Pensions Planning: The NUMBER
Options
Comments
-
That is if it hasn't all been spent in the intervening 12 years of early retirement.
Spend unwrapped funds first and also "ISA up" like crazy to get it all tax free before state pension kicks in.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »Spend unwrapped funds first and also "ISA up" like crazy to get it all tax free before state pension kicks in.
I agree that if you are investing into shares/funds, then an ISA makes sense, but I cannot get enthusiastic about cash ISA's... their low returns are not compensated by the potential tax saving. Or am I missing something?THE NUMBER is how much you need to live comfortably: very IMPORTANT as part 1 of Retirement Planning. (Average response to my thread is £26k pa)0 -
I cannot get enthusiastic about cash ISA's... their low returns are not compensated by the potential tax saving. Or am I missing something?
If you're missing something, then you won't learn it from me as we've never done cash ISAs! Cash is for emergency funds and nothing more. We have a couple of years of essential spending in NS&I linkers and a fully offset mortgage as backup.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Hmmm, we may have done some AA ones at 4% pa for a year, but I moved them to the S&S ISAs once the NS&I "rainy day" was in place.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
4% a year on a cash ISA?
What is this magic of which you speak?
Save 12 k in 2018 challenge member #79
Target 2018: 24k Jan 2018- £560 April £26700 -
4% a year on a cash ISA?
What is this magic of which you speak?
It was a *long* time ago so memory rather hazy TBH! We started with some TESSAs that managed to accidentally get in some splendid "carpet bagging", as did £50k I had with the Leeds Perm to cover a tax bill, but the days of demutualisation and decent savings rates are long gone.
Other than that, it's been S&S PEPs/ISAs since the late 80s.
Our NS&I linkers are starting to look perkier and we plan to hang on to those for now.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
..as our "cash" pot draws down we re trying to decide which "pot" to start taking money from. We have some nsi index linked and I think they will be the last to go. Cash first, SIPPS next, SS ISA's followed by Premium bonds then NSI Index linked.....then sell the house!!!...(at least I think thats the plan...).."It's everybody's fault but mine...."0
-
My plan is -
Hammer the SIPPs as much as tax bands allow (personal allowance for my wife, this and 20% band for me).
Sell down unwrapped assets (currently held and acquired with PCLS) as fast as CGT allowances permit.
ISA up to use these limits (which I expect to get greatly reduced if Labour get into power).
By the time state pensions hit, we should have pretty much everything in ISA wrappers, my wife's pension gone, and mine given a serious talking to. We should then be able to still take pensions/etc. income tax efficiently and our ISAs can plug any gaps.
Dunno about NS&I linkers. We have max of last issue each and ditto for each other held in trust, so a fair chunk of change, and TBH it should probably be working harder elsewhere rather than sitting in cash.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
This reply should be pinned and available to read by everyone. It's really common sense but it seems lot's of people in the world today can't grasp the notion of save a little spend a little and borrow a little if you can afford to pay it back. AS Martin say's good debt is okay it's the bad debt that gets people in trouble..Harry_Powell wrote: »MFW = Mortgage Free Wannabe, DFW = Debt Free Wannabe. They're two boards on MSE that attract quite a few people. The strategies there seem to consist of making your life miserable and scraping by in order to meet some financial target. In DFW the target is to get rid of debt and on the MFW the target is to get rid of a mortgage. It's been said many times before that it's the financial equivalent of crash dieting, and usually has the same outcome.
Often you people on the DFW board confessing that they have 'fallen off the wagon' (and have blown a load of cash) just as crash dieters do when they participate on a super strict diet plan that they get bored with and end up gorging themselves.
I can understand scrimping and saving and blitzing your finances for upto 1 year to get debt under control, but some of these guys are at it for 2 to 3 years with their debts and then move onto their mortgage for a further 5 years and then some of them realise that they have no retirement provision so spend a further 5 years or more blitzing that.
All the time they're doing challenges like 'living off £1 per day" or "living off £4k per year" and IMHO are spending the better part of their lives living like paupers. In the example above, it could be that someone spends a total of 12 years 'blitzing' their debts, mortgage and pension and being miserable while they could have simply done what everyone else does and split their money and do all three at the same time, giving themselves a longer period for pension investment and therefore a longer period for the pension to grow. Plus they get to spend a little on themselves while they're young enough to enjoy it.
They seem incapable of seeing that the net effect of spending 2 years exclusively paying down debt, 5 years exclusively paying down a mortgage and then 5 years exclusively paying into a pension is exactly the same as spending 12 years contributing to all three. Except that if anything goes wrong in year 6 in the second scenario, (say job loss or illness) at least they will have some pension savings that can grow while they look for work or get well.
Much better surely, to save a little, overpay a little and spend a little to achieve your financial targets?
I am 53 yrs old now and had this advice given to me & my wife at our wedding by an Auntie, best present ever. Yes we have had car loans, credit cards and mortgages but always we have felt in control because credit was only a certain amount of our take home pay and we have always tried to avoid any bank charges for whatever reason.
I am lucky that I have a final salary pension scheme which will be enough to live off as I have a long service of 30 yrs this year and probably at least another two. The Number that we need is taken care of really and I feel it is just reward for working shifts for 30 odd years. I also pay AVC and have some savings for emergencies but never miss a year without a nice holiday with the family that is paid for before we go.
Sorry for the long reply but after losing my mother before christmas it really hits home what life is all about. Enjoying it with the family is far more important than being in too much debt to the banks.0 -
Like Gadget, I also have a strategy of running down the SIPPs as quickly as possible, keeping just within our current tax bands. This will give extra tax space in later years when we take our deferred SPs.
One important side effect of this strategy is that it affects where one holds one's assets. It makes most sense to hold safe assets (eg bond and Wealth Preservation funds) in the SIPPs, and higher risk/return and income generating assets in S&S ISAs. One doesnt want to go to all the effort of maximising one's drawdown only to discover that the SIPP has actually increased in size over the year thanks to good investment returns. Also there is the problem of being out of the market for around 2 weeks during the transfer - Bestinvest wants the cash to be available for transfer about 2 weeks before the payment date. If one holds safe investments in the SIPP this should not present any great risk.0
Categories
- All Categories
- 343.3K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 248K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards