How much do you need to retire?

[TOPGUN749]

13 hours ago, oowee said:

This is the answer.

I cannot understand these figures. £20k over 2.5 years is only £8000 a year. l am in for fixed costs of £600 a month(£7200 annual) and then I need to eat something. 

Yes was £8,000 a year, now about £9000 with the increases since, Council tax is the biggest expense £1350 a year, then utilities £1,050, Car and motorcycle costs £1,500 for 3,000 miles. Insurance,tv licence, shopping,clothing etc.holidays.

Usually have about £350 a month unspent from the £1100 pensions.

[JohnfromUK]

59 minutes ago, marsh man said:

I am very , very glad I didn't follow his advise .

A lot depends on the individual adviser (and where he is representing a company, the company).

Perhaps I was lucky but I decided when in my 20's (with some gentle arm twisting from my father it has to be said) to 'do something' about a pension.  At the time I was in a noin contributory contracted out company scheme, but the general advice then was to 'have your own' as what was known as a 'Free Standing' Additional Voluntary Contribution scheme (FSAVC).

I sat down with an advisor who asked some questions to which 'we agreed' answers;

• At what age did I want to (be able to) retire?  We decided on aged 60.
• How much money (annual income) would I like to be able to retire on?  This was 'set' as a percentage of expected final salary based on me having a 'typical' career path, inflation, and other standard factors.  We decided on I think about 2/3 to 3/4 of final expected salary.

The advisor then came up with a monthly contribution needed based on what we had agreed I wanted.  This was followed up by annual reviews to 'assess progress against the plan' and of course increase contribution, take advantage of any changes in legislation, or changes in my objectives.

Wind forward to aged 60 (i.e. about 32 or 33 years on) - and I took voluntary retirement.  There was sufficient money in the 'pot' to meet the original plan made, so I cannot complain that it didn't work.

Could it have been done cheaper?  Undoubtedly.  I could have had better growth with different funds, perhaps a lower set of charges, or even none if I had self managed it.

Would I have been disciplined enough to do it without having a company managing it?  Probably not in truth.

Could it all have gone horribly wrong?  Definitely.  I was lucky that the provider chosen has overall been fairly good (their funds have had both good and less good years) and they have been regular in reviews and monitoring.  They have also been probably relatively expensive compared to some others, BUT the objective was met, so I cannot really complain.

As it turns out, I have a relative who had a (very successful) career in the financial world and he always 'looked over' suggestions made to me and has always taken the view that my way was expensive, but did what it said on the tin.

 

[oowee]

2 hours ago, Mice! said:

I'll bet you wouldn't put money on it, the way Labour are going they seem happy to take money from wherever they can, and raiding pensions again seems like an easy target.

What part of pensions do you think will be raided?

[Old farrier]

20 minutes ago, oowee said:

What part of pensions do you think will be raided?

There already raiding them by making them part(all) of your tax allowance 

As soon as you’re state pension kicks in any other income from savings other pensions is taxed at the full rate 

unless they alter the tax threshold this will continue 

[marsh man]

2 hours ago, old man said:

Sadly my son did. Wipeout!

Thankfully I wasn't relying on my private pension when I was thinking of taking early retirement which was a good job I wasn't , this is going back a while now but when I used to get a yearly statement from Scottish Widows, it was for around three years lower than it was the year before and I remember saying to my wife , at this rate I am going to owe them money let alone they giving me any , then it stabilised and thankfully it started to go up a little , only a little but in the right direction , looking back it was a total waste of time 

[Dave-G]

Dunno if this will help anyone but I got a nice surprise today. 

Last August we applied for council tax support, just hoping really as I didn't think we'd qualify on our joint pensions of nearly 19K. Due to our low income we got a £1201.19 support assessment - full amount band B is £1783.06. It was backdated to June so as I'd already paid this years they'll send over £500 to my bank account.

I should have tried for it a few years ago.

