What made you 'pull the trigger'?

yp70479

Message for Chubster
Have you been on a retirement planning course? Would your company be willing to let you go on one. My old company had an arrangement with Close Brothers who run really good one day workshops. Failing that, there are some good books that may help "The Good Retirement Guide" was one I found especially helpful - it's published every year so it keeps up to date with allowance and tax changes. From what I can remember from my workshop - do a budget and include EVERYTHING. Then divide it up into "Must have" - food heating etc, "like to have" - holidays, etc hobbies and "nice to have" - new car, new kitchen etc. Make sure you have a reliable income to cover "must haves". This could be a DB pension, state pension or an annuity. Then have a portion of what is left in medium term savings, like fixed term bonds or savings accounts, and finally have some invested in the market for the longer term for growth. Your annuity pays into your current account for day to day living. They also advised keeping a float in something with easy access - 6-12  months of bills - just in case of emergencies. You keep the float topped up from the medium term investments, and if this becomes depleted then you can cash in investments. But, because of the 3 tier structure you can afford to wait if the markets are not performing well until they recover a bit. Well, that was their advice 5 years ago. Don't know if it will help now - but get on a course if you can!

[Deleted User]

Albermarle said:

cambsperson said:

I think I'm in a different category to a lot of people here, in that  I'm in my mid 60s, work in an interesting medical/computing area and actually would like to keep going till well over 70. However, this year I hear nothing in the press but new plans media speculation/scaremongering to try and relieve me of the money I've saved, and the pension and SERPS contributions I've made over 45 years, e.g.

Should the state pension be means-tested? Unlikely for the foreseeable future, although the removal of the unaffordable triple lock seems likely at some point
Should the tax free lump sum be capped/removed? Even more unlikely as it would be so unpopular
Should there be a maximum on ISA values? Maybe one day, but effectively will only mean some tax on values above a certain high level.
Labour MPs lobbying for a wealth tax to be in the manifesto. Very,very difficult to impliment in practice.

My current thinking is that if (or as seems more likely when) Labour get in, they will move on some of these, and maybe it makes more sense to bail out before the next election.  I have no faith that they would be so nuanced as to accept how much cash you need saved in the private sector at 60-something to get a pension remotely comparable to a public sector one

By converting the lump sum to an annuity I'll drop off the radar of easily targetable savings to be relieved of.  I know you shouldn't let the tax tail wag the investment dog, but it would be madness to work another ten years just to replace the money avoidably taken as tax.
Anyone else had similar thoughts, or have good reasons not to think this way?  Thanks.

Anyone else had similar thoughts, or have good reasons not to think this way? 

Probably best not to believe everything you read in the media and usually best not to plan you financial future based on things that may or may not happen.

Thanks.  I'm not planning anything immediate, but will instead be seriously assessing the mood music of the parties in the run up to the next election.  If Starmer keeps the manifesto at the Blairite rather than Corbyn end of the spectrum, I might be less pessimistic about working on.

chubsta

yp70479 said:

Message for Chubster
Have you been on a retirement planning course? Would your company be willing to let you go on one. My old company had an arrangement with Close Brothers who run really good one day workshops. Failing that, there are some good books that may help "The Good Retirement Guide" was one I found especially helpful - it's published every year so it keeps up to date with allowance and tax changes. From what I can remember from my workshop - do a budget and include EVERYTHING. Then divide it up into "Must have" - food heating etc, "like to have" - holidays, etc hobbies and "nice to have" - new car, new kitchen etc. Make sure you have a reliable income to cover "must haves". This could be a DB pension, state pension or an annuity. Then have a portion of what is left in medium term savings, like fixed term bonds or savings accounts, and finally have some invested in the market for the longer term for growth. Your annuity pays into your current account for day to day living. They also advised keeping a float in something with easy access - 6-12  months of bills - just in case of emergencies. You keep the float topped up from the medium term investments, and if this becomes depleted then you can cash in investments. But, because of the 3 tier structure you can afford to wait if the markets are not performing well until they recover a bit. Well, that was their advice 5 years ago. Don't know if it will help now - but get on a course if you can!

