Can we retire please? How much money do you really need need?

[Cheshirecat57]

I looked at annuities years ago and stopped paying in as the return is poor and inflation can reduce the value. Since drawdown came in I have put as much as I could afford into my pension, I wish I had been able to do so before. With drawdown I can choose when to take my pension and thereby reduce my tax liability.

Nail on head

 

[Chris]

I have always thought about £30k for 25 years would be enough ignoring inflation as a drawdown.

I am some way short.

 

[busby]

hi
I don’t have managers as I don’t trust anyone else, i’m a one man band and always have been tbh.

The main thing that swayed it was infact I was talking to my accountant in 2018 saying that i’d be getting my OAP and that the money would just go into a bank account and i’d never see it but my kids would.

That same week our son purchased a new motorhome after tugging for years and we went for a look at it, within a week or 2 of looking around, ours was ordered and paid for cash and the government is paying me back albeit on a monthly basis . After 30 months they’ve paid me nearly 20 grand so eventually they’ll have paid me back in full.

Thats how i’m looking at it tbh, so that and the sheer enjoyment of owning it and the great life it’s brought/bringing us is perfect for us and we love it.

Reading other replies to this thread has made me realise I could stop running my business now and live quite well until i’m about 140 years old but I love what I do and made made/met some lovely people along the way so why stop.

As I said i’m tailoring it down so it suits my new/our lifestyle quite a bit, I can work from the motorhome quite easy, I take the laptop and printer so I can keep up with paperwork if needed, answer emails and phone enquires and all in the sunshine. It’s great tbh and I can’t wait to get back at it once this C is behind us.

The only thing I can’t do are personal Home Cinema demonstrations, (now this I really like), whilst we’re away so that’s a price to pay whilst sunning ourselves when abroad, it’s not affected business too much as most will wait until we are back home, those who won’t, well I wish them well and still advise them the best I can, advice is free in my book.

So in essence i’m well sorted I suppose and I should stop worrying about what might happen and get on with enjoying the time I/we have left before I can’t.

Not wanting to preach but if you can do the same then I would no question, we can meet up somewhere and have a bottle or 2 under the awning trying to shade ourselves from the sun, it’s great

Al

If I had Sat down and calculated my finances back in 2000 when I retired I would still be working.On paper there would have been no way we could afford it but we did thank goodness..Scrimped and scraped a bit for a few years,,well three to be precise and then bought a caravan in 2003 and have travelled abroad extensively ever since and want for nothing, BUSBY,

 

[Fragle]

Well Motorhome Fun comes up trumps again for information

So although my Gov page says 43 years of full NI payment and my pension will be £175. this may be false

Reading this something clicked in the grey matter and I remember a letter May 2015 about our future pension payments.

Now at the time it said the wife would get a full pension of £151.25 now £175. Me on the other hand had 2 payments £115.95 plus additional pension of £22.21 Total £138.16

The pension payment part is now £137.60 but don't know how much the additional part is. So I assume somewhere between £160 and £175

Will try next week to see what they say but better to have the shock now I suppose. So it looks as if this year having paid in for 9 years more than I had to, the same number of years I was contracted out for I get less money.

Can anyone enlighten me on what the £22 payment is now?

 

[Hirsch]

Thanks for the replies. I did speak with someone who confirmed i needed to pay 2017/18 (£796) and 2018/19 (£600) which would provide the additional £5 for each year .

I need to make sure I am employed and paying NI up until 5/4/21 for this current year to count. As it was inferred my contract might finish after 30/3/21 I need to be careful I don't miss out on a full year for the sake of a week. He did mention the need for a reference number which I need to sort.

I do have the cash so will mull it over and sort one way or the other before D day (5/4/21).

Obergruppenfuhrer questions the worth in doing it and I am undecided at the moment.

I can contribute circa £25k per annum from April 2022. My wife (who is 8 years younger ), is a long way off state pensionable age but has an old Royal Insurance pension which she needs to sort.

Need to jettison the 3 adults currently taking up space, downsize (buy myself a M3 with proceeds), and I think we might have some good years before the inevitable (hope my knees hold up ).

