difficult to get the balance right ?

clean_cotton

looks like I have completely mis calculated the teachers pension then. Im so glad I posted on here as we still have 18 years left until our retirement goal. So there is time to get the ducks in a row. 

Mcooke - I agree with your points, I put the loans on the back burner as thought that I shouldn't wait any longer to get my retirement planning in place, but the payments do eat into our income and it annoys me. 

Moving forward. 

1. I have read some stuff online and ordered a few book regarding the basics on investing and the psychology of it all. I will keep reading and reading. 
2. I will leave the teachers pension, with the extra contributions as it is for now. 
3. I will continue to pay £240 per month to my pension (Peoples Pension) - their fee seems to be reasonable. However once I get my head around investments and the market, I can make a better decision as to what my pension is invested in. Can also then look at different providers, but right now, I don't know what I am looking for. 
4. I won't buy anymore gold until I know what I am doing (or not at all)
5. I will ensure the debts are cleared as soon as possible - rather than taking a casual attitude towards them - then maybe direct this money towards a Stocks and Shares ISA. 

I read somewhere that if you saved 50% of your income - you can retire in 18 years - is that true ? 

Thank you!

Anonymous101

clean_cotton said:

I read somewhere that if you saved 50% of your income - you can retire in 18 years - is that true ? 

This was a real eye opener for me.

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Gary1984

Sell all your gold now and put the proceeds towards your car loans. Gold prices have shot up recently so it's a relatively good time to sell and paying off debt is a better use of your funds than owning lumps of metal. 

hugheskevi

Few further thoughts/comments with links where relevant:

• Learn more about the Teachers Pension scheme. In particular, understand how the lump sum option works, and why it is (generally) a bad idea to take more than any automatic lump sum that is provided.
• Consider whether your partner will be in-scope of the McCloud remedy (ie was he in the scheme as at 31 March 2012?) if so, learn about McCloud and how it will affect his pension. Given you do not have a desire to leave a large inheritance, the Defined Benefit Teachers Pension may be particularly attractive.
  
• Learn about Added Pension, Faster Accrual and Buy Out. These are all ways to enhance Teachers Pension so it is important to understand them, and consider whether they are appropriate.
• Learn about LISAs and whether they may be a better choice than putting money into your personal pension.
  
• Check your State Pension position, and when you will both have accrued full State Pensions.
• Consider your combined income at State Pension age, taking into account Teachers Pension and both State Pensions.
• Retiring before minimum pension age (probably 58 for you) is particularly expensive, as you cannot use a pension for that, and so cannot benefit from tax relief. It is nonetheless entirely possible, just less efficient from a tax perspective.
  
• You may wish to target your Defined Contribution pot (plus any your partner may decide to build up) at providing an income equal to what you will get post-State Pension age for the years between age 58 and 68. Ensure that you will use your full Personal Allowance each year from age 58 to be most tax efficient.
• You say your partner only works 4 days a week. If that is to avoid higher rate tax then additional pension contributions are excellent value, as although they are not salary sacrifice they get income tax relief and National Insurance is only 2% on the income going into a pension. If it is a lifestyle choice then fair enough.
• Understand when pension contributions are good and when ISA contributions are good. If you are not benefiting from salary sacrifice, employer contributions or higher rate tax relief then putting more money into a pension may not be a good idea compared to investing in a S+S ISA or LISA. Money in an S+S ISA can be drawn in the future to enable more earnings to go into a pension when you are getting more of an incentive to put money into a pension.
  

Anonymous101

Great post hugheskevi.
That final point is perhaps the most important of all, and maybe you need to have gone through the process on the previous points in order to get to that.
I think understanding the implications of taxation (whilst factoring in access requirements) is the biggest factor on ones wealth. Tax is likely to be one of the biggest expenses, and its vital therefore that everyone understands it and how to minimise it.

clean_cotton

oh wow. thanks so much. 

The whole pension v S&S ISA was a big debate for me, I went for pension contributions in the end for tax relief, as I thought pensions are just stocks and shares, just with a limit as to when you can access them. 

I do like the attraction of flexibility with an ISA though. 

I will make sure I look into everything suggested on here, and let you know how I get on. 

crv1963

clean_cotton said:

oh wow. thanks so much. 

The whole pension v S&S ISA was a big debate for me, I went for pension contributions in the end for tax relief, as I thought pensions are just stocks and shares, just with a limit as to when you can access them. 

I do like the attraction of flexibility with an ISA though. 

I will make sure I look into everything suggested on here, and let you know how I get on. 

It is good to have a hard look at everything- we did when we started our planning- what we spent, what we wanted to buy, how we see our retired selves, what we had to use as emergency funds etc. Net result we formed some plans, ran several questions on here and got some good advice, and helpful suggestions. I'd have a discussion with your partner if I were you- what are their thoughts/ aims they may or may not be keen on the details of how it is all going to come together- Mrs CRV just wants the bottom line- how much, when and at what cost now? Leaving (trusting) me to sort out the pension choices etc. Works for us so I'm not complaining!

You could of course split what you save into ISA and a Pension? Even £100 pm adds up over 18 years especially if you increase it in line with inflation as you save.

Thrugelmir

mcooke999 said:

My advice, as soon as possible get rid of your car loans as these are just a massive drag on your wealth building potential. Buy reliable used cars instead with cash and !!!!!! what anyone else thinks. 

Secondly forget buying gold, waste of time an effort. Instead just concentrate on lowering your monthly expenses as much as possible (see above point!!), Increasing your income as much as practical and investing the difference wisely. 

Do some or all of the above and you won't regret it.

Gold can form a usefull part of portfolio diversification. Particularly when the current policy is to print money to keep the entire global economy afloat.

michaels

Baron_Dale said:

Pension pot of of £100000, £25000 tax free plus £2250 p.a. assuming 3.5% annual drawdown. However if you both have full state pensions the pension income for both of you would be about £36500 at 68 (assuming TP of 16000, 2 x 9100 state pension and the 2250) but a lot less if you both went 10 years earlier! 

Surely the lump sums would be used to bridge the gap up to state pension (and possibly to push back the date at which the DB pension was drawn if this works out beneficial) to keep income constant over the whole period of retirement rather than to provide an ongoing forever small annual income?

cfw1994

Gary1984 said:

Sell all your gold now and put the proceeds towards your car loans. Gold prices have shot up recently so it's a relatively good time to sell and paying off debt is a better use of your funds than owning lumps of metal. 

The irony of selling the lumps of metal to pay for the lump of metal 

I do agree with Thrugelmir on gold perhaps being a useful part of portfolio diversification.....but the fear of theft/loss means it would be best in some funds.   Or well-insured (& well documented!) jewellery perhaps.....