Retirement Imminent - impact of coronavirus on your plans

cfw1994

crv1963 said:

DairyQueen said:

crv1963 said:

Covid-19 has actually had a positive effect on our plans! 

Took my DB Pension end April- had served notice end of January before the current situation became so serious. Plan was to retire and then either work agency full time or return to work part time so as not to fall foul of the Pension Scheme Rules and top up with agency part time. Covid-19 has changed plans- Emergency Act cleared me for a retire and return full time, plus continued overtime without impacting on my DB Pension.

Net result, I have usual income plus pension (first payment due 1/6/2020), so we're clearing mortgage with my TFLS and using the remainder for further work age proofing our home- we like where we live and so have no plans to move, although that had crossed our minds. Using income to save the same amount of wife net earnings into her SIPP, and opening a SIPP in my name to save everything that I get taxed at HRT. We plan to draw down whatever is in the SIPPs at a rate equal to our SP until SP starts. My SIPP will likely then be empty but Mrs CRV will likely have enough to carry on draw down just under start of income tax rate for a few years after starting getting her SP.

I took a view- a hunch- that likely fall out from the extra cost to the Govt. may be the TFLS getting some sort of tax laid against it in the future and likely tax relief for HRT will be reduced- things that are always mooted around budget time but I thought I'd mitigate in my own little way. Paying off the mortgage isn't the best use of the TFLS I am sure but the "peace of mind" it affords Mrs CRV is worth it. 

Not withstanding our personal increased risk of catching the virus- both frontline essential workers, it felt wrong to retire completely at the time our skills are required, a personal view I know but one echoed by several other colleagues who have either delayed retirement, retired and returned (like me) or returned from retirement. Personally spending has dropped quite a bit, mainly fuel for travel to work (increased commute) and "meal deals from Tesco". No spend on days out but that has a worse effect on my mother than me- I still get to travel all be it to work.

I have found that I am spending more on mail order plants/ soil delivery and garden supplies- most of which I in turn pass on to Mum- at 81 she is spending around 12-14 hours a day in her garden and now she is pleased it is so large! It also looks good and I post pictures on line for my Uncle (her brother) and other family to see and she feels this brings her closer to them when she is told their comments.

I do miss going down my local on my days off- usually twice per week for a couple of pints and a natter with friends. Lockdown has had no impact on Mrs CRV lifestyle, she has carried on her normal go to work, go home, order hobby supplies on line, do hobbies!

Very pleased to hear that a retirement benefit will go some way to compensating for the extraordinary contribution made by you and others in the health service. Do you now plan to retire when the crisis is over?

To be honest I'm not sure. Mrs CRV will probably retire at her 55 or 56, I actually really enjoy my work but not the targets and endless blurb. I hope to go by age 60, I know I can fill my time constructively and travel abroad may be a safe possibility by then.

I'd add a big *thanks* for getting stuck in and helping out (probably an understatement!).   
Some of us are utterly useless/helpless with the current pandemic: the best I can do is mostly stay home and continue with work zooms, & frankly it feels pretty pathetic!
Anyway: thanks!!

atush

Deleted_User said:

November for me, 124 working days. Me 54, partner 49. She doesn't work, I have SIPPs and DCs and a DC with GMP, all being consolidated or will be.
Both good SP forecasts - mine slightly more, her slightly less
I had a figure I could live on and planned to sell the house next year, rent for 6 months then move abroad
Nothing that is happening now is worrying me, I have started to drip feed back into the market after being in 80-90% cash for 18 months.

She may not work, but doesnt mean she cant have a pension

michaels

Possibly not the thread but how confident are people that all these glorious DB pensions actually have sufficient asset backing to meet the promised payouts given the countries productive potential is lower going forward so a DB basically means a claim on a bigger share of what is now a smaller pot.

shinytop

michaels said:

Possibly not the thread but how confident are people that all these glorious DB pensions actually have sufficient asset backing to meet the promised payouts given the countries productive potential is lower going forward so a DB basically means a claim on a bigger share of what is now a smaller pot.

More confident than had I taken the CETV and were managing a personal investment portfolio trying to generate the same income    No doubt there will be added pressures on companies with DB pensions though. 

GibbsRule_No3.

PPOV it has been interesting. At the beginning of last year I was going to retire at Christmas but then changed my mind, as my US friend is a teacher and decided to stay on longer. Since that meant we were still limited to holiday time due to her schedule, I decided to stay until 2021 so I could say I had worked where I am from 1971 - 2021. I only do three day week anyway, so getting paid, getting pensions and putting money into a stakeholder for a nice little lump sum. This lockdown means working from home, not spending as much, no holiday to US this year I’m assuming, so lots of money and I get to see what retirement will be like. Single person, so used to being on my own and meeting close friends and older sibling, missing that at present. If it wasn’t for the lure of 50 years I might have decided during this time, to retire anyway when/if we go back before December. 

