Pensions and retirement.

[morty]

I plan to retire early, at age 60, in three years time.

Not sure of most people's ages here, but, any tips?

 

[Ricardo]

I plan to retire early, at age 60, in three years time.

Not sure of most people's ages here, but, any tips?

Don't get old.

Seriously though in the final years before you retire, bang as much into your pension fund as you can afford. Mrs R used to moan about how much I was putting in but in retrospect I am glad I did.
You might not live long enough to draw but the odds are that you will.

 

[Fenway Frank]

I'm the same as you Morty, I retire in a little over three years although I am older than you as I will be 67 when I finish working. I will need to give it some thought as my private pensions will be available when I'm 65 so I will have decide whether to start drawing from them straight away or keep paying in until I get to 67. It's one of those things that you don't think about for years and then all of a sudden you have decisions to make.

 

[Scoop]

Keep busy otherwise you'll age quickly.
If you're not self motivated, get a hobby that demands commitment of some sort.
That's my observation from the people I've witnessed make the transition.

And my No1 advice/ bug bear, which goes along with that, is to be honest about who you are, as in your personality - know yourself.
A lot of people don't , they seem to think they're someone else!
Just coz Dave does that and enjoys it, it doesn't mean you'll be content if you do the same.
My mum still goes to work at 4:30 every morning for a few hours and she's 83. She doesn't have to but she likes to, despite everyone else telling her she should retire. She's fit, well and very content. If you met her you'd think she was mid 60s, bless her, but she's honest about her need to have that commitment in her days.

 

[morty]

I'm the same as you Morty, I retire in a little over three years although I am older than you as I will be 67 when I finish working. I will need to give it some thought as my private pensions will be available when I'm 65 so I will have decide whether to start drawing from them straight away or keep paying in until I get to 67. It's one of those things that you don't think about for years and then all of a sudden you have decisions to make.

I think the pension thing is probably my biggest thing I need to research. I didn't realise there were options for what you do with your pot, I'm still torn about taking the 25% tax free lumper, I can see arguments for both sides.

 

[morty]

Keep busy otherwise you'll age quickly.
If you're not self motivated, get a hobby that demands commitment of some sort.
That's my observation from the people I've witnessed make the transition.

And my No1 advice/ bug bear, which goes along with that, is to be honest about who you are, as in your personality - know yourself.
A lot of people don't , they seem to think they're someone else!
Just coz Dave does that and enjoys it, it doesn't mean you'll be content if you do the same.
My mum still goes to work at 4:30 every morning for a few hours and she's 83. She doesn't have to but she likes to, despite everyone else telling her she should retire. She's fit, well and very content. If you met her you'd think she was mid 60s, bless her, but she's honest about her need to have that commitment in her days.

The main reason I'm retiring is that I work offshore, and have had enough of being away from home for half the year, also my job is pretty physical and I'm falling to bits (Had a year off work 3 years ago due to a really bad knee injury).

There is a fair chance I'll maybe get a wee part time job, just to get me out the house a bit and to earn a bit of beer money, I could also do with paying a few years NI, but thats a longer story lol. Am thinking a few shifts a week shelf stacking at Morrissons!

 

[Scoop]

The main reason I'm retiring is that I work offshore, and have had enough of being away from home for half the year, also my job is pretty physical and I'm falling to bits (Had a year off work 3 years ago due to a really bad knee injury).

There is a fair chance I'll maybe get a wee part time job, just to get me out the house a bit and to earn a bit of beer money, I could also do with paying a few years NI, but thats a longer story lol. Am thinking a few shifts a week shelf stacking at Morrissons!

Oh don't talk to me about topping up NI Contributions. What a joke HMRC are!
It is worth doing but man, what a mess the system is.

I am 2 years off the full pension contributions (same age as you but had to top up 2 years due to being overseas in the past). Be very careful how you do it because HMRC are notoriously bad for reconciling your voluntary conts. to your NI record and if you need to contact them there's just one number that very rarely gets answered. No email. Google it, people have taken years to get it sorted.
I did it a few months back and it's still not added to my record. Being in Oz again now there's no way I can spend 5hrs on hold to them to try to get any help. I've resigned myself to the fact that that money has gone.
If you can get your employer to do it via payroll, if it's possible, then that'd be the best way.

