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  • FIRST POST
    • stephen0002002
    • By stephen0002002 7th Mar 18, 10:02 AM
    • 19Posts
    • 3Thanks
    stephen0002002
    Ready for retirement
    • #1
    • 7th Mar 18, 10:02 AM
    Ready for retirement 7th Mar 18 at 10:02 AM
    Hello.
    I'm 62 this year and hope to retire in a few months time. I am lucky (I know). I have saved up in a personal pension of 250K - (invested in a Royal London fund ready for drawdown). I am also looking to Transfer funds from 2 final salary pensions the TV's worth about 250K in total. It seems like a good time to transfer those.

    I would like my funds to grow so do I consolidate (and go with charges and another fund) or consider say index trackers, as they do look interesting (but I am a novice). Do I take the full 25% int free - is that a no brainer ?

    I would like to have 30K per year for the next few years if that's possible so we can travel a bit. At least until our OAPs cuts in in a few years time. My wife (62) doesn't have a pension. I also like to look after my grown up kids when I can :-) Advice or thoughts would be welcome folks. Thank you very much.
Page 1
    • MallyGirl
    • By MallyGirl 7th Mar 18, 10:11 AM
    • 2,736 Posts
    • 7,745 Thanks
    MallyGirl
    • #2
    • 7th Mar 18, 10:11 AM
    • #2
    • 7th Mar 18, 10:11 AM
    why do you want to transfer the FS pensions? Do they have any guarantees or extra benefits? You would need to get IFA advice to do this as over £30k
    • tacpot12
    • By tacpot12 7th Mar 18, 10:26 AM
    • 1,038 Posts
    • 878 Thanks
    tacpot12
    • #3
    • 7th Mar 18, 10:26 AM
    • #3
    • 7th Mar 18, 10:26 AM
    What will the two Final Salary Pensions pay you and from what age?
    • maximumgardener
    • By maximumgardener 7th Mar 18, 11:07 AM
    • 281 Posts
    • 120 Thanks
    maximumgardener
    • #4
    • 7th Mar 18, 11:07 AM
    • #4
    • 7th Mar 18, 11:07 AM
    with 500k it makes sense for you to see an IFA . get some good advice worth its weight in gold and will save you making potential errors (expensive)? meet with 2 or 3 IFA's .Free initial discussion and decide which one you want to work with?
    • atush
    • By atush 7th Mar 18, 11:13 AM
    • 16,806 Posts
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    atush
    • #5
    • 7th Mar 18, 11:13 AM
    • #5
    • 7th Mar 18, 11:13 AM
    If you are a nobiv investor, you need an IFA. And will need one anyway of transferring DB pensions.

    And as above, why move the FS/DB pensions? What will they pay at age 62?
    • stephen0002002
    • By stephen0002002 7th Mar 18, 12:04 PM
    • 19 Posts
    • 3 Thanks
    stephen0002002
    • #6
    • 7th Mar 18, 12:04 PM
    • #6
    • 7th Mar 18, 12:04 PM
    The Final Salary pensions gives me £9K pa total (after 25% int Free).
    Yes I will use a F.Advisor -thanks.

    My question is what do I do with the TV.

    Transfer values are high atm thats why we are taking advantage of withdrawing now, while its good.

    Are Index trackers worth considering (ie.lower costs over time) or should I plump for just another pension/drawdown type fund. I wanted to ensure a reasonable growth if possible. Or am I being greedy.
    • xylophone
    • By xylophone 7th Mar 18, 1:48 PM
    • 25,565 Posts
    • 15,099 Thanks
    xylophone
    • #7
    • 7th Mar 18, 1:48 PM
    • #7
    • 7th Mar 18, 1:48 PM
    Yes I will use a F.Advis
    Not just any financial adviser.

    https://www.fca.org.uk/consumers/pension-transfer

    Advice on pension transfers must be given, or checked by, a pension transfer specialist. A pension transfer specialist must follow our training and competence rules, and have the appropriate qualifications and, with that, the permission to perform the function.
    • ams25
    • By ams25 7th Mar 18, 1:50 PM
    • 175 Posts
    • 202 Thanks
    ams25
    • #8
    • 7th Mar 18, 1:50 PM
    • #8
    • 7th Mar 18, 1:50 PM
    if you are being offered £9k pa, is it index linked and is there a spouse pension. when does it start?

    £250k TV for £9k pa may seem a lot but actually it is not so much. You may (or may not) be able to get a comparable return from investing (but only if you are prepared to invest at least 50% in equities and handle the volatility that will entail). If you already have £250k in a PP then having a core income from the FS pensions is a good mix of safe income (the FS and later SP) and additional capital/income from the PP invested.

    a lot depends on your circumstances..how much do you need pa, other provision, likely life expectancy etc so some more information would gain you better feedback from people here.
    • LHW99
    • By LHW99 7th Mar 18, 2:49 PM
    • 1,316 Posts
    • 1,214 Thanks
    LHW99
    • #9
    • 7th Mar 18, 2:49 PM
    • #9
    • 7th Mar 18, 2:49 PM
    a lot depends on your circumstances..how much do you need pa, other provision, likely life expectancy etc so some more information would gain you better feedback from people here.
    And is the sort of information that a good IFA will go through and consider in order to provide rounded advice
    • ams25
    • By ams25 7th Mar 18, 4:25 PM
    • 175 Posts
    • 202 Thanks
    ams25
    And is the sort of information that a good IFA will go through and consider in order to provide rounded advice
    Originally posted by LHW99

    indeed, but if people want to gain some knowledge here though feedback AND are prepared to do some research then they are better able to get the most from an IFA. And perhaps able to tell the good IFA from the not so good.
    • stephen0002002
    • By stephen0002002 7th Mar 18, 4:40 PM
    • 19 Posts
    • 3 Thanks
    stephen0002002
    The 9K pa is what my F.Salary pensions would pay me "now" at 62.
    Spouse gets 50% of F.Sal pension - ( but with a TV fund its 100% ).
    Yes FS is index linked.

    TxValue (of £250k) in theory would last a long time.
    I'm 62 so if it lasted 20+ years I'd be 82 then.
    ( Coupled with my PP of 250k - it is looking good )

    A T.Value fund with reasonable growth would be good.
    I'm asking what could I do with the "final salary" fund when I transfer it.

    And I am wondering if index trackers with low charges is an option.

    I'm only looking for ideas, and thank you for those so far folks.
    Last edited by stephen0002002; 07-03-2018 at 4:49 PM.
    • bostonerimus
    • By bostonerimus 7th Mar 18, 5:26 PM
    • 1,933 Posts
    • 1,273 Thanks
    bostonerimus
    Transfer values are currently tempting, but please consider the diversity and safety given by the combination of the FS and 250k personal pension.

    The FS pension gives you inflation protection and longevity insurance. If you live 30 years and there is 3% inflation it's equivalent to a 4% rate of return. You could think of that as your fixed income allocation and invest your 250k aggressively in equities.

    The 9k pension plus a couple of SPs will give you a nice guaranteed income.

    Even if you do the transfer so you have a pot of 500k an 30k drawdown is too aggressive.
    Misanthrope in search of similar for mutual loathing
    • sandsy
    • By sandsy 7th Mar 18, 6:42 PM
    • 1,335 Posts
    • 802 Thanks
    sandsy
    The 9K pa is what my F.Salary pensions would pay me "now" at 62.
    Originally posted by stephen0002002
    And it will go up each year with inflation. £250k for £9k pa after TFC doesn't seem that great a transfer value, to be honest.

    Spouse gets 50% of F.Sal pension - ( but with a TV fund its 100% ).
    Originally posted by stephen0002002
    So if you transfer, she'll get £250k if you pop your clogs the day after you transfer but if you die after spending everything in the pot, she'll get nothing.

    Yes FS is index linked.
    TxValue (of £250k) in theory would last a long time.
    I'm 62 so if it lasted 20+ years I'd be 82 then.
    ( Coupled with my PP of 250k - it is looking good )
    Originally posted by stephen0002002
    Most men live longer than that. 50% of men will live beyond the average life expectancy of 86, 25% will reach 94. See: https://visual.ons.gov.uk/how-long-will-my-pension-need-to-last/
    And your wife's equivalent numbers are 89 and 96.
    Planning for a time horizon of 20 years isn't long enough. If you've used up those funds after 20 years and you are no more, what is she going to live on?

    A T.Value fund with reasonable growth would be good.
    I'm asking what could I do with the "final salary" fund when I transfer it.

    And I am wondering if index trackers with low charges is an option.
    Originally posted by stephen0002002
    How do you feel about managing £0.5m? What do you consider to be reasonable growth? How risk averse or risk loving are you? Will you worry if it drops in value? Are you happy to pay other people to manage it for you?
    • ams25
    • By ams25 7th Mar 18, 6:58 PM
    • 175 Posts
    • 202 Thanks
    ams25
    http://monevator.com/the-most-important-goal-for-every-retiree/

    Have a look at this article. Research "income floor" as part of retirement planning.

    if you can construct retirement income with a risk free element (such as your FS) for essential expenses then you can take more risk with your other capital. Retirement experts like Wade Pfau (google him too, lots of insight) advocate this mix of risk free assets and investments if possible.

    my deferred FS will (in 7 yrs) give me c.40% of my required expenses. After lots of reading and research...I will be keeping it. (even though the TV was a substantial sum).

