Author Topic: You know you're middle aged when  (Read 63076 times)

CommuteTooFar

  • Inadequate Randonneur
Re: You know you're middle aged when
« Reply #850 on: March 06, 2019, 04:14:22 pm »
All pensions depend on if you are lucky enough to have saved enough. If you have a big enough fund you can choose a low yield and watch the money grow above inflation.

In my case my pension is invested in  investment trusts, open ended funds and a few shares.  This will provide an income of 4%. If I was richer I would have chosen a lower yield. Funds that yield 2% grow more and in time produce more income than the 4% funds that grow more slowly.

As for taking a lump sum. I never will. I will stay invested and take the cash free element with each withdrawal.

I am retired at 56.  [I look after my octogenarian mother]
I am currently living on less that 10,000 income generated by my ISA (tax free)
At 60 I will change my Pension funds from growth to income funds and take uncrystallised lump sums
At this point my retirement income will be higher than my modest finishing pay after tax.
At state retirement age the government will probably give me some more money.
 
If I stayed at work and carried on paying into my pension to state pension age I would probably have become a millionaire. That was a really impressive number when I left school but was not a big enough incentive now.

Just in case anyone thinks I am totally on top of my finances. In the last 12 months my wealth has dropped by £100,000. Eeek!

Re: You know you're middle aged when
« Reply #851 on: March 06, 2019, 04:48:06 pm »
On a (1/80th) final salary pension based on £40k with 38 years service. For every £1k reduction
of pension you can get an extra £12k lump sum.

Adam

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Re: You know you're middle aged when
« Reply #852 on: March 06, 2019, 09:48:22 pm »
All pensions depend on if you are lucky enough to have saved enough. If you have a big enough fund you can choose a low yield and watch the money grow above inflation.

In my case my pension is invested in  investment trusts, open ended funds and a few shares.  This will provide an income of 4%. If I was richer I would have chosen a lower yield. Funds that yield 2% grow more and in time produce more income than the 4% funds that grow more slowly.

As for taking a lump sum. I never will. I will stay invested and take the cash free element with each withdrawal.

I am retired at 56.  [I look after my octogenarian mother]
I am currently living on less that 10,000 income generated by my ISA (tax free)
At 60 I will change my Pension funds from growth to income funds and take uncrystallised lump sums
At this point my retirement income will be higher than my modest finishing pay after tax.
At state retirement age the government will probably give me some more money.
 
If I stayed at work and carried on paying into my pension to state pension age I would probably have become a millionaire. That was a really impressive number when I left school but was not a big enough incentive now.

Just in case anyone thinks I am totally on top of my finances. In the last 12 months my wealth has dropped by £100,000. Eeek!

I've put on bold the bits about not taking the 25% tax free cash, and taking uncrystallised lump sums.


If the income you need each year is less than the personal allowance, then I can see the logic in doing it that way.  If not, then you end up paying more tax.
“Life is like riding a bicycle. To keep your balance you must keep moving.” -Albert Einstein

CommuteTooFar

  • Inadequate Randonneur
Re: You know you're middle aged when
« Reply #853 on: March 07, 2019, 12:04:05 pm »
Not quite tax free.

I will 'earn' £28k, £10k from ISA, £18K from pension.
£4,500 is tax free lump sum and leaving 13,500 of taxable income.
Next year the personal allowance is £12,500 so I need to pay 20% of 1000.
Or £200 tax.

The 100k drop in wealth reduces my income to £24k so no tax will be payable then.

The real sign of middle age. You start doing pension calculations.


ian

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Re: You know you're middle aged when
« Reply #854 on: March 07, 2019, 12:27:15 pm »
Think on the good side, anyone who isn't middle-aged by now won't have to worry about pension calculations.
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Jaded

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Re: You know you're middle aged when
« Reply #855 on: March 07, 2019, 03:16:49 pm »
Yes, for several reasons...
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fuzzy (retd.) AAGE

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Re: You know you're middle aged when
« Reply #856 on: March 13, 2019, 12:09:58 pm »
My reason for taking the maximum lump sum was weekly orders. Spending 26 and a bit years reading weekly orders and seeing reports of 'Death of Police Pensioner' where more than was coincidental, were getting less than 10 years as a pensioner..........

Full rotating shift work, unhealth working conditions and high levels of stress do not generally make for a long and happy retirement.

Learning of someone who had died after 20 or 30 years of retirement generally got a standing ovation in my office.
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