Do things really change when you retire? (2 Viewers)

[Jands]

thought the state pension was pegged at £165 ?

Serps is added mine in worth £184.93 when I reach 66.
Retired last month, had some company shares in a scheme which I sold and as I contracted out and in to Serps took the 25% which paid for my MH.
Good company private pension which will take next year, this year living on Serps drawdown pension amount paid each month.
When decided to retire went to a financial adviser who has helped in my planning and how to make my pension work for me, costly but will save me money.
Have I missed work - No
Will I go back - No
Now I get up at a sensible time, go to bed at night, don't work weekends and have time to do what I want.
One thing I noticed last week, was at Ripon in MH went to Fountains Abbey the number of retired couples out walking in the gardens, holding hands and enjoying their time together. Makes a change from rushed crowded weekends.

 

[nicholsong]

I thought the state pension was pegged at £165 ?

One way to enhance that is to defer taking it, if one can afford to do that. I did for 6 years and I now get £12,000p.a.(£230 p.w.)

 

[deleted-member02]

One way to enhance that is to defer taking it, if one can afford to do that. I did for 6 years and I now get £12,000p.a.(£230 p.w.)

I guess it very much depends on circumstance and opinion (do you feel lucky??)
You're getting an extra £3,380 per year (65x52) but have sacrificed £51,480 (165x52x6) to get it.
So break even is not for many years, you need to be looking at a ripe old age to turn a profit...

It's an option that's frequently discussed and is clearly taken by many people, yourself included.
Personally, I don't understand the reasoning, what made you take this path (if you don't mind me asking!)

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[Flook]

Techno, I am under the impression the amount of State pension one get’s largely depends on how much you paid in, and the consistency of payment. I paid just the basic, my half brother paid in as much more as he could. He gets more than double than myself, there again he could afford it.

I was lucky, he advised me (under duress) what to do with what I was getting. I appreciate some of you may say OMG, you did not do that did you. Well he is a multi millionaire, made his money with investments etc, so who better to get advice from.

I now await comment on this, do not get too rough on ole flookie

 

[Flook]

I guess it very much depends on circumstance and opinion (do you feel lucky??)
You're getting an extra £3,380 per year (65x52) but have sacrificed £51,480 (165x52x6) to get it.
So break even is not for many years, you need to be looking at a ripe old age to turn a profit...

It's an option that's frequently discussed and is clearly taken by many people, yourself included.
Personally, I don't understand the reasoning, what made you take this path (if you don't mind me asking!)

Every one does what they think is the right decision for them, some of you may think my decision was not the correct one, but I made it as I knew the full circumstances of what I wanted and whom to get the best info from.

 

[Chris51]

I retired in Feb 2016 just before the new pension rules (April )and missed out of quite a few pounds -luckily I had paid serps etc but that didn't quite come to new pension amount.My private pension made up for it fortunately.At similar time my wife retired at 60 and got a small NHS pension -plus a private one that was split over 6 years( with advice off FA )until she has waited another 6 years to qualify for state pension.The 25% we banked and are spending it on hols/house improvements while we are fit enough to. Best to (live your dream )while you can if you can afford ?

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[Chris51]

Every one does what they think is the right decision for them, some of you may think my decision was not the correct one, but I made it as I knew the full circumstances of what I wanted and whom to get the best info from.

Think the (break even ) works out at about 10 years.

 

[Nasher]

You can check your potential state pension here:

https://www.gov.uk/check-state-pension

The rules on deffering state pension changed a couple of years ago & is far less of an advantage now

Once again, if you are not sure what's best for you, get advice.
For example, when I took my works pension 10 years early, some said 'don't do that, you'll lose a fortune' 2 minutes with a spreadsheet showed the break even point was when I'm 83! Add in 10 years of not having to pay tax on it & it extends that a few extra years.
BUT that was for the scheme I was in for me - your scheme & your circumstances may be different. If you're not sure (I was) talk to someone who knows what they are talking about!

