Life's swerve ball - need to plan differently!

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  • Rodders2409
    Rodders2409 Posts: 160 Forumite
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    Wwhhooaa...this is really good feedback and I'll get my head around this later this morning, and I warn you that there will be questions and some of them stupid...so be warned ;-).....but many thanks to all that have taken the time to feed me this info'....cheers.
  • crv1963
    crv1963 Posts: 1,372 Forumite
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    Rodders2409 wrote: »
    Wwhhooaa...this is really good feedback and I'll get my head around this later this morning, and I warn you that there will be questions and some of them stupid...so be warned ;-).....but many thanks to all that have taken the time to feed me this info'....cheers.



    Hi Rodders2409


    I too have found this Forum really helpful, the people on here are very generous with their knowledge and explain things, there is no such thing as a stupid question, only the stupid don't question!


    Good luck with your plans, using this forum our "dream" of actually retiring before State Pension Age looks like it might be possible with some planning and of course (for us) hard saving.


    CRV
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
  • FatherAbraham
    FatherAbraham Posts: 1,024 Forumite
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    Rodders2409 wrote: »
    I have a property which I rent out and get £7000 p/a net of all costs...and am looking to get this put into my other half's name if it's tax beneficial. This would form quite a big part of our pension plans I guess.

    Better still, get rid of it.
    "After careful planning and research, my wife and I bought our first rental property last year. We bought it as a long-term investment, but our first tenant hasn’t paid rent for four months.

    We have sought advice from our solicitor, who is telling me it will take nine months to get them evicted.    "

    http://www.telegraph.co.uk/property/property-doctors/property-doctors-first-tenant-hasnt-paid-rent-four-months/

    Warmest regards,
    FA
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
  • Terron
    Terron Posts: 846 Forumite
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    Given that it sounds like they have a good tenant (as the majority are) getting rid of it now would seem a bad idea. A single property providing a significant amount of your income is risky. especially if it is mortgaged, though more from voids than bad tenants. But if you have a good tenant you might as well hang on to the property at least until they give notice.
  • Mnd
    Mnd Posts: 1,699 Forumite
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    I just refer you back to post 15 where you say there willl be no restrictions on paying into the prudential pension, just to clarify the only restriction will be the amount of cash. As a non earner she is restricted to the 2880 made up to 3600. You may have got that but just to make it clear.m
    No.79 save £12k in 2020. Total end May £11610
    Annual target £24000
  • FatherAbraham
    FatherAbraham Posts: 1,024 Forumite
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    Terron wrote: »
    Given that it sounds like they have a good tenant (as the majority are) getting rid of it now would seem a bad idea. A single property providing a significant amount of your income is risky. especially if it is mortgaged, though more from voids than bad tenants. But if you have a good tenant you might as well hang on to the property at least until they give notice.

    No, the other way around.

    The real estate is worth more when it looks like a trouble-free rent with a great tenant. That's the time to cash in.

    If one waits until problems manifest, one takes a massive hit as a distressed seller.

    Warmest regards,
    FA
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
  • Rodders2409
    Rodders2409 Posts: 160 Forumite
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    Ok...here we go!

    Michaels....unfortunately my other half won't be able to draw her SP until 66 yrs old.

    Bontonerimus ...can you advise how you got to £678K as a pension pot by 60yrs?

    I am at approx £255K now and aiming to continue with paying in at least £1167 + £205 (company)...plus the 25% tax , so I'm guessing your figure is derived from this growing year on year to a value such as £678K?...I had thought it would be around £480K - £520K.

    Xylophone...yes it's DC and no Safeguards

    Kidmugsy...

    The Prudential have said that they won't allow any new payments in, but we can move to a different product that could possibly allow it. From what you've mentioned we could transfer to any SIPP (learning the lingo!) and start the process of adding the £2880 to maximise the tax benefit.

    We wouldn't need to draw down until I stopped working at 60...unless I miss something as I didn't quite understand this part...

    "The point of her drawing this income would be to make it easier for you to contribute more to your pension e.g. to get your income down to the higher rate tax threshold (£45k, but £43k in Scotland). You should take maximum advantage of the 40% tax relief while it's still available".

    I've decided that the kids are tall enough so feeding them anymore is probably not required :-)
  • Rodders2409
    Rodders2409 Posts: 160 Forumite
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    Sorry, I missed responses regarding the rental property!

    I't been a big bonus for us and was an accident, as it was meant to have been sold when we purchased the family home in 1994, but the buyer back then pulled out and the lovely Bank Manager (remember those!?) let us keep the property alongside the family home provided I tried to sell it asap and could cover both mortgages...which we didn't ...and we did :-)

    So we've had a total of 4 tennants with the current one being there for 9 years and the mortgage was paid off last year.

    I can't see how cashing in would be better than getting the rental and allowing a good level of diversification on our potential incomes. Especially as I'm pretty handy and able to keep the costs down etc...

    I'm sorry you've had a bad experience though Father Abra...that sounds awful.
  • Rodders2409
    Rodders2409 Posts: 160 Forumite
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    Now the cogs are starting to wwerrr in my noggin, am I correct in this summary...

    Our current pensions are generally OK and 'locked' away in large managed funds with the likes of Aegon / FrIends Prov' & Prudential, where I'm looking to maximise payments from myself and restart some payments into my other half's to gain a tax benefit.

    The pension companies should be adding growth to the increasing pension pots over the next 10 years 'till I'm 60 by about 4-5% p/a.

    At 60 yrs the pension companies hopefully will have grown our pot so it reaches somewhere between £450K - £500K ...at that point we would start to draw down from the pots at approx 4-5% and add our rental income, with the SP's kicking in approx 6 years later.

    In general we should / could leave the pensions in these companies to continue the investments to cover the 4-5% draw down throughout the retirement period...OR...should we be thinking to move some out and get it spread across other investment platforms to maximise returns?

    I've started to realise that there's many options if you can be bothered to manage your own future more closely...with risks though I guess.
  • BLB53
    BLB53 Posts: 1,583 Forumite
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    Our current pensions are generally OK and 'locked' away in large managed funds with the likes of Aegon / FrIends Prov' & Prudential
    I suppose you need to know the actual charges being taken by the current providers...is this something you have looked into? It may be possible to transfer to a SIPP and save ~1.0% or so in charges which translates to £4,500 p.a in your pocket rather than the current provider - over 20 yrs this is £90K.
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