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

[Wh05apk]

Correct.


Wrong I'm afraid. If it is owned jointly in equal proportions (which is the norm) the income and expenses have to be split 50/50.

The ownership of the property can theoretically be changed from joint tenants to tenants in common at any time, think carefully whether this is the best thing for you to potentially save about £1,000 year tax, as effectively you have just given the house away.

 

[Minxy]

The ownership of the property can theoretically be changed from joint tenants to tenants in common at any time, think carefully whether this is the best thing for you to potentially save about £1,000 year tax, as effectively you have just given the house away.

We simply did a transfer of ownership with the Land Registry, it cost about £40 to put in my name then the same again when we put it back in joint names. This was done for various reasons to benefit us tax wise at the time.

 

[Wh05apk]

We simply did a transfer of ownership with the Land Registry, it cost about £40 to put in my name then the same again when we put it back in joint names. This was done for various reasons to benefit us tax wise at the time.

A transfer of ownership is different, you have taken one party off completely, and potentially could involve stamp duty, changing to tenants in common keeps all parties on the property (and has no implications to any mortgages) just affecting the legal split of ownership.

 

[ceejayt]

A transfer of ownership is different, you have taken one party off completely, and potentially could involve stamp duty, changing to tenants in common keeps all parties on the property (and has no implications to any mortgages) just affecting the legal split of ownership.

I believe that is what we did when we were in a similar situation to put income into wife’s name

 

[Lizbiebrowne]

Can you rent your house out and full time in your van? Don’t look back on life and think ’what a nice house we had’, look back and think ‘wow what an adventure’.

You should take advice - there may be Capital Gains tax implications.

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[ceejayt]

You should take advice - there may be Capital Gains tax implications.

CGT should be pretty mini unless you have only owned the property a very short while. You should check but it used to be that the first year of non occupation didn’t count. Each further year then is used as a fraction of your total ownership period to calculate any percentage gain of which the first £11k or so is exempt anyway. Bit of professional advice never hurts though

 

[Cheshirecat57]

CGT should be pretty mini unless you have only owned the property a very short while. You should check but it used to be that the first year of non occupation didn’t count. Each further year then is used as a fraction of your total ownership period to calculate any percentage gain of which the first £11k or so is exempt anyway. Bit of professional advice never hurts though

Called "Tapered Relief" ( for info)

 

[fordsabroad]

Regrettably Taper relief is long gone. I believe that on the sale of the property the profit is split between each owner in the ratio that they own it, normally 50/50. They will each owe CGT on this profit minus the CGT allowance allowed at the time. Certain expenses can be deducted from the profit but that is best dealt with by an accountant.
That's the basics of it. It gets more complicated if you have ever lived in it. The rate of CGT you pay is based on your income tax band. This will probably all change (not for the better) when Rishi starts to claw back the money he has been forced to borrow.

 

[RobbieBobby]

We approached this from the other end working out how much cash we would have then comparing it with what we spent each year less the costs of going to work.
Th first thing to do is set aside an amount equal to the state pension each year until you reach state pension age . Then work out any other income from investments/savings and I set it up on a spreadsheet with an allowance for inflation.
Our finances were a bit complicated so in the end we visited a financial advisor who we had used before he used a computer program that did the spreadsheet thing a lot better. You input all your assets and incomes (pension etc). At the top is a timeline with a symbol of an umbrella on a beach that you can drag to your retirement age and a skull and crossbones that you set to the expected date you might pyc. The program then calculates given the level of cash you expect to draw how your savings reduce over the years. You can choose things like inflation, interest rates of assets like shares/ISAs/property etc and see how your assets are likely to last or not. You can then alter the drawings to see what the effect is of taking more or less cash.....its huge especially if you take more out in the early years. It was very useful for us as we have some rental from property and the program is smart enough to assume you sell when you have no savings left then have an increase in cash but less income.
We were lucky we had visited him before and he neither charged us or tried to sell us anything just said he was happy to say it looked like the sums added up and made sense so just do what you think best. Of course there will still be things you can't predict (Labour were proposing to heavily affect our rental income with tax and increased regulation) . He suggested a plan to the age of 100 I hope he's right!!!!!
It's a big decision and we aim to re-do the financial calculation every 3 to 5 years.
So it's sharpen your pencil and fire up the PC but remember two facts. You can have more money when you retire and less years or more years and less money but not both. And there are no pockets in shrouds.