I did go on a pre-retirement course last month actually, but it wasn't much help really as there was very little I didn't know - I study this almost every day!

I currently micro-manage our finances and have done for a number of years, not in terms of restricting spending, but knowing exactly where every penny has gone. My OH and I have totally separate finances except for certain bills so my current status is:

mortgage and debt free - even well in credit on gas and electric!
For the last few years I have lived off my projected pension income minus £400 per month, so I know I can afford to retire. 
The money I have saved from my wages each month will then be 'drip-fed' back into my current account each month after retirement to give me an extra income - it will be 110 months until I get the State Pension so it only has to last until then.
Will get a lump sum from pension, 2/3 of which will be put in savings to give a monthly income to add to the pension, the rest used as the 'float' as you suggest.
We have two houses - we are looking at selling both and moving away, depending on whether OH can bear to be a couple of hours away from the children/grandchildren, or just selling one and investing the money, there is no hurry on that so may just keep both although there are associated costs obviously. For various sentimental reasons I would like to keep it so unless we need the money its going nowhere!
I am a cheap date - travelled a lot when younger so have no desire to do so again, neither does my OH, happy just relaxing, walking dogs, DIY, I write retro computer games for fun so there is always a new system to learn.

So basically, I SHOULD be ok, but I am very risk-averse so have to make sure everything is right from a financial and mental point of view before 'pulling the trigger' - as mentioned earlier, the ideal scenario will be to be able to get a menial but very active part-time job for a couple of days a week just to keep me busy when I am not doing other things.

Funnily enough I bumped into an old girl-friend for the first time in many years, she has inherited a lot of money, around the million mark, she paid off her mortgage, bought a property to rent and invested the rest, yet she still goes to work part time even though she hates it, purely for the social side of it and it gets her away from the kids for a bit, so I can see how potential retirees may feel the same way.

mumf

Cottage_Economy said:

DH pulled the pin in May 2021 on his 60th. His plan was to retire at 62 but a close friend of his became ill in the February, was diagnosed with terminal liver cancer in April and was gone by mid-June. They were the same age.

The previous year I managed to move sideways in my job and get a decent payrise while training. When J was diagnosed, I worked out that once I had completed my training, the additional payrise combined with DH's NRA60 pension benefits and a small SIPP we had built up would replace his salary. Then an aunt died and unexpectedly left him a small lump sum and that sealed the deal. That became an extra 'cushion'.

We're in a good place- there's money in the bank that we have yet to touch, I'm aiming to retire in five years (I'm 12 years younger) and we're still on track. Even with the cost of living increases, we're doing ok and have a lot to be grateful for. 

His was a manual job and I wanted him out. I was sick of seeing him walk in through the door after every shift looking like a ghost. He's never going back. 

All so true! I did manual work all my life,and the last twelve months ( after 40+ years) I too have been coming home like your DH ,tired and not good at all. My wife wanted me to chuck the job in and at worst,go part time in something else more gentle ( I wanted to phase out gently) . As it happened,I fell very ill at the beginning of December. I have terminal cancer. Fortunately we have savings,and our house was paid for years ago ( my aim to be frank) . I have a moderate pension fund too,but frankly,that will go to my wife when I pass on ,along with other assets. I am glad I worked for that,as it means as a husband,I have looked after my wife. We are not super- rich,but nor are we poor. My best mate is in a good financial position,and slightly older than me. His wife has told him to Jack the job in, and he wouldn’t. Until he heard of my issues. This week he finished. 

My point is that anyone who has the financial abilities to retire - and wants to - then do it! Life can change rapidly and badly. Nobody is indestructible,and nobody lives forever! Good luck everyone,and be well. 

Anonymous101

cambb said:

Next month I hit 54 so really started thinking about maximising the last few years at work and predicting “if” we have enough to retire when I hit 57.

Currently I have 2 pensions with a combined value of £874k. I contribute about £20k into my pensions a year due to my company paying 20% and me 5%.

My wife (51) has a DB pension which will be worth around £6k a year when she hits 55.

We both have full NI contributions.

We still owe about £70k on our mortgage but on a 5 year deal 0.94% and are over paying it so it will be paid off in 4 years when the deal ends.