 

[Tanya_and_Mick]

Early retirement for us in Dec, 2019

Down size house, saved well, private pension(s) drawdown in conjunction with SIPP invested in ETF and no debts..........

It’s gonna be a long 14 months

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[Reallyretired]

I retired at 58, 9 years ago when SWMBO retired through I'll health (much better now) and I don't miss working at all. Miss some of the excellent people I worked with though occasionally see some elsewhere as we still live in the same place.
We have children and grandchildren locally so don't have as much spare time as we might but still get away for 3-4 months in the mh and a cruise annually.

 

[Odd job]

thought the state pension was pegged at £165

It depends on how much you have paid in up to when I got mine. I think it will change in the future.

 

[gus-lopez]

I thought the state pension was pegged at £165 ?

Not under the old system .Not sure about the new one.
Friend here contracted out for 20 years & then his FA advised him to contract back in ,which he did, & he received £175/week when he retired about 8 years ago.
My M-In-law gets just under £280/week & over 400 when some benefits are added + she gets an amount from her late husbands as well.

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[nicholsong]

I guess it very much depends on circumstance and opinion (do you feel lucky??)
You're getting an extra £3,380 per year (65x52) but have sacrificed £51,480 (165x52x6) to get it.
So break even is not for many years, you need to be looking at a ripe old age to turn a profit...

It's an option that's frequently discussed and is clearly taken by many people, yourself included.
Personally, I don't understand the reasoning, what made you take this path (if you don't mind me asking!)

Your calculations are adrift for two reasons - my full(not reduced contributions) pension at 65 would have been more like £112p.w. and you have not taken into account the net of tax figures, which in my case would have involved amounts in the 40% tax bracket. I did the calculation and the break-even came out at 6 years and 8 months. I am already 4 years into that and healthy.

The reasoning was that I was still a bachelor and did not want to sit in the house all day, or the pub, so I was working days of my choice and was already drawing two private pensions so had income good enough for my needs. Drawing the State Pension would have put income into higher-rate tax, but when I stopped work it would drop some of my income out of that.

I was in financial services so I knew how to do the calculations.

You are right with the 'Do I feel lucky?' comment, the answer to which is 'yes' and I am 4 years into the pay-off. Our income is still above expenditure so only the 'Inheritance Fund' would suffer if I snuffed it tomorrow and Basia is well provided for now.

The answer to whether to defer depends on personal circumstances and the ability to do the calculations. My deferral was based on the increments at that time of 1% per 5 weeks(10.4%p.a.) but that has been dropped to about half that now. The whole lot was subject to 'triple-lock' increases, i.e. min 2.5%.

I did know what I was doing and am still happy with the decision.

Geoff

 

[Garfields]

You can check your potential state pension here:

https://www.gov.uk/check-state-pension

!

Thanks have been meaning to look at that for ages
As people have posted its all down to personal circumstances and choices folk made in the past or were forced to make. (and luck)
Some we have made worked out fine and others were pants.
The fact we have a motor home (PVC) and can keep putting in the fuel etc we are not doing badly.

 

[Ivory55]

Martin Lewis used to have a graph showing the the break even to deferral of state pension.

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[scotjimland]

I thought the state pension was pegged at £165 ?

I wish..

Basic State Pension weekly rate for 2017 to 2018

Maximum qualifying years £125.95

https://www.nidirect.gov.uk/articles/basic-state-pension-rate

 

[Techno]

 

[scotjimland]

View attachment 261538

am aware of that.. but it is Not pegged at £164.35.. I can assure you..

I have max qualifying years and only get £130.52

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[Techno]

Depends when you were born. I will qualify for the new pension with over 40yrs contributions

 

[Ivory55]

If you don’t make a full year’s National insurance contribution is the whole year written off or if you have to half years do they count as one ?

 

[Techno]

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[Techno]

I see now Jim
That is my forecast rather than the current pension

 

[scotjimland]

I am not eligible for the new State pension.. born in 1949 ..

Eligibility
You’ll be able to claim the new State Pension if you’re:

• a man born on or after 6 April 1951

Also, as I have a small private pension.. and I do mean small..
I don't qualify for pension credit or any other social benefits..

we would actually be better off financially with no private pension..

