50 and panicking

alimantado

I'm worried about my pension situation. I have 3 very small funds kicking around and my latest state pension forecast said I'd get my full state pension BUT I'm a self-employed single parent and at the moment I'm not saving anything for retirement. I have no mortgage on my home and I have another property that is rented out. I think the equity in that is approx £100,000. I'm thinking to sell the property and try to use the money I have to build up some sort of pension pot. I'd really appreciate any pointers on how to start. Thanks

kidmugsy

Some people prefer a rental property to a pension. Why do you choose to act now?

My own instincts would be (i) get out of BTL before Mr Corbyn confiscates part of your property rights, but (ii) don't invest in equities until the Wall St crash of 2018/21.

That leaves you with the problem of what to do with the capital before equities become attractive again. Cash, gold, commodities, foreign exchange, ...

justme111

Why do you think you need to do anything about your pension?
Will you want to stop working before your SP age?
How much money do you spend yearly now ?
How much of that expense you will still have in retirement? ( take away expenses for children , for mortgage , savings, tax , NI)
Is it the amount you want to have when retired? How much is it? What is the situation with btl?( mortgage , rent, profit and plans with it?)

alimantado

I need to do something because as it stands I'll have the state pension and not much more. I reckon I need another 10,000 pa to live on fairly comfortably - meaning an income of roughly 17-18000 pa. Taking the equity in my property as my pension pot means I've just about enough to last 10 years. I'm not imagining I can retire early. I'm just worried because I keep reading things saying I'll need a pot of around £200,000 to retire and I've got barely half that.

The rental property was bought in 2011 for £143,000 in and might sell for £155,000 not. I have a 50,000 mortgage which costs £378 pcm and the tenants pay 600 pcm

justme111

Would the mortgage be paid by retirement? If so then it would probably provide you with £6000/year( (I plan roughly £1200 for expenses/voids although you know better than I do what are expenses and occupancy on this property), leaving you to find only about £5000. I am not sure why you talking about selling it .
What are your present pension pots?

Brynsam

alimantado wrote: »

I'm just worried because I keep reading things saying I'll need a pot of around £200,000 to retire and I've got barely half that.

Stop reading things based on wild generalisations (as these things are) and assuming they apply to you, word for word. They don't. Take a good hard look at what you spend now, what your income is now, and how your income and spending patterns are likely to change as you get older. You may find yourself a lot less worried when you've done the sums instead of just nibbling your nails (although I think many of us would be joining you in doing the latter!).

atush

alimantado wrote: »

I'm worried about my pension situation. I have 3 very small funds kicking around and my latest state pension forecast said I'd get my full state pension BUT I'm a self-employed single parent and at the moment I'm not saving anything for retirement. I have no mortgage on my home and I have another property that is rented out. I think the equity in that is approx £100,000. I'm thinking to sell the property and try to use the money I have to build up some sort of pension pot. I'd really appreciate any pointers on how to start. Thanks

pensions are more tax efficient so yes i'd sell and boost pension myself.

But why are you mtg free? Have you been paying off the mtg instead of pensions?

are you truely SE or are you an LLC?

bostonerimus

Rather than selling the rental you need to understand it's value. So what is the net income after expenses? Property is also a nice store of wealth outside of banks and the stock market and can provide good regular income.

So I think you are in a good situation having state pension, the diversification of a rental property and some retirement savings. I would now aggressively save into a pension and ISA to build up those pots over the next 10 or 15 years.

Stubod

Personally I would not sell the rental property, (assuming you have good tenants). It sounds like the rent is more than covering the mortgage a the mo. I would now be using all my spare income to "invest" in a pension....but that's just me.

Terron

£378pm for just £50k seems high. Is it a repayment mortgage. Presumably the property has few problems as you have kept it for so long, but the returns look a bit low unless you are paying down the mortgage. When did you last remortgage? Rates have been dropping so you might be ablr to reduce the amount you are paying.



I am planning to use BTL for part of my returement income, but I am getting net returns of 8% (not counting capital gains)..


I suggest talking to a broker to see if you can get a cheaper mortgage. If so put some of the money you save into a pension of ISA,

scaredofdebt

BTL is a much higher return that a pension* (assuming you are looking at annuities) so I wouldn't rush into selling.

However, it is possible to buy 2 properties with that £100k equity if you don't mind them being in an area with low house prices, which would boost your income as you'd get two rental incomes, so something like 2 x £400 a month or so.

More work being a landlord to two tenants and possible other issues but worth considering the pros and cons.

I believe the return from a multiple occupancy house is even higher, but again more work and risk.

Worth a thought though, no way will I be getting an annuity with my pension but I understand some people like to have zero risk.

* depending on your circumstances