Pension Vs ISA

Firegirl

Yes sounds like it…..I’ll need to check my pay slips but I don’t remember my password and no way I’m logging onto work computer while I’m off 😂

Firegirl

jamesd said:

Catch for you is you probably have an age 57 minimum access age but your scheme might be one with a protected 55 age, ask.

Called my main pension provider and it’s not protected at 55 so it will be 57 for me. 

Firegirl

@hugheskevi said: Does this have any bearing on your plans, ie, does it mean you prefer to have access to your savings rather than tying them up in a pension until age 57/58? Would you qualify for early ill-health access to a pension from the condition were it to be an issue?

If I need to I can access my main pension due to ill health with the support of doctors letters.  Good to know this info now encase I ever need to use it!

Albermarle

Nest doesn't offer any investments that I'd call good so best to use somewhere else for most of your money. They also tend to put people in low growth options for ages so I suggest turning off lifestyling and picking their Sharia fund, which looks like their least bad option.

The Nest ongoing charge of 0.3% is pretty good as it includes everything, but they charge 1.8% on all new contributions, so another reason not to use them.

@jamesd

Welcome back by the way !

LHW99

Have you worked out what you will need to live on once the mortgage is paid off and you retire?

Once you have that, and checked you are on the way to getting a full SP (https://www.gov.uk/check-state-pension) you can work out how much you need in the ISA to carry you through from 55 to 57, and get an idea how much you need in the work pension to see you through to, and top up, your SP.

jamesd

If it is salary sacrifice then the NI benefit is likely to make paying into Nest then transferring out the way to go. Nest won't let you transfer out while paying in so you'd need to opt out, transfer then restart. Their Sharia fund is adequate for a year or two between transfers.

For your VCT reading list the Lemon Fool VCT board is well worth reading: https://www.lemonfool.co.uk/viewforum.php?f=25

Firegirl

LHW99 said:

Have you worked out what you will need to live on once the mortgage is paid off and you retire?

Once you have that, and checked you are on the way to getting a full SP (https://www.gov.uk/check-state-pension) you can work out how much you need in the ISA to carry you through from 55 to 57, and get an idea how much you need in the work pension to see you through to, and top up, your SP.

Not worked it out properly, tend to overestimate and imagine a lavish lifestyle and then go OMG😆  I work out what amount I’d need to have in pension pot to be able to take approx 5% a year and then think to myself…..that’s wild, just gotta keep saving…I suppose highest amount is needing what I spend now really. In short….yes I still need to work this out properly to set a goal!  

Good news is I’m on track for full state pension😃 Need to contribute another 12 years before 5 April 2047.

Hoenir

Firegirl said:

LHW99 said:

Have you worked out what you will need to live on once the mortgage is paid off and you retire?

Once you have that, and checked you are on the way to getting a full SP (https://www.gov.uk/check-state-pension) you can work out how much you need in the ISA to carry you through from 55 to 57, and get an idea how much you need in the work pension to see you through to, and top up, your SP.

Good news is I’m on track for full state pension😃 Need to contribute another 12 years before 5 April 2047.

Retiring at 57 then you'll need to fund yourself entirely for 10/11 years.      A 5% rate of drawdown (inflation linked) is aggressive and not without considerable downside risk. Likely to be at least one market downturn in that period . 

jamesd

If intended for life and using constant inflation- adjusted income, the 4% rule, 5% is quite aggressive.

Here the plan isn't 5% for life but rather a split of the sort that Guyton used with his clients: a lifetime portion using the Guyton-Klinger rules and a discretionary portion to be spent as desired. In this case part or all of the discretionary is planned to bridge the years until other pensions start. That's one of the ways his clients routinely use it.

Firegirl

jamesd said:

If intended for life and using constant inflation- adjusted income, the 4% rule, 5% is quite aggressive.

Here the plan isn't 5% for life but rather a split of the sort that Guyton used with his clients: a lifetime portion using the Guyton-Klinger rules and a discretionary portion to be spent as desired. In this case part of all of the discretionary is planned to bridge the years until other pensions start. That's one of the ways his clients routinely use it.

Learning more every post!

I found this article with a quick google search
https://jsevy.com/wordpress/index.php/finance-and-retirement/retirement-withdrawal-strategies-guyton-klinger-as-a-happy-medium/