[Misc] Retirement

Sirnormangall · Jan 26, 2023

Nicks said:
1 year and 2 days until I finally reach the official Retirement age of 66.
We were the first year at school to get told we had to do the extra year and I'm sure we are the first year to get the extra year added on to retirement
Mind you I'm semi retired now and just do a bit of work 30 minutes from my front door and that finishes in April .
I have got right into Metal Detecting and I enjoy the walking football stuff down here in Salisbury.
Plenty of time to do the metal detecting at weekends at the moment as I'm midway through my 5 match home game ban

I think yours is the second school year to get the extra year: I’m in the school year before you and my NRA is 66. But I doubt that news will make you less angry! Metal detecting sounds interesting- is the kit expensive?

Nicks · Jan 26, 2023

Sirnormangall said:
I think yours is the second school year to get the extra year: I’m in the school year before you and my NRA is 66. But I doubt that news will make you less angry! Metal detecting sounds interesting- is the kit expensive?

No we were the first school year to get hammered as my NRA is 66 as well.
Metal detectors are a bit pricey but it depends on how serious you want to take it to be honest.
You can get a decent second hand one for about £350.00 then you need all the bits that go with it, Pinpointer, shovel etc etc and the permission off the landowners to detect on it , plus you need to be registered.

Flagship · Jan 27, 2023

I retired at 64 having worked 47 years, mostly self employed. I moved up north and bought a bigger property arranged as three flats, so get a reasonable rental income.
It was a hell of a wrench leaving Brighton and all my friends and family and relinquishing my season ticket, but it is so much cheaper to live here. If I had stayed in Brighton I could see myself working until I dropped. I've spent the past year or so working on the new property so I'm easing myself into retirement. I think it is important to have a plan and try and follow it through.

Mrs F is probably going to outlast me by many years, so the plan is to make sure she has enough for her later years.

Shropshire Seagull · Jan 27, 2023

dazzer6666 said:
Gov website

State Pension age is currently 66 and two further increases are currently set out in legislation: a gradual rise to 67 for those born on or after April 1960; and a gradual rise to 68 between 2044 and 2046 for those born on or after April 1977.

Lucky me, born premature on 22 March 1960 - so only shunted back one year to age 66 ...

Harry Wilson's tackle · Jan 27, 2023

I have sought advice....but it wasn't any help.

My work pension is 'full' (I maxed my AVCs and bought into missing years as we PhDs don't 'start work' till around 30) and yet I am still making it bigger.

My plan is to take my max lump sum and get sonny boy into bricks and mortar. This stays as a tax free gift if I live X years (7?). In North Kent the house prices are low compared with you lot in Sussex. Ssssshhhh! The advice I was given was 'take half that'. Why? I know what to do with the money.

My annual pension income is decent.

Plus I have another job as a journal editor starting in 24. Easy work, from home. That will bring me much the same as my son earns in his day job. FFS

The missus is back in work and she has a good skill set.

Mortgage paid off years ago.

But if I retire I become semi detached from a patented drug I'm developing....so I really need to stay in post....

And my health is failing fast (spine, hips and knees). The travel to work is onerous now.

And my day job is exhausting. I am on here a lot but I multitask. I was working tonight till close to midnight.

Decisions.....decisions....

sparkie · Jan 27, 2023

Weststander said:
The state pension age is already 67 for those born on or after 6 March 1961.

And 68 for those born 1976.

It's looking like that will change on March 15th, and not in a good way.

The trial balloon is that for me it'll be changing from 67 to 68, although reports are confused and "nothing has been decided yet".

Work til you drop, peasants !

zefarelly · Jan 27, 2023

sparkie said:
Work til you drop, peasants !

I'm only 51 and have always been of the opinion I will only be able to aford to retire If I can afford to pay for it All myself.

the greedy self serving scum that have run this country the last 40+ years have seen to that good and proper.

dazzer6666 · Jan 27, 2023

Harry Wilson's tackle said:
I have sought advice....but it wasn't any help.

My work pension is 'full' (I maxed my AVCs and bought into missing years as we PhDs don't 'start work' till around 30) and yet I am still making it bigger.

My plan is to take my max lump sum and get sonny boy into bricks and mortar. This stays as a tax free gift if I live X years (7?). In North Kent the house prices are low compared with you lot in Sussex. Ssssshhhh! The advice I was given was 'take half that'. Why? I know what to do with the money.

