Have seen it myself.completely agree.
Again maybe the advantage of owning own companies - stressful in many ways but the freedom/opportunity to manage own time better.
In my case there is a slight fear factor of when my father sold up and retired from running his companies in his late 60s. Went downhill pretty fast when there wasn't the high level of day-to-day stimulation. sadly dementia set in pretty quickly and he's a shell of the man he used to be.
Again father-in-law was a journalist who worked on into his early 70s. Sadly again dementia set in when he stopped working and led to his death 18 months later.
A cruel disease dementia.
You said 30% invested in shares was low risk and 30% to 50% was medium risk. You were right on the part of 30% invested in shares is medium risk.
Again low risk is trying to match what you would get from a cash account. Low risk is still a risk. Like company loans or government bonds.
The stock market is a risk higher than low risk. And putting about a third of your money into medium risk doesn't become low risk.
If you went to an independent financial adviser who wasn't looking at investing on your behalf he would tell you to get all of your investment out of shares at least 10 years before retirement. He would tell you to go low risk.
Only thing I could add to that is the other good reason for putting money into a pension is that it goes in before tax is paid. For every £80 You put in it is like the taxman putting in £20. And if you are a higher rate tax payer it is even better. That starts at just over 46k IIRC. So every £100 You put in really only costs you £60. So if your company only matches what you put in and you invest £300 a month you will invest £600 each month altogether for an outlay of £180 out of your pocket.Definitely - the earlier you do it the longer the pot gets invested and the more you get to retire on. No idea how old you are or if you're employed/self-employed but if you're an employee definitely look at a works pension if for no reason than the contributions your employer will make too. Put the highest percentage you can afford in as usually the amount the employer puts in goes up the more you put in.
Don't worry about being stuck with their provider though, as you can move it or transfer it from them nearer your retirement if you want. You don't even have to take an annuity anymore with defined contribution schemes (which pretty much all schemes have been for a number of years).
Personally I wouldn't go too high risk unless you're really willing/can afford to lose the money - low to medium risk is a perfectly fine strategy as long as you're patient - much of the big increases in the pot happen in the last 10 years or so and it can feel like you're not getting much added value at the start. Don't go putting all your eggs in one basket either if you're going down a personal pension plan/SIPP - make sure you get a diversified portfolio and/or check that any financial advisor etc is registered with the FCA.
At the moment there's tons of uncertainty because of Brexit and Donald Trump keeps on saying and doing dumb things that spooks investors and the markets (though if you go medium-low risk you won't have that much put in stocks anyway - mostly likely bonds, property and cash) so there's quite a few giving negative returns on investment over the past couple of years but as I say it's more important the length of time you invest more than anything. There'll be some really good returns to even it out over the years.
*This is based on the rules now and those can of course change over time.
Always take your full tax free quota though. Even if you don't need it all at that point and the plan is to reinvest, take what you can
Some are yes.But I repeat some shares are hedged which makes it a lower risk as agreements are made on growth streams - so there is a degree of safety. 10% would generate nothing
The purpose of the provider is to assess the areas of investment to meet the need. Average growth in equity funds has been over 4% per annum in the last 10 years
Only thing I could add to that is the other good reason for putting money into a pension is that it goes in before tax is paid. For every £80 You put in it is like the taxman putting in £20. And if you are a higher rate tax payer it is even better. That starts at just over 46k IIRC. So every £100 You put in really only costs you £60. So if your company only matches what you put in and you invest £300 a month you will invest £600 each month altogether for an outlay of £180 out of your pocket.
It reduces it by 25% normally. The same as what you take out tax free.Yep - the amount the pension is reduced by when taking the tax free quota is neglible, and given it's tax free is effectively nothing. If you can afford to set it aside and re-invest the tax free sum it's a far better return.
Only if Labour get in.Yeah, the tax advantages are another great reason to do so. This can change but they tend to want people to invest for retirement so don't mess about too much with the tax breaks (but do from time to time just to see what they can get away with). Think Higher rate tax will be £50k as of next year
Just the £46k p/a with no mortgage and no work expenses - how will you manage?It reduces it by 25% normally. The same as what you take out tax free.
It is all to do with if you can afford to leave the tax free in and how long you think you will live. But nearly everyone is better off taking theirs out.
I am considering leaving mine alone. My main pension gives the wife a pension for life. It would guarantee her later years if I go before her. The other pot will all be taken as cash. It will be done tax efficiently so over about 7 years. My FS pot will only be 75% taxable with not taking the tax free. I need to keep all withdrawals below £46k a year including all other incomes.
