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  • FIRST POST
    • Oliver1191
    • By Oliver1191 8th Apr 18, 5:30 PM
    • 47Posts
    • 13Thanks
    Oliver1191
    If you could go back in time, what would you do differently?
    • #1
    • 8th Apr 18, 5:30 PM
    If you could go back in time, what would you do differently? 8th Apr 18 at 5:30 PM
    Hi to anyone in their 50s contemplating retirement, or to anyone who has now retired.

    If you could go back in time to your 30s, what would you do differently (from a financial perspective)?

    What were your successes? What were your mistakes?

    How did you make yourself financially secure? What concerns do you now have?

    What do you wish you could have to enjoy retirement more?

    Thank you for sharing!
Page 2
    • ermine
    • By ermine 9th Apr 18, 11:08 AM
    • 658 Posts
    • 981 Thanks
    ermine
    No concern over your "investments" then?
    Originally posted by Thrugelmir
    I was in my early 50s when I discharged the mortgage because I was frightened of losing my job, I took VR three years later. The rational thing to do would have been to pump up a SIPP with HL with the money I paid off the mortgage with, leave it in cash, eat the inflation hit to the SIPP and pay down the residual of the mortgage with a combination of the PCLS and running out the rest fo the pension at 20% tax, saving 40% going in.

    Not every SIPP needs investing, if your time horizon is short enough, and I have a DB pension waiting to draw at 60. Paying that mortgage off early was dumb, but frightened people make stupid decisions at times. I am poorer now that I would otherwise have been, until I get to 60, because of the extra tax. But the greatest gift I gave myself is that of time. It came out OK in the end
    • ermine
    • By ermine 9th Apr 18, 11:24 AM
    • 658 Posts
    • 981 Thanks
    ermine
    Thank you Ermine.

    Do you mean that you can pay-off your mortgage with the pension 25% tax free lump sum?

    From your perspective, would you consider the LISA as useful as a pension (you have to be 60 to cash it in)?
    Originally posted by Oliver1191
    I was paying 40% tax at the time, plus I could save into AVCs using salary sacrifice so coudl save at 32% once into the BRT bad.

    The PCLS is a definite win for paying the mortgage off effectively pre-tax, but even BRT taxpayers with sal sac get a decent leg-up by not paying 32% (tax+NI) even if the resultant pension is taxed @ 20%. As you get closer to the age you can draw a DC pension you can risk carrying cash in a SIPP with the express purpose to discharge the rest of the mortgage, one should not be in a hurry to pay a mortgage off between ~ 45 to 55 if you can use a SIPP instead. The important thing is to have a plan to pay down the capital, and sufficient mortgage flexibility as to when to do that. Nobody will give you a mortgage when you don't have a job, and the hazard of that increases past 45.

    I am too old to know much about a LISA, the issue I can see with them are that £4k p.a is too little to shift the needle on the dial as far as getting a deposit on your first house in your early thirties unless you can start saving the 4k p.a. in your early twenties, which is usually an extremely tough time financially, and for a pension it is not ideal because you don't get the benefit of not paying tax on the way in. Most people's pension income is lower than their earned income. Which is not so bad because as a pensioner you may not be carrying a mortgage or saving for a pension, and you are not carrying the costs of establishing a household and bringing up children.
    • crv1963
    • By crv1963 9th Apr 18, 12:35 PM
    • 265 Posts
    • 619 Thanks
    crv1963
    Hi to anyone in their 50s contemplating retirement, or to anyone who has now retired.

    If you could go back in time to your 30s, what would you do differently (from a financial perspective)?

    What were your successes? What were your mistakes?

    How did you make yourself financially secure? What concerns do you now have?

    What do you wish you could have to enjoy retirement more?

    Thank you for sharing!
    Originally posted by Oliver1191


    Successes- House mortgage free (feels good looking at the house and knowing no one can take it away), learnt that car finance is a poor deal- never borrow with interest for anything that looses money. Cash for cars, do borrow now pay later but clear the finance before the debt is due to start being paid, in my experience usually about 4-6 weeks before first payment due.


    Mistakes- many but mainly getting a mortgage again, not making sure both myself and my then wife had more or less equal pension savings (lost 40% of my pot on divorce). Not knowing enough about pensions/ investments/ saving.


    Financially secure- We're not still pension planning and saving in our early 50s! But we have a plan to make it or rather enough for our number. Like many we plan to use some of the TFLS to finish the mortgage off. Maximise any salary sacrifice if you can.


    Concerns- we may not be able to save quite enough so need to work longer, had we planned better from the start my wife (my second one that is) and I could maybe have retired this year. Experience and lots of deaths of friends/ colleagues/ relations show that retirement isn't a given not everyone makes that particular finishing line.


