On the home run to retirement - give me your top tips!

ussdave

Spogchait said:

Hi @ussdave, yes as I understand it I am able to take the AVC part of the employees scheme as the tax free lump sum at the same time, so at a simple level I would get out what I put in +41% on top due to the tax break.  Could then use some of that to pay off what’s left of that mortgage.  I worry about putting too many eggs in one basket but even assuming no growth, the return on investment is fantastic if you think about that 40% on top and it would take a lot to diminish that.

How is your partner's pension provision?  Ideally they should have enough that they can at least withdraw up to their personal allowance (plus 25% tax free, so about 16k) per year between minimum retirement age and state pension.
If I'm remembering your first post correctly you already paid off one mortgage so I'd argue that doing that was putting all your eggs in the mortgage basket and now you need to "catch up" by building additional funds in AVCs, SIPPs, etc.

In your position personally I'd leave the DB where it is, max out the AVC element as much as you can afford, get your partner's pension up if need be and look into building up a separate SIPP to bridge between whatever age you want to stop working and 60 so you can take your DB+AVC without reduction.

Spogchait

Hi @Deleted_User why the aversion to DB?  I take it you mean your preference would be to transfer out when you can?
I have considered selling the flat,  it’s a bit of a security blanket for me and my reasons for not selling are emotional too.  I sometimes think I will keep going with letting it out and it will be an okay income in retirement when the mortgage is paid off but truthfully, there are better properties for that that would be less hassle.

Spogchait

@ussdave my partner has nothing beyond state pension.  He is 55 now.  Because he does not have an income I assume that if thinking about pensions (and we trust one another) it’s better to focus on mine as I am a higher rate tax payer.

Spogchait

Linton said:

So far the top tips have all been about finance. As important is how you are going to spend your time.  The joy at not working can quickly wear off so you need positive reasons to retire,  things to do that will occupy a significant amount of time for many years.  Pottering and watching daytime TV will probably not satisfy you.  Perhaps you have a bucket list of places you have never visited or experiences you have never had.  Maybe there are hobbies you will be able to take more seriously.  Perhaps voluntary work either using your work skills or something completely new may appeal.

OK, it is probably too early to come to any conclusions but certainly worthwhile to keep it in mind and think more deeply about later so that retirement becomes the start of an enjoyable and satisfying new life rather than just the end of the old one.

I like your style @Linton, I do need to get my head around what retirement will be like for me.  I don’t want to be bored stiff.  I have been thinking that all being well I might do a bit of part time work in the first few years, it might be that that gives me the opportunity to defer my pension until I am 60.  I’m also tempted to travel, my sister lives abroad, would be nice to see her more.

Albermarle

Spogchait said:

Hi @Deleted_User why the aversion to DB?  I take it you mean your preference would be to transfer out when you can?
I have considered selling the flat,  it’s a bit of a security blanket for me and my reasons for not selling are emotional too.  I sometimes think I will keep going with letting it out and it will be an okay income in retirement when the mortgage is paid off but truthfully, there are better properties for that that would be less hassle.

I am sure that Mordko meant leave the DB as it is - a guaranteed income to underpin other investments reliant on the vagaries of the markets .

Spogchait

Thanks @Albermarle - I was confused!

[Deleted User]

Spogchait said:

Hi @Deleted_User why the aversion to DB?  I take it you mean your preference would be to transfer out when you can?
I have considered selling the flat,  it’s a bit of a security blanket for me and my reasons for not selling are emotional too.  I sometimes think I will keep going with letting it out and it will be an okay income in retirement when the mortgage is paid off but truthfully, there are better properties for that that would be less hassle.

Sorry, I meant “I would leave DB pension as is”. Its great to have it.
Yes, I understand your reasons for keeping the flat are emotional. They always are. But they are not good reasons from the point of view of financial security. You would be much better off not being overexposed to too much real estate which brings no income and requires work and debt as you are approaching retirement. 

barnstar2077

I do know of someone who has kept their flat and is renting it out just in case they ever split up from their partner.   The chap in question has been seperated briefly from her before though, so it isn't without reason.  Not a pleasant thing to consider, but a consideration none the less. 

MalMonroe

I've been retired for ten years now and haven't been bored one iota. Love it more than I ever liked working! My tip? Don't live frugally. Enjoy your life now. My best friend's partner died tragically at the age of 60. They had such plans. She was bereft. I say have a good time while you can. 

When I was younger I had no thought of how I'd live when I retired. I have a state pension as well as two small private ones but I could have had bigger pots had I stayed in this country all my working life. I didn't, I lived overseas twice and I've travelled all around the world. I'd say I've had a pretty good time but I want more!  

To that end, I'm starting up my own online business, registered with HMRC and I'm so happy I live in this century, not one where they'd say "you can't possibly do such a thing at your age, madam".

Don't forget to have some fun while you can (coronavirus permitting, of course). There's more to life than money. I didn't really plan well for my retirement but I've enjoyed my life and I've managed to live well for the past ten years too.  Now I'm about to enter a new chapter. Never say never!

ussdave

Spogchait said:

@ussdave my partner has nothing beyond state pension.  He is 55 now.  Because he does not have an income I assume that if thinking about pensions (and we trust one another) it’s better to focus on mine as I am a higher rate tax payer.

Have you double-checked that your partner's state pension provision is going to be the full amount?  Worth checking and resolving if it isn't.

Regarding just focusing on your pension provision... it may depend on how much you're earning above the HR tax threshold.  Assuming you dip back into BR tax bracket with some of your pension contributions it may still be worth putting some money in a SIPP for your other half.  Anything that goes in (up to the 3.8k or so limit with no earnings) will be uplifted 25% and assuming they have no other income, can be withdrawn completely tax free once they hit pension age.  It's not as good as salary sacrifice with an AVC but it would spread your pension provision out a bit - keeping you further away from the LTA and also potentially being a tax-free pot of money to draw on in your years leading up to retirement/drawing your DB pension.