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Another planning for retirement post

13

Comments

  • satrdayboy_2
    satrdayboy_2 Posts: 53 Forumite
    I read a lot of the posts on hear and a few mention spreadsheets. Any suggestions for what data goes into them, are there any examples to copy? thanks
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    jerrysimon wrote: »
    A point often overlooked and always well made. I took my pension this year at 56.5 years old with a reduction of 2.8K/year. However drawing my pension early meant I will have drawn 60.2K in 3.5 years which would take me 13 years (I would be 70 before being in credit) to gain back assuming I had carried on and left at 60. This includes added years and pension I would have accrued.

    Jerry

    Looking at the reduction alone. At 2% CPI in 13 years time the £2.8k will have risen to £3.6k. By the time you are 80 over £4.2k. CPI is currently well above 2%. Compounding is the key. Jam today or more jam tomorrow.
  • k6chris
    k6chris Posts: 787 Forumite
    Part of the Furniture 500 Posts Name Dropper Photogenic
    Thrugelmir wrote: »
    Looking at the reduction alone. At 2% CPI in 13 years time the £2.8k will have risen to £3.6k. By the time you are 80 over £4.2k. CPI is currently well above 2%. Compounding is the key. Jam today or more jam tomorrow.

    Jam today, PLUS the free time you now have because you retired earlier, or more jam tomorrow, but not that extra time. It's a time vs jam balancing act!
    "For every complicated problem, there is always a simple, wrong answer"
  • Hussel
    Hussel Posts: 21 Forumite
    Sixth Anniversary Combo Breaker
    k6chris wrote: »
    Jam today, PLUS the free time you now have because you retired earlier, or more jam tomorrow, but not that extra time. It's a time vs jam balancing act!

    Agreed. There seems to be a lot of aversion to early retirement reductions but they're there as an option because a lot of people don't want to be working until their normal retirement age and may not have other bridging arrangements available. They should also be cost-neutral to the pension fund so an 'average' member should receive the same value if they retire early or not.
  • justme111
    justme111 Posts: 3,531 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    If one is happy with one spoon of jam daily there is no point in holding off jam today so that tomorrow one has enough of it for two spoons daily
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
    Often people seem to use this word mistakenly where "quandary" would fit better.
  • satrdayboy_2
    satrdayboy_2 Posts: 53 Forumite
    If i did transfer my pot and it grew at say 4% a year and i took 25% tax free at 60. How much would it have to continue to grow for me to take £19000 a year without me touching my remains pot? sorry if this a bit confusing
  • satrdayboy_2
    satrdayboy_2 Posts: 53 Forumite
    satrdayboy wrote: »
    If i did transfer my pot and it grew at say 4% a year and i took 25% tax free at 60. How much would it have to continue to grow for me to take £19000 a year without me touching my remains pot? sorry if this a bit confusing

    remaining not remains, typo sorry
  • justme111
    justme111 Posts: 3,531 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    You can Google compund return and drawdown calculators and play with changing numbers.
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
    Often people seem to use this word mistakenly where "quandary" would fit better.
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    justme111 wrote: »
    If one is happy with one spoon of jam daily there is no point in holding off jam today so that tomorrow one has enough of it for two spoons daily

    If one wants one spoon of jam daily but eats 2 spoons because they are greedy for a whole week, what happens the next day? Week? month?
  • justme111
    justme111 Posts: 3,531 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    The other end of alimentary canal gets sticky :D
    The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
    Often people seem to use this word mistakenly where "quandary" would fit better.
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