Great advice! Go see a financial advisor before you make any decisions. If you have an occupational pension ask for a "cash equivalent transfer value". Don't guess and don't take my advice (or anybody else's). You life is your life and your decisions are your decisions. Food for thought: Standard pensions (state or occupational) and annuities assume that your annual needs will be flat (or increasing with inflation). Reality is somewhat different. Do you really expect to be spending more per year when you are 85 than when you are 65? Personally, I don't think so. I have a state pension (just), a small, index-linked occupational pension, an annuity and a flexi-access drawdown pot so I have some security plus the flexibilty to draw down more if I need (want!). That works for me but we all have different needs and different approaches to risk versus security.

 

[Rosemary1]

Great advice! Go see a financial advisor before you make any decisions. If you have an occupational pension ask for a "cash equivalent transfer value". Don't guess and don't take my advice (or anybody else's). You life is your life and your decisions are your decisions. Food for thought: Standard pensions (state or occupational) and annuities assume that your annual needs will be flat (or increasing with inflation). Reality is somewhat different. Do you really expect to be spending more per year when you are 85 than when you are 65? Personally, I don't think so. I have a state pension (just), a small, index-linked occupational pension, an annuity and a flexi-access drawdown pot so I have some security plus the flexibilty to draw down more if I need (want!). That works for me but we all have different needs and different approaches to risk versus security.

We thought that too - planning to spend more each year in our 60‘s and early 70’s (God willing!) and then prepared to cut back in our late 70’s and 80’s (if still here!).

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[deleted79651]

Great advice! Go see a financial advisor before you make any decisions. If you have an occupational pension ask for a "cash equivalent transfer value". Don't guess and don't take my advice (or anybody else's). You life is your life and your decisions are your decisions. Food for thought: Standard pensions (state or occupational) and annuities assume that your annual needs will be flat (or increasing with inflation). Reality is somewhat different. Do you really expect to be spending more per year when you are 85 than when you are 65? Personally, I don't think so. I have a state pension (just), a small, index-linked occupational pension, an annuity and a flexi-access drawdown pot so I have some security plus the flexibilty to draw down more if I need (want!). That works for me but we all have different needs and different approaches to risk versus security.

I worked in Social Services Finance and we had a ratio for typical spend amongst the different age groups: 55- 64 £1; 65- 79 £2; 80+ £4.

So, yes, you can expect to be spending more at age 85 than age 65, given that financial contributions towards one's social care are likely to rise, either to fund the vaunted expansion and funding of social care; or to meet the full cost of necessary care on a self funding basis.

Steve

 

[Pablo19]

This has probably been spoken about before, but if you are over 55 you can get a pension valuation. I had 4 pension schemes throughout my various careers, one of them being a private scheme with Aviva. I lost my job just 18 months before I was planning to retire, and had such a limited knowledge of pensions.

When my final salary pension was due to mature I received a load of paperwork with different options. Not really fully upstanding any of them I looked through a long list of FCA authorised and approved Independent Financial Advisors and came across Reeves Independent who are based in Newcastle, who specialise in pensions. Based on their advise I didn’t take the Final Salary pension but consolidated the 4 pensions and now have a investment account. I take full advantage of my personal allowance, and the 25% tax free part of the pension and avoid as much as is legally allowed, paying income tax. I’m still with Reeves after 4 years and I so highly recommend them. Give them a call, you have nothing to lose and everything to gain.

I'm not questioning the advice they gave you but it's actually very unusual for an advisor to recommend selling out a defined benefit pension. Many advisors will actually refuse to accept the cash investment value in fear of being sued further down the line. It's also a requirement to take financial advice for doing so and there a lot of people wanting to transfer to a money purchase pension and can't find anyone to do it for them!

 

[Wh05apk]

I'm not questioning the advice they gave you but it's actually very unusual for an advisor to recommend selling out a defined benefit pension. Many advisors will actually refuse to accept the cash investment value in fear of being sued further down the line. It's also a requirement to take financial advice for doing so and there a lot of people wanting to transfer to a money purchase pension and can't find anyone to do it for them!

Not necessarily, I switched mine, at the time the companies were giving something like 40x the final pension figure, so it ws a no brainer.

 

[The Wino]

Not necessarily, I switched mine, at the time the companies were giving something like 40x the final pension figure, so it ws a no brainer.

It depends how long you were expecting to live what assumptions there are on inflation and interest rates etc etc. But at 40 times it is a bit of a no brainer! I wonder what the current rates are. Were in the opposite position pretty good savings/ investments next to no pension. I would ideally like half and half but annuity rates are a bit too low at the moment.

 

[Pablo19]

Not necessarily, I switched mine, at the time the companies were giving something like 40x the final pension figure, so it ws a no brainer.

