Ltd Company Pension Contributions with one eye on retirement

GunJack

What sort of retirement do you want? If it's a decent one, I'd suggest £15k pa won't cut it, and that's before lisyloo's points above about costs increasing.

Why not look to increase your retirement income, even with paying a bit of tax? I don't get the "cut off nose to spite face" thing that lots of people have about retirement income and tax....let's face it, the older you get the more likely you are to need NHS, social services, etc.

The fact that your income is high enough to pay tax, means you're also getting more in your pocket

WoB

lisyloo wrote: »

The 4% rule is to be relatively confident you won’t run out of money if you live a long time e.g.into your 90s
It isn’t really possible to calculate using all the capital as none of us know how long we’ve got, so if you don’t want to live in penury at say 95 then you do need to calculate it lasting a very long time.
In practice At this level there isn’t much a line between forever and say 45 years (or however long you want to be confident you’re not in penury).

My personal experience of elderly parents is that costs might go down temporarily (when they stop driving, doing on holiday etc.) but then quite quickly start to go up when they need help with cleaning, any DIY and eventually care. Transport doesn’t necessarily go down when you stop driving depending on where you live. If you need taxis because you can’t get to the bus stop or even a wheelchair taxi then it gets more expensive.
This is all individual of course, so it’s best to do your own figures, but general pot sizes discussed on here are £400k - £1millionfor retirement with £400k being at the more frugal end of the spectrum.

Like I say this started out more of a thought on reducing tax coming out of the pension (i.e. replacement of income). We have other money in ISA's, NS&I, etc. which has already gone through paying tax (I used to be regular PAYE before contracting more recently). The total currently is around £600k for pensions pots/savings etc. but that is for two of us. My wife is about to turn 55 and has just finished work but we are looking at options (I may reduce my workload, the missus may take another part time job after a little break, etc.).

WoB

GunJack wrote: »

What sort of retirement do you want? If it's a decent one, I'd suggest £15k pa won't cut it, and that's before lisyloo's points above about costs increasing.

Why not look to increase your retirement income, even with paying a bit of tax? I don't get the "cut off nose to spite face" thing that lots of people have about retirement income and tax....let's face it, the older you get the more likely you are to need NHS, social services, etc.

The fact that your income is high enough to pay tax, means you're also getting more in your pocket

The £15k was more to do with a 50/50 split between myself and wife. We worked out we can get by easily on £30k between us.

Appreciate the points on paying some tax. I guess it's easy to get carried away trying to be efficient with money and all the calculations.

The main thing here is becoming financially independent and having some freedom to make choices. That may include earning as much as I can for another few years to get the pot's increased or I could wind down a bit but keep a reasonable salary coming in for the next 5+ years etc. so the pots remain unscathed.