Retirement - Live Life or Penny Pinch

snowlaser

Miiade said:

I am not claiming to be an expert on life expectancy and am I not saying people should base their spending patterns on my observations. 

Miiade said:

Based on my observations if you are a tall male spend your DC pot early, if you are a short male make sure you have got some left for later…

Honestly it rather sounded like you were EXACTLY telling people to base their retirement planning on their height.

This doesn't sound very sensible to me.

Instead I would suggest something more gradual that means you plan to spend
- MORE in the early years when you are more active
- LESS in the later years when you will be older and spend more time at home (LESS...but not NOTHING)

DT2001

bluenose1 said:

Think there are lots of factors the actuaries dont use in considering life expectancy, for example dont think they take into account where you live which has a bearing on your life expectancy  -From ONS data  male life expectancy between 2018 and 2020 was highest in England (79.4 years) and lowest in Scotland (76.8 years). Within England, sizable regional differences are present , including a three-year gap between the North East (77.6 years) and the South East (80.6 years). 

From what i have read grip strength is a good marker for life expectancy, being able to balance and how easy you get up and down from the floor. .

Good balance makes a lot of sense as you are much less likely to fall and our bones get more brittle with age.
My mother fell and broke her hip at 80 and I was told she had a 50% chance of surviving 12 months. I think it is as a result of muscle wastage, decreased activity and increased chance of pneumonia. She defied the odds and was given simple balance exercises (which were easily proven to work - length of time standing on one leg and then with eyes closed (hands close to grab rails)) and didn’t have another fall for 10 years. Maybe we should all start…

eskbanker

Silvertabby said:
Note that the State pension is taxable income.  It's only tax free for those who's only income is the State pension and,  even then, only if the pension is below the personal tax allowance

It's taxable income for everyone, but for anyone for whom it falls exclusively within their personal tax allowance there's no tax to pay on it, regardless of their other income....

Albermarle

She defied the odds and was given simple balance exercises (which were easily proven to work - length of time standing on one leg and then with eyes closed (hands close to grab rails)) and didn’t have another fall for 10 years. Maybe we should all start…

The ability to balance on one leg for 10 seconds ( or not ) as you get older, is supposed to be a marker of how you could be as you get older still.
In other words if you can not do this say when you are 60, it indicates that you will develop more problems as you get older, than someone who can do it. That's the theory anyway.
Not sure if you are supposed to do it with your eyes closed, or maybe with your hands on your head ?

pensionpawn

Silvertabby said:

pensionpawn said:

Live in the moment, however plan for the future. We intend to enjoy (not splash the cash carelessly) the first ten (most active and should be most healthy) years rather than scrimp to have 10 years at the end hoping I can still wipe my own a... We've both qualified for full SPs, which at ~ £21k pa tax free isn't the poverty line if you don't have any debt. We also have a good (by national average standards), though not large (compared to this forum) pots and will be able to fully utilise our personal allowances throughout retirement, which is ~ £25k tax free pa. My father had many sayings, two of which are relevant to this thread. The first was "I came into the good money too late to enjoy it" and what he meant by that was his salary. He retired at 65 (and enjoyed a 20 year retirement). However that philosophy could be applied to pension planning. Work too hard for too long (which takes a toll, though not always visible) and then only permit yourself basic rations in the first years of retirement, and you'll end up the richest person in the graveyard, which I certain don't intend to be. I know many friends and family who (without bragging) say that they have more money than time to spend it. The second phrase, bearing in mind he served in WW2, was "tomorrow is never promised" which is true for all of us. Most of us don't know how many cards remain in the pack. It would be a shame to work / save hard all your life to never reap the rewards. Of course we can pass on our wealth, however this is a thread about pensions (for you), not inheritance planning (for offspring / family / charity).
My philosophy is to work for as long as you still enjoy the activity however quit (gradually?) as soon as you can afford it after 55 if work becomes physically / mentally too stressful. You can't re-spawn and try again!
By the way, regarding the observations about height, I read that for extremely tall people, their mortality is linked to the function of the pituitary gland in the brain. Causation / correlation ? Maybe not a linear function, however interesting none the less. I was 5 ft 7 and am shrinking, so heading in the right direction 

Note that the State pension is taxable income.  It's only tax free for those who's only income is the State pension and,  even then, only if the pension is below the personal tax allowance (there are many 'old' pensioners out there on way more than £12,570 per year, due to SERPS/SP2 and/or deferring at over 10% per year).

