Retiring

[denislawsbackheel]

Once you retire you stop paying NI
I was quite comfortable with my 50% of final gross salary pension plus a tax free lump sum of 1.5 times salary.

 

[Blue Maverick]

Sorry I might have put a confused message I get 2/3 of my gross salary but then commute 25% of that so end up with half my gross, once my mortgage is paid off I end up more cash in my pocket per month to blow than I did when working, so I’m happy with that.

 

[dickie davies]

Sorry I might have put a confused message I get 2/3 of my gross salary but then commute 25% of that so end up with half my gross, once my mortgage is paid off I end up more cash in my pocket per month to blow than I did when working, so I’m happy with that.

Which should be the right position to be in
Lots of leisure time to enjoy without financial worries

 

[denislawsbackheel]

I have far more free cash a month than I ever had before I retired with a mortgage and three kids at home.

 

[East Level 2]

Where as I'd say net if you're not renting

In general, people lose 25ish percent of their gross salary in tax and NIC contributions and then there are all the saving policies (mortgage, pension etc) to deduct.
So if you're a home owner then two thirds of your net salary SHOULD leave you comfortable

Cheers. so as long as I'm above 2/3rds of net (including state pension) then I should be OK. - No mortgage, no rent, no kids etc and will probably cut down on long distance away games.

 

[ChicagoBlue]

Be aware that most people spend considerably MORE in the first few years of retirement than they thought they would…then they settle into a more stable pattern. This is often due to moving, a burst in traveling, or buying things they believe they need for retirement. This is another reason to try to have a cash cushion OUTSIDE your retirement investments that spin off income.

Good luck to us all.

 

[Quad]

Reading this had made me want to retire early or get a part time job, just been thinking in my head what bills need to be paid was thinking

100 council tax
110 gas , elec n water
80 sky
50 gym
80 Man City
50 car insurance
160 food
so roughly 600 a month for essentials
roughly 3k a year for holidays
around 7 k for leisure

so roughly 16 k a year does this sound about right

 

[SWP's back]

I have leveraged like fuck all my life and as soon as i possibly can from an early age. Interest rates being so low and property price increases since 1996 when i bought my first one. Basically other people renting have paid my mortgages for me. Issue now is the Capital gains tax bills and inheritance tax planning.

Gift and survive 7 years.

 

[SWP's back]

Subject to CGT though and will you have an agent run your BTL or will you take on the hassle yourself? You need to factor in periodic redecorating and for periods without tenants. Also, there’s a big question mark about future house values once we get the post covid shake out.

Then there’s the issue of tenants that refuse to pay rent. My folks got hit with that, the tenant was the eldest child of a close friend, she was a mother and worked as a nurse (so respectable one would imagine) but she stopped paying rent and it took 9 months to get her out through the courts and when they did, she’d trashed the place in his last week and they had to spend £20k on a new kitchen, bathroom and redecorating. They took her to county court for that and managed to get a court order saying she’d pay back £50 per month as it was all she could afford.

The stress of that aged my Dad very badly and wiped out much of their savings.

I’m a big fan of BTL’s, but as with anything, one can be hugely unlucky.

 

[Tommy_Catons_Perm]

Reading this had made me want to retire early or get a part time job, just been thinking in my head what bills need to be paid was thinking

100 council tax
110 gas , elec n water
80 sky
50 gym
80 Man City
50 car insurance
160 food
so roughly 600 a month for essentials
roughly 3k a year for holidays
around 7 k for leisure

so roughly 16 k a year does this sound about right

Surely the most accurate way to determine annual spending is to just add up the money that leaves bank accounts annually? Most bills are paid by direct debit or credit card. You could look at your statements online for the last couple of years, copy to a spreadsheet and then add it all up?

 

[Kompany Car]

Surely the most accurate way to determine annual spending is to just add up the money that leaves bank accounts annually? Most bills are paid by direct debit or credit card. You could look at your statements online for the last couple of years, copy to a spreadsheet and then add it all up?

That’s pretty much what everyone should do regardless of retirement.
It allows you to get an idea of what your outgoings are and plan for major purchases like cars or those once in a lifetime holidays.
Most people, like companies end up in debt because they don’t control their cash flow, not because they cannot afford it.