 

[Ivory55]

I am not eligible for the new State pension.. born in 1949 ..

Eligibility
You’ll be able to claim the new State Pension if you’re:

• a man born on or after 6 April 1951

Also, as I have a small private pension.. and I do mean small..
I don't qualify for pension credit or any other social benefits..

we would actually be better off financially with no private pension..

That’s the trouble you either need a lot or nothing at all in the uk. Having a little makes you worse off.

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[Flook]

Ivory55, that depends how near the tax level one is. If you are just into the tax band, one could be worse off than if one is just below that tax level.

I confess, I am just below the tax level, her indoors is well below. This covers our expenditures. Investments covers motorhome holidays.

 

[Techno]

My state pension forecast is based on today’s pension, by the time I retire that could have risen by 3% year on year

 

[Odd job]

I have 5 "pension pots" some with very little in. When I draw the pension I will amalgamate them, and take cash draw-down. However the state pension is still our main income when we retire completely. When Mrs. Gasman gets her pension, in about 4 years, the state pension (both) will be about £15,000 pa. I expect we will take aprox. £10,000 from cash draw-down We should be OK with that level of income as we do not have a very extravagant lifestyle, but do like to go away often in the MO HO.

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[deleted-member02]

the state pension is still our main income when we retire completely. When Mrs. Gasman gets her pension, in about 4 years, the state pension (both) will be about £15,000 pa. I expect we will take aprox. £10,000 from cash draw-down We should be OK with that level of income as we do not have a very extravagant lifestyle, but do like to go away often in the MO HO.

This is pretty much our plan, although we're still 22yrs away from state pension, so it will have inevitably changed by then...
We can comfortably get by on that kind of income, 24k is just about the combined tax threshold, which has to be good.
Our main aim is to give the kids as much as possible and to minimise tax liabilities (current earnings and investments through to inheritance tax in the future).
It's not easy to navigate the best route, I'm pretty up on it all and do take professional advise, but these threads are always educational

 

[Ivory55]

I bet there is a lot of people who thought once the kids were gone they would be cruising in to retirement on the same sort of money they was earning 15 years a go and would be putting money aside. Not earning less.

 

[Feltwell]

I'm also a long way off the State Pension - I'm 46, so 21 years to go - if the rules don't change. Had a workplace pension from my early 20's, and apart from a break for 4 years in my 30's, when I worked for a very financially unstable business, I have always paid in, but only the standard amount - which I now regret. Looking back I wish I'd made the effort and put more in.

Got serious about it in my early 40's, now paying well above the minimum - a bit more than I can afford really, but the new-ish tax rules around Child Benefit make it very unattractive for me to earn above a certain amount, so I get round it by shoving it in the pension instead.

Trying to look forward is almost impossible though - there are so many variables that will affect what I get:-

• I'd like to go at 55, but even though that's only 9 years away how the pension investments perform in that time make a huge difference
• I can see that the difference between going at 55 and even waiting just an extra couple of years can make a really big difference to the pot.
• How much will I need when I retire? How the hell do you judge this? I earn a decent salary and live a pretty modest life, don't smoke, hardly drink, rarely eat out and am happy driving older cars - but still seem to need a lot more than the numbers some of you are quoting! 3 kids all in school - state school, but even so - still cost us a lot, how that will change by then I don't know, chances are it will be 1 in work, 1 in university, 1 doing A levels.
• And of course the biggest unknown of all, how long will I & Mrs F need a pension income for?

There's so many unknowns I think all I can do is keep shovelling as much in as I can and keep reviewing it every year. I'll almost certainly end up with a bit of an inheritance at some point, hopefully many years away, but really want to ignore that as you just never know what will happen and what care costs could do to it - so best not to count on it at all I think.

How did you lot judge what annual income you'd need in retirement? Was it simply a case of waiting until you're close to the date and then basing it on your actual annual spend then, with any notable adjustments such as your mortgage finishing adjusted for ?

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