Retirement

[Voyager EMH]

hmmm.
I would say that the very low interest rates which have been in place since 2008 have contributed a great deal to the rich (particularly the asset rich) getting much, much richer at the expense of the poor.
They don't have money in a savings account getting interest on the whole.

Yep, the very wealthy have been by far the biggest winners in periods of low interest rates and high interest rates.
I'm sure they like it that way.
The bigger the money - the more protection there is of it.

 

[harpo_72]

a few points to add on this subject. 1. Bussiness spending is also inflationary, not just consumer; 2.You cannot adjust taxes monthly like you can with interest rates so this strategy could never be flexible as interest rates are; 3. Central bank is independant and thus not politicised (supposedly); 4. Central banks have made the biggets mistake in their history and have caused (largely) the whole inflation bubble by not raising rates (and stopping QE) years aggo when the afteraffects of the financial crises in 2008/9 had calmed and growth was back on. A decade of zero rates and printing money was enetering the twilight zone and we will reap the affects for years to come

The 2008/2009 issue was caused by unregulated lending and the purchasing of bad debt. In the end we are all tidying up a mess of bad practice.
Should we have been taxed to tidy up this ? No we should have regulated the banks and made them responsible to the tax payers. We may have lost “competitive edge” but that was always a very weak argument.. should not build an economy purely on services that’s a “Greek tragedy “ waiting to happen.
The decade was not spent wisely for sure and one has to ask where did all the printed money go .. basically someone else’s pocket, not your average taxpayer.
Certain economic models don’t work and never will because greed is a human condition that is not being addressed.
The banks exercised their powers on Truss they effectively undermined her policies ( rightly or wrongly, who knows) but she lost their support and they dumped on her. The policies we have now are ones they support … why ? Because they get richer and that decade of printed money and lending has multiplied.
Irrespective of political party the bankers are in control..

 

[PNWokingham]

The 2008/2009 issue was caused by unregulated lending and the purchasing of bad debt. In the end we are all tidying up a mess of bad practice.
Should we have been taxed to tidy up this ? No we should have regulated the banks and made them responsible to the tax payers. We may have lost “competitive edge” but that was always a very weak argument.. should not build an economy purely on services that’s a “Greek tragedy “ waiting to happen.
The decade was not spent wisely for sure and one has to ask where did all the printed money go .. basically someone else’s pocket, not your average taxpayer.
Certain economic models don’t work and never will because greed is a human condition that is not being addressed.
The banks exercised their powers on Truss they effectively undermined her policies ( rightly or wrongly, who knows) but she lost their support and they dumped on her. The policies we have now are ones they support … why ? Because they get richer and that decade of printed money and lending has multiplied.
Irrespective of political party the bankers are in control..

all very nice comments on something that was nothing to do with what i mentioned and off topic and very conspiratorial. All i will say is Gordon Brown has a lot to answer for! and that over-regulation is at least as bad as under-regulation (did anyone mention MIFID 2)! And not to sure that addressing a natural human condition of "greed" is very sensible as it goes hand in hand with innovation and growth and high tax rates ensure the benefits are distributed

 

[SwingsitlikeHogan]

There is more factors to age ofc

At 55 my kids would be 25 , 22 and 22 but add 5 more years they are more settled in their life's in theory. Maybe needing a grandad for childcare

Then my wifes pension is terrible compared to mine, she won't be able to go much earlier than 65 so 5 years without her would be less boring than 10

However if I stay longer my pension is higher and we could both go at 60 and I support her

I finished just under 3 yrs ago. My wife still works P/T and spends a load of time up ‘north’ (I don‘t count Chesterfield as being in the north, but def north of Surrey)…sometimes in the last year it’s been weeks at a time - with me left down here in the South (definitely south ). I can count on one hand the number of days I’ve been bored.

TBH I have a feeling quite a few gaslight themselves into believing they’d be bored if they retired ‘too soon’, when in fact there is some other underlying reason for not stopping. I’d certainly encourage anyone who can afford it to retire as soon as they can, and don’t let fear of boredom stop them. Enjoy life. You don’t need the riches of Creosus to do that - but first set out and budget with a FA what you’d like to:be able to do in retirement - without, that is, looking to do the barely realistic.

 

[Voyager EMH]

all very nice comments on something that was nothing to do with what i mentioned and off topic and very conspiratorial. All i will say is Gordon Brown has a lot to answer for! and that over-regulation is at least as bad as under-regulation (did anyone mention MIFID 2)! And not to sure that addressing a natural human condition of "greed" is very sensible as it goes hand in hand with innovation and growth and high tax rates ensure the benefits are distributed

Which makes me wonder which of the 6 Chancellors we've had in the last 5 years is answerable for which things.
Will there have to be some kind of collective responsibility taken in a similar way to the Post Office scandal, I wonder?
Another public enquiry maybe?

 

[PJ87]

I finished just under 3 yrs ago. My wife still works P/T and spends a load of time up ‘north’ (I don‘t count Chesterfield as being in the north, but def north of Surrey)…sometimes in the last year it’s been weeks at a time - with me left down here in the South (definitely south ). I can count on one hand the number of days I’ve been bored.

TBH I have a feeling quite a few gaslight themselves into believing they’d be bored if they retired ‘too soon’, when in fact there is some other underlying reason for not stopping. I’d certainly encourage anyone who can afford it to retire as soon as they can, and don’t let fear of boredom stop them. Enjoy life. You don’t need the riches of Creosus to do that.

Defo need the mortgage paid off

Retirement (until state pension kicks in) is an instant 50% pay cut overnight with no overtime to top up

 

[SwingsitlikeHogan]

Defo need the mortgage paid off

Retirement (until state pension kicks in) is an instant 50% pay cut overnight with no overtime to top up

You don’t actually. We paid ours off it is true, but we have since taken out a mortgage for an extension, and my current pension is, through choice, less than 50% of my final take home salary. It’s only a few hundred a month and is affordable from my pension. And that is obviously key as your situation may be quite different.

We had the savings to fund much of the cost of the build but wanted to have a cash in hand for ‘living’. We got a good rate before they soared…and we come off it in 3 yrs time. We have a number of things worked out with our FA as to what we do then, and indeed between now and then…but we could keep paying it for as long as…

Its just my opinion, but I think there is almost an obsession about ‘paying off the mortgage’, when actually perhaps what is required is to reduce it to a manageable and sustainable level.

 

[PJ87]

You don’t actually. We paid ours off it is true, but we have since taken out a mortgage for an extension. It’s only a few hundred a month and is affordable from my pension.

We had the savings to fund much of the cost of the build but wanted to have a cash in hand for ‘living’. We got a good rate before they soared…and we come off it in 3 yrs time. We have a number of things worked out with our FA as to what we do then, and indeed between now and then…but we could keep paying it for as long as…

Its just my opinion, but I think there is almost an obsession about ‘paying off the mortgage’, when actually perhaps what is required is to reduce it to a manageable and sustainable level.

Thing is mortgages now are so high, sure I could take our a small mortgage later but as it stands my mortgage is 275k which in modern life is smaller than a lot of people's but compared to mortgages of the past is ridiculous

I'd want that firmly paid for (age 62 but over paying) before I hang up my mouse and Chinagraph

 

[PNWokingham]

Which makes me wonder which of the 6 Chancellors we've had in the last 5 years is answerable for which things.
Will there have to be some kind of collective responsibility taken in a similar way to the Post Office scandal, I wonder?
Another public enquiry maybe?

a very deflecting post - not defending any chancellor over the past 16 years but we have not had an event like the GFC in my lifetime so sort of off piste. The said Chancellor inherited the best period of recent history for managing the country - very low debt levels and a boom economy yet forgot to do what previous holders did and tuck some pennies away during the good times to cover the innevitable bad times!

 

[Voyager EMH]

a very deflecting post - not defending any chancellor over the past 16 years but we have not had an event like the GFC in my lifetime so sort of off piste. The said Chancellor inherited the best period of recent history for managing the country - very low debt levels and a boom economy yet forgot to do what previous holders did and tuck some pennies away during the good times to cover the innevitable bad times!

If you call record levels of unemployment and record numbers of house repossessions and record high mortgage rates as a "period of best management of the country" then you lived and worked in a completely different way from me.
He did pay off our war-debt to USA. But the GFC resulted in a bank-bailout that left no "pennies tucked away".
He was commended in Europe and USA for his actions in seeking a swift and coordinated strategy to deal with the GFC and bank bailouts.
It was this coordinated strategy that was needed rather than countries pulling in different directions.
A very great deal to be answerable for, I'm sure.

 

[jim8flog]

Well, they do "see" it of course. But if, for example, you have more than one private pension, you have to decide which one gets all the tax taken from it. HMRC does not pick one at random. So it is up to you to tell HMRC which private pension you want your income tax taken from.

Not my experience.

I kept having to contact IR as they wanted to decide which of my pensions had my remaining personal allowance allocated to and I had to do it every year. I gave up in the end.

 

[PhilTheFragger]

Professor Fragger the well known economist has the following observations.


Previous recessions/ economic downturns have been caused largely by financial/ fiscal mismanagement
And have typically seen high interest rates, increasing unemployment and rising house repossessions.

The current economic problems stem from having to pay the bills left by Covid ( Months of furlough isn’t cheap) and the war in Ukraine, this had an immediate affect on the price of oil, gas and leccy.

Directly leading to the current cost of living crisis.

We have had increased interest rates, but we don’t have high unemployment and we don’t have increased repossessions,( partially due to many mortgages being fixed rates and are still on the old low rates) therefore this is not a typical economic downturn and therefore the standard tool of interest rates is far too blunt a tool to be used.

People aren’t spending on luxuries, they are having trouble affording the necessities

The current recession won’t be long or deep, it is time for the BofE to knock a bit off interest rates to relieve the pressure on Joe Public

 

[Crazyface]

Professor Fragger the well known economist has the following observations.


Previous recessions/ economic downturns have been caused largely by financial/ fiscal mismanagement
And have typically seen high interest rates, increasing unemployment and rising house repossessions.