You guys in the UK don't know how lucky you are.
It's difficult to retire early in the US because health insurance is tied to employment.
No employer = no health insurance.
And buying private health insurance is very expensive.
As the low level thresholds have been raised, it's the middle earners who have suffered and were effectively been squeezed.Only if Labour get in.
If anything the Tories might lower the 50% limit. But raising the higher rate over 40% would mainly hit Tory voters.
Only if Labour get in.
If anything the Tories might lower the 50% limit. But raising the higher rate over 40% would mainly hit Tory voters.
Some are yes.
But it still doesn't make a 30% investment in shares as low risk.
That is money to be invested out of a pension. It isn't income.Just the £46k p/a with no mortgage and no work expenses - how will you manage?
As someone with a Hungarian wife and who has business interests in Hungary this Brexit messing about is a nightmare for any sort of planning in the short (and even mid-term).I hope it all works out for you. We don't know what is going to happen with Brexit and hopefully those that want to move to other EU countries can, I am sure if people are financially secure then there is no reason to stop them moving over, I can't remember what it was like before we joined the EU but we had Brits living in Spain long before we joined.
My friends owned a 10 bedroom ski lodge and built a smaller one in the back garden and sold the big one, they live on 1 side and they rent out the other side. The electricians bill was 25,000 euros per side!!
I am 57 and ready to retire but my wife who is 50 loves her job and I can see her working till she is 67. The thought of me retiring at 67 is just depressing!
Know the feeling but maybe not as bad as for yourself.As someone with a Hungarian wife and who has business interests in Hungary this Brexit messing about is a nightmare for any sort of planning in the short (and even mid-term).
Spain has basically already agreed to pretty well protect current British expats but across EU it is on a country-by-country basis and not a lot of info available. Those wanting to move to EU after 2021 could find it more difficult.
Earlier I posted link to calculator on martin lewis web site. Does this calc for you based on real figures.Only thing I could add to that is the other good reason for putting money into a pension is that it goes in before tax is paid. For every £80 You put in it is like the taxman putting in £20. And if you are a higher rate tax payer it is even better. That starts at just over 46k IIRC. So every £100 You put in really only costs you £60. So if your company only matches what you put in and you invest £300 a month you will invest £600 each month altogether for an outlay of £180 out of your pocket.
Pension calculators are good. But they don't explain much on how it works.Earlier I posted link to calculator on martin lewis web site. Does this calc for you based on real figures.
I’m leaving at the end of this month voluntarily and it’s causing far more personal angst than I imagined.
I haven’t quite broke it to my family that I’ll be seeking new employment very soon
Took me a while to properly make the decision, it is a big lifestyle change but glad I did it now. Right one more cup of coffee and I'm off fell walking this morning.I’m leaving at the end of this month voluntarily and it’s causing far more personal angst than I imagined.
I haven’t quite broke it to my family that I’ll be seeking new employment very soon
Difficult situation. I wish you good luck.I’m leaving at the end of this month voluntarily and it’s causing far more personal angst than I imagined.
I haven’t quite broke it to my family that I’ll be seeking new employment very soon
Pension recycling is also a way to boost your pension
there are rules around it so it is restricted, but you can put up to 30% of your lump sum, back into your pension scheme to take additional tax relief
If you are a 40% tax payer, and take the money back out the following year @ a 20% tax rate, you can turn a 25k lump sum on a 100k pension pot, into £28k+
it is also legal
I think you have got your wires crossed. Recycling isn't legal if certain things happen. And I don't think the amount you mention would be legal if other conditions were also met. You could end up with a massive tax bill. I think one of the conditions is premeditated. As in if you took your lump sum with the plan of putting it back into a pension for tax reasons.Pension recycling is also a way to boost your pension
there are rules around it so it is restricted, but you can put up to 30% of your lump sum, back into your pension scheme to take additional tax relief
If you are a 40% tax payer, and take the money back out the following year @ a 20% tax rate, you can turn a 25k lump sum on a 100k pension pot, into £28k+
it is also legal
Have you taken the VR from JLR? Weren't you talking of retiring and moving anyway?
My brother(68), and pretty fit, eat well, exercised regularly had a stroke in November.OK , but lost his sight in one eye. This has made me seriously consider my plans. I am 58 soon, and we are going to try Spain for 3 months later this year. I am lucky that I can have an unpaid break from work. We are renting a two bed house. Don't think we would move permanently, but if all goes well, I will retire end of next year and rent in Spain for the winter and spring months.Suppose we were the lucky generation regarding company pension and property prices.
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