Author Topic: The finish line is in site- retirement planning and financial advice  (Read 8280 times)

Yesterday, I checked my NHS pension  statement. It seems that on  turning 60, that's three years away, I am entitled to a lump sum of 100k and a pension of 33k a year.

Depending  on what's happened in my career and life, grandchildren being likely, I 'll probably  continue to work for some years  yet  but not  full  time..

However, assuming  that both  I the  GLW/SWMBO have a further 20+ years in us, not an unreasonable assumption, I think I now need to do some  financial planning.
Things already talked about -
 moving to a smaller house
The GLW having a smaller pot and not able to retire or work less yet
How to use the lump sum , other than achieving N...

Any one else been or  reaching this position?

Re: The finish line is in site- retirement planning and financial advice
« Reply #1 on: 19 January, 2018, 01:29:20 pm »
Joy, congratulations of some astute planning. Sorry I cannot offer you anyadvice.

I am rather at the other end of the scale. HAving worked for the NHS for a few years when I I enjoyed working there. But I have spent most of my life working in the private sector. Now ten years from retirement I find myself with tiny pension plans for each company I worked for, and really no major pension at all.
My fault I know.

If anyone can point me towards some good sources of advice I would be grateful too.

Pedal Castro

  • so talented I can run with scissors - ouch!
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Re: The finish line is in site- retirement planning and financial advice
« Reply #2 on: 19 January, 2018, 02:57:52 pm »
I am retiring at the end of August (age 57) and will have approximately the same numbers you have. We will work on a principle that involves spending up to £5k from the lump sum per year on holidays. As we have been overpaying the mortgage that'll finish in August too, and with no ridiculous 12% pension contributions, no NI contributions and lower tax bracket our monthly disposable income won't be much less than at present!

Re: The finish line is in site- retirement planning and financial advice
« Reply #3 on: 19 January, 2018, 04:30:10 pm »
Mortgage is diminishing - probably gone by next year...

Yes, trying to  think what living on 33k might look like.

Re: The finish line is in site- retirement planning and financial advice
« Reply #4 on: 19 January, 2018, 04:57:45 pm »
Yesterday, I checked my NHS pension  statement. It seems that on  turning 60, that's three years away, I am entitled to a lump sum of 100k** and a pension of 33k** a year.

I'd be happy with those figures.  :-)  I hope to take my (final salary) pension in two year's time (@58).
In order to boost my lump sump I'll be reducing the pension by £3k per year, thus increasing the lump
sum by £36k to £93k. From that I'll pay off my mortgage (about £50k) and still have a reasonable amount left.

My pension will be just over £14k, about £1.2k per month after tax.

*(All of this has taken into account that upon receiving my pension two years early I lose 10% of expected
pension and 6% of predicted lump sum).

**(You must be in a very senior position in the NHS. Pension of £33k would be approx £28,700 after tax, so about £2,390 per month.) ;)

nicknack

  • Hornblower
Re: The finish line is in site- retirement planning and financial advice
« Reply #5 on: 19 January, 2018, 05:03:37 pm »
Yes, trying to  think what living on 33k might look like.
I'm 65 in a couple of weeks. I'll get slightly less than a full state pension (dissolute youth). It'll represent a tripling of my current income.
33K? ROFLMFAO
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Re: The finish line is in site- retirement planning and financial advice
« Reply #6 on: 19 January, 2018, 05:19:15 pm »
Mortgage is diminishing - probably gone by next year...

Yes, trying to  think what living on 33k might look like.

Very comfortable I should imagine.   

Re: The finish line is in site- retirement planning and financial advice
« Reply #7 on: 19 January, 2018, 05:26:46 pm »
Yes, trying to  think what living on 33k might look like.
How much are you living on at the moment?

Re: The finish line is in site- retirement planning and financial advice
« Reply #8 on: 19 January, 2018, 05:28:54 pm »
That's more than my Dad got and he was a very senior civil servant, equivalent army rank Brigadier.

Joy of essex must be a Major General!  (Very model of?)

Mrs A and I have pretty good pensions (private sector) but what ups our spending power is having no mortgage.
Move Faster and Bake Things

LEE

  • "Shut Up Jens" - Legs.
Re: The finish line is in site- retirement planning and financial advice
« Reply #9 on: 19 January, 2018, 05:33:18 pm »
I'm 55.

That (being >55) allowed me to "cash in" my final salary pensions, move the money out, and take a tax-free lump sum also.
It's worth noting that companies who provide final salary pensions are VERY keen to get rid of you from their schemes and are offering fantastic transfer-out deals.  I took one*

The remaining "pension pot" (the 75% that remains after the 25% cash lump sum) is invested privately in a draw-down fund which I don't need to touch until I finally retire (later this year I suspect a redundancy offer...which I would take).

The Mortgage is paid off, we're looking to buy an apartment with the lump sum (for rental income and the security of bricks and mortar if we return to the UK after our travels), we have a Motorhome all paid for, then we intend to sell our house and go travelling around Europe and Scandinavia (requires about £15K a year) until we find a place with a couple of cottages/Gites we can rent out.