Edited October 25 by Dave-G

[oowee]

20 minutes ago, Dave-G said:

Dunno if this will help anyone but I got a nice surprise today. 

Last August we applied for council tax support, just hoping really as I didn't think we'd qualify on our joint pensions of nearly 19K. Due to our low income we got a £1201.19 support assessment - full amount band B is £1783.06. It was backdated to June so as I'd already paid this years they'll send over £500 to my bank account.

I should have tried for it a few years ago.

Well done Dave that's good to hear. What a lovely surprise. 

[Mungler]

My pension and investments are property centred because of what I know and the job I do. I know I now need to diversify as I head towards retirement but the entire pensions industry is IMHO unnecessarily complicated smoke and mirrors packed with middle men all shaving bits off your money. 

My business partner and I started a SIP about 10 years ago when we bought a small unit on a busy industrial estate in Chadwell Heath (which like everywhere else inside the M25 has become an over populated dump). Indeed, with net immigration running at 1,000,000+ year on year with no sign of abating, and applying the golden rule of ‘everyone needs somewhere to go to work and somewhere to live’ property has done well for us.

That first unit had a footprint of a large single story quadruple garage and cost us £40,000 (and the £20k each we put into the SIP to kick off gave us tax relief against our earnings at that time). We spent £20,000 refurbing the unit and it then rented for £10k pa on an FRI lease. The rent on the unit is now £12k pa and the unit worth somewhere North of £150k. The tenant went a bit behind in covid but has caught up. We do our own management and so the SIP fees are negligible.

Rich Dad Poor Dad opened my eyes to tax efficiency and passive income - once you work out there’s only so much you can do with your own hands in any one day, you have to search for what can make you money in the background.

 

[Wymondley]

18 hours ago, Lloyd90 said:

Fear of the unknown, don’t want to be cheeky but do you mind disclosing what you consider a “modest” pension that you are able to live off? 
 

Everyone’s definition of a modest and bare necessities differ. 

Yes' I get that, not cheeky at all, I get around £16,000 a year pension, I have some savings and an as yet untouched pension that's probably worth another couple of thousand if needed.

I was earning significantly more before I retired.

No debts, mortgage free and on my own, I run two Land Rovers and shoot shotgun/FAC a couple of times a month, I enjoy a beer and a meal out but no longer smoke. I have survived the last 15 months quite comfortably on that, plus I get the state pension on top in six years.

However I don't, and never have had...

Holidays abroad, I enjoy the occasional weekend away here.

New or even not that old, cars, always an older Land rover or two and an old banger to run about in. Plus, working in the motor trade I've never paid a garage bill.

Have a new Kitchen/bathroom/house redecorate every few years, although that's on the cards for next year (as a one off).

Spent money on expensive clothes, it's charity shops and ebay for me.

I'm a very practical person and I'll have a go at anything, so I've never paid for tradesmen to do jobs, although I've occasionally swapped car work for building work.

I don't own a TV, I just like being outdoors or pottering in my workshop (when I'm not on here).

Simple life.

If I had to survive on less I'd still do it, work was literally killing me.

Edited October 25 by Wymondley

[Lloyd90]

59 minutes ago, Wymondley said:

Yes' I get that, not cheeky at all, I get around £16,000 a year pension, I have some savings and an as yet untouched pension that's probably worth another couple of thousand if needed.

I was earning significantly more before I retired.

No debts, mortgage free and on my own, I run two Land Rovers and shoot shotgun/FAC a couple of times a month, I enjoy a beer and a meal out but no longer smoke. I have survived the last 15 months quite comfortably on that, plus I get the state pension on top in six years.

However I don't, and never have had...

Holidays abroad, I enjoy the occasional weekend away here.

New or even not that old, cars, always an older Land rover or two and an old banger to run about in. Plus, working in the motor trade I've never paid a garage bill.

Have a new Kitchen/bathroom/house redecorate every few years, although that's on the cards for next year (as a one off).

