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  • FIRST POST
    • Gatser
    • By Gatser 14th Dec 09, 1:44 PM
    • 593Posts
    • 221Thanks
    Gatser
    Pensions Planning: The NUMBER
    • #1
    • 14th Dec 09, 1:44 PM
    Pensions Planning: The NUMBER 14th Dec 09 at 1:44 PM
    The NUMBER is how much income you need to "live comfortably"
    So What's your number?
    Very important for pensions planning, to know what you are aiming for.

    My Number? (for a couple)
    I calculated: £22,000
    based on
    Food £5,000
    Car/transport £5,000
    Bills/Utilities £4,500
    Holidays/Leisure £4,500
    Clothing/Cash/Xmas/Other £2,000
    Repairs/replacements £1,000
Page 71
    • crv1963
    • By crv1963 25th Jul 19, 8:12 AM
    • 1,004 Posts
    • 2,275 Thanks
    crv1963
    @crv1963, are you going for 11.5k p.a. for Mrs crv1963 because that's what you need or just because you don't want to pay tax ?


    Because you could get ~16k out per year and not pay tax by using your 25% tax free and the Personal Allowance.
    Originally posted by NoMore
    Undecided at the moment, the 11.5 we think will be the need, but we could take the 16k, we'd place excess of need into ISA or premium bonds, it will be a case of deciding when we get to drawdown, taken faster will deplete the pot earlier, we will have to wait and see I think.

    Premium bonds are a choice because no tax on winnings so no juggling about with fears of any tax on savings, tied up loosely as in accessible but have to clearly go through a process to get the cash back in a few days-so can't take out with the hole in the wall so can't spend on a whim, and an opportunity however unlikely to win something big!

    Juggling lots of different balls at the moment, pension savings, future proofing our home- spending some savings for this and an unexpected sum from Mum as well as working extra hours to fund future needs, I will be glad when the plans come together and we are actually retired.

    Son aged 22 at interview asked the panel about pension contribution from employer, was told he was the first young person ever to ask that of a panel at the company and why he'd asked it. His response to the panel was "When I reach your age I intend to have the option of retiring". Oldest interviewer was 44!
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • cfw1994
    • By cfw1994 25th Jul 19, 8:35 AM
    • 485 Posts
    • 435 Thanks
    cfw1994
    Son aged 22 at interview asked the panel about pension contribution from employer, was told he was the first young person ever to ask that of a panel at the company and why he'd asked it. His response to the panel was "When I reach your age I intend to have the option of retiring". Oldest interviewer was 44!
    Originally posted by crv1963
    Good lad!

    Did he get the job? Or were they overly offended at not thinking the same at his age.....
    • crv1963
    • By crv1963 25th Jul 19, 8:44 AM
    • 1,004 Posts
    • 2,275 Thanks
    crv1963
    Good lad!

    Did he get the job? Or were they overly offended at not thinking the same at his age.....
    Originally posted by cfw1994
    He hasn't heard back yet. The company he currently works for are in his department at least very focused on pensions and early retirement, his current boss is 36 with a plan to go at 45, so he gets lots of encouragement to both live a life and plan a future without work.

    I don't interfere with what my sons do for work but do encourage future planning- something I never really did at their ages, but have passed on the benefit of experience with money mistakes and planning!

    Every generation has different issues, his is the problem with home ownership (by 25 everyone I knew was a home owner- then came the massive increase in interest rates and lots of people re-possessed), rising pension age (for SP) and Brexit. The constant I have learned is plan for your own future and take promises from the Govt with a pinch of salt, just use the chances available at the time.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • MallyGirl
    • By MallyGirl 25th Jul 19, 9:38 AM
    • 4,036 Posts
    • 9,471 Thanks
    MallyGirl
    I understand your position as my OH enjoys her work (and the social interaction that brings) and our total is enough to stop now.
    As others have suggested on different threads couldn’t you borrow on your mortgage to cover until drawdown is available and repay with 25% tax free funds to effectively rebalance your pots? I know you say you’re happy with your approach but I wondered if you could reduce your hours/move earlier if you wanted?

