Pensions Planning: The NUMBER

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  • Esox
    Esox Posts: 25 Forumite
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    Did you mean?
    OldMusicGuy wrote: »
    So our target annual income [STRIKE]before[/STRIKE] after tax (the "number") will be £32,000. I think allowing 12,000 on top of the 20,000 for discretionary spending should be plenty for the kind of lifestyle we want to lead. Of course, the £20,000 should go down a bit once we downsize so I think 32K should be adequate.
  • OldMusicGuy
    OldMusicGuy Posts: 1,758 Forumite
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    Esox wrote: »
    Did you mean? (after tax)
    Oops yes! Although until we reach SP age they will be the same as we won't be paying any tax until then.
  • gallygirl
    gallygirl Posts: 17,228 Forumite
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    Gatser wrote: »
    I am with you, JustMe111 !
    Somewhat older, but I moved to part time at 55 (only 7days/month) and have found a positive cycle....
    It allows me to meet more people and from them comes more ideas for hobbies, interests and mini-adventures.
    Now I am about to fully retire and have no doubt I will fill the time. I do not need a job as a purpose in life, I suppose I have a job though, "Retirement Organiser/Planner"


    You are also spot on regarding fitness.
    Finding an hour most days to "walk somewhere" is no problem.
    We will walk to the supermarket (1.5 miles) now, instead of using the car ... but not for the BIG shop!
    I used to go to an aquafit class when I was working. Mad dash home from work, get there at the last minute, stressed. Changed afterwards and straight home.

    Monday I left home at noon for a 1pm Pilates class. Walked in the sunshine (we've moved to Spain). Called in at supermarket and then a cafe on the way. After class my partner was waiting for me in cafe, where friends were also. Got home at 3pm, only because I had to be somewhere at 3.30.

    Having the time to do things at a more leisurely pace is wonderful. I do a lot of aerobics, Pilates and aquafit classes now - all stress-free as I'm not bombing about trying to fit everything in. Also averaged just over five miles a day last year.

    Time and health are the greatest gifts :T.

    Oh, and mini-adventures - off on one at the weekend :D.
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    :) Mortgage Balance = £0 :)
    "Do what others won't early in life so you can do what others can't later in life"
  • OldMusicGuy
    OldMusicGuy Posts: 1,758 Forumite
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    gallygirl wrote: »
    Time and health are the greatest gifts :T.
    Well said. This was the realization that got me out of the OMY mindset, despite it meaning we will be in a weaker financial position.
  • Terron
    Terron Posts: 846 Forumite
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    gallygirl wrote: »
    Monday I left home at noon for a 1pm Pilates class. Walked in the sunshine (we've moved to Spain). Called in at supermarket and then a cafe on the way. After class my partner was waiting for me in cafe, where friends were also. Got home at 3pm, only because I had to be somewhere at 3.30. .

    All I've done today is clear the snow from the paths to my front and back doors. :)
  • BOBS
    BOBS Posts: 2,871 Forumite
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    Gallygirl - would love to retire to Spain / France even part time !! Did you keep house here as well ? Do you own property there.
    [FONT=verdana,arial,helvetica][/FONT]
  • gallygirl
    gallygirl Posts: 17,228 Forumite
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    BOBS wrote: »
    Gallygirl - would love to retire to Spain / France even part time !! Did you keep house here as well ? Do you own property there.
    Yes we have kept house and let it out. If we were to decide to go back to UK I would want to sell it and buy something else. We have rental income from four (cheap!!!) UK properties.

    We bought in Spain, not necessarily something I'd recommend to others but it was right for us for various reasons. If you don't know an area well then renting first is best option - maybe even if you do know the area as living there is very different to visiting. I don't know about France, but buying in Spain is very expense (and stressful!) so a costly mistake if you don't get it right first time.
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    :) Mortgage Balance = £0 :)
    "Do what others won't early in life so you can do what others can't later in life"
  • DCB1967
    DCB1967 Posts: 10 Forumite
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    Hi


    We are hoping to retire when we both reach 55, I'm 51 this year and my wife will be 52, she has special class status in the NHS and can retire at 55 on full pension. I have made the calculation below with my basic financial knowledge, and would appreciate any feedback on whether I am making some glaringly obvious mistakes or over presumptions. The £35,000 per year before SRA is about £9,000 higher than our predicted retirement but have used this figure to smooth the pre / post SRA incomes.




    Wife Retire at 55 with £21,945 / year NHS pension & £65,835 lump sum.

    Me Retire at 55 with pension pot of £362,000*.
    Take 25% lump sum = £ 90,500
    Balance = £271,500

    Need to fund 12 years gap until State Retirement Age (SRA).

    Total of £35,000 net / year, made up of:

    Wife £21,945 / year gross = £19,856 net**

    Total Lump sum value ranging from £145,835* to £184,085, use lower amount for investment calculation:

    £145,835 x 3% interest pa = £ 4,375

    £35,000 - £19,856 - £4,375 = £ 10,769 / year to be taken from my pot.
    12 years x £10,769 = £129,228

    At SRA of 67

    Me
    Pension Pot Starting amount = £271,500
    Minus 12 years bridge = £129,228
    Balance = £142,272
    = £142,272 x 4% draw down
    = £ 5,691 Private
    £ 8,300 State
    £13,991 gross
    £13,492 net

    Wife = £21,945 NHS
    £ 8,300 State
    £30,245 gross
    £26,496 net

    Total At SRA = £44,236 gross
    £39,998 net

    * Based on current (Jan 18) total pot value of £217,000 with annual contributions of
    £1154 x 12 = £13,848 and average growth of 5% per annum.
    If annual growth is 3% Pot Value = £320,000 £ 80,000 LS & £240,000 Balance
    10% Pot Value = £435,000 £108,750 LS & £326,250 Balance
    12% Pot Value = £473,000 £118,250 LS & £354,750 Balance

    ** Tax free allowance of £11,500
  • stoozie1
    stoozie1 Posts: 656 Forumite
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    Do you need to take your lump sum immediately?
    Save 12 k in 2018 challenge member #79
    Target 2018: 24k Jan 2018- £560 April £2670
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    DCB1967 wrote: »
    Total Lump sum value ranging from £145,835* to £184,085, use lower amount for investment calculation:

    £145,835 x 3% interest pa = £ 4,375
    Hi

    A little unsure where this 'lump sum' comes from? Is this pre-existing savings, or existing savings plus the TFLS (£90k)??

    One thought would be to draw down from your pension whilst you are not working and not claiming the SP, that way all / a large part of your pension income would be tax-free. You can then retain / continue growing the 'lump sum' pot and draw on that as the pension pot diminishes / you are in receipt of SP due hopefully to it being in an ISA and therefore tax free (????)
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
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