My annual pension income is decent.

Plus I have another job as a journal editor starting in 24. Easy work, from home. That will bring me much the same as my son earns in his day job. FFS

The missus is back in work and she has a good skill set.

Mortgage paid off years ago.

But if I retire I become semi detached from a patented drug I'm developing....so I really need to stay in post....

And my health is failing fast (spine, hips and knees). The travel to work is onerous now.

And my day job is exhausting. I am on here a lot but I multitask. I was working tonight till close to midnight.

Decisions.....decisions....

What was the logic for the advice to take half the lump sum ? If you know what to do with it (7 years is correct BTW for any gift to avoid inheritance tax, so the earlier you do that the better from that perspective) and the remainder provides you with an income (with other sources) that will mean you’re comfortable recommending half does sound a bit odd unless perhaps it was to retain a high degree of flexibility ?

I was told it’s also worth considering the 25% tax free withdrawal may change (reduce) in the future - particularly given the Gov need to increase tax revenues. I took mine out of my various pots - like you we want to give the kids a leg-up on to the property ladder (also bearing in mind the 7 year rule) and I’m happy to invest elsewhere like ISAs for example. The pension lifetime allowance may also be a factor - taking out the 25% potentially and significantly reduces the tax charge payable at 75 when your funds are tested.

Can understand the wish to continue with the drug development but - particularly if you have heath issues - working when you don’t really need to made no sense to me once I’d fully rationalised it in my head (and it took a while). When I stopped the easy option was definitely to not have stopped…..keep taking the salary, the work wasn’t hugely difficult etc etc. However much money you have though, you can’t buy time - and have to say having pretty much all your time to yourself and not be answerable to anyone is just fantastic.

Beach Hut · Jan 27, 2023

dazzer6666 said:
However much money you have though, you can’t buy time - and have to say having pretty much all your time to yourself and not be answerable to anyone is just fantastic.

This is so true, three people I worked with passed away just before of very soon after they retired.

A lot of decisions on retirement must also include you as the individual.

Carlos BC · Jan 27, 2023

dazzer6666 said:
What was the logic for the advice to take half the lump sum ? If you know what to do with it (7 years is correct BTW for any gift to avoid inheritance tax, so the earlier you do that the better from that perspective) and the remainder provides you with an income (with other sources) that will mean you’re comfortable recommending half does sound a bit odd unless perhaps it was to retain a high degree of flexibility ?

I was told it’s also worth considering the 25% tax free withdrawal may change (reduce) in the future - particularly given the Gov need to increase tax revenues. I took mine out of my various pots - like you we want to give the kids a leg-up on to the property ladder (also bearing in mind the 7 year rule) and I’m happy to invest elsewhere like ISAs for example. The pension lifetime allowance may also be a factor - taking out the 25% potentially and significantly reduces the tax charge payable at 75 when your funds are tested.

Can understand the wish to continue with the drug development but - particularly if you have heath issues - working when you don’t really need to made no sense to me once I’d fully rationalised it in my head (and it took a while). When I stopped the easy option was definitely to not have stopped…..keep taking the salary, the work wasn’t hugely difficult etc etc. However much money you have though, you can’t buy time - and have to say having pretty much all your time to yourself and not be answerable to anyone is just fantastic.

Taking the 25% of the tax free cash (or whatever % suits you) is a crystallisation event and at that point is tested against the lifetime allowance. Depending on how you mean to take the money from your pensions your pensions can make different approaches work for different people. The lifetime allowance charge is 25% on income and 55% on lump sums on the amount above the lifetime allowance. So if the amount above the LTA has come purely from growth of your pot that you have left invested then you may consider that similar to normal taxation (if taking as income). It can even pay to continue contributions when above the LTA if an employer is also contributing (for example if you are a higher rate taxpayer - you pay £60 after tax relief to have £100 in your pension and then employer matches. Ignoring growth, the £200 has an LTA charge of 25%= £50 - so your £60 contribution after LTA charge and 20% tax is still worth £120). Have assumed higher rate taxpayer when working and basic rate in retirement.

Pensions sit outside of your estate and the Defined Contribution pensions can be passed on - tax free before age 75 and at the recipients tax rate if over 75.

Tax free cash can be useful to take almost like an income to help with tax planning. Say for example you have an income need of £24,570 take home in retirement. You have the state pension at around £10,000 and also take £2,570 from your pension as actual income. This is at the level of your personal allowance so no tax payable. The remaining £12,000 you need, can come as monthly tax free cash from your pension with the bulk of your pot still invested so that it can grow. As long as your tax free cash lasts, you can live without paying tax.

There really isn't one size fits all, a good financial planner can be well worth the investment.

GOM · Jan 27, 2023

Sirnormangall said:
I think yours is the second school year to get the extra year: I’m in the school year before you and my NRA is 66. But I doubt that news will make you less angry! Metal detecting sounds interesting- is the kit expensive?

It increased to 66 in 2019/2020 so not the first or second year....

dazzer6666 · Jan 27, 2023

Carlos BC said:
Taking the 25% of the tax free cash (or whatever % suits you) is a crystallisation event and at that point is tested against the lifetime allowance. Depending on how you mean to take the money from your pensions your pensions can make different approaches work for different people. The lifetime allowance charge is 25% on income and 55% on lump sums on the amount above the lifetime allowance. So if the amount above the LTA has come purely from growth of your pot that you have left invested then you may consider that similar to normal taxation (if taking as income). It can even pay to continue contributions when above the LTA if an employer is also contributing (for example if you are a higher rate taxpayer - you pay £60 after tax relief to have £100 in your pension and then employer matches. Ignoring growth, the £200 has an LTA charge of 25%= £50 - so your £60 contribution after LTA charge and 20% tax is still worth £120). Have assumed higher rate taxpayer when working and basic rate in retirement.

Pensions sit outside of your estate and the Defined Contribution pensions can be passed on - tax free before age 75 and at the recipients tax rate if over 75.

Tax free cash can be useful to take almost like an income to help with tax planning. Say for example you have an income need of £24,570 take home in retirement. You have the state pension at around £10,000 and also take £2,570 from your pension as actual income. This is at the level of your personal allowance so no tax payable. The remaining £12,000 you need, can come as monthly tax free cash from your pension with the bulk of your pot still invested so that it can grow. As long as your tax free cash lasts, you can live without paying tax.

There really isn't one size fits all, a good financial planner can be well worth the investment.

Yep….pretty much where I am. Now taking an income and paying some tax on that as the lesser of two evils. Will be a hit when I’m 75 but trying to minimise that.

Harry Wilson's tackle · Jan 27, 2023

dazzer6666 said:
What was the logic for the advice to take half the lump sum ? If you know what to do with it (7 years is correct BTW for any gift to avoid inheritance tax, so the earlier you do that the better from that perspective) and the remainder provides you with an income (with other sources) that will mean you’re comfortable recommending half does sound a bit odd unless perhaps it was to retain a high degree of flexibility ?

I was told it’s also worth considering the 25% tax free withdrawal may change (reduce) in the future - particularly given the Gov need to increase tax revenues. I took mine out of my various pots - like you we want to give the kids a leg-up on to the property ladder (also bearing in mind the 7 year rule) and I’m happy to invest elsewhere like ISAs for example. The pension lifetime allowance may also be a factor - taking out the 25% potentially and significantly reduces the tax charge payable at 75 when your funds are tested.

Can understand the wish to continue with the drug development but - particularly if you have heath issues - working when you don’t really need to made no sense to me once I’d fully rationalised it in my head (and it took a while). When I stopped the easy option was definitely to not have stopped…..keep taking the salary, the work wasn’t hugely difficult etc etc. However much money you have though, you can’t buy time - and have to say having pretty much all your time to yourself and not be answerable to anyone is just fantastic.

Wise words. If my drug isn't making progress in 6 months I'll trigger retirement this time next year, I think. I was up late last night kicking a few arses. My collaborators are procrastinating.

The advice I was given was well meaning (and not charged but the advisor I feel wasn't really listening and didn't fully understand my perspective. He perhaps though that if I reduced my pot too much it would disadvantage me, and retaining flexibility, as you suggest, may have been in his mind). But I worked out that the reduction in my pot, if I take the max amount, will only result in a 'net loss' going forward when I'm in my 80s. So I thanked him and decided the advice was literally worthless.

I had considered going back to work part time but I would be dumped on with teaching hours and the worst part of the job is the travel to London, so that helps me not at all. Its all in or all out.

Its all a moveable feast though.

You reply is much appreciated

dazzer6666 · Jan 27, 2023

Harry Wilson's tackle said:
Wise words. If my drug isn't making progress in 6 months I'll trigger retirement this time next year, I think. I was up late last night kicking a few arses. My collaborators are procrastinating.

