What to do with £110k

swindiff

I get where you are coming from now.  If she retires on her 60th birthday, which is currently the plan, she would not have enough earnings to contribute £20k gross.  I do currently fund her SIPP, and could certainly max her contributions out the year before she retires.  The plan is to draw the SIPP from the age of 60 to fully utilise her tax free allowance.

BikingBud

swindiff said:

Thanks for all the replies already.  It's always good to get other points of view as there may well be a good option that I had not even considered

A bit more info for context
The wife already thinks I pay too much into my pension and keeps saying we should live a bit more for the day, so locking more money away into pensions I suspect would not go down too well.  I know I could access it from next year but I also would not want to trigger the MPAA until I actually decide to retire.
Objectives are a bit woolly really, the thought of no mortgage is very appealing.  Financially, probably the best thing would be to salary sacrifice down to minimum wage and live off the £110k until it ran out, but as I say, I really don't think this would go down well with the wife lol.
Trying to get a mix of being better off now and to make the money work the best for our future.

Live a little more :

swindiff

Bit of an upgrade from my old Hyundai 😂

Stubod

It may not be the most efficient use of money, but for me it would be a no brainer to just pay off the mortgage...it's a great feeling!!

You could then continue to "save" your mortgage payments into something else...and yes, the surplus I would spend...car / holiday..whatever takes your fancy...!!

penners324

Have really good holiday to start with. 

Then pay down the mortgage. Put the cleared mortgage payments into a holiday pot to have a good holiday once a year

DRS1

Stubod said:

It may not be the most efficient use of money, but for me it would be a no brainer to just pay off the mortgage...it's a great feeling!!

You could then continue to "save" your mortgage payments into something else...and yes, the surplus I would spend...car / holiday..whatever takes your fancy...!!

Agree 100%.

I would not want a mortgage hanging over my head till I'm 73.  At least get it down so it is gone by the time you retire.

And splurge on something the OH will enjoy (perhaps not an Aston?) - that is something you can't put a financial value on.

nicknameless

Discussion is pointless without clear objectives.

Personally I'd be maxing out pensions and ignoring the mortgage, if a key objective turns out to be future income or an earlier retirement.  Why intentionally make yourself poorer?

That Aston Martin does look nice though.  Perhaps offer the wife the option of (1) Aston Martin (2) Maxing pensions and retiring earlier (3) Paying off mortgage to feel better but (and with emphasis) most likely be significantly poorer in the long term.

Our mortgage runs till we're 75 btw.  Couldn't give two hoots and will likely retire next year (53).  As you can tell I never went for (1) or (3) above.

That Aston Martin does look nice though.

nicknameless

In fact forget my advice above.  Just googled the Aston.  It leaves you with a chunk of change.  Four litre V8 twin turbo - highly practical round town.  I'm with Biking Bud.

swindiff

Retiring earlier is not that simple in my case.  With my DB pension, going before I am 60 is particularly punitive with regards to the actuarial reduction factors.  My normal pension age is currently 66, however a large chunk of my pension can be taken at age 60 with no reduction, if I go 1 day before I am 60 then the whole lot would get reduced for being taken 6 years early, rising to 7 years in 2028.  You may ask why not retire at 58 or 59 and live off other sources of income such as ISA or SIPP and then take DB pension at 60.  The problem with that is, if I leave my employment, the age at which I can retire without all my pension being actuarily reduced rises to 63 1/2.  So I am really stuck working until I am at least 60, or I will be making myself significantly poorer in the long term.

I was never overly concerned with my mortgage running into my 70's either, which is why I pay an extra 23% into my DC pension on top of the DB pension rather than paying down the mortgage.  When we do both retire our net income will actually be higher than it is now, so continuing to pay the mortgage was never a worry for me.

BikingBud

nicknameless said:

In fact forget my advice above.  Just googled the Aston.  It leaves you with a chunk of change.  Four litre V8 twin turbo - highly practical round town.  I'm with Biking Bud.

I posted in jest and fully realise that others have differing objectives and priorities but in terms of paying tax somewhere along the line or having fun I think buying and ragging the Aston for a while might be a very effective way to achieve the latter and with an added bonus of avoiding the former.

No doubt some killjoy will come alongside and try to dress it up as deprivation of assets.