Starting to think about retirement planning 13 July at 7:52AM in Pensions, Annuities & Retirement Planning 28 replies 1.2K views

longway2go

I have been in the Mortgage Free Wannabe board for about a year and have decided that we need to take a more holistic approach in relation to finances. I am just at the start of this and therefore would appreciate any thoughts or guidance on best calculators etc. 
Our situation is:
Me age 38
Mr age 39
Mortgage 146k
Salary
Me 23000
Mr 21000
Emergancy Fund 4000 (would like this to be min 6k)
Pensions 
Me 60k
Mr - not sure but small amount 
Currently no other savings
We have a BTL property which we get £350pm after paying the mortgage. 
My thoughts are to both open a LISA as my husband is nearly 40 so don't want to loose this opportunity. 
As I said I have been on the MFW board for about a year and would love to clear that ASAP but have recently realised that this should not be at the expense of everything else. 
Any thoughts would be greatly appreciated as would be information on any helpful calculators. 
Thank you

Brynsam

longway2go said:

Pensions 
Me 60k
Mr - not sure but small amount 

If you're going to plan (good idea!), find out the basic facts. Your husband is in employment so presumably in his employer's scheme, getting the benefit of employer contributions?

justme111

So your combined take home pay is about 37 k ?
How much of it you spending or saving ? Which of those expenses will be still there when you stop working ? So you will arrive at your "number"( see the thread with this name on here) and check whether you are on track for it..

longway2go

Brynsam said:

longway2go said:

Pensions 
Me 60k
Mr - not sure but small amount 

If you're going to plan (good idea!), find out the basic facts. Your husband is in employment so presumably in his employer's scheme, getting the benefit of employer contributions?

Hi, thanks for your reply. It is an employer pension but has only been in place since it became mandatory. I am going to get some figures. 

crv1963

longway2go said:

I have been in the Mortgage Free Wannabe board for about a year and have decided that we need to take a more holistic approach in relation to finances. I am just at the start of this and therefore would appreciate any thoughts or guidance on best calculators etc.  
As I said I have been on the MFW board for about a year and would love to clear that ASAP but have recently realised that this should not be at the expense of everything else. 
Any thoughts would be greatly appreciated as would be information on any helpful calculators. 
Thank you

You're right to look at it in the whole. My view is best chip away at it all gradually than focus on one at the expense of another- it is a marathon not a sprint. I'd suggest-

1) Do open the LISA- these may or may not evolve over time, but a little put by doesn't harm.
2) Definitely get accurate figures for what you have - then you know where you are starting from.
3) Decide- what retirement income you want, and when you want it- then you have an idea of the amount you need to save and over what time frame. Remember not every "pot" of money needs to last a lifetime, some can be ran down to zero as an example Mrs CRV SIPP is planned to finance her/us age 57-67, when her SP takes over/ comes on stream.
4) First look to employer pensions- try to get the maximum free money so look at matching contributions, if you already get as much as they will offer (as not all offer increases above the legal minimum) then look to other free money- either LISA or another pension pot.
5) Discuss with Mr- find out his risk level and yours and plan accordingly.

It may be one or the other of you sorts most things out- Mrs CRV finds the whole pensions/ retirement planning turns her cold and has left me with sorting the detail out all she wants to know is how much and when do I get it at what cost now? I on the other hand have no idea about the household budget- I simply hand over what she says is my equal contribution each payday. We jointly save into our EF. Not for everyone but our system works for us!

Good luck.

cloud_dog

longway2go said:

Any thoughts would be greatly appreciated as would be information on any helpful calculators. 
Thank you

You should definitely open LIASs for both of you before 40, so as to allow the option of using them (deposit £1)

At a simplistic financial level, additional monies deposited in to a LISA beats additional money deposited in to a pension for a non tax payer or basic rate tax payer who does not benefit from being paid via Salary Sacrifice.

As you have a buy to let I am going to ignore the benefit a pension offers over a LISA in relation to means tested benefits.

longway2go

justme111 said:

So your combined take home pay is about 37 k ?
How much of it you spending or saving ? Which of those expenses will be still there when you stop working ? So you will arrive at your "number"( see the thread with this name on here) and check whether you are on track for it..

Thank you for your reply. Our combined income is around 44k plus rental income(after mortgage payment) of 4200.  We currently have spend about 2700 pm (which includes a mortgage OP of 115 and the mortgage for the BTL.  In retirement this would be reduced by 930 pm. In retirement we plan to still have the BTL income.
I will take a look at the thread you have suggested. 
Thank you :-) 

longway2go

crv1963 said:

longway2go said:

I have been in the Mortgage Free Wannabe board for about a year and have decided that we need to take a more holistic approach in relation to finances. I am just at the start of this and therefore would appreciate any thoughts or guidance on best calculators etc.  
As I said I have been on the MFW board for about a year and would love to clear that ASAP but have recently realised that this should not be at the expense of everything else. 
Any thoughts would be greatly appreciated as would be information on any helpful calculators. 
Thank you

You're right to look at it in the whole. My view is best chip away at it all gradually than focus on one at the expense of another- it is a marathon not a sprint. I'd suggest-

1) Do open the LISA- these may or may not evolve over time, but a little put by doesn't harm.
2) Definitely get accurate figures for what you have - then you know where you are starting from.
3) Decide- what retirement income you want, and when you want it- then you have an idea of the amount you need to save and over what time frame. Remember not every "pot" of money needs to last a lifetime, some can be ran down to zero as an example Mrs CRV SIPP is planned to finance her/us age 57-67, when her SP takes over/ comes on stream.
4) First look to employer pensions- try to get the maximum free money so look at matching contributions, if you already get as much as they will offer (as not all offer increases above the legal minimum) then look to other free money- either LISA or another pension pot.
5) Discuss with Mr- find out his risk level and yours and plan accordingly.

