Approaching retirement - best beginner tips?

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/81867083#Comment_81867083

Perhaps it should come as no surprise but I am still amazed how many folk roughly my age now hate their work and cannot wait to retire. Have to say I am in a similar boat, but 30/40 years ago, whilst not exactly loving my job, I did at least find it stimulating and returned home thinking my working day had at least been worthwhile and beneficial. To answer the original question perhaps….

Save as much a feasibly possible and do claim for the higher rate rebate via HMRC if you can. I believe it is also retrospective. I use AJ Bell as a good low cost, easy to understand platform. When drawing pensions, my thinking to bridge the gap until SP kicks in is (if I need say 30K/ann) is to withdraw 72K - taking 18K in TFLS, then withdrawing 12K from the crystallized( taxable) bit. If no other income, then my tax bill should be nil. Repeat each year until SP kicks in then delete withdrawing from crystallized until uncrystallized runs out.

cfw1994

You are clearly asking mostly about finances, but my main tip for a happy retirement is figuring out how you intend to spend it 😎

What things will you (& partner if relevant) do to fill your time 🧐
Some of these will be free or very low cost - walking, cycling, reading, crafting, coffee with friends. Some won’t.
Try to visualise FutureYou™ without having to go into the bank 👀
Before I stepped away, I actually wrote a spreadsheet with the first column having a headline (DIY, craft, family, friends, culture, etc), with columns after it having things to do. Eg, Garden: greenhouse, veg bed, re-roof shed 🤓

It gave me something to look at over my first year and block in green when I did it. Okay, a bit nerdy, but it worked for me. Others might write lists. Whatever works for you 🙏

WillowLeaf

https://forums.moneysavingexpert.com/discussion/comment/81867668#Comment_81867668

On the first point, I do wonder whether people want to retire because they dislike their jobs or they dislike their jobs because they want to retire. I enjoyed work when I started, maybe because it was different then or because I was different then.

Regarding retrospective years, does that mean I can pay in savings (money that has already been taxed) in to a pension? Or can pension payments only come from salary?

WillowLeaf

https://forums.moneysavingexpert.com/discussion/comment/81867721#Comment_81867721

A spreadsheet and a to-do list combined, doesn't get any better than that 😀

I do actually have an issue with to-do lists as they kind of weigh me down if there is too much on there. Even enjoyable things like a TV watchlist, if there is too much it feels like Ive got to work through it. Bit strange, not sure if its just me.

I did see a link on this forum for a video on retirement phases and how the first year is the honeymoon period where it's like being on holiday, but then after that it can fall a bit flat if you dont find a purpose etc. A nice problem to have maybe.

MallyGirl

https://forums.moneysavingexpert.com/discussion/comment/81867771#Comment_81867771

your gross pension contributions cannot exceed your earned income in the current tax year but it doesn't have to come directly from salary if you have some savings you would like to contribute

cfw1994

https://forums.moneysavingexpert.com/discussion/comment/81867783#Comment_81867783

I know what you mean….however, when you think of it as an ideas and possibilities list, things sound better!

I’ve not kept it going, but just had a look back at it, probs last edited about 2 years after I stepped away: the greens feel like accomplishment (blurred to protect the banality of it all🤣)

Even the red is underway: those were admin - wills & LPA. We’ve done the wills, so that’s a start (almost 5 years In 🫣)

MarlowMallard

If you are in a part-DB part-DC scheme, it is worth finding out if you can take most of the DC pot as tax-free lump at the point you trigger the DB.

I'm in USS and it can do this; under HMRC rules the max TFLS when you trigger DB is 6.66x annual pension (because 6.66 is 1/4 of 20 + 6.66); so if you take the standard pension + 3x lump , you can take another 3.66x out of DC tax-free, but only at the same time. Or you can reverse-commute the 3x lump into extra pension, and take 6.66x the larger pension out of DC, if the DC pot is large enough.

WillowLeaf

https://forums.moneysavingexpert.com/discussion/comment/81867822#Comment_81867822

I like that, im going to get started on it so at least I can see what I might want to do if/when I retire.

WillowLeaf

Thank you, yes there was some very vague text that mentions whether you take tax-free from the DB or DC and how much. Seems I'll have to build up a list of specific questions and ask as the brochure is too vague.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81867771#Comment_81867771

I think when a poster mentioned retrospective, they meant that if you had not claimed the higher rate relief in previous tax years, on the contributions you already made in those years, you could still do that. However as you did not contribute to a DC pension until now that is not relevant.