^{_{Subscribers  do not see these advertisements}}

 

[Cheshirecat57]

We both have forecasts of £190 and £170 a week, in 30 and 16 months respectively for a retirement at 66
If that is correct, it is £18700 a year , so if I draw just £6300 a year, that would be tax free as a couple and 25k a year
We can easily function on that the 1st 100k of my pot will last to nearly 82
BECAUSE I WANT TO PAY AS LITTLE TAX AS POSS

 

[Fragle]

get the impression (correct me if I am wrong) that if you are under the new single tier SP system from 2016 onwards you can effectively make up for past contracted-out years as long as you are adding complete NI contribution years to your record. That wasn't possible for those like me who got their pension under the pre-2016 SP.

Are you saying that post 2016 the extra years cover the opted out years as I'm not getting state pension for 7 more years?

 

[Nasher]

I need to make sure I am employed and paying NI up until 5/4/21 for this current year to count. As it was inferred my contract might finish after 30/3/21 I need to be careful I don't miss out on a full year for the sake of a week. He did mention the need for a reference number which I need to sort.

I'm not sure if the rules have changed, but when I retired in the middle of July 2009 I had already paid enough NI for the tax year 2009/2010 and was therefore credited a full year for pension purposes

If it's still the same, then your wage/salary for the year paid up until 30/3/21 should be more than enough - in fact any money paid after 06/04/21 would be counted towards 2021/2022 tax year

Hope this helps - perhaps someone on here will know how much NI needs to be paid?

 

[Hirsch]

I'm not sure if the rules have changed, but when I retired in the middle of July 2009 I had already paid enough NI for the tax year 2009/2010 and was therefore credited a full year for pension purposes

If it's still the same, then your wage/salary for the year paid up until 30/3/21 should be more than enough - in fact any money paid after 06/04/21 would be counted towards 2021/2022 tax year

Hope this helps - perhaps someone on here will know how much NI needs to be paid?

I'm hoping my last wage for week ending 30th March (if it turns out to be my last week) will do it. But just to make sure I'll have a word with my employer.

 

[Nasher]

A quick google & I found this:

To gain a qualifying year, you need to have earned a set minimum during a tax year (6 April to 5 April) and paid the required NI contributions. For 2020/21, the minimum is: £6,240 for employees

^{_{Subscribers  do not see these advertisements}}

 

[Hirsch]

A quick google & I found this:

To gain a qualifying year, you need to have earned a set minimum during a tax year (6 April to 5 April) and paid the required NI contributions. For 2020/21, the minimum is: £6,240 for employees

I'm ok with that

 

[Oscar]

Are you saying that post 2016 the extra years cover the opted out years as I'm not getting state pension for 7 more years?

I've recently 'bought' 2 extra years 2016/17 and 2017/18 as I was 2 years short of a 'full' pension & these were the years suggested by the pension service. I'm due to collect my OAP in July 2022. My online forecast shows a full state pension payable of £175.20 pw now, I've not been able to speak to anyone to confirm this, so am hoping that it's correct

Alb

 

[jannyman]

Jeez! So here am I thinking that the much lauded 'simpler' State Pension scheme was claimed to be better and more fair for all? How naive of me judging by reading most of the above. I realise I was very lucky to retire before all the (alledged) reforms kicked in.
As others have said though employ the services of a good IFA. Initial advice is free and should take into account both private and state pensions plus any other assets (savings etc) you can access. Going forward - good luck you all!

 

[gus-lopez]

Sorry, can I just ask, if you ask the gov.uk for a pension forecast do you get a "realistic" figure of what you will actually receive?

When you contact them by phone on many occasions they can sort it out there & then. In my case they had to refer it ti the back office staff & booked me an online phone appoitment for 2 weeks time & at a specified time. On receipt of that call they confirmed that I could only pay the 3 years from 2016 up until my retirment date in 2019 that would actually count towards an increased state pension.This they confirmed in writing specifying what years. At the time I then had to contact the HMRC national insurance again for a full list of paid & not complete years & using that I could then select the 3 years that i could pay for that would count.

