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

halfmist said:
It’s good to see someone put a very reasoned case together without becoming abusive.
Just to deal with the points you make.
Human nature being what it is everyone wants more, there just isn’t enough to give everyone what they want.
As regards the pension changes, we know why the Government brought that change in, the NHS consultants refused to work additional hours as their effective tax Tate became 55%.
Some additional tax will be recovered when they get around to drawing their pension.
Capital Gains Tax. It was proven last time they raised the rates the tax take went down.
Dividends rates in line with income tax, the main losers there would be the pension funds and ultimately those with a private pension fund so less incentive to save and hence become more reliant on the State.
I think the evidence says the wealthy are paying a higher percentage rate than they have ever done before.
Tax them even further and then why would they bother taking risks, employing others, putting their wealth on the line etc with personal bank guarantees.
Some might not like it but it’s a fact the market determines what your worth as an employee
Click to expand...
The whole purpose of government and civilisation for that matter is to ensure everyone is provided for and to ensure balance.

To address your responses -
  • The changes to pension limits have little to do with doctors and more to do with a wealth tax break. If it was purely doctors then the limit would have been increased rather than abolished or purely targeted at doctors. Whilst you do pay income tax when you withdraw money, you pay it at a future rate which will have a higher threshold than todays income tax bands. Furthermore you also avoid national insurance so the overall tax rate is much less and you can withdraw 25% tax free.
  • The argument that the tax rate is effectively 55% once you exceeded the threshold is also not really valid. I would have exceeded the limit but any way you look at it, if you are employed by a company it’s effectively free money being payed in, just the benefit is not as substantial.
  • To quote the late Nigel Lawson, who I have a great deal of respect for, “there is little economic difference between income and capital gains tax”, between 1988 and 98, contrary to the claim that tax take reduced, it didn’t, it actually increased and the administration costs were also much lower, what did happen is that CGT could no longer be used as a loop hole so CGT revenue went down but income tax receipts increased. Most economists agree that aligning CGT is the right thing to do, including the IFS (Institute for Fiscal Studies). CGT is a progressive tax, however it does require some thought about how it’s implemented. You need to avoid taxing the increase in the value of an asset due purely to inflation (indexation) and only tax the net gain. The bigger target needs to be the taxing more of the share-based rewards arising from employment, and of the accumulated retained earnings in smaller companies. Likewise ensuring that hedge and wealth managers don’t get paid using the “carried interest” loophole which means their income is only taxed at CGT rates and not income tax rates.
  • Pension funds are exempt from dividend tax.
  • Regarding entrepreneurship there are already existing tax incentives that encourage investment e.g Business Asset Disposal Relief. However I do agree that risk based investment should be incentivised but not using the broad brush tools currently applied. Something much more targeted that incentivises the growth of smaller business that offer skilled employment and training, not just minimum wage jobs. This would prevent the use of small companies as a way to avoid tax and as a wrapper for assets.
Yes there is always going to be a disparity between what people earn and rightly so, should someone who has studied for years and become a doctor be paid the same as someone who decided that they couldn’t be bothered, of course not. Likewise those that have truly taken financial risks with their own money should be wealthier.

The problem is when that disparity grows to the level that we are at now, where many have little to no disposable income and the few can spend almost without consequence.

Sorry everyone if I have derailed the thread a little here. I will go back in my box.
 
Kompany Car said:
The whole purpose of government and civilisation for that matter is to ensure everyone is provided for and to ensure balance.

To address your responses -
  • The changes to pension limits have little to do with doctors and more to do with a wealth tax break. If it was purely doctors then the limit would have been increased rather than abolished or purely targeted at doctors. Whilst you do pay income tax when you withdraw money, you pay it at a future rate which will have a higher threshold than todays income tax bands. Furthermore you also avoid national insurance so the overall tax rate is much less and you can withdraw 25% tax free.
  • The argument that the tax rate is effectively 55% once you exceeded the threshold is also not really valid. I would have exceeded the limit but any way you look at it, if you are employed by a company it’s effectively free money being payed in, just the benefit is not as substantial.
  • To quote the late Nigel Lawson, who I have a great deal of respect for, “there is little economic difference between income and capital gains tax”, between 1988 and 98, contrary to the claim that tax take reduced, it didn’t, it actually increased and the administration costs were also much lower, what did happen is that CGT could no longer be used as a loop hole so CGT revenue went down but income tax receipts increased. Most economists agree that aligning CGT is the right thing to do, including the IFS (Institute for Fiscal Studies). CGT is a progressive tax, however it does require some thought about how it’s implemented. You need to avoid taxing the increase in the value of an asset due purely to inflation (indexation) and only tax the net gain. The bigger target needs to be the taxing more of the share-based rewards arising from employment, and of the accumulated retained earnings in smaller companies. Likewise ensuring that hedge and wealth managers don’t get paid using the “carried interest” loophole which means their income is only taxed at CGT rates and not income tax rates.
  • Pension funds are exempt from dividend tax.
  • Regarding entrepreneurship there are already existing tax incentives that encourage investment e.g Business Asset Disposal Relief. However I do agree that risk based investment should be incentivised but not using the broad brush tools currently applied. Something much more targeted that incentivises the growth of smaller business that offer skilled employment and training, not just minimum wage jobs. This would prevent the use of small companies as a way to avoid tax and as a wrapper for assets.
Yes there is always going to be a disparity between what people earn and rightly so, should someone who has studied for years and become a doctor be paid the same as someone who decided that they couldn’t be bothered, of course not. Likewise those that have truly taken financial risks with their own money should be wealthier.