    There is much to learn on this topic and plenty of information on the internet. Good luck
    • Thrugelmir
    • By Thrugelmir 7th Mar 18, 10:38 PM
    • 58,914 Posts
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    Thrugelmir
    The 9K pa is what my F.Salary pensions would pay me "now" at 62.
    Originally posted by stephen0002002
    What is projected to be at your scheme NRA?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • kidmugsy
    • By kidmugsy 7th Mar 18, 11:11 PM
    • 10,842 Posts
    • 7,419 Thanks
    kidmugsy
    please consider the diversity and safety given by the combination of the FS and 250k personal pension.

    The FS pension gives you inflation protection and longevity insurance.

    The 9k pension plus a couple of SPs will give you a nice guaranteed income.
    Originally posted by bostonerimus
    I agree. I go further. He should consider keeping the DB pensions and ask whether even taking a TFLS from the DB pensions makes sense - what would be the commutation rate? Moreover, he should check whether either offers "Allocation" whereby the pensioner surrenders some of his pension so that his wife will eventually receive a larger widow's pension.

    Do I take the full 25% int free - is that a no brainer?
    Originally posted by stephen0002002
    It is for the personal pension.

    My wife (62) doesn't have a pension.
    Originally posted by stephen0002002
    Well fill one up for her pronto. What an extravagant oversight that is.
    Last edited by kidmugsy; 07-03-2018 at 11:15 PM.
    Free the dunston one next time too.
    • stephen0002002
    • By stephen0002002 8th Mar 18, 10:03 AM
    • 19 Posts
    • 3 Thanks
    stephen0002002
    Thank you for your thoughts so far, appreciated.
    I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.

    I also factor in old age Pensions (OAP) @ 12k in 3-4 years time.

    I've thought long about life expectancy. My own thoughts are. If we're lucky to actually both get to 75-80 (there no guarantee) then things slow down, so will our expectations (and costs), the old age pension itself is still there at least (hopefully). So thats' a happy place. We cut our cloth by then and be happy with what we have. Getting to a good age and hopefully healthy is a reward in itself.

    I understand the £-balanced view, thank you for that, good folks.
    But I do feel the next 10-15 years are worth living well in.
    We can save up for ripe old age (which we may not get to) but why not live well now before we slow down the pace.
    Last edited by stephen0002002; 08-03-2018 at 10:05 AM.
    • coyrls
    • By coyrls 8th Mar 18, 2:24 PM
    • 992 Posts
    • 1,043 Thanks
    coyrls
    I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.
    Originally posted by stephen0002002
    If you do transfer the final salary pension schemes, then growth will not be guaranteed no matter how important you feel growth is.
    • Silvertabby
    • By Silvertabby 8th Mar 18, 3:48 PM
    • 2,847 Posts
    • 4,064 Thanks
    Silvertabby
    I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.
    Originally posted by stephen0002002

    If you do transfer the final salary pension schemes, then growth will not be guaranteed no matter how important you feel growth is.
    Originally posted by coyrls
    And the value could even drop.
    • bostonerimus
    • By bostonerimus 8th Mar 18, 4:11 PM
    • 1,933 Posts
    • 1,273 Thanks
    bostonerimus
    Thank you for your thoughts so far, appreciated.
    I feel if I do transfer the final salaries then growth would be important to ensure the pot does not dwindle too fast.

    I also factor in old age Pensions (OAP) @ 12k in 3-4 years time.
    Originally posted by stephen0002002
    Growrth of a drawdown pot is usually required to keep pace with inflation. If you keep the FS pension to give you an income floor you can be quite aggressive with your 250k personal pension.

    I've thought long about life expectancy. My own thoughts are. If we're lucky to actually both get to 75-80 (there no guarantee) then things slow down, so will our expectations (and costs), the old age pension itself is still there at least (hopefully). So thats' a happy place. We cut our cloth by then and be happy with what we have. Getting to a good age and hopefully healthy is a reward in itself.
    There is a a better than 50% chance that both of you will live into your mid 80s and a strong possibility that at least one of you will live into your 90s. So you need to plan for that long.

    I understand the £-balanced view, thank you for that, good folks.
    But I do feel the next 10-15 years are worth living well in.
    We can save up for ripe old age (which we may not get to) but why not live well now before we slow down the pace.
    Front loading spending is dangerous if you have a few years in down markets where your investments lose money. Things could work out well, but you must plane for the worst and when the best occurs you'll be doubly happy.
    Misanthrope in search of similar for mutual loathing
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