IHT - At what age should you start to take it seriously?

getmore4less

What proportion is the house,?

Are you sure you have enough.

Sea_Shell

House is worth about £350k, so £500k is a mixture of cash/ISA/DC pensions. This excludes DB pensions (DH's) and SPs.

I have a whole other thread about our plan, on the pension board, if you need a cure for insomnia!!;);)

getmore4less

The DB and SP can be counted at 20 times to estimate a pot size.

getmore4less

Should have said if the DB(indexed) and SP will cover the bills then the rest is slush money for the discretionary spending.

if the DB is one sided(like ours) then you hope you die in the right order or have a bit of a backup(often the house).

getmore4less

Sea_Shell wrote: »

House is worth about £350k, so £500k is a mixture of cash/ISA/DC pensions. This excludes DB pensions (DH's) and SPs.

I have a whole other thread about our plan, on the pension board, if you need a cure for insomnia!!;);)

Working through that one now, up to Oct 18, looking good so far.

getmore4less

OK that's a cracking 2 year thread.

Conclusion

You just spent 2 years worrying you won't have enough.

now you have decided it is enough(retiring Aug)

you are worrying it might be too much.

---

Simplifying

It seems clear once you are on the DB+SP(£25k+) you can cover your current lifestyle(£15k-) comfortably.

if I have this right the forcasts are
DB year 8
SP(hubby) year 17
SP(you) year 20

if you assume savings can keep pace with inflation and the pensions index linked.

With £12k in <10years time, £150k will cover the 10 year gap.
£3k to cover before the rest kicks in 10y another £36k.

Round up to £200k which more than covers your predicted spends over the next 20 years

£500k pot gives 2.5 times contingency, think that is plenty

There are some potential bigger spend not on the normal day to day you have been tracking but they are more than covered by the pots you have even after bridging the 20y gap till all the pensions kick in.


Take up gardening you could cut your minuscule food bill.

lisyloo

Be careful on giving away money in later life.
If you need to go into a care home or receive care at home then this might be determined to be deprivation of assets.
Also note that some homes the local authrity would put you in are in the overmydeadbody category and you could even be split up (they tried so split up Mil & FIL after 60 years of marriage).

It’s a minority that need residential care but I’m not sure how that helps if you don’t know whether it will be you.

The only way round this would be to buy an annuity for care fees so then you can give away the rest, but having loooked into this recently it’s possible that care fees exceed your annuity over time and you need more money.

It would be easy to budget if we all knew how long we had.

Sea_Shell

Sea_Shell wrote: »

Regards pensions, I realise that on first death they pass outside of the estate, but what about after 2nd death. Surely if the pension pot was paid out on first death it then just becomes a cash asset of the surviving spouse, or is it inherited within a pension wrapper??

Is anyone able to answer this part?

getmore4less wrote: »

OK that's a cracking 2 year thread.

Conclusion

You just spent 2 years worrying you won't have enough.

now you have decided it is enough(retiring Aug)

you are worrying it might be too much.

---

Simplifying

It seems clear once you are on the DB+SP(£25k+) you can cover your current lifestyle(£15k-) comfortably.

if I have this right the forcasts are
DB year 8
SP(hubby) year 17
SP(you) year 20

if you assume savings can keep pace with inflation and the pensions index linked.

With £12k in <10years time, £150k will cover the 10 year gap.
£3k to cover before the rest kicks in 10y another £36k.

Round up to £200k which more than covers your predicted spends over the next 20 years

£500k pot gives 2.5 times contingency, think that is plenty

There are some potential bigger spend not on the normal day to day you have been tracking but they are more than covered by the pots you have even after bridging the 20y gap till all the pensions kick in.


Take up gardening you could cut your minuscule food bill.

Thanks for taking the time to read my other thread. Also good to hear that you think our numbers stack up too.

However, who says im WORRYING about IHT?? ;)

I am AWARE of IHT and what would happen if we both met an untimely end next week....a big IHT bill. However, this thread was really about getting peoples opinions or anecdotes about when IS the time to really start to take it seriously.

Most people seem to be of the opinion, that with no direct heirs, we should just spend spend spend, and if it's all gone, so be it!!!! But then if we need care for X years later in life, we'd want to be somewhere comfortable, so as always its a balancing act, which would be made SO much easier if we had one of them "Balls of Posh Glass". :beer::beer:

getmore4less

Another failed attempt at humour...

I would retain the dosh tilll you have uninteruptable income sources on stream to meet the spends.

That will be hubby's SP kicks in.

A bit of delay could adjust that.

You could just say 20years when yours kicks in.

From your other thread I can't see you becoming big spenders but there is probably room to upgrade some to higher quality but still value products.

One option is to start looking at longer term housing needs should your health/mobility change get the last move over and done with.

One discussion you can look at is as you are comfortable and may not need anything from your parents maybe they can consider where they would like their surplus to go

IHT planning should be multi generation.

Sit back and enjoy the next10-20 years then review.

Sea_Shell

Sorry, that went straight over my head!!! But yes I see the irony in my question!

We'll review it in 20 years. IHT that is.

Cheers.