The problem is when that disparity grows to the level that we are at now, where many have little to no disposable income and the few can spend almost without consequence.

Sorry everyone if I have derailed the thread a little here. I will go back in my box.
Click to expand...
I could reply in detail to your very good well thought out points but like you have said we are getting a little bit off thread and also I am off out in the next 10 minutes.
My overall point is who ever is in power has a massive problem in trying to redistribute wealth through the tax system.
For example if tax payers had to list a change in value on every capital item they had over £1000 on a tax return annually it would run in to 10’s of pages.
Assets easy to hide or dispose of would never be declared.
Then there is the problem with valuation, I own land next to a housing estate.
Without planning it’s worth Jack shit, with it, it’s worth several million.
How is that dealt with in wealth redistribution.
I would obviously not apply for planning permission until any rules were changed back.
What would you do with individual homes. If they remained the only tax free asset everyone would plough everything in to them and prices would shoot up.
Best of luck to any Party who genuinely tries to tackle the problem of wealth redistribution.
Finally whilst there are tax incentives and exemptions from any tax there will always be legal tax avoidance and I doubt there will be any mention of removing incentives in either parties manifesto’s
 
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I think part of not enjoying retirement or feeling you want to go back to work is a bit like when they release a whale from captivity. You're so used to your old way of life that you can't adapt to being free. In the same fashion, you even hear about people being released from long prison sentences who want to go back in.
 
halfmist said:
It’s good to see someone put a very reasoned case together without becoming abusive.
Just to deal with the points you make.
Human nature being what it is everyone wants more, there just isn’t enough to give everyone what they want.
As regards the pension changes, we know why the Government brought that change in, the NHS consultants refused to work additional hours as their effective tax Tate became 55%.
Some additional tax will be recovered when they get around to drawing their pension.
Capital Gains Tax. It was proven last time they raised the rates the tax take went down.
Dividends rates in line with income tax, the main losers there would be the pension funds and ultimately those with a private pension fund so less incentive to save and hence become more reliant on the State.
I think the evidence says the wealthy are paying a higher percentage rate than they have ever done before.
Tax them even further and then why would they bother taking risks, employing others, putting their wealth on the line etc with personal bank guarantees.
Some might not like it but it’s a fact the market determines what your worth as an employee
Click to expand...
Spot on, it's bloody hard running a small business these days. The corporation tax hike will put an end to tens of thousands of small buiness aspirations. Those that don't run a small business think it's allsweetness and light. Far from it.

There is very little financial incentive to start a small buiness these days and an awful lot of hassle and hoops to jump through that wernt there 30 years ago.
 
Manchester33 said:
I find it strange when people post "I'd be too bored if I retired". Really? Rather than travel the world or pursue your interests or do something truly rewarding, you'd rather stack shelves at an Aldi in Openshawe?... Just incase you got bored?
Click to expand...
Whilst I completely agree with you, there's about a million things you can do to avoid being bored, some people just need the structure.

I suspect quite often there's a social side to it as well, retirement has the potential to be quite isolating.
 
My plan is on track to retire at 62, one thing is for sure though, if im not able to go at that point i will be going part time doing something that a get some satisfaction from. I'll be fucked if i am doing a job a hate for an additional 5 years.
 
Kompany Car said:
The whole purpose of government and civilisation for that matter is to ensure everyone is provided for and to ensure balance.

To address your responses -
  • The changes to pension limits have little to do with doctors and more to do with a wealth tax break. If it was purely doctors then the limit would have been increased rather than abolished or purely targeted at doctors. Whilst you do pay income tax when you withdraw money, you pay it at a future rate which will have a higher threshold than todays income tax bands. Furthermore you also avoid national insurance so the overall tax rate is much less and you can withdraw 25% tax free.
  • The argument that the tax rate is effectively 55% once you exceeded the threshold is also not really valid. I would have exceeded the limit but any way you look at it, if you are employed by a company it’s effectively free money being payed in, just the benefit is not as substantial.
  • To quote the late Nigel Lawson, who I have a great deal of respect for, “there is little economic difference between income and capital gains tax”, between 1988 and 98, contrary to the claim that tax take reduced, it didn’t, it actually increased and the administration costs were also much lower, what did happen is that CGT could no longer be used as a loop hole so CGT revenue went down but income tax receipts increased. Most economists agree that aligning CGT is the right thing to do, including the IFS (Institute for Fiscal Studies). CGT is a progressive tax, however it does require some thought about how it’s implemented. You need to avoid taxing the increase in the value of an asset due purely to inflation (indexation) and only tax the net gain. The bigger target needs to be the taxing more of the share-based rewards arising from employment, and of the accumulated retained earnings in smaller companies. Likewise ensuring that hedge and wealth managers don’t get paid using the “carried interest” loophole which means their income is only taxed at CGT rates and not income tax rates.
  • Pension funds are exempt from dividend tax.
  • Regarding entrepreneurship there are already existing tax incentives that encourage investment e.g Business Asset Disposal Relief. However I do agree that risk based investment should be incentivised but not using the broad brush tools currently applied. Something much more targeted that incentivises the growth of smaller business that offer skilled employment and training, not just minimum wage jobs. This would prevent the use of small companies as a way to avoid tax and as a wrapper for assets.
Yes there is always going to be a disparity between what people earn and rightly so, should someone who has studied for years and become a doctor be paid the same as someone who decided that they couldn’t be bothered, of course not. Likewise those that have truly taken financial risks with their own money should be wealthier.

