Retirement...when, how old and how much??

[Blue Maverick]

It's incredible that people don't even understand the basics. With access to the internet, there's not really any excuse for not understanding roughly how much the state pension is and why you'd need at least some form of private pension.

He’s a good bloke but with the pandemic his ex doing nothing he ended up using his savings from his house in the kids and other crap. I always remember in our younger days going to his house and he had all designer gear etc hes had a great life don’t get me wrong and so did I but I just didn’t have the cash to blow like that, I’m reaping the rewards now. I don’t think it helped his dad had a private pension which basically disappeared in the crash of 2008, so I think he thought fuck it.

 

[Manchester33]

You can leave your unused drawdown pot but it might be taxed on the beneficiary after the age of 75 depending on how they withdraw it and what tax rate they pay.


It’s an interesting one this, and whilst you can guarantee pots with annuities and provide for a spouse if you wish, many people still prefer drawdown for the death benefits they provide.

That shouldn’t be the reason for deciding on drawdown though for me except in a few circumstances. When you start saving into a pension, your objective isn’t to leave it behind for other people. It’s to build up a pot to enjoy your retirement. I think some people lose sight of what they saved for in the first place. Ideally you should spend every penny of your pension pot before you die. Maybe leave enough for a spouse but they should then spend it. The only exception I would say are people who have other savings/investments and an IHT liability. In these situations, the pension wrapper is a useful IHT shelter and it is often better to use other sources first.

In my experience, many people tend to over save and under spend, as the fear of the rainy day is always there. However, time really does tend to catch up with people and spending drops as you get older. The nightmare of care home fees is always looming large though.

I completely agree.

People should also consider that spending in retirement won't be completely fixed pa. There will be times when we use our ingenuity to cut back on certain expenses, and other times when we feel able to overspend. I'd like to be in a position to treat my loved ones whilst I'm still here (to get satisfaction from seeing my help in action).

I do think, in some cases, people need to ensure they have something though. Most of my elder relatives have no retirement plan whatsoever. I actually have one Christian relative with no savings who gives any spare cash he has to the church because 'God will provide for him'. It makes me so anxious thinking about it!

 

[RobMCFC]

I don’t think it helped his dad had a private pension which basically disappeared in the crash of 2008, so I think he thought fuck it.

That's also one of the reasons why I don't want to commit any excess to a pension - better to hedge your bets by spending some now, save some into a bank account and not put too much in the pension.

I know pensions are supposed to be better protected these days, but I still don't have 100% faith that it will all be there when the time comes!

 

[Manchester33]

That's also one of the reasons why I don't want to commit any excess to a pension - better to hedge your bets by spending some now, save some into a bank account and not put too much in the pension.

I know pensions are supposed to be better protected these days, but I still don't have 100% faith that it will all be there when the time comes!

It's risk vs reward.

You might feel that pensions aren't safe, but I'd argue they are worth the risk because of the tax incentives behind them.

If you're effectively investing 20%/40% more through a pension and can withdraw it efficiently too, the returns would be incomparable to paying down your mortgage for example. If you have a timescale of 15 years+ a well-invested pension would win every time.

 

[denislawsbackheel]

It's incredible that people don't even understand the basics. With access to the internet, there's not really any excuse for not understanding roughly how much the state pension is and why you'd need at least some form of private pension.

People get confused. Someone on this very thread was posting links to the old pre 2016 state pension rules as if they were current rules recently.

 

[Cricket Blue]

Got a private pension but personally I think it's getting to a stage where it is utterly pointless for people who cannot afford to pay into it. What's the point when this lot want you working until your 70?
My father passed away when he was 65 so all the savings / pensions were more or less pointless.
Besides I'm not sure i'd want to live past 65 in this shit world we have.

 

[denislawsbackheel]

Got a private pension but personally I think it's getting to a stage where it is utterly pointless for people who cannot afford to pay into it. What's the point when this lot want you working until your 70?
My father passed away when he was 65 so all the savings / pensions were more or less pointless.
Besides I'm not sure i'd want to live past 65 in this shit world we have.

You can take a private pension from 55 (shortly to be 57).

 

[Corky]

My mate is sane age as me is a plasterer, his body is fucked he’s blown all his money trying to bring two kids up on his own, he’s just moved into a council house his rent is £800 a month then bills etc, I asked him why he’s going to do when he retires he reckon the state pension is enough until pointed out it won’t even cover his rent! He’s has decent money all his life but spent it on clothes, cars etc. Then the two kids later have taken the rest, he’s totally fucked but just doesn’t realise it yet.

He will get housing benefit/UC, pension guarantee credit and over pension age Full council tax support.

£800pcm is an extreme amount to pay for a council property if not in the south east, but unless there are spare room the HB/UC will cover the rent completely if he isn't earning and doesn't have savings.

 

[abu13]

The best bit of advise i can give to anyone is to log your annual living expenses, i have done this for the last 3 years and expect to continye until i look to retire in 6 or 7 years time.

As basic as,
How much cas came into the household.
Hiw much cash went into debt repayment.
How much cash went into savings, investments.

Deduct the debt and savings payments from the total income for a rough cut figure of your day to day living.


Very rough cut but by my working out i need in the region of £26k per year in my hand to maintain my current lifestyle.


Obviously this will increase with inflation so i work it as a percentage of my total income,the aim is to keep this as clise as possible each year.

 

[Cricket Blue]

You can take a private pension from 55 (shortly to be 57).

Yes again though they keep changing the goal posts on this. Let's face it they want people to snuff it particularly this heartless goverment.