The current economic problems stem from having to pay the bills left by Covid ( Months of furlough isn’t cheap) and the war in Ukraine, this had an immediate affect on the price of oil, gas and leccy.

Directly leading to the current cost of living crisis.

We have had increased interest rates, but we don’t have high unemployment and we don’t have increased repossessions,( partially due to many mortgages being fixed rates and are still on the old low rates) therefore this is not a typical economic downturn and therefore the standard tool of interest rates is far too blunt a tool to be used.

People aren’t spending on luxuries, they are having trouble affording the necessities

The current recession won’t be long or deep, it is time for the BofE to knock a bit off interest rates to relieve the pressure on Joe Public

Oddly I disagree. Leave it as it is. Let people start to make proper choices. Food + bills ,over non essential items.

 

[Crazyface]

We had a discussion over actually staying here or not. Problem is......we can't now go anywhere.

 

[PJ87]

Oddly I disagree. Leave it as it is. Let people start to make proper choices. Food + bills ,over non essential items.

How many people are spending on non essential items over food and bills?

I really think you live in the daily mail comment section

 

[harpo_72]

How many people are spending on non essential items over food and bills?

I really think you live in the daily mail comment section

I dunno think there is stuff that’s not required and we have .. but no one should be unable to heat their homes, access to water etc ..
The real issue here is it’s not a case of not enough to go around.. it’s a case of greedy people having too much.

 

[PJ87]

I dunno think there is stuff that’s not required and we have .. but no one should be unable to heat their homes, access to water etc ..
The real issue here is it’s not a case of not enough to go around.. it’s a case of greedy people having too much.

100%

You really don't see people putting buying a phone over buying their kids a meal

Only in some fake story do you get that

 

[IanM]

100%

You really don't see people putting buying a phone over buying their kids a meal

Only in some fake story do you get that

The actual items vary, but I saw some stuff in my working life that would shock and sadden you.


Anyway, back on retirement. Some reasonably intelligent people make some very odd decisions.

 

[jim8flog]

A bit late to some of the comments but for those that do not know you can get your state pension forecast in writing

Check your State Pension forecast

Find out how much State Pension you could get (your forecast), when you could get it and how you could increase it

www.gov.uk

 

[PNWokingham]

i have been paying a lot of attention to pensions over past year. Not sure when it will happen but will stay in my job as long as i can - be great to get to 60 (currently 53) although never know when the reaper will strike. On State Pension, this year will be 34 years of full contributions, so will be maxed out in a few months for payouts at 67. I have 2 SIPPs and ISAs with AJ Bell and Interactive Investor, which i think are the best 2 pension platforms on the market - Hargreaves also very good and all three offer the whole market of funds, shares, ETFs etc - but Hargreaves is just more expensive.

I am not allowed to invest in shares or individual instruments (due to my job) like bonds, which has frustrated me a lot but i have really got into Investment Trusts (ITs) over the past year and have a very diverse allocation. Investemnt Trusts are companies and differ from Open Ended funds like unit trusts/ OEICs etc in they are live priced (rather than daily), although both are managed by the same fund managers. A unique feature of Investment Trusts is they they have a live stock-exchange quoted price and also an underlying NAV (net asset value) - unit trusts price is the same as the NAV. So you can look at the discount or premium to NAV - and there are lots of ITs that are trading on substantial discounts to NAV - for instance, you can buy many REITs or real asset funds, especially in the alternative energy (solar, battery soreage etc) that trade on discounts of 30% or more. This is whwere i have been allocating most of my money across around 50 trusts - and these all pay substantial dividends of 5% to 9% - and there is a lot of merger activity atm in the REIT space due to the large NAV discounts and as companies look to bulk up.

My target over the coming years - ie the total asset size i would like to have a reasonably comfortable retirement - is 50% to 70% above what i currently have. Hence, I will be putting as much into my company pension as possible combined and hoping for a 10% area return on current assets. Putting as much as possible into your pension is now a no brainer due to the tax breaks and with the new pension freedoms that you can access from 55. It is an additional benefit if your company contributions can be invested as salary sacrifice - we can do this from the annual bonus, so i will take max advantage of this as it is another 2% saving.

I would never go anywhere near an annuity post retirement and keep the current strategy of high-yielding investment trusts (REITs, Real Assets, Equity Income and Fixed Income funds), along with alocating more to individual high-yielding shares and short-term Gilts if they are paying 4%+.

I have looked a lot at how to access the cash through the SIPPa and there are lot of factors to consider - ie how to access the tax-free element (capped at £268,275 despite the size of the fund). I am not sure of what i will do yet but the tax free element will defitely be deployed into ISAs, to ensure the ISA allowance is used each year post retirement - they are both just 2 pots managed in the same place and containing similar investments. I know inheritance plans are best served by leaving as much in pensions as possible as they are IHT free but i feel the flexibilty of ISA through retirement is worth the trade off. Both SIPPS and ISAs have a dividend yield well north of 5% so i would hope i can take at least this much annually without running down their total sizes.