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BLT v Bigger Home v Pension
Comments
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Sort out your (and spouses) pension as a priority, then reassess any other options0
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How old are you?
I presume we is you and your spouse? Do you have or might you have children in future?
2 children 9 & 14.
How much do you anticipate the business being worth?
No pension isn’t good but how bad it is depends on how old you are.
I'm 47 and the business may be worth approx £250k, but I have a business partner.0 -
BLT.
Sandwich every time!0 -
So you have a 50% stake in it?Dave_MacDonald wrote: »I'm 47 and the business may be worth approx £250k, but I have a business partner.
How's that £250k figure arrived at? How much of the business is YOU, and your skills/knowledge/contacts/personal reputation?0 -
Dave_MacDonald wrote: »I'm 47 and the business may be worth approx £250k, but I have a business partner.
You definitely need to prioritise you retirement savings (of which a pension is one vehicle but not the only way and has limits).
As a ball park guide you can take 4% of your pension pot annually.
So let’s say someone has a pot of £600k, the they can expect to have £24k annually to live on which will be subject to income tax if its from a pension.
Whilst the £600k sound seems like a lot it isn’t to provide a income for 35 or 40 years or even longer especially if it’s for two people.
You can use BTL and your home for retirement savings but there are risks with those options (property is not liquid).
If you but a home and plan to downsize to retire then bear in mind it will be a wrench and you might not want to leave your dream home.
A pension is not suitable for putting in a large sum as there are limits and you’ll be taxed on the income.
You could ask your friends for a recommendation for a good IFA.
Yes they need to be paid (this is psycologically easier as a %) but the right advice is worth its weight in gold if you get a good IFA.0
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