    What to have to enjoy retirement more? A philosophical question- time/ money/ hobbies/ travel who knows it'll be different for each person!


    My advise to my 30 something self would be live a bit, save a bit, invest a bit. Time isn't a given so travel when you can, health isn't a given to make the most of everything, and my new favourite saying is FISH- F*** it S*** Happens, so just suck it and move on, any experience good or bad has a lesson just don't overthink anything, worry only about things you can change every thing else just ruins your day!


    Plan for the gap between when you want to retire and when your state pension starts, every little saved somewhere helps but don't live like a monk or a pauper!


    Just my thoughts if they are no good to you just ignore them- good luck and great for thinking about it now.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • Oliver1191
    • By Oliver1191 9th Apr 18, 2:35 PM
    • 47 Posts
    • 13 Thanks
    Oliver1191
    It seems to me as though the general advice is: for the most part, focus on building a large pension between 35 - 45. Avoid mortgage overpayments while interest rates are low until 45 / 50.

    From 45, focus on building ISA more and use this to help retire early / make lump sums to clear mortgage in your 50s.
    • ermine
    • By ermine 9th Apr 18, 3:25 PM
    • 658 Posts
    • 981 Thanks
    ermine
    It seems to me as though the general advice is: for the most part, focus on building a large pension between 35 - 45. Avoid mortgage overpayments while interest rates are low until 45 / 50.

    From 45, focus on building ISA more and use this to help retire early / make lump sums to clear mortgage in your 50s.
    Originally posted by Oliver1191
    That's not a bad summary. But you are getting serious sample bias, because you are getting these reports from people who have had the privilege of good fortune, in being able to have these choices in life, and these people had that good fortune across the last 30 years. We can be sure that the next 30 years will be different, though we can't be sure how.

    The high-level view is keep optionality. Optionality resides in having savings, both ISA and pensions, and nowadays indirectly in having a mortgage at a time of low interest rates. In general terms, try to have as few of your financial decisions forced upon you. But recall too that as Christopher Rice said “Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we’ve got 24 hours each.”

    If that leads you to YOLO and spend more than you earn on wasting assets when you are young, then perhaps you are on the wrong track. But if that leads to hoard your resources when you are old then you still can't take it with you...
    • Spreadsheetman
    • By Spreadsheetman 9th Apr 18, 4:03 PM
    • 60 Posts
    • 46 Thanks
    Spreadsheetman
    Generally I'd save more and start saving earlier - especially in Index funds both inside and outside pension wrappers. I've never developed expensive tastes so I could have done a lot more than I did and much earlier giving a lot more time to compound.

    My best move was to make a very expensive and risky career change at 40 to run my own company. This paid off massively and has set me up to ER soon, but it took 15 years to do it with lots of very shaky periods along the way. I'd hesitate to recommend that to anyone else though due to the amount of sheer hard work and the large number of lucky breaks needed along the way.

    Once I pull the plug and ER the worry will be "have I got enough?". Whatever the theoretical safety margin the future is unknowable - I might have enough investments, I might not and it will be too late to do much about it when I find out. That applies to everyone without a substantial DB pension though so I'm not alone.
    • badmemory
    • By badmemory 9th Apr 18, 4:18 PM
    • 1,544 Posts
    • 1,984 Thanks
    badmemory
    Basically I'd kick my solicitor's backside twice round the town for failing to mention that I could have got a lot of my almost-ex's company pension. So worst decision in my whole life (after marrying him naturally) was my choice of solicitor for our divorce.
    • ProDave
    • By ProDave 9th Apr 18, 4:53 PM
    • 790 Posts
    • 856 Thanks
    ProDave
    Another thing we did "right" was not having children until were 40. Not entirely by choice but that's just the way it happened.

    I can honestly say having children when you are established financially, and have "done" a lot of things on your bucket list already is a whole lot better than trying to afford children in your first house that is probably too small, but with the cost of raising children etc you can't afford anything bigger.....
    • WillowCat
    • By WillowCat 9th Apr 18, 7:34 PM
    • 788 Posts
    • 955 Thanks
    WillowCat
    I would have salary sac'd a whole load of higher rate taxable earnings into a pension, and then, most importantly, kept that a secret from my husband. Divorce is extremely expensive.

    If I could go back to my twenties I'd tell myself not to marry a man who wasn't prepared to pull his weight in the job market.
    • aphill24
    • By aphill24 9th Apr 18, 7:45 PM
    • 90 Posts
    • 35 Thanks
    aphill24
    Hi to anyone in their 50s contemplating retirement, or to anyone who has now retired.

