Another Ready for Retirement Thread

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  • EdSwippet
    EdSwippet Posts: 1,588 Forumite
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    kevfm wrote: »
    DB Pensions (2) currently £25k + £5k p.a., NRA 60, indexed, 50% spouse benefit, 4% p.a. early payment. DC pension £320k now, increasing by £2800 pm
    Since nobody else has mentioned it, I'll just insert a quick warning here about the potential for a 25% tax penalty if you save into pensions past the Lifetime Allowance (LTA).

    The LTA is currently £1,030k. Your £30k total DB pensions are valued for LTA purposes at 20x, and adding a £320k DC pension puts you at £920k, so you are already at 89% of the LTA. Allowing for investment growth (4% real) on your DC pension alone, adding £2,800/m would put you above the LTA in only two years.
  • wjr4
    wjr4 Posts: 1,131 Forumite
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    kidmugsy wrote: »
    Another trick would be for you to take the whole TFLS at the beginning and plunk it into savings and investments, including ISAs
    This wouldn’t be a good idea if there is an IHT issue.
    I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    wjr4 wrote: »
    This wouldn’t be a good idea if there is an IHT issue.

    But he's not said that there is.
    Free the dunston one next time too.
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