Forum menu
Take the pay and put it in an ISA. Tax free growth and accessible if needed.
Take the pay and put it in an ISA. Tax free growth and accessible if needed.
Maybe. If you think tax free growth beats the tax benefits of gross contributions to a pension. 20% ‘extra’ straight up for a basic rate tax payer.
edit obviously not flexibly accessible if it is put in a pension.
Annuities are certainly looking more attractive - rates are at 17 year high and a healthy 60 year old could get about £5,000 of index linked income per annum (increases with inflation),per £100,000 of pension pot. An unhealthy 60 year old would get more :-).
Ex smokers here who stopped 10+ years ago. 6.89% is what we were quoted for a joint lifetime fixed annuity.
Looks about right, but fixed has an obvious drawback.
TBH don’t forget you’ll get your state pension when you hit that age so yes your bang per buck will decrease but then you’ll get a little boost when that comes in.
OK with £60k pa
Hahaha.....
Sod that.
Don't you have to add 25% as it's the maths done in reverse?
Not your amount plus the tax , but the whole amount brought down to the actual numbers.
O level maths failure here so I am probably wrong
If you're really cheeky, you take up smoking and heavy drinking and get fat before getting an enhanced annuity rate then go on a health kick when accepted 😉
Don't you have to add 25% as it's the maths done in reverse?
Not your amount plus the tax , but the whole amount brought down to the actual numbers
Could you give more context/ detail as I'm not sure what this is about
I think he's assuming that £60k is net, and what would be the gross figure...
Take the pay and put it in an ISA. Tax free growth and accessible if needed.
Maybe. If you think tax free growth beats the tax benefits of gross contributions to a pension. 20% ‘extra’ straight up for a basic rate tax payer.
edit obviously not flexibly accessible if it is put in a pension.
....but taxable when you take it, @effective 15%
,^^either way, it's easy more than I need, before or after tax.....
60k, I really can't think how we'd spend that. Madame is happy with a horse, she doesn't want a ranch, I already have too many bikes. Holidays are hassle and need recovery time, I'm just too old and lazy to spend that kind of money.
Don't you have to add 25% as it's the maths done in reverse?
Not your amount plus the tax , but the whole amount brought down to the actual numbers
Could you give more context/ detail as I'm not sure what this is about
I think this is pointing out that the percentage is different when tax relief is applied.
£100 less 20% tax = £80
To get you back up to your £100 via tax relief, that £20 is now 25% of the £80 you put in.
Either way, it would help everyone who is commenting on how much money they have to live on or hope/need to live on, if they just used net figures. We can't avoid tax* and we don't all have they same circumstances so have different tax arrangements
*I'm assuming there's no billionaires living in the Caymans on STW
*I'm assuming there's no billionaires living in the Caymans on STW
Presumably we can check by searching the epstein files for mention of STW.
[edit - I just did, no mention of STW. He did buy two mountain bikes at one point]
Ignore - I misunderstood your question
*I'm assuming there's no billionaires living in the Caymans on STW
Presumably we can check by searching the epstein files for mention of STW.
[edit - I just did, no mention of STW. He did buy two mountain bikes at one point]
Probably rides an Apollo... I don't think you'll find many of that persuasion here 😆
Some actual numbers for monthly costs per person would be really useful.
Around £1400 pcm which I find plenty for everyday life
£1900 per month for me and Mrs ton. and we never spend it all.
Got an email last month about a person who i've know for years, a stalwart of our running club. A lovely bloke always out there doing something getting a life time club membership.
He retired from work a month ago.
An email today that he had passed albeit out there doing something.
£1900 per month for me and Mrs ton. and we never spend it all
£1850 for me and Mrs Surfer for our spending money after our bills and expenses are paid each month.
We also have 12 months of our mortgage left but it is on a lower rate for around 10 of those months as Mrs Surfer worked for a bank. Not worth changing it for the remaining few payments or paying it off. I keep a years cash in an ISA from my SIPP then withdraw my monthly "salary" on the same date so all of the DD etc go out as they did when I was working. On top of that we put around £600 away each month for holidays and expenses such as car/van servicing, xmas, birthdays, vets costs etc. I manage this so the interest I earn on this doesn't breach the tax threshold. I could leave it in the ISA but as long as I am not financially at a loss I find some of these habits are psychologically helpful.
keep a years cash in an ISA from my SIPP then withdraw my monthly "salary"
how does that work ? I thought you could only transfer 20k per annum into an ISA ?
keep a years cash in an ISA from my SIPP then withdraw my monthly "salary"
how does that work ? I thought you could only transfer 20k per annum into an ISA ?