    If you could go back in time to your 30s, what would you do differently (from a financial perspective)?

    What were your successes? What were your mistakes?

    How did you make yourself financially secure? What concerns do you now have?

    What do you wish you could have to enjoy retirement more?

    Thank you for sharing!
    Originally posted by Oliver1191
    I am in my fifties (53) and will try to answer your question as best I can.
    If I could go back to my 30's where I was in secure employment (still here but very insecure at the moment) i would have paid into avc's to boost my DB pension. This would have been taken out of my pay and I would have not paid the top rate of tax on the overtime worked.
    I was told there was n need to pay into avc's as I would have the maximum pension when I retire.(Very bad advice)

    The best decision I made was to pay my mortgage over 19 years when we moved house and not remortgage for another 25 years. We had lived in our first house for 6 years and I wanted to be mortgage free when I hit 50. The payments were obviously higher but for a shorter term.

    Credit cards are the worst invention ever In my opinion, they have their advantages but I think they are outweighed by the ease of how people get into debt. I have the opinion that one credit card should be the maximum you should be allowed.

    Save more for that rainy day, this is so important.

    We have had a holiday every year, always paid for before we go as we set up a standing order for an amount we need to go away for some sun. It's not a dress rehearsal and it's important to have some fun and not worry about finance too much.

    Hope that helps on any little way and I truly believe the old fashioned ways of our previous generations who never took on credit are something to be admired, you really don't need that latest gadget unless you can pay for it in cash.

    New Car's are also an expensive hobby especially on pcp finance as you become a slave to the motor industry. Just my opinion
    • Snakey
    • By Snakey 9th Apr 18, 8:48 PM
    • 1,058 Posts
    • 1,275 Thanks
    Snakey
    I'm 46 and not retired yet, but I am so, so glad that I did spend my thirties and early forties socking away as much as I could into my pension fund. As I get older and look around me it gets driven home that the blithe twenty-something assumption that - if you needed to - you could "just" keep working full time until 60 or 70 is not a safe one. People not much older than me develop long-term health issues. If there were a recession in the next few years (and we are about due for one), a whole load of people my age will lose their jobs and could well never work again - or at least, not at anything like the level of earnings they currently enjoy. Either of those things could happen to me. When you're younger you might know this logically, but in your heart you believe that the bad things will only happen to other people - you'll be magically untouched. When you're older, you feel it differently. And it's a real weight off my mind to know that at least I would have (albeit only just, were it to happen tomorrow) enough in my pension and other savings to not be reliant on whatever the State considers I need and stuck with whatever hoops they might make me jump through to get it. So that was well worth making the sacrifices for.

    What I would do differently is get on the London property ladder as soon as I could, rather than thinking that it didn't matter because I was saving and paying in to my pension instead and so it was all swings and roundabouts because I could always buy a place outright with my lump sum when I retired. It sounds daft but I just didn't appreciate the extent to which property prices were going up compared to investments. I'd be in a much better position now if I had bought ten years earlier than I did. It would probably have allowed me to bring forward my retirement plans by 3-4 years.

    Of course both these things are on the basis that I am allowed to go back in time - that is to say, that the stock market and the property market would pan out broadly the same even if I personally made different choices. No butterflies flapping their wings in Brazilian rainforests are allowed to change everything! In reality, the decisions you make today are going to be tested over the next twenty years, not the last twenty. History only becomes obvious with hindsight - it's deliberately written with a narrative to make it sound like it was all inevitable and that an intelligent person could have seen it all coming. But really, if it were possible to predict the future, we'd all be rich and nobody would have any regrets.
    • Thrugelmir
    • By Thrugelmir 9th Apr 18, 9:12 PM
    • 58,196 Posts
    • 51,568 Thanks
    Thrugelmir
    It seems to me as though the general advice is: for the most part, focus on building a large pension between 35 - 45. Avoid mortgage overpayments while interest rates are low until 45 / 50.

    From 45, focus on building ISA more and use this to help retire early / make lump sums to clear mortgage in your 50s.
    Originally posted by Oliver1191
    If you've a secure job / career path. Then it's possible to plan long term. Many people are unable to. As lack of job security / employment can blow the plans out of the water. I lost my job for life at the end of October 1999. Life is full of uncertainties.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Terron
    • By Terron 9th Apr 18, 10:48 PM
    • 199 Posts
    • 183 Thanks
    Terron
    I lost £25k on my first home which I bought in 1989, but I needed to move for my best ever job so I don't regret it, except that it put mu off investing in propertyfor too long.