Our current outgoings are roughly £2k a month minus the mortgage payments. We have roughly £90k in savings spread across ISA’s etc. With both of our salaries we come out with £5k a month. We do have 4 holidays a year and dont really save anything.

I really enjoy my job and work from home with zero stress.

I guess the question is I don’t want to stay to long at work and “might” hit the LTA therefore I'm a bit conflicted about retiring or being greedy and saving more.

20% is an extremely good employer contribution. What industry do you work in if you don't mind me asking?
I work in Construction where its a typical 5-6% employer contribution is to be expected. There are the odd one or two which have increased this to 10% but above that is unheard of.

Agree with the other posts about over paying the mortgage. Not the best use of funds with such a low interest rate. Perhaps set up a specific fund / savings account to save for the next 4 years at a better rate with a view to paying of a lump when you next remortgage?

Regards the balance between saving more and keeping working. My initial reaction is that you don't need the money. You already have sufficient to maintain your lifestyle (£2k p/m) so any above that represents wasted time. I do understand your position though so perhaps a more balanced approach to work could be taken. Working part time is appropriate or in lots of industries where that's not possible. Perhaps taking more holidays unpaid or longer breaks at suitable times (ends of project for example) would be acceptable?

Albermarle

yp70479 said:

Message for Chubster
Have you been on a retirement planning course? Would your company be willing to let you go on one. My old company had an arrangement with Close Brothers who run really good one day workshops. Failing that, there are some good books that may help "The Good Retirement Guide" was one I found especially helpful - it's published every year so it keeps up to date with allowance and tax changes. From what I can remember from my workshop - do a budget and include EVERYTHING. Then divide it up into "Must have" - food heating etc, "like to have" - holidays, etc hobbies and "nice to have" - new car, new kitchen etc. Make sure you have a reliable income to cover "must haves". This could be a DB pension, state pension or an annuity. Then have a portion of what is left in medium term savings, like fixed term bonds or savings accounts, and finally have some invested in the market for the longer term for growth. Your annuity pays into your current account for day to day living. They also advised keeping a float in something with easy access - 6-12  months of bills - just in case of emergencies. You keep the float topped up from the medium term investments, and if this becomes depleted then you can cash in investments. But, because of the 3 tier structure you can afford to wait if the markets are not performing well until they recover a bit. Well, that was their advice 5 years ago. Don't know if it will help now - but get on a course if you can!

Similar advice/guidance is proffered on this forum at regular intervals. As it is just basic common sense it really does not change over the years.
Of course it can be tinkered with depending on your actual situation. For example someone with no DB pension, and relying more on an invested pension pot, would probably hold more than 12 months cash if possible ( opinions vary on exactly how much ). Also for someone with no DB pension, the decision whether to buy an annuity, with part or all of the DC pot is quite a tricky decision and very dependent on personal circumstances and personality.

Pat38493

Albermarle said:

yp70479 said:

Message for Chubster
Have you been on a retirement planning course? Would your company be willing to let you go on one. My old company had an arrangement with Close Brothers who run really good one day workshops. Failing that, there are some good books that may help "The Good Retirement Guide" was one I found especially helpful - it's published every year so it keeps up to date with allowance and tax changes. From what I can remember from my workshop - do a budget and include EVERYTHING. Then divide it up into "Must have" - food heating etc, "like to have" - holidays, etc hobbies and "nice to have" - new car, new kitchen etc. Make sure you have a reliable income to cover "must haves". This could be a DB pension, state pension or an annuity. Then have a portion of what is left in medium term savings, like fixed term bonds or savings accounts, and finally have some invested in the market for the longer term for growth. Your annuity pays into your current account for day to day living. They also advised keeping a float in something with easy access - 6-12  months of bills - just in case of emergencies. You keep the float topped up from the medium term investments, and if this becomes depleted then you can cash in investments. But, because of the 3 tier structure you can afford to wait if the markets are not performing well until they recover a bit. Well, that was their advice 5 years ago. Don't know if it will help now - but get on a course if you can!