Well, £1850 between them would leave about £18,000 to cover bills between them - under £20k if split equally?
Ah, I think I misread it, thanks
Single, no dependants, house paid for & need fund for 5 years until state pension.
Am I right in thinking set my SIPP up to give me an income of £12570 per year.
Use £1000 personal savings interest allowance from savings.
Use additional £5000 starting rate for savings interest allowance for income under £17570.
Giving £338 per week & paying zero tax.
Full pot of premium bonds winnings for holidays etc.
I'm rarely spending £1500 a month over the last 18 months so should be OK.
Yes - all of that is correct.
Am I right in thinking set my SIPP up to give me an income of £12570 per year.
If you haven't yet taken your PCLS you will get £4190 tax free on top of that £12570
£1900 per month for me and Mrs ton.
Is that each or combined?
I am 59 this summer and have started working out what I think we would need to live on in retirement. We are 'fortunate' in that our mortgage will be fully paid off a few months before I hit 67, and my wife is 9 years younger than me so she may carry on working for a bit (yet to have a proper conversation about how that will look – ie, if she wants to retire at the same time as I do).
However, by far the biggest outgoings, which we can't really change much, are the cost of council tax and gas & electricity, which is currently a combined £660 a month for our four-bed detached house. I really can't see past the obvious solution of downsizing and reducing both of those costs – which will also free up a reasonable amount of money for us to enjoy.
My neighbour is looking to retire early next year. He has gone from a full-time job to working 3 days a week doing deliveries for which he gets pretty well paid.
His Wife retired a few years ago after leaving her job & intending to get another one, but then deciding she quite liked doing nothing so never found another job.
I was chatting about retirement with him over a pint last week & he reckoned that when he finally gives his job up they will have around £1800/month to live on until their state pension kicks in.
2 kids who've left home & no mortgage.
They do have a penchant for holidays and trips to London to watch shows etc. so I guess they might have to peg this back a bit.
Our basic direct debits, before food, come to around £1300. That’s Council tax, utilities, Sky, pet insurance, gym membership. Ok, the David Lloyd gym at £150 is a luxury, and Sky at £120, but even without it’s still a good bit over a grand. That’s a 4 bed modern house so no real way to reduce much.
we currently have our 2 adult boys still at home, so big food bills etc but that will come down in a few years when they move on.. My reckoning is that currently we spend between 2.8 and 3.2k per month, once we include for food, house insurance and birthday presents etc.
adding in for car insurance, repair and replacement funds, house repairs and maintenance, clothes and some regular spending money, a couple of weeks of holiday cottage breaks, that is more like 5k, which we will aim to cover between my wife working part time and me drawing down on investments and savings until I need to then access my SIPP. Having just turned 60 I’d like to pad it out with some part time interesting work a day a week or so.
^^^ there was a lengthy discussion around that a few pages back. Currently, no, they are at early stages in their careers and we are trying to help them for now. They both need to drive to work, and both have cars which they fully finance and insure themselves. If they are still living at home by this time next years they will be contributing to the household costs.
Currently, no, they are at early stages in their careers and we are trying to help them for now.
That sounds about fair, but I think I'd want even a very small amount to show their appreciation (obviously depending on how much they are earning). We just had our first ever conversation with our two soon-to-be 17 yr olds about them paying us board money if they are still with us as adults. One of them said 'I'm not paying your mortgage for you' but we tried to explain how they would need to contribute something, even if it is simply to get them to understand that, as adults, not everything they earn goes on things they want to spend their money on – and that boarding with us would still be significantly cheaper than renting or buying...
Ours are a bit older, 19 and 23. A huge chunk of their money goes on car payments and insurance, but that will come down a bit this year (insurance that is) and the balance will be going to the house food and utility bills !
Don't ask about paying board - my son has paid it about 4 times in 6 years. Point blank refuses. Moved out now thank god. Couldn't even get him to help around the house despite him seeing me struggle the last 10 years with back injuries and this last year with a busted pelvis. Zero. He's 25.
