Aiming for Mortgage Free!

rugbymadfamily

I need to take a look at the pensions board in the next few weeks. I'm starting new job but it only has statutory contributions which is too low so I need to put more aside than I do currently, but and this is the big bit I need to research more....neither of us want to be working until 68 (current retirement age but am sure that's going to go up). So need to work out how to save money / pension / ISA etc but in a way that we can access it from 60ish. Have no idea how that works at the moment but need to put my big girl pants on and go to the pensions board (I just find it so confusing lol). My main concern is tying too much money up in pension which I can't access for nearly 40 years so need to balance contributions to ensure enough goes in there but enough kept elsewhere to use.

mark55man

Access is currently from 55, going up to 10 years less than state pension age in a few years - there has just been a consultation paper which I think looks like leaving 58 as minimum age.  Also if you are not a HR payer, then there is not so much difference between a LISA and a pension (which has the tax free lump sum as an advantage).

pensions are a minefield but there are pots of gold - however also persons who wish to steal them - so always be careful and check!

the first thing I would advise is just to read and reread the basics (not just the board bit also general sites, such as MAS and pensionwise and moneyvator) so you understand the differences. eg you have to choose what to invest in and also how to invest. "What" is primarily about your attitude to risk, your timing needs (how many decades) and results in a decision about asset allocation - whereas "how" is about your personal tax circumstances and predicted incomes/needs,and about combined different investment platforms pension, ISA/LISA, cash, .....

A pension (Personal Penion / SIPP) is taxed on the way out (payment), but you get tax relief on the way in whereas an ISA is built with taxed income but paid out tax free.  Assuming you mean Money Purchase (or Defined Contribution / DC) as opposed to Final Salary (or Defined Benefit / DB - now really only available in Public Sector)

also understand your state pension provision and understand the pensions you have built up with previous employers.  DOn;t underestimate the value of 2 state pensions - if full about £20k p.a

retiring early is mainly a juggling act of how much of your DC pots you consume before you are entitled to claim other payments.

good luck, and I agree you just need to do it. its not that every day counts bigly, but leaving it years makes the problem worse. 

savingholmes

What Mark said

rugbymadfamily

Good weekend, only money spent was food shop. Was a bit on the pricey side this week as had lots to top up on but all good.

Got a good 10k run in and some yoga so was a good weekend on the exercise front. And managed some circuits at home already this week.

Still struggling at work, its just a horrible place to be at the moment....but at least I only have a few weeks left to go get through before starting the new job! 

rugbymadfamily

The weather has cheered me right up this afternoon, hanging washing outside and some daffodils are starting to sprout... doesn't take much to cheer me up!

South_coast

Blimey, you've had much better weather than us then - it's been blowing an absolute gale here all day 🙁! 

Work is always horrid in the last few weeks. You know you don't want to be there, everyone else knows you don't want to be there, and they're resentful that you're the one leaving and not them! Hopefully it will go quickly, then onwards and upwards 😀!

rugbymadfamily

South_coast said:

Blimey, you've had much better weather than us then - it's been blowing an absolute gale here all day 🙁! 

Work is always horrid in the last few weeks. You know you don't want to be there, everyone else knows you don't want to be there, and they're resentful that you're the one leaving and not them! Hopefully it will go quickly, then onwards and upwards 😀!

So true about the resentful bit, and I feel for them as it is so sh*te at the moment....but they all have the option to leave as well! Its been a beautiful spring like day here, hoping it continues all week!

Retireinten

Hi Rugby

Just popping in to encourage you to visit the pensions forum - this forum has the potential to make the biggest positive contribution to your personal finances... yes, even bigger than the MFW forum (and I'm a devoted fan of this forum too - mortgage paid off over two years ago now ) 


Five years on from finding the pensions forum I have progressed from wanting to retire at 55 with a joint household income of £30k net a year but with not the foggiest idea how to achieve it.... to a revised target of £36k net, clarity on my income streams at each stage of retirement, a clear understanding of the gaps in my pension savings and a plan to address them.  If things carry on as they are we're actually on target to achieve full financial independence in less than 8 years (age 53) and on a much higher income than our target.  I would still be pretty much sleepwalking towards retirement had I not found the pensions board.  To give you some context we're both basic rate tax payers (salaries over £40k each). 


The people that contribute regularly are incredibly knowledgeable but can be quite direct at times. And they may well challenge your views but this is a good thing as it gets you thinking.  For instance as a HRT payer you will likely be encouraged to save more into pensions than mortgage overpayments.  The key thing is that you gather all the facts and make the right choices for you.   I still prioritised my mortgage over pension savings because that was the right thing to do for me, but I have no doubt that financially I am worse off for that decision (but better off in other ways!). 

Pop over there when you have time and find The Number thread. It's a good place to start and it's very active at the moment so should be on page 1 or 2.

rugbymadfamily

Thanks @Retireinten really appreciate you commenting. Sounds like you've had some really good experiences on the pensions board and done very well from your pension planning! I've got a week off between jobs coming up and am going to spend some time doing a proper bit of research and getting our strategy together. 

savingholmes

Well done Retireinten

We hope to have a choice over whether to semi retire from mid 50s. Time will tell.