The plan and the numbers - please critique

Radiantsoul

The only thing I wonder is do you both have life insurance.
Apart from that you have a very high income and very high savings rate, so you should be fine.

Mistermeaner

lisyloo wrote: »

You can get married for very little if you want.

This might be cheaper that the arrangements you’d otherwise need to put in place to protect each other in the event of death/incapacity etc.

You are young but when whilst your sorting things out then LPAs would be a good idea (I’ve been through the alternative and it’s arduous, slow and expensive).

I’ll put it to her this way

No one knee job

Simple financial facts

How could she refuse 🤔

enthusiasticsaver

Mistermeaner wrote: »

Thanks all for input

Couple of people mentioned the pension for the partner; what is the advantage of this vs e.g. paying into her LISA? (is it just that itenables additional contributions above her LISA limit?)

Ref the comments on increasing her LISA contributions; if we have extra disposable this will certainly be considered but thinking was as I am older we get my pots sooner (both my pension and my LISA), and also we get more tax benefits in my pension (High earner) + salary sacrifice benefits (nat ins.).... for this reason we would always prioritise contributions into my pots rather than hers

NB: They are my pots only by name.... it's all OURS

PS: I am working on the assumption that should I die at any point it can all be inherited by her in full (assuming we're married which is a discussion for another day )

I would say this leaves your partner very vulnerable especially if you are not married. Make sure you do a will.

We prioritised my DHs pension as he was a 40% tax payer and I was basic (worked part time after kids) and I regret that now. We were right to maximise his contributions but I only paid the statutory 6.5% into my LGPS until I returned full time when I upped my contributions to 10% then 15%. As a consequence my DH is paying tax on his pension (DB not DC) even though he is claiming part of my tax allowance and I have £6k unused of my tax allowance until my next pension kicks in. As others have said consider tax efficiency on way out as well as way in.


If you pay £2880 into a SIPP in your partners name the tax payment will increase this to £3600. I have done this for the last four or five years now and in the final years of my working life I put 100% of my salary into my LGPS and SIPP combined.

I also would say that you need to allow a substantial amount for 4 children re university costs etc. We planned for our mortgage to finish just as the eldest started university and we did not retire until after they were finished at uni. You are going to possibly have two at university just as you retire. However you do have a potentially large pension pot, you will be mortgage free and no doubt your wife will return to work when the little ones are older.

Interesting you have chosen SIPPs for your children and not for your wife and SIPPs are very illiquid and they may need money for university, property deposits etc instead. Is there a reason for that?

Mistermeaner

enthusiasticsaver wrote: »

Interesting you have chosen SIPPs for your children and not for your wife and SIPPs are very illiquid and they may need money for university, property deposits etc instead. Is there a reason for that?

Thanks for input; we're going to look at wills and also do some math on tax on the way out as well as way in.

ref the Sipps for the kids; ummed and arred alot about this and concluded the following:

- Older kids (current 10 and 12) I'll still be working at age 46-52 when they hit uni time so any funding they need will come from income at that time (mum will probably be at work then as well)

- Additionally they each have another parent so the burden is not all ours

- On top of this student finance is IMO a pretty good deal ; and if your degree doesn't pay for itself you shouldn't be doing it anyway

- Younger kids will be at uni age when I am hitting 57-62 at which point I (might) be pulling from my pension / LISA which could if appropriate be used to help

- JISA's are pretty pants generally an offer no meaningful tax advantages

- At an appropriate point I hope to be able to sit down with each child (probably when they get their first proper job) and show them their SIPP, the payments I made, the 'free' money that was added and the compounded growth that money have enjoyed. This will hopefully be a very valid lesson in benefits of saving and pensions and investment... ideally something they will themselves continue

- Another big advantage with a junior SIPP is that the kids cant take the money out - probably one of the worst possible times to give your kids money is age 18 . so many distractions, so little experience. Much better they are protected from themselves and can enjoy the money when they retire

lisyloo

Mistermeaner wrote: »

I’ll put it to her this way

No one knee job

Simple financial facts

How could she refuse 🤔

I don’t know your partner, but most women understand financial facts :T

AnotherJoe

Not a fan of SIPPs for children unless you've exhausted every other savings avenue for them, locking up money for 50 or 60 years they may not even get to use ever, and they are unlikely at age say 30 to be saying "thanks dad for building up money I cant access or use for my university costs / training course / house deposit and meaning I'll be in a crappier house or job for 30 years than I could have been"

Mistermeaner

AnotherJoe wrote: »

Not a fan of SIPPs for children unless you've exhausted every other savings avenue for them, locking up money for 50 or 60 years they may not even get to use ever, and they are unlikely at age say 30 to be saying "thanks dad for building up money I cant access or use for my university costs / training course / house deposit and meaning I'll be in a crappier house or job for 30 years than I could have been"

i've never really been popular in my house

one day, long after i'm gone, some of them may have a little chuckle and think 'dad was right'

maybe.....

atush

JISA's are pretty pants generally an offer no meaningful tax advantages

Not sure they are pants, not if you invest in equities over cash? income and Cap gains are tax free.

Thrugelmir

Mistermeaner wrote: »

i've never really been popular in my house

one day, long after i'm gone, some of them may have a little chuckle and think 'dad was right'

maybe.....

My father was. Hopefully my son will one day think the same of me. At least at an early age he grasped the importance of an adequate pension provision.

michaels

Mistermeaner wrote: »

Thanks for input; we're going to look at wills and also do some math on tax on the way out as well as way in.

ref the Sipps for the kids; ummed and arred alot about this and concluded the following:

- Older kids (current 10 and 12) I'll still be working at age 46-52 when they hit uni time so any funding they need will come from income at that time (mum will probably be at work then as well)

- Additionally they each have another parent so the burden is not all ours

- On top of this student finance is IMO a pretty good deal ; and if your degree doesn't pay for itself you shouldn't be doing it anyway

- Younger kids will be at uni age when I am hitting 57-62 at which point I (might) be pulling from my pension / LISA which could if appropriate be used to help

- JISA's are pretty pants generally an offer no meaningful tax advantages

- At an appropriate point I hope to be able to sit down with each child (probably when they get their first proper job) and show them their SIPP, the payments I made, the 'free' money that was added and the compounded growth that money have enjoyed. This will hopefully be a very valid lesson in benefits of saving and pensions and investment... ideally something they will themselves continue

- Another big advantage with a junior SIPP is that the kids cant take the money out - probably one of the worst possible times to give your kids money is age 18 . so many distractions, so little experience. Much better they are protected from themselves and can enjoy the money when they retire

I plan to be retired and living of savings when the kids are at uni so I have no assessed income so they can get the full loan and possibly grants if they are reinstated....drawdown can then commence when they have finished.