The advice I was given was well meaning (and not charged but the advisor I feel wasn't really listening and didn't fully understand my perspective. He perhaps though that if I reduced my pot too much it would disadvantage me, and retaining flexibility, as you suggest, may have been in his mind). But I worked out that the reduction in my pot, if I take the max amount, will only result in a 'net loss' going forward when I'm in my 80s. So I thanked him and decided the advice was literally worthless.

I had considered going back to work part time but I would be dumped on with teaching hours and the worst part of the job is the travel to London, so that helps me not at all. Its all in or all out.

Its all a moveable feast though.

You reply is much appreciated

No worries....we all have different circumstances (as others have said - needs to be tailored to individual needs), it's all very complicated and - critically - everything feels like a massive decision at the time which in turn can lead to not making a decision..........

The discussions with advisors about pension pots 'running out' are interesting. Was similar for me, but my view is that we can curb discretionary expenditure any time, and by the time we get to our 80s all the expensive holidays will have stopped (our only real luxury), the kids will be set up and we'll be happy sat watching Bargain Hunt with a cup of tea and a biscuit, spending bugger all (so we're dong it all now, whilst still young and fit enough to do so)

LamieRobertson · Jan 27, 2023

Such a relief not to be burdened by all this tax planning and when to retire

dazzer6666 · Jan 27, 2023

LamieRobertson said:
Such a relief not to be burdened by all this tax planning and when to retire

Aha, the cash economy

Eric the meek · Jan 27, 2023

dazzer6666 said:
Aha, the cash economy

It's got a lot going for it.

I've just had the enjoyment of spending 40 minutes yesterday waiting to get through to HMRC and then 30 minutes this morning, at which point I gave up.

The first time was to see why they changed my tax code on 27 December from my usual 1257L to K872 M1, just to immediately collect an - estimated - underpayment of tax of £613 for this tax year (which might turn out to be right or wrong). Result - my pension payment of £1775 suddenly gets £500 tax taken off. Nice. Another result is that I'm not going to take any more pension payments until they change the tax code back.

This morning, I thought I would ring up to find out when they are going to process my NI top up payment for three years in NI shortfall, so that I get a full state pension. I made that payment on 9 December. Now I can't get through for them to tell me that they're snowed under.

So they've got the time to change my tax code to grab tax off me, (which I may or may not owe come April 6), but don't have the time to process the NI top up payment I made 7 weeks ago, nor answer the phone.

Rant over.

Springal · Jan 27, 2023

You can set your own tax code online if you do a SA. I do it now cos it was all over the place and just keep an eye for end of year to pay what extra I owe - or rather pay a lump in a private pension to make sure the rebate wipes out the underpayment

Weststander · Jan 27, 2023

Harry Wilson's tackle said:
I have sought advice....but it wasn't any help.

My work pension is 'full' (I maxed my AVCs and bought into missing years as we PhDs don't 'start work' till around 30) and yet I am still making it bigger.

My plan is to take my max lump sum and get sonny boy into bricks and mortar. This stays as a tax free gift if I live X years (7?). In North Kent the house prices are low compared with you lot in Sussex. Ssssshhhh! The advice I was given was 'take half that'. Why? I know what to do with the money.

My annual pension income is decent.

Plus I have another job as a journal editor starting in 24. Easy work, from home. That will bring me much the same as my son earns in his day job. FFS

The missus is back in work and she has a good skill set.

Mortgage paid off years ago.

But if I retire I become semi detached from a patented drug I'm developing....so I really need to stay in post....

And my health is failing fast (spine, hips and knees). The travel to work is onerous now.

And my day job is exhausting. I am on here a lot but I multitask. I was working tonight till close to midnight.

Decisions.....decisions....

Is there an end in sight for patenting the drug?

[Just saw your later post].

A personal view, based on the pension pot figure you mentioned on nsc a while back .... leave the Uni post a.s.a.p. So many life and health positives will spin from that, not all mentioned in your posts. Luckily you'll keep the brain active with the editorial work.

Eric the meek · Jan 27, 2023

Springal said:
You can set your own tax code online if you do a SA. I do it now cos it was all over the place and just keep an eye for end of year to pay what extra I owe - or rather pay a lump in a private pension to make sure the rebate wipes out the underpayment

Thanks. I looked at that online but couldn't find where to do it. I'll take another look.

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