Yep, we are aware of that. So from 67 we can top up our SP's to our PA's without any tax liability. Any unused drawdown prior to 67, that we dropped into an ISA, will be available as a tax free top up buffer.

michaels

MarkCarnage said:

bluenose1 said

Think there are lots of factors the actuaries dont use in considering life expectancy, for example dont think they take into account where you live which has a bearing on your life expectancy  -From ONS data  male life expectancy between 2018 and 2020 was highest in England (79.4 years) and lowest in Scotland (76.8 years). Within England, sizable regional differences are present , including a three-year gap between the North East (77.6 years) and the South East (80.6 years). 

From what i have read grip strength is a good marker for life expectancy, being able to balance and how easy you get up and down from the floor. .

Oh yes they take account of where you live! Postcode analysis is used extensively in mortality expectation calcs and hence annuity pricing etc., both for individuals and for pension schemes seeking insurance buy out of liabilities. If a scheme doesn't have decent data, they will quickly find that the pricing is loaded against them. 
As an actuary said to me quite recently, gaming the system means 'acquiring' an address in a certain area in Glasgow for a year or so when about to buy an annuity.......I'm sure there are quite a few other areas too. As an example, life expectancy varies from not far over 60 in one area of North Glasgow, to over 80 in Bearsden, less than 5 miles away. 

So I wonder if it is worth paying 18 months rent and 'documentarily' moving to a property in a low life expectancy area when purchasing an annuity?!

barnstar2077

michaels said:

MarkCarnage said:

bluenose1 said

Think there are lots of factors the actuaries dont use in considering life expectancy, for example dont think they take into account where you live which has a bearing on your life expectancy  -From ONS data  male life expectancy between 2018 and 2020 was highest in England (79.4 years) and lowest in Scotland (76.8 years). Within England, sizable regional differences are present , including a three-year gap between the North East (77.6 years) and the South East (80.6 years). 

From what i have read grip strength is a good marker for life expectancy, being able to balance and how easy you get up and down from the floor. .

Oh yes they take account of where you live! Postcode analysis is used extensively in mortality expectation calcs and hence annuity pricing etc., both for individuals and for pension schemes seeking insurance buy out of liabilities. If a scheme doesn't have decent data, they will quickly find that the pricing is loaded against them. 
As an actuary said to me quite recently, gaming the system means 'acquiring' an address in a certain area in Glasgow for a year or so when about to buy an annuity.......I'm sure there are quite a few other areas too. As an example, life expectancy varies from not far over 60 in one area of North Glasgow, to over 80 in Bearsden, less than 5 miles away. 

So I wonder if it is worth paying 18 months rent and 'documentarily' moving to a property in a low life expectancy area when purchasing an annuity?!

Or fraud, as it is also known as! : )

I saw a story on the BBC last year about a young women who pretended to live in a council property in order to gain a discount on it's purchase.  It didn't end well for her! 

DT2001

Albermarle said:

She defied the odds and was given simple balance exercises (which were easily proven to work - length of time standing on one leg and then with eyes closed (hands close to grab rails)) and didn’t have another fall for 10 years. Maybe we should all start…

The ability to balance on one leg for 10 seconds ( or not ) as you get older, is supposed to be a marker of how you could be as you get older still.
In other words if you can not do this say when you are 60, it indicates that you will develop more problems as you get older, than someone who can do it. That's the theory anyway.
Not sure if you are supposed to do it with your eyes closed, or maybe with your hands on your head ?

