Mind the 'age' gap: retirement planning
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I'm thinking that in addition to doing this planning, I need to put together some kind of guide for DH and update it yearly.
When I die, he won't have a clue about any of this or what to do. I can talk him through some of it but he glazes at anything substantial.0 -
Cottage_Economy wrote: »I'm thinking that in addition to doing this planning, I need to put together some kind of guide for DH and update it yearly.
When I die, he won't have a clue about any of this or what to do. I can talk him through some of it but he glazes at anything substantial.
I have this issue- I have started to simplify things for that reason.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Noobie2011 wrote: »So I am not sure how conservative you should be with compound interest but it seems everyone goes off 5%. However when I apply that to our pension pots they increase quite a bit and give us quite a few more options. Is 5% realistic to calculate off or is the rule to apply a less risky %
If you start in 1870 the average compound growth rate is 6.1%. However that's with income reinvested. Without income reinvested it's nearer 0.5%.
For what if scenarios. Since 1870 there have been 46 years when stock markets returned below inflation rates of return, in percentage terms 31%.
In essence no one knows what the future holds. Though considering recent years equity returns. Seems only logical that the market needs to readjust to the real returns generated by companies.0 -
Cottage_Economy wrote: »I've been looking at 3% for safety. I like being conservative as I may not have that much wiggle room to make up a shortfall if I plan for greater growth and it doesn't happen.
overall that is good. But I will front load mine, 6% to begin and 3% or so when SP ages occur.
But I will have 2/3 years cash so dont have to draw 6% if a correction occurs.0 -
Not pleasant I know, and at times you almost feel like like you are planning when the most convenient time would be for them to pop their clogs
.....but it is something you need to consider, especially if you rely on your partner's pension income and it would take a substantial haircut in the event of their "departure".
the most convenient time was years ago when he was worth more dead than alive lol.0 -
overall that is good. But I will front load mine, 6% to begin and 3% or so when SP ages occur.
But I will have 2/3 years cash so dont have to draw 6% if a correction occurs.
Sorry, I'm being thick - why drop it at SP age? Is it because you are moving your investments into less risky ones?the most convenient time was years ago when he was worth more dead than alive lol.
After a bit more playing around last night two other little niggles emerged:
1. We have too much money in later life and not enough earlier. I've been reading Beyond The 4% Rule and the U-shaped curve makes sense. I'm not achieving anything like a U-shape at the moment.
2. If I try and bring in the pensions at the earliest opportunity, DH and I pay a load of tax and NI so overall not much further forward.
I'm starting to see the important part ISAs have to play in mitigating the tax bill when running up to retirement, except that the 20% uplift from putting our ISA money into the SIPP is important to us, as it would be at least 2-3 years of extra income when drawn down.
So, now looking at scenarios taking all/some of the 25% tax free lump sums from our various pensions and putting them into ISAs to draw on when needed. Won't be enough though, so the next plan will probably involve pumping shed-loads through our pensions to increase the possible lump sums we could take.0 -
Thrugelmir wrote: »If you start in 1870 the average compound growth rate is 6.1%. However that's with income reinvested. Without income reinvested it's nearer 0.5%.
For what if scenarios. Since 1870 there have been 46 years when stock markets returned below inflation rates of return, in percentage terms 31%.
In essence no one knows what the future holds. Though considering recent years equity returns. Seems only logical that the market needs to readjust to the real returns generated by companies.
Thanks for the info and do understand this is all unknown as your are basically trying to forecast.
From what you said Am I right in thinking 3% is quite conservative to start with if you go off past history ignoring the fact the future is unknown?0 -
Cottage_Economy wrote: »Well, I have come around to the spreadsheet idea. I couldn't make the RetireEasy thing work in the end. I need months and I was having a problem with the software insisting on taking the 25% tax free lump sum on my personal pension, even though I didn't want it and it screwed with my subsequent income.
I physically put the numbers into a spreadsheet, playing around with the drawdown figures for savings and pensions trying to maintain a steady total income close to what we have now.
It is interestingn to hear your comments on RetireEasy. I only have the basic version which is free but it seems far too optimistic on how comfortable we will be in retirement. I know that this in part is down to the assumptions but their default values must be quite high in areas that I haven't tweaked yet.
I have a tiny final salary scheme (£1400 pa) and the rest is all DC/SIPP/S&S ISAs. DH (2 weeks younger than me) only has DC/S&S ISAs. It does make it simpler to model when one of us goes.
He is definitely worth more dead than alive but I think I will keep him anyway! His employer gives 8x salary for death in service but it cost almost nothing to increase to 10x in the flexi package so we did.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
It is interestingn to hear your comments on RetireEasy. I only have the basic version which is free but it seems far too optimistic on how comfortable we will be in retirement. I know that this in part is down to the assumptions but their default values must be quite high in areas that I haven't tweaked yet.
I thought that too. I went through every single area I could and downgraded everything to as conservative as I could.
I got an email back from a member of staff to tell me that if I did not want the 25% lump sum to move the data from Personal Pensions to SIPPs, which has the facility to do that. Why not just have that facility in Personal Pensions?I have a tiny final salary scheme (£1400 pa) and the rest is all DC/SIPP/S&S ISAs. DH (2 weeks younger than me) only has DC/S&S ISAs. It does make it simpler to model when one of us goes.
He is definitely worth more dead than alive but I think I will keep him anyway! His employer gives 8x salary for death in service but it cost almost nothing to increase to 10x in the flexi package so we did.
8-10x is pretty decent! Mine's a bog standard 4x and no facility to change that.0 -
Just throwing this out there as it sprang to mind - why can't we have the state pension operate in a similar way to a normal pension as to when you take it?
So 67 is the current state pension age, but if you want it sooner it will be 'reduced' by a certain percentage for every year early you have it.
Anyone?
EDITED: just been ringing round tracing old pension schemes and discovered I was part of the M&S pension scheme when I worked there from 1989. My hopes have been dashed, however, as apparently I had less than two years in the scheme and therefore no pensionable benefits are available to me.
Good exercise to do though.0
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