Similar advice/guidance is proffered on this forum at regular intervals. As it is just basic common sense it really does not change over the years.
Of course it can be tinkered with depending on your actual situation. For example someone with no DB pension, and relying more on an invested pension pot, would probably hold more than 12 months cash if possible ( opinions vary on exactly how much ). Also for someone with no DB pension, the decision whether to buy an annuity, with part or all of the DC pot is quite a tricky decision and very dependent on personal circumstances and personality.

It also comes up quite a bit from my short time posting here around whether the use of a "bucket strategy" as described above is really common sense.  It provides a feeling of safety but may not actually benefit you much in the long run of a full retirement.  Here's a quote from a recent blog:

"… A balanced stock/bond portfolio, regularly rebalanced, would have withstood all the past market volatility, including the Great Depression of the 1930s and the Great Inflation of the 1970s/80s, and will likely survive whatever the future will bring.".  Obviously this is in the context of remaining within calculated safe withdrawal rates.

I suppose having 1 year of cash could also be seen as just making annual withdrawals so this is probably quite sensible and wouldn't make much difference.

Albermarle

Pat38493 said:

Albermarle said:

yp70479 said:

Message for Chubster
Have you been on a retirement planning course? Would your company be willing to let you go on one. My old company had an arrangement with Close Brothers who run really good one day workshops. Failing that, there are some good books that may help "The Good Retirement Guide" was one I found especially helpful - it's published every year so it keeps up to date with allowance and tax changes. From what I can remember from my workshop - do a budget and include EVERYTHING. Then divide it up into "Must have" - food heating etc, "like to have" - holidays, etc hobbies and "nice to have" - new car, new kitchen etc. Make sure you have a reliable income to cover "must haves". This could be a DB pension, state pension or an annuity. Then have a portion of what is left in medium term savings, like fixed term bonds or savings accounts, and finally have some invested in the market for the longer term for growth. Your annuity pays into your current account for day to day living. They also advised keeping a float in something with easy access - 6-12  months of bills - just in case of emergencies. You keep the float topped up from the medium term investments, and if this becomes depleted then you can cash in investments. But, because of the 3 tier structure you can afford to wait if the markets are not performing well until they recover a bit. Well, that was their advice 5 years ago. Don't know if it will help now - but get on a course if you can!

Similar advice/guidance is proffered on this forum at regular intervals. As it is just basic common sense it really does not change over the years.
Of course it can be tinkered with depending on your actual situation. For example someone with no DB pension, and relying more on an invested pension pot, would probably hold more than 12 months cash if possible ( opinions vary on exactly how much ). Also for someone with no DB pension, the decision whether to buy an annuity, with part or all of the DC pot is quite a tricky decision and very dependent on personal circumstances and personality.

It also comes up quite a bit from my short time posting here around whether the use of a "bucket strategy" as described above is really common sense.  It provides a feeling of safety but may not actually benefit you much in the long run of a full retirement.  Here's a quote from a recent blog:

"… A balanced stock/bond portfolio, regularly rebalanced, would have withstood all the past market volatility, including the Great Depression of the 1930s and the Great Inflation of the 1970s/80s, and will likely survive whatever the future will bring.".  Obviously this is in the context of remaining within calculated safe withdrawal rates.

I suppose having 1 year of cash could also be seen as just making annual withdrawals so this is probably quite sensible and wouldn't make much difference.

 It provides a feeling of safety but may not actually benefit you much in the long run of a full retirement.

It may not benefit you in Pound notes in the long term, but a feeling of safety and being able to sleep at night has a value as well. For the average investor/pensioner that is probably more important than gaining a few extra quid.

yp70479

Chubsta - go for it - you are more than prepared - just a little scared! I remember someone saying no one has  -" they were a good worker" - on their tombstone - you've doe your time and paid your dues - now have some "me  time" - it sounds as though you've done everything you possibly could to prepare - and who wants to receive "death in service" benefits!!

chubsta

yp70479 said:

Chubsta - go for it - you are more than prepared - just a little scared! I remember someone saying no one has  -" they were a good worker" - on their tombstone - you've doe your time and paid your dues - now have some "me  time" - it sounds as though you've done everything you possibly could to prepare - and who wants to receive "death in service" benefits!!

My biggest fear - 'what on earth will I think about if I don't have to think about my pension projections and retirement date'?