eto do is keep working beyond SPA if you cant be bothered to save.

kidmugsy

Cottage_Economy wrote: »

Well, these last few days I have had an interesting glimpse into how retirement with an aging husband could be. DH has torn a leg muscle and it is going to take months to get it right.

How lucky that there was a Royal Wedding to entertain him.

Cottage_Economy

kidmugsy wrote: »

How lucky that there was a Royal Wedding to entertain him.

Yes, he was most entertained. So entertained I believe he slept through part of it and watched a Fleetwood Mac documentary on youtube during the rest.

MK62

Sounds like something I should have done during the FA Cup Final.......:)

bluenose1

MK62 wrote: »

Sounds like something I should have done during the FA Cup Final.......:)

As an Everton fan I will be making alternative plans to watching the Champoins League final on Saturday. Planning go the cinema to watch the Avengers.

Cottage_Economy

Interesting conversation DH had last night with a medically-retired ex-Royal Mail friend. He was stumped as to why DH didn't just retire now at 57 as the pension and benefits were so good he would have loads of money.

When we pointed out that he was medically retired more than 10 years early based on no possibility of him being able to do another job, with full FS/DB benefits made up to NRA 65 and huge lump sum based on lost future income, plus other bits and pieces for colleague shares etc., he had no clue what we were talking about.

He assumed that what he got was normal, and that everybody gets that if they retired early.

I was gobsmacked. He thought we were wrong when we told him about actuarial reduction, loss of future contributions, etc and how that would greatly diminish DH's pension.

How could anybody think that that massive lump sum for loss of future earnings was a normal thing to get on early retirement?? Or a fully funded pension??

Malthusian

Cottage_Economy wrote: »

How could anybody think that that massive lump sum for loss of future earnings was a normal thing to get on early retirement?? Or a fully funded pension??

The standard assumption is that anything that happens to you is absolutely normal. If you spent your whole life locked in a cellar having the Book of Mormon read to you while standing on your head, you'd think that was how everyone lived.

People who spend their whole working lives in generous defined benefit plans tend not to think about their pension planning very much, so there's no reason they should ever read up on what other people's pensions are like.

I'm not a postman and if I was unable to work again I'd get an income (rather than a lump sum) based on lost future earnings paid to me up until State Pension Age thanks to the group income protection policy (aka PHI). Anyone well-off enough that state benefits will be inadequate can take out one of their own. So the concept of being compensated for loss of future earnings isn't abnormal in the slightest.

If I took out a regular premium pension with waiver of premium cover, I'd get the fully funded pension as well.