I used to do loads for my folks at his age (we;; until I moved out at 25).
I paid board until I moved out at 21. My parents had saved some of it and used it to buy me a fridge and freezer for my own place.
We were clear with our two that they'd pay board if they were living at home after 18. Never expected them to pay when they were home on holiday, but they were/are encouraged to find a summer job.
My son has ADHD and just refused to pay it when he saw none of his mates did either. My daughter is doing her Masters, but I suspect she won't be able to get a job for a while in her chosen career (Digital Animation) so will end up doing shop work (she did 3 months at Superdrug before Christmas).
She's unlikely to be able to move out for a long time as her boyfriend is a professional benefits claimant. 22 nearly 23 never worked and bailed Uni 3 times after a month.
I can see my retirement being set back.
I paid board, a fair amount TBH from 16 to 25. I was paying more 40 years ago than we asked my son to pay !
One thing that would REALLY set them up well, if they're adults, is to charge a small amount for lodgings and then get them to put that in their pension in a high growth vehicle. The compounding effect by the time they need it would be amazing
I'm another one that paid board but my parents let me stop whilst I was saving for a deposit on my own house. They were always short of money so they couldn't help me financially get my own place, but put in loads of hours decorating and generally fixing the place up with me.
One thing that would REALLY set them up well, if they're adults, is to charge a small amount for lodgings and then get them to put that in their pension in a high growth vehicle.
That's a great idea - even if it wasn't the full amount, just doing something could make a huge difference.
to charge a small amount for lodgings and then get them to put that in their pension in a high growth vehicle. The compounding effect by the time they need it would be amazing
we discussed this with our youngest, who is in yr2 of a 4yr engineering apprenticeship in the defence industry. We agreed he’d increase his voluntary contribution to his employer scheme so gets the added tax benefit. He’s 19 so it’s a great start.
my son has paid it about 4 times in 6 years. Point blank refuses. Moved out now thank god. Couldn't even get him to help around the house despite him seeing me struggle the last 10 years with back injuries and this last year with a busted pelvis. Zero. He's 25.
My son has ADHD and just refused to pay it when he saw none of his mates did either
her boyfriend is a professional benefits claimant. 22 nearly 23 never worked and bailed Uni 3 times after a month.
<Checks whether these are posts from the same person.....
I can see my retirement being set back.
Can I respectfully suggest you stick up for yourself a bit more. It sounds like you are being taken advantage of
I made a quick and dirty monte carlo simulator for pension modelling. Let's you put in an age range you fancy retiring in, pension contributions, kids uni fees / gifts, etc. Then it runs a monte carlo simulation (I think the defaults are relatively plausible in terms of volatility and long term growth for a global tracker) and tells you what percentage of runs result in you being screwed or not.
My main take away is I need to put more in my pension (the defaults are not my numbers!)
https://mrhoney81.github.io/pension_monte_carlo/
Thats actually pretty good, I was using a professional version (Cashcalc) earlier today to plot my exit from the grind and the results tie up. Its really surprising how small a pot you can retire on if youre prepared to take investment risks and face the fact that some sort of employment may be required should markets be flat.
Good to hear it ties up! I got cursor to run various test cases, but i'm still treating it as a hint rather than definitive!
I made a quick and dirty monte carlo simulator for pension modelling. Let's you put in an age range you fancy retiring in, pension contributions, kids uni fees / gifts, etc. Then it runs a monte carlo simulation (I think the defaults are relatively plausible in terms of volatility and long term growth for a global tracker) and tells you what percentage of runs result in you being screwed or not.
Money lasts to 90: 97.3%
Ruin: 82 / 3,000 runs
Median retirement age: 55
Median pot at retirement: £1.05M (median of each run’s pot at the end of the year they retired)
Median estate at 90: £1.70M
Weirdly it asked for my wife's OAP but not her pension pot or how much she needs pcm. Is that because those are supposed to be joint figures?
Guess so.
How did you code it @ewan ?
I’ve viewed a few MC sims in recent months. What I haven’t had time to consider is whether a Markov chain is a better approach. Folks seem to settle on MC for its simulation value which seems neat. I’m interested in given this prior state what is the distribution. As I’m not a statistician I wonder which approach might be most realistic.