Can I retire in a years time at 57??

cfw1994

dave_hendy wrote: »

I thought taking the 25% and leaving the rest as long as possible was the best option, I hadn’t really thought about paying more in was an option once we were retired.

I was watching a video this morning where they were implying shares as a whole were very high and everybody expected them to go down, so I didn’t want to jump in then if it was stupid. I understand nobody knows what will actually happen. I could obviously pay the years allowance in gradually over that tax year.

To be fair, I've been saying that for 18 months now :rotfl:
Luckily, although I eased down my risk (moving my main pot from 100% equities to include ~30% bonds/gilts), I have still made gains from the main 70%. Which of course could be at risk if/when there is a "market correction". But would have missed out on the gains over those 18 months.....

"time in the market, not timing the market" is the mantra to live by.
Even when you retire, you might still be "in the market" for 20-30+ years.....

dave_hendy wrote: »

You are correct it would be approx 9 years until I get my SP and 15 years for my wife.

So I take it as I would be taking more than my 3% recommended out of my pension once my SP started I would cut right back on my withdrawals? Or wouldn’t this matter if I am reinvesting it?

If you take 5% (for example!), but reinvest 2%, then that is effectively you using 3%: sounds good to me.

BUT...the question you need to answer.....is whether you will be confident to manage this over the next 10-30 years.....or whether to pay an IFA x% (likely averaging 1%, I suspect), to manage it for you.
Of course every % taken out taken directly from your gains.....whether the market goes up or down!

Only you can figure this out.....

dave_hendy

cfw1994 wrote: »

If you take 5% (for example!), but reinvest 2%, then that is effectively you using 3%: sounds good to me.

BUT...the question you need to answer.....is whether you will be confident to manage this over the next 10-30 years.....or whether to pay an IFA x% (likely averaging 1%, I suspect), to manage it for you.
Of course every % taken out taken directly from your gains.....whether the market goes up or down!

Only you can figure this out.....

Early days, but I am beginning to think, get financial advice from a IFA and get yearly follow ups for first few years to get me into things then possibly go it alone. I don’t feel confident enough to be picking my own investments to start with.

I will watch YouTube videos and continue to ask questions and try and learn as much as possible especially once I give up work as I do find it interesting.

Dazed_and_confused

She can pay voluntary NI contributions after she stops working until she reaches SP age or has earned the maximum SP, which ever comes first. Each year costs around £750. The increased SP pays for this in about 3-4 years so it's an amazingly good deal. However she needs to get an SP forecast first so she knows where she stands.

Getting the forecast is definitely the first step. She needs to read past the headline £168.60 and remember that 35 years doesn't apply to her as she is under transitional rules.

If she needs to contribute for years after stopping work (as an employee) an alternative to paying Class 3 voluntary National Insurance is to become self employed and pay voluntary Class 2 National Insurance. Approx £150/year rather than £750/year.

She has to complete a Self Assessment return to benefit from this but if her business was very small she could actually end up (as far as the self employment part of the return is concerned) just declaring her income (turnover) was less than £1,000 and is covered by the Trading Allowance but she can then pay voluntary Class 2 National Insurance.

Dazed_and_confused

This maybe useful as she has just had an extra tax bill for getting over her £1k interest allowance?

There is no "allowance" for interest.

Presumably you mean the savings nil rate of tax (confusingly often referred to as the Personal Savings Allowance).
Don't forget that if her taxable earned income (employment/pension/self employment/rental income etc) is less than £17,500* she will free up some of the savings starter rate of tax whereby upto £5,000 of interest can also be taxed at 0%.

This, and the Personal Allowance, both have to be used before the savings nil rate can be used.

*£16,250 if she had applied for Marriage Allowance

Keep_pedalling

dave_hendy wrote: »

If I go down the s&s ISA route in April (already done this years allowance) is this a good time to be opening one with the full £20K? How do I know?

As you already have substantial cash ISAs you don’t have to wait til April, and you don’t have to limit the investment to £20k as you can transfer cash already in an ISA to S&S ISAs

dave_hendy

Keep_pedalling wrote: »

As you already have substantial cash ISAs you don’t have to wait til April, and you don’t have to limit the investment to £20k as you can transfer cash already in an ISA to S&S ISAs

I was already thinking of that as I have a fixed ISA finishing in January.

Thanks

dave_hendy

dave_hendy wrote: »

I was already thinking of that as I have a fixed ISA finishing in January.

Thanks

My Virgin 1 year fixed ISA (1.55%) ends on the 24th January, the easiest option for me would be to move it to a Virgin s&s ISA. It is invested:
16% UK Government bonds
9% Corporate bonds
50% UK shares
25% overseas shares


or they have another:
25% UK shares
50% overseas shares
25% emerging markets


Would either of these be a good first step for me into this world? It says the ongoing charges are 1%.

Audaxer

dave_hendy wrote: »

My Virgin 1 year fixed ISA (1.55%) ends on the 24th January, the easiest option for me would be to move it to a Virgin s&s ISA. It is invested:
16% UK Government bonds
9% Corporate bonds
50% UK shares
25% overseas shares


or they have another:
25% UK shares
50% overseas shares
25% emerging markets


Would either of these be a good first step for me into this world? It says the ongoing charges are 1%.

The fund charges at 1% are expensive for passive funds. It would be much cheaper transferring the Cash ISA to a fixed fee platform like Halifax Share Dealing or iWeb and investing in a multi asset fund like Vanguard LifeStrategy or HSBC Global Strategy, with the version that most suits your risk tolerance.

Of the two funds you have listed, the second one is much higher risk than the first one.

dave_hendy

Audaxer wrote: »

The fund charges at 1% are expensive for passive funds. It would be much cheaper transferring the Cash ISA to a fixed fee platform like Halifax Share Dealing or iWeb and investing in a multi asset fund like Vanguard LifeStrategy or HSBC Global Strategy, with the version that most suits your risk tolerance.

Of the two funds you have listed, the second one is much higher risk than the first one.

Thanks for the reply, I didn’t realise 1% wasn’t a good rate, shame that would have been a nice easy option!

Apart from this ISA swop, the s&s isa might be on hold until I have had some advice? I am going to pay £30k into my wife’s pension and probably the same in the next tax year. I may also add another £10k to mine.

New (slight) problem is, although I am coming round to getting a IFA the wife is dead against it and thinks I can sort it........ I have told her I think it’s a better idea to get overall advice now and go from there. I’ll see what information I get from Pension Wise and go from there.

Audaxer

dave_hendy wrote: »

New (slight) problem is, although I am coming round to getting a IFA the wife is dead against it and thinks I can sort it........ I have told her I think it’s a better idea to get overall advice now and go from there. I’ll see what information I get from Pension Wise and go from there.

If you get in touch with a few IFAs, you should be able to get the initial appointments free and you can walk away after that if you don't like any. You need to make sure they are definitely Independent FAs and you should steer clear of Wealth Managers as they are usually expensive.