Yeah, a PT job would be great, my old man did it making tile boards for displays at a tile shop and he loved it, like I said earlier it just gave him a purpose.
I myself am highly driven so I'm OK. Leave me at home alone and I'll fill my day somehow (I just cleaned the range oven ) but not everybody is that way inclined.
Or take up golf, great social sport and people are very accommodating. I'm shit at golf but made quite a few friends around the course.

 

[morty]

Oh don't talk to me about topping up NI Contributions. What a joke HMRC are!
It is worth doing but man, what a mess the system is.

I am 2 years off the full pension contributions (same age as you but had to top up 2 years due to being overseas in the past). Be very careful how you do it because HMRC are notoriously bad for reconciling your voluntary conts. to your NI record and if you need to contact them there's just one number that very rarely gets answered. No email. Google it, people have taken years to get it sorted.
I did it a few months back and it's still not added to my record. Being in Oz again now there's no way I can spend 5hrs on hold to them to try to get any help. I've resigned myself to the fact that that money has gone.
If you can get your employer to do it via payroll, if it's possible, then that'd be the best way.

Yeah, a PT job would be great, my old man did it making tile boards for displays at a tile shop and he loved it, like I said earlier it just gave him a purpose.
I myself am highly driven so I'm OK. Leave me at home alone and I'll fill my day somehow (I just cleaned the range oven ) but not everybody is that way inclined.
Or take up golf, great social sport and people are very accommodating. I'm shit at golf but made quite a few friends around the course.

My NI is complicated. I work for a firm based in Singapore and as long as I stay out of the country for 183 days a year I don't pay tax. They used to pay NI on my behalf, but some rule change about 7 years ago happened, and they just stopped paying it. I already had a decent amount paid, but find myself 4 years short. I can't pay it online, so like you would have to ring them.

I can pay up those 4 years for just over 3 grand, which will get me an extra 20 quid a week on my pension, so only have to be claiming it for 3 years before it becomes worth it. But I'm hoping if I get a part time job that could well take care of that, I'll have to weigh it up nearer the time.

 

[Fenway Frank]

I just cleaned the range oven

I think I'll keep working!
I only work three days a week so I am part of the way there, a friend retired a few months ago and easily fills his day as he's redecorating his house. He still sets his alarm every day.
I think it's probably very tempting to stay indoors at this time of year but as Scoop has said, you need a reason to get up and do things.
Somewhere like Morrisons will happily have you Morty, and while it's beer money, it's also getting out a few days and the social side of things. Some people will say that I only work for M&S but I work with some really nice people

 

[morty]

I think I'll keep working!
I only work three days a week so I am part of the way there, a friend retired a few months ago and easily fills his day as he's redecorating his house. He still sets his alarm every day.
I think it's probably very tempting to stay indoors at this time of year but as Scoop has said, you need a reason to get up and do things.
Somewhere like Morrisons will happily have you Morty, and while it's beer money, it's also getting out a few days and the social side of things. Some people will say that I only work for M&S but I work with some really nice people

I actually love my job but it is tough going, when I go to sea for 5 weeks, thats 5 weeks of 12 hours shifts, no days off. And some days are proper hard graft. Going part time isn't really an option in the job unfortunately. I'll miss the laughs we have, I don't think people realise just how much social contact work can provide.

When I'm on my 5 weeks off I always keep busy, I'm pretty driven and won't sit around and do nothing, but there is only so much DIY, decorating and gardening that needs doing! Theres a fair chance I'll get involved with some voluntary / charity work.

 

[morty]

Does anyone have any firm thoughts on whether or not to take the 25% tax free lump sum from your pension pot?