Sounds to me like it's worth doing! When you ring the Future Pension centre, they should advise you which years would be your best option to purchase, and give you a reference number to quote when you make the payment, which should ensure you are credited with the correct year(s). In the past, when you

As above .Probably changed it now to a reference number to make it easier

If I had Sat down and calculated my finances back in 2000 when I retired I would still be working.

True. It is the same as trying to work out when you can "afford to have children" answer would be never.

So although my Gov page says 43 years of full NI payment and my pension will be £175. this may be false

Glad to hear that you are checking & good luck.

As it was inferred my contract might finish after 30/3/21 I need to be careful I don't miss out on a full year for the sake of a week

As others have said you need to have paid in around £800 in NI contributions for it to be classed as a full year

A quick google & I found this:

To gain a qualifying year, you need to have earned a set minimum during a tax year (6 April to 5 April) and paid the required NI contributions. For 2020/21, the minimum is: £6,240 for employees

 

[lorger]

I have always thought about £30k for 25 years would be enough ignoring inflation as a drawdown.

I am some way short.

That’s the figure I’ve worked to not including Lorraine’s pension so I hope you aren’t to far off

^{_{Subscribers  do not see these advertisements}}

 

[Happy Jim]

I've recently 'bought' 2 extra years 2016/17 and 2017/18 as I was 2 years short of a 'full' pension & these were the years suggested by the pension service. I'm due to collect my OAP in July 2022. My online forecast shows a full state pension payable of £175.20 pw now, I've not been able to speak to anyone to confirm this, so am hoping that it's correct

Alb

I tried to buy a couple of years for my wife a while back and gave up (tied myself in knots), is there an easy way of doing it?

When I looked and did the maths it was about a three year pay back.....which seemed like a no brainer!

 

[Stonemags76]

I tried to buy a couple of years for my wife a while back and gave up (tied myself in knots), is there an easy way of doing it?

When I looked and did the maths it was about a three year pay back.....which seemed like a no brainer!

She needs to phone the future pensions department & they will give her a reference number & pay details. Then just a case of transferring the payment stating the reference number.

 

[Oscar]

I tried to buy a couple of years for my wife a while back and gave up (tied myself in knots), is there an easy way of doing it?

When I looked and did the maths it was about a three year pay back.....which seemed like a no brainer!

I rang the Future Pension Centre helpline (think it was 0800 731 0175), your wife will need her NI number, they should talk her through the process and advise which are the best years to purchase, it's classed as paying class 3 contributions. I was given a sort code and account number and reference number, I paid the amount by bank transfer. Within a few days I could see my online tax account had been credited & my pension forecast increased.

 

[Silver-Fox]

Well I thought we'd got it sorted ... when we married he was 5 years and 1 month older than me so we always joked that we'd get our pensions together! As it stands now when he gets his it will be 6 years and 1 month afterwards that I'll get mine!

I’ll bet the women that were pushing for equality didn’t see the pension sting coming

 

[The Wino]

I’ll bet the women that were pushing for equality didn’t see the pension sting coming

That's a bit of an assumption what makes you think pension changes have anything to do with equality? If that was the case why wasn't there a lower pension age for ethnic minorities before the equality legislation!!

^{_{Subscribers  do not see these advertisements}}

 

[Silver-Fox]

Need to jettison the 3 adults currently taking up space

They should be contributing enough housekeeping for you to be at least £150 a month per person clear in your pocket.

If not just change the locks

 

[Silver-Fox]

That's a bit of an assumption what makes you think pension changes have anything to do with equality? If that was the case why wasn't there a lower pension age for ethnic minorities before the equality legislation!!

And your assuming it wasn’t

 

[Oscar]

Full state pension is due to rise in April 2021 from £175.20 per week to £179.60 per week

Revealed: what the state pension will pay in 2021 – Which? News

 

[SpeedyDux]

Are you saying that post 2016 the extra years cover the opted out years as I'm not getting state pension for 7 more years?