 

[hammocity]

Just to throw cat amongst the pigeons - has anybody any views/experience on the current spate of 'lifetime mortgages or equity release schemes' as a way of funding retirement.

It seems to me the major downside is the possibilitiy that offspring won't be getting full inheritance but my kids seem to be doing better than me anyway, so in 25 years time (hopefully!!!) it won't matter to them so much

Or are such products going to be the future 'PPI' scandal?

Copy of a post I placed on here last week, may help (hopefully)

Someone mentioned "dreaded equity release"

Due to the financial crisis a decade ago I lost quite a lot of money on my business, so much so I had to remortgage my house which was due to be paid off in 2013. So here I am at 62 with 34k mortgage outstanding for another 6 years and paying nearly 600pm. I've been a member of the Nationwide for a long time and I called about their lifetime mortgages.

I've had one approved and it works out like this:

I pay 136 per month for life, I look at that as about 35 a week rent.
Ive upped the amount to 50k and put the difference in my early retirement pot, when me and Mrs H die we leave a house with a current value of 200k meaning we still leave 150k. If we can't afford to pay the 136 (won't happen) we have the option to not pay and accrue the debt with the 50k, after 25 years that would be about 100k still leaving a chunk of money to pass on.

There's a charge for Solicitors usually about 700 but the Nationwide fund it by giving you a grand.

I wouldn't touch the ER companies out there but Nationwide have done over 7k of the mortgages since they started to offer them.

 

[hammocity]

Gift and survive 7 years.

Can they go back further than 7 years in certain circumstances?

 

[Quad]

Surely the most accurate way to determine annual spending is to just add up the money that leaves bank accounts annually? Most bills are paid by direct debit or credit card. You could look at your statements online for the last couple of years, copy to a spreadsheet and then add it all up?

I'm miles off giving work , was just wondering about the true cost in retirement with bills and trying to gauge what I actually need to aim.to save for

 

[stonerblue]

Gift and survive 7 years.

Am i right in thinking i could give my kid a 'gift' of 20k with no charges/taxes for either of us?

 

[SWP's back]

Can they go back further than 7 years in certain circumstances?

Not if you’ve survived that 7. So let’s say that WW gifts a house to each kid and lives a further 15 years. So long as the gift was complete and he received no income or benefit from it, there’s no IHT issue.

This article explains when the additional 7 years comes from:

IHT and the Seven-Year Rule…Or is it 14 Years? - Tax Insider

www.taxinsider.co.uk

I used to have exams on this stuff and despite doing the job 18 years, it’s never actually come up in the real world as it’s rare people gift CLT’s such as discretionary trusts etc.

 

[SWP's back]

Am i right in thinking i could give my kid a 'gift' of 20k with no charges/taxes for either of us?

Yes, absolutely. Only issue would be if you were over the IHT threshold and then died.

 

[flook]

Yes, absolutely. Only issue would be if you were over the IHT threshold and then died.

This is a whole issue in itself, perhaps we need a "don't give the government bastards anything when you die" thread. My very limited knowledge on this is that there are ways around IHT (eg gifting ahead of time as has been mentioned, trust funds etc) but each comes with risks

 

[hammocity]

Not if you’ve survived that 7. So let’s say that WW gifts a house to each kid and lives a further 15 years. So long as the gift was complete and he received no income or benefit from it, there’s no IHT issue.

This article explains when the additional 7 years comes from:

IHT and the Seven-Year Rule…Or is it 14 Years? - Tax Insider

www.taxinsider.co.uk

Cheers, my sister works for an IFA (GJS in Stalybridge), she mentioned a while ago there were rules outside of the 7 years, that article explains it.

Just as an aside, Gregg, the IFA started his business on the 11th September 2001!

 

[Kompany Car]

Can they go back further than 7 years in certain circumstances?

For income tax/IHT purposes no, but should you need care there have been cases where local authorities have gone further back as it’s classed as “deprivation of assets”. If it’s a significant amount then it’s probably best to get some legal advice.