I expect my disposable income will drop drastically but I'm willing to trade a very decent income, with just weekends to spend it (on stuff that generally ends up in the loft), for 7 days a week to do as I please (when doing as I please will hopefully be mainly reading, photography and cycling to local French/Spanish/Italian Cafes).  We really don't need that much to live on if it's sunny.

I've worked all my life for big companies who (thank ****) looked after my pension contributions for me, when I was far too short-sighted to be trusted to do it myself.  Through no planning of my own those pension pots have become quite valuable.  I got lucky, nothing else.

*I realise people will be horrified that I chose not to take a final-salary pension but things have changed.
The tax rule changes make it financially sound to take your money out, you don't lose anything to tax unless you "realise" over £1,000,000.
The money you take out is available as inheritance to your children, and not lost to the annuity company on your death (This was possibly the biggest argument for taking the money)
The money is available at 55 years of age.  I didn't want to wait until 63 for my full pension, life's too short, I want to travel ASAP.
Potentially I can earn as much as my final salary projections NOW, from the interest on the draw-down pension.

Millions of people manage on far less than I will have in the pot.  Free time became more important than a good salary and weekends.

So...quite possibly I may be a pensioner by my 56th birthday in May.  I hope so.

Note.  I will have to stop buying bikes and cameras.........but I can live with that.  I think perhaps I only do it to offset the boredom of a spreadsheet based job.
Some people say I'm self-obsessed but that's enough about them.

Re: The finish line is in site- retirement planning and financial advice
« Reply #10 on: 20 January, 2018, 08:41:12 am »
Mortgage is diminishing - probably gone by next year...

Yes, trying to  think what living on 33k might look like.

Very comfortable I should imagine.   

Agreed.

To work out what I might need to maintain my lifestyle I kept a spreadsheet of expenditure last year. Once I remove mortgage, commuting costs other than cycling, savings and pension payments, the figure for day-to-day expenditure is substantially less than £33k. Thankfully, because a pension of that size would mean working well into my 70s!

JoE - you could try something similar, you have three years to go. You will probably be pleasantly surprised.
Quote from: tiermat
that's not science, it's semantics.

Re: The finish line is in site- retirement planning and financial advice
« Reply #11 on: 20 January, 2018, 08:52:27 am »
Am I  really that  fortunate ?

Well, I am an 8c, for those of you who know what that means, and  I ve been paying  superannuation  since I was 18...

Spreadsheet to live on sounds a  good idea.   What, however, to do   with the lump sum..

Re: The finish line is in site- retirement planning and financial advice
« Reply #12 on: 20 January, 2018, 08:58:15 am »
What, however, to do   with the lump sum..

n+1 obvs.
Quote from: tiermat
that's not science, it's semantics.

Re: The finish line is in site- retirement planning and financial advice
« Reply #13 on: 20 January, 2018, 09:00:51 am »
No, it  will achieve N...

nicknack

  • Hornblower
Re: The finish line is in site- retirement planning and financial advice
« Reply #14 on: 20 January, 2018, 09:01:03 am »
Am I  really that  fortunate ?
Yes.
But my (relative) poverty is a result of deliberate choices on my part, so I've nothing to complain about. I'm not unhappy with the way my life has gone and I reckon living on the state pension should be reasonably easy. As I said, it's more than I've had for the last few years.
Anyway, good luck to you! I hope you have a long and happy retirement.
There's no vibrations, but wait.

Jaded

  • The Codfather
  • Formerly known as Jaded
Re: The finish line is in site- retirement planning and financial advice
« Reply #15 on: 20 January, 2018, 09:10:41 am »
I think £33k would be perfectly acceptable. I’ll have to carry on working in some form after official retirement age. A combination of appalling management by Railtrack and Thames Trains managers and a poor investment decision mean very little to show. But, as nicknak alludes to, it’s about more than that. It’s good to be alive.
It is simpler than it looks.

Re: The finish line is in site- retirement planning and financial advice
« Reply #16 on: 20 January, 2018, 09:16:24 am »

Am I  really that  fortunate? ('8C'= £56,665 - £69,168 per year)

What, however, to do with the lump sum..
* Buy a Harley Davidson, or brand new car.
* Buy a couple of gold bars.
* Sponsor a local sports team.
* Take a couple of world cruises.
* Treat a friend or relative on a world cruise.

Re: The finish line is in site- retirement planning and financial advice
« Reply #17 on: 20 January, 2018, 09:17:57 am »
Am I  really that  fortunate ?
...

Indeed you are.  Discounting Farage and his solid gold  £72k pa? EU pension, your annual income exceeds the average income in the UK which in itself is heavy skewed by those being paid stellar amounts.  Millions are paid minimum wage at £7.50hr or £16k pa, half of your projected income. 

The thing about final salary pensions is that it matters not what you actually put in but what you are paid at point of departure.   I am truly grateful for my 15 years of $harclays final salary pension which is also index linked and starts in five years.  I have time to investigate my options as intimated by Lee whilst I draw down my money purchase daylight robbery pension over the next five years.   If I compare like for like my $harklays pension pot will be in excess of £1million so we'll see just how generous they are likely to be.