I was referring to an article I read in the Telegraph by Olivia Rudgard dated 15 September 2016. The title is

Face a smaller state pension because you were contracted out? Here's what you could do

This is an extract:

"For anyone who has been contracted out for a long time and is retiring after the introduction of the new system, the new state pension is unlikely to be more than [the “basic” state pension of £119.30 a week], said Sue Waites, a partner at pensions consultancy Hymans Robertson.

All new retirees will get a “starting amount”, which is the higher of their current entitlement under the new and old systems.

Under the new system, the employee with 35 years (the new minimum for full entitlement) of contracted out NI payments would get the full £155.65 less deductions that are “considerable” and would probably take him or her below the “basic” amount under the old rules. So their starting amount would be the basic £119.30 a week.

What can I do?

The best way to fix the deficit is to keep working or receiving NI credits. Ms Waites estimates that a worker who had been contracted out for 30 years would need around eight-and-a-half years of full NI payments to build their state pension entitlement back up to £155.65 a week.

Anyone still working or receiving NI credits for this period would automatically get back to this level. For each year worked, the employee would get around one 35th of £155.65, which is equivalent to £4.42 a week added to their income.

The problem comes for anyone who will reach state pension age within the next couple of years. They won’t have enough time to pay the NI necessary to build themselves back up to the full new amount."

I don't know if this advice is correct. You should ask the DWP to confirm it. I was in the category referred to in the final paragraph so there was nothing I could do, but I am helping the Duxette who is much younger than me achieve a full state pension without her contracted-out years and hopefully she won't have that deduction when she reaches her state pension age. Fingers crossed.

[Edited after re-reading the final 2 sentences.]

 

[The Wino]

And your assuming it wasn’t

True enough. But I think if people thought that way there would be no progress on social mobility or equality we would largely be serfs grovelling to our"betters" in case we upset the apple cart. I don't think it was right to have an inequality in retirement ages and that a lot of women would rather have equality if that was the cost. The change however is more likely the fact that it was known to be necessary for years but the short term cost in votes stopped it happening until it was unavoidable and unrelated to equality.

^{_{Subscribers  do not see these advertisements}}

 

[Silver-Fox]

True enough. But I think if people thought that way there would be no progress on social mobility or equality we would largely be serfs grovelling to our"betters" in case we upset the apple cart. I don't think it was right to have an inequality in retirement ages and that a lot of women would rather have equality if that was the cost. The change however is more likely the fact that it was known to be necessary for years but the short term cost in votes stopped it happening until it was unavoidable and unrelated to equality.

I think the Government at the time saw the equality issue as an ideal time to “up” the pension age for women.

Give with one hand and take with the other.
Is that not always the way and allows the books to be balanced.

Maybe I’m just too cynical or can see through the smoke screen

 

[Minxy]

I’ll bet the women that were pushing for equality didn’t see the pension sting coming

As I used to advise a colleague at work who wanted more responsibility and more pay "be careful what you wish for, it might come true" ... it did and she hated it!

 

[Silver-Fox]

As I used to advise a colleague at work who wanted more responsibility and more pay "be careful what you wish for, it might come true" ... it did and she hated it!

Exactly, sometimes you need to take a step back to see the wider picture.

I do think there should be a stepped system that allows for anyone involved in heavy manual work to retire earlier.
But that’s never going to happen

 

[68c]

I think it is fair that those who opted out get a smaller pension those still opted in. When you opt out it goes alongside running a seperate , usually workplace, pension. The money you would have paid into the state system is paid into a private pension instead. When you opted out you gambled that your private pension would perform better than the state pension. Now which one did best I do not know. I do remember initially being advised to opt out which I did, then the advice changed to opting in which I also did.

 

[Otter Spotter]

I think it is fair that those who opted out get a smaller pension those still opted in. When you opt out it goes alongside running a seperate , usually workplace, pension. The money you would have paid into the state system is paid into a private pension instead. When you opted out you gambled that your private pension would perform better than the state pension. Now which one did best I do not know. I do remember initially being advised to opt out which I did, then the advice changed to opting in which I also did.

This is true, in addition when Serps arrived in 1987/8 many people were convinced to opt out of their company pension and set up a personal pension which accepted the NI contributions. These people will also have a reduced state pension.

^{_{Subscribers  do not see these advertisements}}