Two lines of thought here :-

1. If you don't specifically need the money then leave it in the pot, and have larger monthly pension payments.

2. Grab the cash while you can, you might die tomorrow lol.

 

[Fenway Frank]

Does anyone have any firm thoughts on whether or not to take the 25% tax free lump sum from your pension pot?

Two lines of thought here :-

1. If you don't specifically need the money then leave it in the pot, and have larger monthly pension payments.

2. Grab the cash while you can, you might die tomorrow lol.

I don't know the answer unfortunately, I have sat at home and thought that if I lived to 80 then I will do one thing. The problem is we don't know how long we've got . The other thing is if the 25% is a decent amount you may make more from the interest, difficult decision.

 

[morty]

I don't know the answer unfortunately, I have sat at home and thought that if I lived to 80 then I will do one thing. The problem is we don't know how long we've got . The other thing is if the 25% is a decent amount you may make more from the interest, difficult decision.

I think, for me, if you don't need it then leave it in your pot, as like you say, nobody knows how long we have to make it last. But I think if someone had debt or a mortgage to pay off, then taking it to clear that would be a good use of it. Everyone's circumstances are different, so there is no real definitive answer here.

I guess if you had other incomes then it could actually benefit you to make your pension payments smaller if you were trying to minimise your tax liability.

 

[gerryinromania]

Morty. I took a tax free lump. Later my wife decided to divorce me. The lump went to her, but the judge decided that by her having that, my private pension stayed mine. I'm 80 now, she lost out, been on my pension since I got to be 55. She didn't want the house, she insisted on me buying her a small apartment, ( clown ) trying to make life difficult for me. Judge not too sympathetic

 

[gerryinromania]

My company paid my NI from 55 to 60, as part of my package. This meant that I was 2 years light. I decided not to pay those two years, resulting in an 8 pound a month shortcoming in my state pension. I was happy with that, as I have a decent company pension

 

[gerryinromania]

Morty. 2 options on my company private pension that I took up.
My pension started at 55, enhanced to 60 years

Instead of taking a flat full pension, I took a small reduction initially, with it raising each year, after 11 years, the lines crossed and I was on my original pension, however, by doing this, the company index linked this as from that date, so I get an increase each year, I guess I gambled on living. Have been a company pensioner 25 years now

Instead of taking a monthly pension, I opted for 13 payments Each 28 days I get my private pension, that extra payment is invaluable as far as I am concerned

 

[gerryinromania]

I did work for 6 months, didn't like the atmosphere. Changed tack and moved out here. New life, new things to learn, new places to visit. Complete change of life style

 

[morty]

At the minute I am just dipping my toes in the water really, I still have three years left before I retire. I have done a spreadsheet with all my outgoings, money I will get from my pensions and savings, and crunched the figures to make sure I can afford to retire early.

Am currently researching the differences between drawing your pension down, or taking an annuity. It has been an interesting exercise, mostly to confirm that I am on the right track.

Amusingly I just went on a website that forecast what your annuity could be, you had to fill in some details, but, no word of a lie, within about 2 minutes of me putting my phone number in, somebody rang me. And immediately got hung up on.

 

[How I Wrote Elastic Man]

I'm a similar age as Morty. A few months ago, I traced some of the pensions I'd paid into before I left the UK 6 years ago
Total pot circa £13000
6 years in Iceland and I've built up a pot equivalent to £60000, as employers are mandated to pay 11.5%, and the employee 4% of salary
I've just started paying a supplemental 4% and my employer has to contribute another 2%
Hopefully, if I can keep working to 67, I'll have enough for a reasonable retirement, though I don't expect to be able to earn what I do now for that length of time
I'd like to keep working as long as possible, if health permits. Maybe part time when I'm older.

 

[morty]

Out of curiosity, I just googled how much UK companies must pay towards employee pensions :-

In the UK, employers must pay at least 3% of an employee's qualifying earnings into their pension scheme. The total minimum contribution is 8% of the employee's earnings, with the employee contributing the remaining 5%. However, employers can choose to pay more.

That is pretty shit, to be honest. My company is dreadful at this kind of thing and I was paying 5% (Then upped to 10) and they paid in 10%.