Having earned you pension and your retirement when it comes, enjoy it but perhaps share your good fortune with your extended family as you go.   You cannot take it with you.

hellymedic

  • Just do it!
Re: The finish line is in site- retirement planning and financial advice
« Reply #18 on: 20 January, 2018, 09:23:20 am »
Much of my lump sum seems to have gone on BORING 'capital' projects for my house.

I replaced the boiler, the double glazing and the garage that had reached the end of their useful lives.

Jaded

  • The Codfather
  • Formerly known as Jaded
Re: The finish line is in site- retirement planning and financial advice
« Reply #19 on: 20 January, 2018, 09:28:15 am »
If any of you do have a lump sum and not enough cruises (or bikes) to spend it on, consider ways that you could help your local community with some of the lump. Inconsequential amounts of money make huge differences for small organisations, individuals and community groups.
It is simpler than it looks.

Re: The finish line is in site- retirement planning and financial advice
« Reply #20 on: 20 January, 2018, 09:30:18 am »
The wealth  will be spread.

Re: The finish line is in site- retirement planning and financial advice
« Reply #21 on: 20 January, 2018, 09:40:24 am »
If any of you do have a lump sum and not enough cruises (or bikes) to spend it on, consider ways that you could help your local community with some of the lump. Inconsequential amounts of money make huge differences for small organisations, individuals and community groups.

Absolutely. 

Local hospice, air ambulance, lifeboats, guide dogs, community energy projects, night hostels and soup kitchens for the homeless, etc., etc.  The list of worthy and deserving causes is endless.

Wowbagger

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Re: The finish line is in site- retirement planning and financial advice
« Reply #22 on: 20 January, 2018, 09:46:18 am »
£33k a year is what? 50% or so more than the mean salary for working people or thereabouts?

My situation is very different. My CS pension is based on only 20 years' reckonable service so isn't massive. However, I have done very well when it comes to elderly relatives so my savings are robust (in my view - that lump sum alone is enormous though!) and I consider myself to be extremely fortunate.

Two other examples:

I have a pal who was a head teacher. His wife was a senior teacher in another primary school. They both refused point blank to teach the national curriculum, so sold their house in Essex for £150k or so (1988 prices) and bought 2.5 acres of the Radnorshire forest with a gamekeeper's cottage in it for £49k. They demolished the corrugated iron cottage and built their own timber framed one-bedroom bungalow (which they designed and built themselves - both were excellent craft teachers) and lived in a caravan for the duration. They then did "bits & pieces" of work until their pensions kicked in. Bill was manager of the Llandrindod Wells Early Learning Centre for a time, and loved it. Jennifer, sadly, died about 5 years ago. Bill is now 83 and has lived the life of Riley for the past 30-odd years. He said to me that when you are in a state of retirement you can live extremely comfortably, extremely frugally.

Another pal was senior in the Inland Revenue - his day job often involved meeting ministers. Gordon Brown gave him early retirement and I reckon his lump sum/pension is comparable to yours. His wife has just turned 60 and works as a classroom assistant - £15k a year I reckon. They had a meal with us a couple of weeks ago and she has decided to retire at the end of this school year. She expressed concern about how they would manage without her salary. He and I exchanged knowing looks - she is a very lovely woman but a bit of a wide-eyed innocent and has always left the financial stuff to him. I suspect she has no idea that his pension brings in approximately double her salary! He told me yesterday that they have decided, when she has finished work, they will move out of Southend. "I'm fed up with that poxy airport waking me up at 6 o'clock every Sunday morning".

Unless you have extremely expensive tastes, £33k a year pension is an absolute fortune. Move to a smaller house, one car between 2 rather than a car each. I'm assuming you live in Essex from your user name. I'd make a guess then that your house is worth in excess of £400k. I reckon that, as a rough figure, is what ours is worth. We paid £68k for it in 1994.
Quote from: Dez
It doesn’t matter where you start. Just start.

Re: The finish line is in site- retirement planning and financial advice
« Reply #23 on: 20 January, 2018, 10:14:52 am »
£33k a year is what? 50% or so more than the mean salary for working people or thereabouts?

The *median* salary.

As Polar Bear says above, the mean is a pointless number as salaries are a skewed distribution. £33k is still above the mean as well.
Quote from: tiermat
that's not science, it's semantics.

CrinklyLion

  • The one with devious, cake-pushing ways....
Re: The finish line is in site- retirement planning and financial advice
« Reply #24 on: 20 January, 2018, 10:28:55 am »
Am I  really that  fortunate ?

As others have said - yes.  Your predicted pension is significantly more (as in about half as much again!) than we have to live on as a single parent family of three and we have a not extravagent but perfectly acceptable standard of living.  Apparently towards the top of the third decile on the IFS chart of average household incomes... https://www.ifs.org.uk/wheredoyoufitin/

You've worked hard for a long time, and had a bit of good luck with timing and so on.  Enjoy the fruits of those labours when they come.