Like I said, I don't question individual circumstances may mean it's fine but it's highly regulated now. there is loads of stuff about it on the money savings expert forums but also a brief summary here https://www.which.co.uk/money/pensi...ransferring-your-company-pension-apxs62n5bwyx

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[Ninjabob]

The things we did in order were - pay off any debt (especially credit card debt) as the interest rates are normally higher than you can achieve from saving. Next pay off your mortgage - it was important at the time for us as interest rates were historically much higher than today but interest only mortgages have a nasty sting in the tail. Make use of the £20k ISA allowance (£40k for a couple) because this can build into several hundred thousand pounds of tax free income from the Stock Market if you play your cards right. If you don't have an ISA wrapper you can stil earn £2k each in dividends tax free from other Stock Market investments. Take the 25% tax free part of your private pension and invest in your existing property in the way of sensible work (extensions etc.) that is going to increase the value of your property in the long run which will be another tax free benefit if you downsize. Drawdown your private pension in a tax efficient way to pay the minimum tax whilst actually being able to extract enough money to reduce the pot.

Or - by a Morelo and blow the lot

 

[Otter Spotter]

Not necessarily, I switched mine, at the time the companies were giving something like 40x the final pension figure, so it ws a no brainer.

Being an qualified IFA before I retired I was able to advise clients on Final Salary or Defined benefit schemes and one of the main points we had to get drilled into clients brains was that on transfer you lose the guaranteed indexed income which will drop into your bank account whether you need it or not. The issue many clients had was they had things they wanted to do whilst they were still relatively young and fit and needed lump sums to do them, whether it was buying a Motorhome, 2nd home, home for kids, big holidays and not every F/S scheme gave them enough at the start to do what they wanted. In addition spending in retirement tends to follow a double bell curve, early into retirement spending goes up and then as we slow down spending decreases and then health issues kick in and care costs become a major expense, this isn’t always the case, but if you have transferred into drawdown you can manage your drawdown if tax free cash and income to follow the curves.
The other major benefit of drawdown plans is that on your death your partner can continue with the same spending strategy because the Drawdown plan will be transferred to them or to any beneficiary you want whereas F/S pays only to wife or partners and financial dependants and cannot be past on as a lump sum.
Transfers of F/S schemes is fraught with danger and you have to understand the risks of both transferring and not transferring.

 

[DandG5515]

It depends how long you were expecting to live what assumptions there are on inflation and interest rates etc etc. But at 40 times it is a bit of a no brainer! I wonder what the current rates are. Were in the opposite position pretty good savings/ investments next to no pension. I would ideally like half and half but annuity rates are a bit too low at the moment.

I’m just 55 and had upto dated figures on a final salary scheme I paid in 1998-2002, without inflation I would need to be 95 to get the transfer value out (40 years). On current figures if I left its to 65 (scheme retirement age) I would need to be 88 to get the transfer value out. I am looking at this one as the scheme is only 70% funded.

 

[The Wino]

I’m just 55 and had upto dated figures on a final salary scheme I paid in 1998-2002, without inflation I would need to be 95 to get the transfer value out (40 years). On current figures if I left its to 65 (scheme retirement age) I would need to be 88 to get the transfer value out. I am looking at this one as the scheme is only 70% funded.

Yes but the unknown is what's going to happen to inflation and interest/ investment rates. I think I might have made the same decision on those figures but if the scheme was indexed to wages the final salary payment could change a lot in 10 years.

 

[Bedspring]

I work hard in a job I hate but money is ok. I am 54 next birthday wife is 64. A 25 year mortgage is paid in full by my birthday so 6 years early. For a few years we can save a good lump. Were fortunate enuff to have a little emergency fund so coverd there.


You may find these a bit cheesy, but there is a lot of truth in it. G

Its hard to move from the job you hate, as it pays bills, change is terrifying, but for me eventually the thought of more years doing a job I hated was more terrifying than the change.

Good luck

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[Tony50]

Maybe worth a google search on pensions 'what's your nimber' - there's a few threads that provide steer

I have a Drawdown pension , it pays double approx. what an Annity does for the same amount investment , but and it's a very big but , it's based on the Stock Market , so Capital can go up or down it's a risk I took, and so far the Capital is ok , mine has been going 16 years , I don't take the maximum allowed out , another plus is that If I " Peg Out " !! before my wife then it's set up she will be entitled to a pension it can also be passed down to children if wife dies , can't remember if Wife will get same pension ( must recheck on that )
ps. I don't intend going yet !!