For every annuity where the insurance company made a profit as the recipient died early there is one where the recipient lived longer than average and they probably made a loss.

is that true though? best buy annuitys seem to sit around 3.5% for a fixed amount (and dropping significantly for one that tracks inflation). The same amount is generally considered “safe” to withdraw from a fund with no reduction of the funds value over the long term. how are annuity providers losing out unless they invest really badly?

btw, I know that market forces mean there probably isn’t a lot of money to be made providing annuitys, it just seems odd when the maths on drawdown seems so much more attractive

But basing your judgement on an outlier case is also rather unwise, 81 is the current average male life expectancy in the UK.

84 for me, with 2/3 expecting to live to 90 – so that’s 30 years of retirement to ‘finance’.

Key thing though is that once you reach a certain age, your expenditure does reduce – based on parents & in-laws, but I can never see it reducing enough to live on £1100 a month…

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07

I’m 50 and apparently have a 3% chance of reaching 100. Do I want to be trading shared at 90 in FB’s metaverse (or whatever share trading looks like in 40 years time) – probably not.

Odd. FF is clearly very good at investing, and says a lot of wise things, but I’m starting to think he’s just arguing for the sake of it. The answer to the above is “no, you don’t want to be trading at that stage, so obviously you stick it somewhere where someone else manages it for you”

And IIRC you were one of the strong advocates of investing over trading anyway, so it’s a bit disingenuous of you to ask if it’s not a bit of a bad idea to be trading as a nonaganarion. (sp)

With respect, you’ve not ‘retired’, you’ve changed jobs.

No, I’m definitely in the process of retiring. It is a surprisingly big psychological jump from building up savings, pension, etc. and starting to draw on them.

84 for me, with 2/3 expecting to live to 90 – so that’s 30 years of retirement to ‘finance’

But a scheme that offers you the equivalent buying power when you are 90 as when you are 60 is unlikely to be good value. Security yes but anything that promises this will be offering a paltry return in the years when you can most enjoy it in order to guarantee it in 40 years time.

No, I’m definitely in the process of retiring. It is a surprisingly big psychological jump from building up savings, pension, etc. and starting to draw on them.

yep…..

I ‘ve no plans to sell my db pension, the recent pay increases have been mid single figures and it’s guaranteed. I know it dies with the holder/spouse but when you get offers of c35x income you have to question why.

The meaningful money podcast covered this v subject and he s an if a so vested interest in selling something.

Anecdotal observation but the wealthiest pensioners I know are actually the most frugal, nor is a miserable way but they just know the best tips for living well for less.

Love this thread, my own pension pot is well diversified in property, shares, state pension and private pension. If 1 goes pear shaped the rest should still perform.

I don’t hold rental property, but my own house will be paid off by mid 50’s. Currently a 4 bed so downsizing definitely an option in retirement.
I do have a RAF pension (15kpa from 60, & 3x lump sum) and we’ve both pretty good DC pots.
When I left the RAF I had the option to roll it into my company scheme, but very glad I didn’t. 15k index linked from 60 will always be there, plus state from 68(?) so that gives me leeway to play more aggressively with my DC pot. I manage it myself within the wrapper of my company scheme. Planning on moving it to II for drawdown as I hate the Aviva platform, but a lot will change between now and then.
My plan is retiring at 60, use my 25% lump sum to fund my retirement sailing, keep 90% of the remainder invested in funds, with 10% in bonds/cash to pay my drawdown income, keeping below the HRT threshold.

I’m fully aware I’m in a much stronger position than many(although still not as good as some) I just hope some find the spread/ plan useful.

The thing is, if you do run out of cash at 85 there’s always the option of releasing housing equity to fund the last few years. Most housing is probably worth enough to be able to release around 10k a year at that age

Plus if my pot ran out when I’m 85 I’d still have £25k/Yr (RAF + state) and I can sell my retirement boat if necessary.

If I’m in sound enough health & mind to spend anywhere near £25k/yr when I’m 85 I’ll be a very happy man 😀

More seriously, I guess it’d fund some half-decent home help…

Steering away from the finances a bit again – one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents and partner. At the age most are looking to retire, it’s likely that their parents could already be infirm or ill, needing support and assistance. That was certainly the case for me when I first retired at 50, with both my folks dead before I was 53. And now not having the worry of trying to balance work with supporting my wife through her cancer is another positive .