The problem is when that disparity grows to the level that we are at now, where many have little to no disposable income and the few can spend almost without consequence.

Sorry everyone if I have derailed the thread a little here. I will go back in my box.
Click to expand...
Good post, the issue I have is the disparity in the current tax burden placed on the smallest businesses compared to the largest.

CGT in its current form is one of the few tax incentives left to start a small buiness and try and build something for your retirement. Take that away and we might as well all work for a big company.
 
I was looking to get out of here and retire to Spain, Benidorm area to be exact.
I'm mortgage free now at 45, was hoping to be able to retire at 55 and get gone, but thanks to the Brexit I'm stuck here, can possibly afford to do the 12 weeks here 12 weeks home thing from 60, but its a massive pain in the arse and would be constantly there to worry about. (2 properties to manage etc)

If things don't change and we don't go back into the EU I'll have to stay on Flag-**** island for ever.
 
Every day for the last 10 hears before I retired, I swore I'd never work again and laughed in the face of anyone who said "I'd be bored". 3 years after retiring I'm still working. Why ? Because even though I have a decent pension, it isn't enough to spend everyday, or even most days, doing the things I had always imagined me doing. Life intervenes. And if you can't do what you want to do, what's the point of being retired ? It's like waiting to die and the older you get, the more you feel time escaping. So there's a happy balance to be struck unless you are really well off which most people aren't.

Being your own boss and working when you want is the key, but, as others have said, the obstacles facing small businesses are unbelievable if you haven't experienced them before.
 
Newman Noggs said:
Every day for the last 10 hears before I retired, I swore I'd never work again and laughed in the face of anyone who said "I'd be bored". 3 years after retiring I'm still working. Why ? Because even though I have a decent pension, it isn't enough to spend everyday, or even most days, doing the things I had always imagined me doing. Life intervenes. And if you can't do what you want to do, what's the point of being retired ? It's like waiting to die and the older you get, the more you feel time escaping. So there's a happy balance to be struck unless you are really well off which most people aren't.

Being your own boss and working when you want is the key, but, as others have said, the obstacles facing small businesses are unbelievable if you haven't experienced them before.
Click to expand...

There does seem to be a divide of those that want to live it up or do new things when they retire and those (like me) who would be happy just pottering around, doing mundane things and taking it easy.
For my lifestyle I wouldn't need much cash at all, and aside from City, I really don't spend much on anything else.
 
Newman Noggs said:
Every day for the last 10 hears before I retired, I swore I'd never work again and laughed in the face of anyone who said "I'd be bored". 3 years after retiring I'm still working. Why ? Because even though I have a decent pension, it isn't enough to spend everyday, or even most days, doing the things I had always imagined me doing. Life intervenes. And if you can't do what you want to do, what's the point of being retired ? It's like waiting to die and the older you get, the more you feel time escaping. So there's a happy balance to be struck unless you are really well off which most people aren't.

Being your own boss and working when you want is the key, but, as others have said, the obstacles facing small businesses are unbelievable if you haven't experienced them before.
Click to expand...
You have to get some satisfaction out of what you do though mate. Can I ask what business you are in? Self employed Ghillie?
Thats not work!
I retired ten years ago and it sounds like I’m in a similar position to you. Enough money for the everyday plus some hols but not enough to go bone fishing every year for sure ;-).
I would do the odd days work if I could find somethin* that kept me motivated. Been thinking recently about doing some volunteering which at least would give something back.
 
Lowtower said:
I was looking to get out of here and retire to Spain, Benidorm area to be exact.
I'm mortgage free now at 45, was hoping to be able to retire at 55 and get gone, but thanks to the Brexit I'm stuck here, can possibly afford to do the 12 weeks here 12 weeks home thing from 60, but its a massive pain in the arse and would be constantly there to worry about. (2 properties to manage etc)

If things don't change and we don't go back into the EU I'll have to stay on Flag-**** island for ever.
Click to expand...

You can still apply for residency there but have to jump through a few hoops to do so and prove you have a certain amount of funds in the bank. I think Spain is doing a lot of lobbying to change that rule but the EU isn't keen.
 
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