    I put some money in the AVCs for the DB pension for that job, but that was a mistake - they were until recently held as cash.

    I mostly paid down my mortgage. That allowed me to ignore all those warninging about the endowments. and stopped me worrying about going into negative equity again. So I don't regret that.
    • RuleTheWorld
    • By RuleTheWorld 9th Apr 18, 10:58 PM
    • 137 Posts
    • 32 Thanks
    RuleTheWorld
    I am only 33 and would say it is a regret I never thought of AVC's before age 31.

    Was as simple as new employer asking what are you going to put in as opposed to previous employer who'd never put it like that
    • Fermion
    • By Fermion 9th Apr 18, 11:09 PM
    • 83 Posts
    • 32 Thanks
    Fermion
    What were your successes? What were your mistakes?

    How did you make yourself financially secure? What concerns do you now have?
    Biggest mistakes, investing in both Friendly Society/Insurance with profits savings plans for the whole family, the returns were very poor. Also failing to cash-in very sizable Employee and Executive Share Options around the millennium for fear of a sizable Capital Gains Tax bill. This was just before the Tech Crash. My options were worthless 2 years later. The phrase "a bird in the hand...." springs to mind.

    Best decisions, investing very heavily in my SIPP and S&S ISA with HL for the last 10 years before retirement. Also NOT buying a property abroad.
    • chiefie
    • By chiefie 10th Apr 18, 7:56 AM
    • 322 Posts
    • 331 Thanks
    chiefie
    Mistakes - was gazumped on first house bought and by the time I bought I paid 60% more just 18 months later. I wish I had bopped the seller on the nose (metaphorically of course) we were one week away from exchanging and she wanted 20% more and we couldn!!!8217;t get an increase in the mortgage offer. I wish I had found some way to borrow it back then.

    Successes - not taking the Britannia building society mortgage as they would only do endowments. I ended up going to Barclays as they would do me a repayment - even back in the 80s I didn!!!8217;t see the point of taking the risk just so someone else could ge5 a commission.

    Paying off the mortgage - I know I know but for someone who had never known low interest rates it was a psychological no brained.

    Working for employers that had dB pensions. When I moved jobs I took the whole package into consideration not just the top line. But I couldn!!!8217;t have predicted how absolutely vital a move this was back then.

    Having an amicable divorce settlement with my first wife. We celebrated the decree with a Chinese and a division of assets without solicitors. Praise the lord for that and thank you to her.

    Having lots of kids - costing a fortune but you get back far far more than monetary returns.
    • Nullboris
    • By Nullboris 10th Apr 18, 10:58 AM
    • 18 Posts
    • 9 Thanks
    Nullboris
    Regrets : being about 40 , and NOT taking a job that was offering 10% pension contributions, (60 now)
    Not taking said job as standard 9-5 employment, rather than staying as freelance.
    Endowment mortgage (even with compensation, I'm sure I would have been in a much better position with a repayment mortgage)
    Not paying as much or as early into pensions (no1 , no brainer)
    Good decision buying a flat
    having some nice holidays
    opening many building society accounts when they were giving away hundreds of pounds (good ole days)
    • scottiescott
    • By scottiescott 10th Apr 18, 7:27 PM
    • 43 Posts
    • 13 Thanks
    scottiescott
    Successes - paying off mortgage at 53, paying AVC's for 28 years and thus retiring at 56 on a final salary pension.


    Mistake - not retiring at 55
    • lildoonbuggy
    • By lildoonbuggy 10th Apr 18, 8:25 PM
    • 52 Posts
    • 139 Thanks
    lildoonbuggy
    Just wanted to jump on and say thank you to all who have shared and also the Q. Super helpful and insightful reflections, and makes for a really nice, positive thread for a change!
    • bluenose1
    • By bluenose1 10th Apr 18, 10:06 PM
    • 1,948 Posts
    • 3,162 Thanks
    bluenose1
    Je ne regrette rein. Well I do actually but on the whole pretty happy with what we have done, admittedly more by luck than planning.
    Wish I had realised years ago the tax and NI savings to be had by increasing pension conts.
    52 in a couple of months and in the last year have massively increased pension contributions. Hoping that this will give me the option to consider retiring at 55+. I have a couple of other DB pensions that will start when 60.
    Rather than 'mindless' spending I am trying 'mindful' spending. Really considering should I save rather than buy materialistic things I don't really need eg how often does my phone really need upgrading. Have cut my expenditure by at least half.
    If I have any regrets was that we should have moved to a nicer area years ago and I should have spent less on holidays/stuff and started paying a lot more into pension years ago.
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