Much more likely to fall if you close your eyes first and then try and balance.
I think hands down as we do not want to increase our chances of an A & E visit at the moment!

I pass the test so probably ‘qualify’ for a lower annuity rate.

michaels

barnstar2077 said:

michaels said:

MarkCarnage said:

bluenose1 said

Think there are lots of factors the actuaries dont use in considering life expectancy, for example dont think they take into account where you live which has a bearing on your life expectancy  -From ONS data  male life expectancy between 2018 and 2020 was highest in England (79.4 years) and lowest in Scotland (76.8 years). Within England, sizable regional differences are present , including a three-year gap between the North East (77.6 years) and the South East (80.6 years). 

From what i have read grip strength is a good marker for life expectancy, being able to balance and how easy you get up and down from the floor. .

Oh yes they take account of where you live! Postcode analysis is used extensively in mortality expectation calcs and hence annuity pricing etc., both for individuals and for pension schemes seeking insurance buy out of liabilities. If a scheme doesn't have decent data, they will quickly find that the pricing is loaded against them. 
As an actuary said to me quite recently, gaming the system means 'acquiring' an address in a certain area in Glasgow for a year or so when about to buy an annuity.......I'm sure there are quite a few other areas too. As an example, life expectancy varies from not far over 60 in one area of North Glasgow, to over 80 in Bearsden, less than 5 miles away. 

So I wonder if it is worth paying 18 months rent and 'documentarily' moving to a property in a low life expectancy area when purchasing an annuity?!

Or fraud, as it is also known as! : )

I saw a story on the BBC last year about a young women who pretended to live in a council property in order to gain a discount on it's purchase.  It didn't end well for her! 

I guess it depends how you define living somewhere. On retirement I might have moved to Glasgow (end of one phase of life, time for a new start, seemed like an ideal base for exploring Scotland whilst still having the amenities of a city, etc), rented out my current house and just happened to spend most of the year I lived there travelling (first year of retirement so living the dream) then decided that I didn't really like the weather and so was forced to move back into my old house.

No lies told to the annuity company.

Pat38493

barnstar2077 said:

michaels said:

MarkCarnage said:

bluenose1 said

Think there are lots of factors the actuaries dont use in considering life expectancy, for example dont think they take into account where you live which has a bearing on your life expectancy  -From ONS data  male life expectancy between 2018 and 2020 was highest in England (79.4 years) and lowest in Scotland (76.8 years). Within England, sizable regional differences are present , including a three-year gap between the North East (77.6 years) and the South East (80.6 years). 

From what i have read grip strength is a good marker for life expectancy, being able to balance and how easy you get up and down from the floor. .

Oh yes they take account of where you live! Postcode analysis is used extensively in mortality expectation calcs and hence annuity pricing etc., both for individuals and for pension schemes seeking insurance buy out of liabilities. If a scheme doesn't have decent data, they will quickly find that the pricing is loaded against them. 
As an actuary said to me quite recently, gaming the system means 'acquiring' an address in a certain area in Glasgow for a year or so when about to buy an annuity.......I'm sure there are quite a few other areas too. As an example, life expectancy varies from not far over 60 in one area of North Glasgow, to over 80 in Bearsden, less than 5 miles away. 

So I wonder if it is worth paying 18 months rent and 'documentarily' moving to a property in a low life expectancy area when purchasing an annuity?!

Or fraud, as it is also known as! : )

I saw a story on the BBC last year about a young women who pretended to live in a council property in order to gain a discount on it's purchase.  It didn't end well for her! 

Right, but what if you actually do move there for a year?  They can't really say you don't live there, and there is no way to prove or disprove whether you intended to stay there or not.  That said, it's probably not just "Glasgow" - I suspect if you moved to a really expensive area of Glasgow for a year it might not make nearly as much sense - you would have to "slum it" for a year if you want to put it that way.