Retirement\Saving Planning

bloke91

Hi,
I am posting to seek tips or advise in relating to saving and planning for retirement please.  I have two children and I intend to retire at 65 or sooner if possible and would like to ensure I am investing spare cash in the right places to support this. e.g Should I invest more into stocks shares isa or pension etc?

• I am 37 with a mortgaged house worth about 300k and on track to clear the mortgage by around age 55.

• I am a 40% tax payer.
• I have about 20k in a cash isa and 10k in a stock shares vanguard life strategy isa and no other debt.  The isa funds will cover my bills in the event of a emergency fund being required.   I am intending to continue saving about £300 a month into my ISA's.

• In terms of pensions, I have an existing company pension which has around 50k invested to date and I contribute 10% with my employer contributing 7%.  I also have a financial salary pension from a previous employer which should provide about 8k a year when I retire.  Estimated yearly amounts from our pensions when we retire should be: Myself: 7k a year from local government pension, plus 10 - 15k a year from a defined benefit pension, plus the state pension.  Wife: 16-20k a year from local government pension, plus state pension.

• I am also considering buying a couple of gold coins as an investment for my children for the future.

Any advice, tips or suggestions would be appreciated.
Thanks in advance.

crv1963

Do you have a spouse/ partner? What is their provision and plan? Does the 20k cash savings cover six months expenses if something happens to stop your income?

Anonymous101

bloke91 said:

Hi,
I am posting to seek tips or advise in relating to saving and planning for retirement please.  I have two children and I intend to retire at 65 or sooner if possible and would like to ensure I am investing spare cash in the right places to support this.

• I am 37 with a mortgaged house worth about 300k  and on track to clear the mortgage by around age 55.

• I have about 20k in a cash isa and 10k in a stock shares vangurd life strategy isa and no other debt.  I am intending to continue saving about £300 a month into my ISA's.

• In terms of pensions, I have an existing company pension which has around 50k invested to date and I contribute 10% with my employer contributing 7%.  I also have a financial salary pension from a previous employer which should provide about 8k a year when I retire.

• I am also considering buying a couple of gold coins as an investment for my children for the future.

Any advice, tips or suggestions would be appreciated.
Thanks in advance.

You sound like you're doing ok generally. If you're contributing to your pension via Salary sacrifice you might want to keep an eye on the level of contribution and increase depending on tax rates etc.

One thing massively jumps out at me is the last comment about buying gold coins as an investment for your children. This seems totally counterintuitive to me. The best thing you can do for your kids is buy a 100% equities global tracker such as your vanguard product.

bloke91

Yes, my isa's will cover 6 months emergency fund if required.  My wife's pension should provide between 16k and 20k a year.

crv1963

bloke91 said:

Yes, my isa's will cover 6 months emergency fund if required.  My wife's pension should provide between 16k and 20k a year.

Then as Anonymous101 says you seem to be on track with the pension, maybe some of the monthly saving would be better going a pension for the uplift that saving into an ISA doesn't get. I also agree that Gold is probably not the best idea for your children, a better aim could be as Anonymous101 suggests- global tracker. 

Albermarle

If you saving for retirement then better to put more in the pensions. The S&S ISA main advantage is that you can access it easier but if you are saving for retirement then you might as well get the tax boost the pension offers. 
Have you looked into how your current pension is invested ? If not then probably your money goes into a default fund ( most peoples does ) but there will be other choices that might be more suitable .

Anonymous101

Albermarle said:

If you saving for retirement then better to put more in the pensions. The S&S ISA main advantage is that you can access it easier but if you are saving for retirement then you might as well get the tax boost the pension offers. 
Have you looked into how your current pension is invested ? If not then probably your money goes into a default fund ( most peoples does ) but there will be other choices that might be more suitable .

I agree with the point on checking the funds are the most suitable for you.
I'd add that when you consider whether to make additional pension or ISA contributions that you need to look at your position as a whole, including any benefits like Child benefit etc which might benefit from a reduced taxable income.
Also bare in mind that whilst you might be in one tax bracket now you may well fall into a different bracket in the future possibly whilst you're still contributing. So if you're a 20% tax payer this year but you might be a 40% tax payer next year it could be worth saving into the ISA this year and increasing the contributions in the future to benefit from the additional tax relief.  

atush

I agree that gold isnt a good idea as the price is high at the moment.  A Jisa with a global tracker is a better idea.
I agree with others that upping your pension is a good idea, but adding some each month to a S&S isa is also a good idea.  Can be used for all sorts incl emergencies, university for the kids etc.  Dont add more to the Cash isa, as rates are poor.

AlanP_2

So with £16-20K from your spouse (is that a DB pension) + £8k from your DB + 2 State Pensions at £9.5k you should have £41k+ a year for retirement.

How much do you want / need?

bloke91

Estimated yearly amounts from our pensions when we retire should be: Myself: 7k a year from local government pension, plus 10 - 15k a year from a defined benefit pension, plus the state pension.  Wife: 16-20k a year from local government pension, plus state pension.
I am a 40% tax payer.

AlanP_2

If you have access to the LGPS scheme then take advantage of the AVC option.

Tax relief on the way in and tax free on the way out within a limit which is 25% of (20 * Annual LGPS Pension + Scheme Lump Sum + AVC pot).

The downside is that it must be taken at same time as overall LGPS benefits.