Self employed retirement

atush

kangoora wrote: »

Funny how different people see the same words. I see multiple people including several whose contributions I respect posting that you need to see an accountant, get an IFA and sort out pensions and investments.

I see one poster, who I don't remember seeing before on this forum, saying 'Don't worry mate, you'll be fine'

I know what conclusion I'd take from this.

I agree.

I'm not the sharpest tool in the box but I'm pretty sure that these schools of thought can't both be true, so I guess I need to figure out what to do next.

Did you consider they both might be true in parts? In that you should be balanced?

atush

SamW123 wrote: »

Have to say I'm more worried now than I was before posting! I really don't want to go down the road of investments and all the risk that that entails, particularly if I end up having to trust an "advisor" (bearing in mind I know very little about financial things, I feel it it would be very easy for to be hoodwinked or misled). I've given it some thought and I reckon the safest option might be to give up on the early retirement thing and just continue working- I do at least have that option, and it would hopefully at least ensure I don't run out of money. Anyway, thanks to everyone for the replies.

When do you trust professionals?

Your doctor? Lawyer? Plumber? Mechanic? Or do you do your own diagnosis, legal requirements, plumbing and do you fix your own car?

I am super good with DIY but dont do most of the above, but will do my own investments.

Terron

dunstonh wrote: »

You typically need around 5-6 properties for a secure retirement income. One property is high risk and unlikely to be anywhere near enough.

One property is indeed high risk if it is your only income, but it could be the base for a pension strategyif you still have some time to go.

1. Start a company
2. Loan the company the money for a deposit
3. Buy a property an let it out
4. Pay into a director's pension - tax free
5. When you retire instead pay a salary to you and take the pension.
6. If you have the money then buy another property through the compan. £80k would be enough for two properties where I invest.
7. If a property increases significantly in value remortgage to extract equity and buy another property. Changes to tax rules make that more difficult to do in your own name if you are a HRT payer.

That assumes you either know what you are doing with property, or know someone you trust who does. It was the latter for me when I started.


If you don't have knowledge of property a straight pension is probably a safer bet.

GoodSon

Hi Sam,

An example for you.

I'm self employed and at the age of 38 realised I needed pension provision. I suppose I'm in the £15/20k taxable profit per annum bracket - so not in limited company territory.

Not really fully understanding my options i opened a stake holder pension - perhaps not the ideal vehicle, but whilst I was making a regular monthly payment there was a possibility of adding ad hoc contributions, so it kinda worked for me.

I'm no Warren buffet, but even with moderate/ boring to slightly higher risk funds it has outperformed any cash preservation or savings account / cash isa.

Anyway, after 10 years I have put in 40k which is increased by 10k with government tax relief and the current value is about 72K after compounding and investment growth.
It's gone up and down with crashes and booms and is probably vulnerable with Brexit and other geo political factors, but that's no different to many investment over the course of history.

Obviously a late start means in reality i have nowhere near enough, but another 15+ years of contribtions and growth means it's something to add to a state pension.

I pay my accountant about £500 a year and I'll be sure that their expertise more than pays for that charge in tax efficiency around my allowances etc.
Also whilst hiring professionals might seem expensive, hiring amateurs can cost more - which is something I say to some of my customers who tell me the bloke on Facebook is cheaper.

So really it's just to say that taking the first step and being disciplined in making the monthly payments is not so daunting - after a while you kind of get used to leaving your account each month and it becomes the norm.

Obviously none of this is investment advice, more the experience of somebody in a similar position to you.

Good luck with whatever you decide to do.