[Deleted User]

michaels said:

Possibly not the thread but how confident are people that all these glorious DB pensions actually have sufficient asset backing to meet the promised payouts given the countries productive potential is lower going forward so a DB basically means a claim on a bigger share of what is now a smaller pot.

A very good question as far as the private DB plans are concerned. 

Also, US municipalities and many other Plans plans need 8% annual returns to stay solvent. Could spell the next financial crisis.
Civil service has the taxpayer carry all the risk so they are alright as usual.

happyandcontented

shinytop said:

michaels said:

Possibly not the thread but how confident are people that all these glorious DB pensions actually have sufficient asset backing to meet the promised payouts given the countries productive potential is lower going forward so a DB basically means a claim on a bigger share of what is now a smaller pot.

More confident than had I taken the CETV and were managing a personal investment portfolio trying to generate the same income    No doubt there will be added pressures on companies with DB pensions though. 

MMm I am not so sure. I think that the only way is up really. It may be slow but it has to happen.

RueyE

For me I feel on balance the coronavirus will have had an unexpectedly beneficial impact in that it will bring forward both my and Mrs R's retirements. It feels terrible to say this virus has had this type impact with all the horrible consequences taking place around us.
I was due to retire in Dec 2020 from my current job, with my main pension provision in place from my previous employment. I had already forewarned my bosses of my decision in order for them to look for a suitable replacement. It's a lovely little job (not particularly well paid, but that was never a problem), I meet and work with some fantastically gifted people and it's a complete change from my earlier career. However it takes it's toll physically and the decision was partly based on the issue that I didn't want to be a physical wreck by the time I retired, as I still want to participate in my sporting activities long after retirement. 
Unfortunately as my current work is in the education arena, it is extremely difficult to see a way forward for this particular business to continue (having read and understood the latest government's education guidelines), so really just waiting for my bosses to let me know it can't continue in it's current format, and to be given my cards. So my retirement will probably now come along a bit sooner.
Even now all the employees are desperately trying to think about ways to adjust their business to permit them to continue in some fashion, as the schools love the service it provides. I would happily help them get going again should they manage to get their business through the current situation, but who knows how long that may take.
Luckily Mrs R and I have enough savings to live off until my DB pension NRD in a few years time.
Additionally I was also very fortunate to make an investment about 20 plus years ago, that is unbelievably now doing very nicely. Indeed it dipped severely at the start of Feb up until the 23rd March lockdown, but since then it has fully recovered and continued on an overall upward trend. Every time a commentator, journalist, politician etc mentions the sort of phrase that includes wording like '...technology will be needed to help resolve this problem...', it is music to my ears. It will now allow Mrs R to retire a bit sooner too, as in the last few years we have cashed in a small percentage of the fund.
The only other thing I can think of that the virus has made me aware of, is that I will need to find some worthwhile hobbies or voluntary work to partially fill my retirement time. Obviously I can't currently do my sporting activities so it has revealed that I do not have that in place.   
Thanks for reading

dunstonh

In reality, it shouldn't really impact on the decision to retire if you are looking at investment values.   Most people are going to be either back above what they were before the crash or getting very close to being so.    As crashes are part and parcel of investing, your retirement plans should see you invested within your risk tolerance and your capacity for loss.    You are probably looking at another 3-7 loss periods similar to this in the remainder of your lifetime.   They should be factored into your future planning.  So, this shouldn't have had an impact unless you were invested outside of your risk tolerance/capacity for loss or you were invested poorly (e.g. 100% in a FTSE100 tracker).   Or your plans were pushing limits based on past performance over a growth period and failed to take into account the negative periods that would occur.     

What it may do is accelerate some people towards retiring earlier.  Either forced to due to employment issues or by choice as they are in a position to be able to retire without the need to work and life being too short want to live it whilst they can.   

Equally, I was speaking to someone earlier in the week who has decided to extend his working life as he was bored stiff over lockdown and he enjoys his work. 

MarkCarnage

Possibly not the thread but how confident are people that all these glorious DB pensions actually have sufficient asset backing to meet the promised payouts given the countries productive potential is lower going forward so a DB basically means a claim on a bigger share of what is now a smaller pot.

I'm completely confident that there will be some DB pension schemes who don't have sufficient asset backing. But I was completely confident of that before COVID. I am pretty confident that they will be in a smallish minority though. I would also take issue with an assumption that productive potential globally is lower on a permanent basis. 

I am also completely confident that if one ran a solvency based, or even technical provisions based valuation of schemes now, it would look pretty bad in some cases. However, the discount rates being used are probably unrealistic. Many big schemes are now largely hedged against adverse interest rate and inflation moves too. 

I also think that if inflation does rise, possibly significantly, in the medium term, then the real value of liabilities is going to fall. It looks like longevity assumptions were beginning to plateau pre COVID too, and difficult to see them rising in the short term.