Retiring

[hampshireblue]

Downsizing, Equity release and RIO's are a way to unlock capital in retirement. The first is the best option but do it sooner rather than later. Some people can't bear to part with houses where they have brought kids up or it holds some sentiment.

A Rio and equity release are best accessed once the savings or drawdown pensions are gone. I'm budgeting to do this if I make it to around mid 70's as I draw down my pension, it will be gone by then, in my case it will be equity release as to get a RIO you still need the requisite income which I won't have, will just be the state pension by then.

As a final point, a Financial Adviser I know told me it's incredible these days that some people factor in inheritance, if it's a big estate then there's no problem. However if it's say around 100k that money would soon go if the person leaving the estate were to be placed in a care home, £3k per month, leaving just £23k ring fenced to pass on, it soon goes. I'm in that boat with my old man who's 88 but I've not factored that to my finances, anyone could have something like a stroke at anytime and need lifetime care.

RIO?

 

[hammocity]

RIO?

Retirement Interest Only mortgage, take a lump sum and pay the monthly interest on it, when you die you pass on the value of the house and pay back the lump sum leaving the net estate to be inherited.

 

[dickie davies]

Downsizing, Equity release and RIO's are a way to unlock capital in retirement. The first is the best option but do it sooner rather than later. Some people can't bear to part with houses where they have brought kids up or it holds some sentiment.

A Rio and equity release are best accessed once the savings or drawdown pensions are gone. I'm budgeting to do this if I make it to around mid 70's as I draw down my pension, it will be gone by then, in my case it will be equity release as to get a RIO you still need the requisite income which I won't have, will just be the state pension by then.

As a final point, a Financial Adviser I know told me it's incredible these days that some people factor in inheritance, if it's a big estate then there's no problem. However if it's say around 100k that money would soon go if the person leaving the estate were to be placed in a care home, £3k per month, leaving just £23k ring fenced to pass on, it soon goes. I'm in that boat with my old man who's 88 but I've not factored that to my finances, anyone could have something like a stroke at anytime and need lifetime care.

Regards the pensioner in a care home, my Auntie was the typical example of this
After her fall so she couldn't live in her own home, we sold her house and found lovely sheltered accommodation with a carer visiting twice daily
The funds from her estate were eroded hugely in two years

 

[Bluemanc100]

What are peoples thoughts on the tax free withdrawal of 25%, i know 3 people who withdrew this as soon as they could at 55. Seems a little silly to me unless you are desperate for the cash.

They have used the money for holiday's, new cars and other "treats" rather than a desperate need for it.
I understand the live for today thinking but seems short sighted to me.

I've had this conversation with Mrs Lady.. she thinks we should take the 25% because we can?! She wants a new kitchen but she's totally missing the fact that she can have a new kitchen out of the savings we already have....

I am due to speak with an IFA but she'll undoubtably get her way ;-)

 

[hammocity]

Regards the pensioner in a care home, my Auntie was the typical example of this
After her fall so she couldn't live in her own home, we sold her house and found lovely sheltered accommodation with a carer visiting twice daily
The funds from her estate were eroded hugely in two years

Very expensive at around £3k per month, around £6k from the State Pension (for a lot of older females) and it's £30k a year out of the estate, as you say really doesn't last long.

 

[sky tot]

What are peoples thoughts on the tax free withdrawal of 25%, i know 3 people who withdrew this as soon as they could at 55. Seems a little silly to me unless you are desperate for the cash.

They have used the money for holiday's, new cars and other "treats" rather than a desperate need for it.
I understand the live for today thinking but seems short sighted to me.

My mate who’s the same age as me did that but he did lose his wife in 2020 with cancer . He knew she was dieing so he withdrew it all . Don’t blame him really . Im 56 in May but I’m leaving mine until it’s full maturity which is when I’m 62 .

 

[abu13]

My mate who’s the same age as me did that but he did lose his wife in 2020 with cancer . He knew she was dieing so he withdrew it all . Don’t blame him really . Im 56 in May but I’m leaving mine until it’s full maturity which is when I’m 62 .

I can understand his position completely, i think i would do the same in those circumstances and make the memories while they had the time.

 

[Bill]

What are peoples thoughts on the tax free withdrawal of 25%, i know 3 people who withdrew this as soon as they could at 55. Seems a little silly to me unless you are desperate for the cash.

They have used the money for holiday's, new cars and other "treats" rather than a desperate need for it.
I understand the live for today thinking but seems short sighted to me.

take it whilst your health lets you see the world .

 

[sky tot]

My mortgage finishes in May . If I use some of the money I used to pay to my mortgage to top up my pension, will have to pay Prudential set up charges ?

 

[Blue Maverick]

Downsizing, Equity release and RIO's are a way to unlock capital in retirement. The first is the best option but do it sooner rather than later. Some people can't bear to part with houses where they have brought kids up or it holds some sentiment.

A Rio and equity release are best accessed once the savings or drawdown pensions are gone. I'm budgeting to do this if I make it to around mid 70's as I draw down my pension, it will be gone by then, in my case it will be equity release as to get a RIO you still need the requisite income which I won't have, will just be the state pension by then.

As a final point, a Financial Adviser I know told me it's incredible these days that some people factor in inheritance, if it's a big estate then there's no problem. However if it's say around 100k that money would soon go if the person leaving the estate were to be placed in a care home, £3k per month, leaving just £23k ring fenced to pass on, it soon goes. I'm in that boat with my old man who's 88 but I've not factored that to my finances, anyone could have something like a stroke at anytime and need lifetime care.

My mum and dad have written a will so that when one dies that part of the house is passed onto the kids, therefore if the other had to go into care then they could not be forced to sell the house. If the other then died in care they could only take the value of the 50% of the property so the kids don’t lose out. Pisses me off that someone who has never saved for old age would have sod all and would get the looked after for basically free yet someone who’s done the right thing would essentially be penalised and anything they’d saved to pass on would be gone.