Spent money on expensive clothes, it's charity shops and ebay for me.

I'm a very practical person and I'll have a go at anything, so I've never paid for tradesmen to do jobs, although I've occasionally swapped car work for building work.

I don't own a TV, I just like being outdoors or pottering in my workshop (when I'm not on here).

Simple life.

If I had to survive on less I'd still do it, work was literally killing me.

Thank you, much clearer picture  once you hit the state pension you also stop paying NI contributions I believe  

[Wymondley]

15 minutes ago, Lloyd90 said:

once you hit the state pension you also stop paying NI contributions I believe

Yes, indeed.

[oowee]

38 minutes ago, Lloyd90 said:

Thank you, much clearer picture  once you hit the state pension you also stop paying NI contributions I believe  

Once you stop working.

[JohnfromUK]

7 minutes ago, oowee said:

Once you stop working.

Not so.  For Class 1 it is once you reach retirement age.

For Class 4, it is at the end of the tax year in which you reach normal retirement age

https://www.nidirect.gov.uk/articles/national-insurance-after-state-pension-age

You can work on - but no NI due.

[oowee]

35 minutes ago, JohnfromUK said:

Not so.  For Class 1 it is once you reach retirement age.

For Class 4, it is at the end of the tax year in which you reach normal retirement age

https://www.nidirect.gov.uk/articles/national-insurance-after-state-pension-age

You can work on - but no NI due.

I see we confused each other. If you are not working there is no NI to pay.

'If you work - either as an employee or self-employed - and your earnings are over a certain level you pay National Insurance contributions.'

Edited October 25 by oowee

[JohnfromUK]

14 minutes ago, oowee said:

I see we confused each other. If you are not working there is no NI to pay.

'If you work - either as an employee or self-employed - and your earnings are over a certain level you pay National Insurance contributions.'

That is in the "Up to State Pension Age" paragraph.

"After State Pension Age" reads.

You do not pay National Insurance after you reach State Pension age - unless you’re self-employed and pay Class 4 contributions. You stop paying Class 4 contributions at the end of the tax year in which you reach State Pension age.

[oowee]

7 minutes ago, JohnfromUK said:

That is in the "Up to State Pension Age" paragraph.

"After State Pension Age" reads.

You do not pay National Insurance after you reach State Pension age - unless you’re self-employed and pay Class 4 contributions. You stop paying Class 4 contributions at the end of the tax year in which you reach State Pension age.

Lloyd said when you reach retirement age you stop paying. As you said.

The point I was making was that if you retire and don't work then you don't pay regardless of age. 

[JohnfromUK]

6 minutes ago, oowee said:

Lloyd said when you reach retirement age you stop paying. As you said.

The point I was making was that if you retire and don't work then you don't pay regardless of age. 

Agreed.  It is also worth noting that IF you retire early, it may be worth making additional years payments to meet the necessary 'qualifying years' for various levels of pension.  It starts getting complex then!  Luckily I already had more than the maximum needed qualifying years ........

[oowee]

22 minutes ago, JohnfromUK said:

Agreed.  It is also worth noting that IF you retire early, it may be worth making additional years payments to meet the necessary 'qualifying years' for various levels of pension.  It starts getting complex then!  Luckily I already had more than the maximum needed qualifying years ........

I had till the rules changed. That said around £800 a year to buy it's one of the best investment / returns you can make. 

[Sussexboy]

52 minutes ago, oowee said:

I had till the rules changed. That said around £800 a year to buy it's one of the best investment / returns you can make. 

My wife was short of years for the full pension. We invested something like £780 in 2022 to buy the cheapest missing year. When we got the pension forecast in 2023 as part of our annual financial review she was a penny short of the full pension, fast forward to 2024 and it has been rounded up to the full pension amount. As you say, a good investment.