It may be one or the other of you sorts most things out- Mrs CRV finds the whole pensions/ retirement planning turns her cold and has left me with sorting the detail out all she wants to know is how much and when do I get it at what cost now? I on the other hand have no idea about the household budget- I simply hand over what she says is my equal contribution each payday. We jointly save into our EF. Not for everyone but our system works for us!

Good luck.

Thank you very much for your reply and good luck wishes. Your suggestions are really helpful and will definitely be of use. My OH is not interested in planning tbh, so looks like it will come down to me. 

Albermarle

Your pension provision is rather low , considering you are both approaching 40 and one of you ( maybe both ) are only making minimum contributions ( + employer contributions). On the other hand your salaries are not high, so we have to be realistic.
So increase pension contributions or open LISA's , they both will help for later in life. If you open a LISA, you should consider a Stocks and shares one as over a 20 year time scale it should produce significantly better returns than a Cash Lisa. All the info needed to make a decision is here.
https://www.moneysavingexpert.com/savings/lifetime-isas/
If the mortgage is on a low interest rate , and you both have reasonably secure jobs , then consider only making minimum payments to free up funds for LISA/pension.

longway2go

cloud_dog said:

longway2go said:

Any thoughts would be greatly appreciated as would be information on any helpful calculators. 
Thank you

You should definitely open LIASs for both of you before 40, so as to allow the option of using them (deposit £1)

At a simplistic financial level, additional monies deposited in to a LISA beats additional money deposited in to a pension for a non tax payer or basic rate tax payer who does not benefit from being paid via Salary Sacrifice.

As you have a buy to let I am going to ignore the benefit a pension offers over a LISA in relation to means tested benefits.

Thank you that's really helpful and good to know I am on the right thought path in relation to LISA.
I have a salary sacrafice scheme but my husband does not, is there a calculator I can use to help work out the LISA or pension contribution you mention above.
Also, excuse my ignorance can you give more information on the means tested benefits please?
Many Thanks 

crv1963

longway2go said:

crv1963 said:

longway2go said:

I have been in the Mortgage Free Wannabe board for about a year and have decided that we need to take a more holistic approach in relation to finances. I am just at the start of this and therefore would appreciate any thoughts or guidance on best calculators etc.  
As I said I have been on the MFW board for about a year and would love to clear that ASAP but have recently realised that this should not be at the expense of everything else. 
Any thoughts would be greatly appreciated as would be information on any helpful calculators. 
Thank you

You're right to look at it in the whole. My view is best chip away at it all gradually than focus on one at the expense of another- it is a marathon not a sprint. I'd suggest-

1) Do open the LISA- these may or may not evolve over time, but a little put by doesn't harm.
2) Definitely get accurate figures for what you have - then you know where you are starting from.
3) Decide- what retirement income you want, and when you want it- then you have an idea of the amount you need to save and over what time frame. Remember not every "pot" of money needs to last a lifetime, some can be ran down to zero as an example Mrs CRV SIPP is planned to finance her/us age 57-67, when her SP takes over/ comes on stream.
4) First look to employer pensions- try to get the maximum free money so look at matching contributions, if you already get as much as they will offer (as not all offer increases above the legal minimum) then look to other free money- either LISA or another pension pot.
5) Discuss with Mr- find out his risk level and yours and plan accordingly.

It may be one or the other of you sorts most things out- Mrs CRV finds the whole pensions/ retirement planning turns her cold and has left me with sorting the detail out all she wants to know is how much and when do I get it at what cost now? I on the other hand have no idea about the household budget- I simply hand over what she says is my equal contribution each payday. We jointly save into our EF. Not for everyone but our system works for us!

Good luck.

Thank you very much for your reply and good luck wishes. Your suggestions are really helpful and will definitely be of use. My OH is not interested in planning tbh, so looks like it will come down to me. 

If that is the case when planning look to try to balance the pots so you have similar incomes in retirement, hopefully depending on your joint income needs reducing or avoiding paying income tax, because we left it late for our planning we will have a big difference in income, I will always pay tax- Mrs CRV from retirement to my demise will pay no tax.

When you look at the "What's Your Number" thread as suggested above take a realistic view of your choices- we (me) worked out three amounts- basic must have to live, comfortable- would like to have sum and luxury- no worries at all sum. Aimed for our luxury sum and have exceeded our basic sum and will probably land in the upper end of the comfortable sum when we hang up or boots and retire!

Also do remember to nominate each other with your various pensions- don't take it as read spouse will automatically get it, they should but it may be another hassle during a difficult time if you need to correspond about it with the pension company doing their due diligence.