    When you state that your total is enough do you calculate on the basis of a particular SWR and personal tax allowance? With Boris in power it reminded me that my forecasts should provide not only for variable investment returns but also changing tax scenarios. I’m optimistic that we can vary our expenditure to cope with fluctuations.
    Originally posted by DT2001
    I use SWR. I am borrowing on the mortgage to stuff the pensions full whilst still working.
    Retiring at 55 with SWR of 3.5% we should have combined gross income of £50k.
    Retiring at 58 this becomes £62k, whilst at 60 it rises to £71k
    Both will get full SP at 67 as well.
    Some would say 3.5% is too optimistic but the house is worth £1m and will be mortgage free on retirement (the earlier we go, the more likely we will need to use a bit of PCLS to achieve this). This is not factored in anywhere so we can always downsize at some point.
    OH would argue that £50k is not enough for the early big trips we want to do so I suspect somewhere between 55 and 58 I will have had enough. Our salaries are similar with mine about 20% lower than his - reduced hours would just mean reduced pension contributions in the last years. Some big conversations to be had once we see what having a uni student DD feels like.
    • DT2001
    • By DT2001 25th Jul 19, 2:05 PM
    • 145 Posts
    • 138 Thanks
    DT2001
    A SWR is based on 30 year retirement? If I’ve understood correctly your income at 67 will get an index linked boost of £17k+ so the SWR will drop. I looked at desired income at 72 (as OH 5 years younger), took off SP x 2, small DB pensions and then calculated pot needed for SWR at 3%. The residual amount I divided to cover the interim period and found I had more than required. I didn’t factor in any growth on the untouched pot which now has another 13 years to grow. I just needed to come to terms with depleting capital at the start of retirement. Maybe this strategy might work for you at 55 or someone could tweak it. I liked the simplicity of splitting my total pots into a leave and grow pot and a ‘cash’ pot to ensure I met my income requirement when I hoped we’d be more active.
    • smutput
    • By smutput 25th Jul 19, 8:04 PM
    • 8 Posts
    • 35 Thanks
    smutput
    A SWR is based on 30 year retirement? If I’ve understood correctly your income at 67 will get an index linked boost of £17k+ so the SWR will drop. I looked at desired income at 72 (as OH 5 years younger), took off SP x 2, small DB pensions and then calculated pot needed for SWR at 3%. The residual amount I divided to cover the interim period and found I had more than required. I didn’t factor in any growth on the untouched pot which now has another 13 years to grow. I just needed to come to terms with depleting capital at the start of retirement. Maybe this strategy might work for you at 55 or someone could tweak it. I liked the simplicity of splitting my total pots into a leave and grow pot and a ‘cash’ pot to ensure I met my income requirement when I hoped we’d be more active.
    Originally posted by DT2001
    I worked out how much we want between 55 and various DB's and 2 x SP kicking in and took that off my DC/husband's SIPP. Whatever was left at aged 67(I assumed keeping up with inflation), if taken at a SWR and added to all the other stuff, roughly equals what we spend now. Job done.

    Same as you but coming from the other direction
    • michaels
    • By michaels 20th Oct 19, 9:03 PM
    • 22,914 Posts
    • 104,757 Thanks
    michaels
    Trying to use cfiresim guyton-klinger but it doesn't seem to be working?

    Any alternatives?
    Cool heads and compromise
    • gadgetmind
    • By gadgetmind 21st Oct 19, 11:18 AM
    • 10,956 Posts
    • 8,964 Thanks
    gadgetmind
    A year into taking a 6% drawdown from my SIPP (don't worry, I'll back off come state pension!), I've got more pounds in there than I started with, but pounds ain't what they used to be!
    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.
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