[oowee]

1 hour ago, Sussexboy said:

My wife was short of years for the full pension. We invested something like £780 in 2022 to buy the cheapest missing year. When we got the pension forecast in 2023 as part of our annual financial review she was a penny short of the full pension, fast forward to 2024 and it has been rounded up to the full pension amount. As you say, a good investment.

I worked out that you had to survive just 4 years to get your money back. My wife will be short about 21 years 😁

[Mice!]

8 hours ago, oowee said:

What part of pensions do you think will be raided?

 

8 hours ago, Old farrier said:

There already raiding them by making them part(all) of your tax allowance 

As soon as you’re state pension kicks in any other income from savings other pensions is taxed at the full rate 

unless they alter the tax threshold this will continue 

That's a start as mentioned above.

Labour seems intent on hitting pensioners, the winter fuel allowance seemed petty to me, like they know pensioners are an easy target.

Not being 50 yet pension plans seem a long way off, but I might have to start looking, I just don't trust the government to not go dipping into them again. 

[elgreco]

15 hours ago, Lloyd90 said:

The real question is, how much do you have in the SIPP to make that viable… 

The transfer values were extremely favourable at the time and I got >£550k

[TOPGUN749]

Many people may not realise that women who didn’t work but stayed home with children and received child benefit get credits for National Insurance. My sister stopped working at 22 after marrying and never worked again,now at 58 discovers she is due a full state pension in 2033. I think there was child benefit paid from 1989 to 2021.

[team tractor]

No pension, mortgage will be paid off when I’m 51 so 9 years left . 
I’ve had 1 holiday abroad in 15 years ( this year) 

I did my rotacuff 10 years ago after rolling my van 😂. 
Divorce helped me a lot financially as I’ve met someone who helps with the bills a lot. 
will i retire  I doubt it . I’m self employed. It upsets me I pay the staffs pension contributions but have none of my own 🙈. 
My body hurts but I think sitting down retired or in an office would be a lot worse. 
I pay maintenance to 2 ex’s for 3 kids . It’s life for me . 
This morning I’m off to Neville’s ( Walker 570) fruit picking again with the kids . 
 

I need 2000 a month too break even currently. Cheap lifestyle really . 
I think I’d like to work 3 days a week in my 60s/70s tho.

 

My mate died last week at 44 from cancer. He spent the lot as he went . I’m glad he did . 
My uncle died the week before at 87 and only just broke even with what he paid in . 
Honestly I don’t know how to feel on it all.

[marsh man]

14 minutes ago, team tractor said:

No pension, mortgage will be paid off when I’m 51 so 9 years left . 
I’ve had 1 holiday abroad in 15 years ( this year) 

I did my rotacuff 10 years ago after rolling my van 😂. 
Divorce helped me a lot financially as I’ve met someone who helps with the bills a lot. 
will i retire  I doubt it . I’m self employed. It upsets me I pay the staffs pension contributions but have none of my own 🙈. 
My body hurts but I think sitting down retired or in an office would be a lot worse. 
I pay maintenance to 2 ex’s for 3 kids . It’s life for me . 
This morning I’m off to Neville’s ( Walker 570) fruit picking again with the kids . 
 

I need 2000 a month too break even currently. Cheap lifestyle really . 
I think I’d like to work 3 days a week in my 60s/70s tho.

 

My mate died last week at 44 from cancer. He spent the lot as he went . I’m glad he did . 
My uncle died the week before at 87 and only just broke even with what he paid in . 
Honestly I don’t know how to feel on it all.

You are at a age now TT where you will think about the years ahead but at the moment that will be only that , thoughts , in a few years time you might then look at the trials in life a bit different to how you are looking and feeling about them now as you have got a lot on your plate and you need to carry on doing what you do to maintain your way of life , everyone circumstances are different and most of the posts are from people who are looking forward to retirement but we must also remember that retirement will not suit everyone and sadly once retired from work then to those guys life no longer have any purpose , yes it really do happen . Hope all goes well and please remember me to ( Nev ) , one of the good ole boys on the forum .      MM