@dantsw13

Do you love your job? My immediate response to your post is to ask why you’re waiting till you’re 60.

You having given any DC detail, but I’m getting the impression you could retire a helluva lot earlier.

( not judging BTW, just interested)

You having given any DC detail, but I’m getting the impression you could retire a helluva lot earlier.

( not judging BTW, just interested)

I was thinking the same. I’m just crunching my numbers at the moment and if I had that pot I’d be out of here.

For now, I’m still paying the mortgage (SE England, but not bonkers) & have 2 kids to fund through uni.

I do still enjoy my job, yes (airline captain). I’m typing this from Barcelona, where I’ve been on a stand over, walking around the city & chilling in coffee shops. If I get back to long haul flying, I used to take my road bike with me, and regularly did 100km rides on my days away in San Francisco, Tokyo, San Diego & many others.

I deliberately didn’t put any DC fund sizes up. My employer pays in 15% and I add 6%. I’m 50% part time, so already get a fortnight off a month. My wife enjoys the intellectual challenges of her job (lawyer) but does find it stressful. If the pension investments perform to/above expectations, we could well retire a few years earlier than 60.

As for the caring point, very much so. My mum (74 ) has just moved into our village to be near us, and my wife’s parents are close by too. They took care of Jackie’s Nan in her final years, even though she stayed independent in her own house.

one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents

That certainly figured in my thinking, but the opposite way around: I was banking on having 5-10 years carefree while still fit enough to make the most of it before being drawn into the inevitable care duties.

The general covid stasis and my mum having a heart-attack and a Parkinson’s diagnosis have buggered that up though (she lives alone, at the opposite end of the country).

We play the cards we’re dealt…

one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents

I wish 🙁 One died at 29 and the other at 71. I’m thinking take the DB and lump sum at 55 (220 days), and work at something else. Life expectancy for me is 85, so a possible thirty years of what could be a healthy salary/pension plus an extra income is possible. Also resigning to another job loses benefits that retiring maintains.

My great grandfather retired at 65 and had 34 years of gas board pension.

Interesting thread….

I’m 37, self employed chippy. No kids.

Although I enjoy what I do I’m quite sure that my body won’t want to be working as much in 20 years time as it currently does.

I own zero property.

Thanks to some savvy tips and not spunking cash up the wall when younger I’ve got a pot of ~£350k.

~90k in an ISA that I can no longer invest into (resident in Germany for the last 14 years).
~110k in a SIPP. (am I right in thinking I can’t touch this till I’m 57?)
~150k in a fund and share account.

I’ve no UK state pension as I left the UK with only 9 out of the required 10 years of NI contribution.

I’ve no pension pot here in Germany.

My plan is to use the F&S account cash to buy a property somewhere for around 150-200€ south of the alps (had enough of long, cold winters and I’ve no desire to spend my time wrapped up indoors whilst paying stupidly high heating costs) in the next few years. Due to being outside of the UK for so long I’m no longer eligible for capital gains tax in the UK. (was thinking about coming back to the UK (at least on paper) to make up the missing one year NI contribution, but that’ll wait till I’ve made use of the cash).

Hitting my numbers into a compound interest calculator says my 200k should be around 450k when I’m 57 (based on 5% annual growth (up till now I’ve averaged between 7-10% growth pa))

Using this website (https://www.which.co.uk/money/pensions-and-retirement/pensions-retirement-calculators/income-drawdown-calculator-a5pj57u5134k) and assuming I can start drawing on my SIPP/ISA at 57 I should be good…. Like forever…

Which has got me thinking…. Look to buy a cheaper property (~100€), keep playing with my funds and retire mid forties.

The GF is likely to inherit (along with her sister) two Munich flats together valued at ~1m€.

The crazy thing is… This seems so surreal as we can barely afford a decent lifestyle here in Munich on the money we earn (the tax man rapes my bank account monthly… Yay for Munich’s ridiculously high business tax rates).

Alpin – looks like you have a decent plan.

TiRed – has the pandemic accelerated your plans at all? Be careful with taking your pension at 55 & working caps future pension input quite substantially.

TiRed – has the pandemic accelerated your plans at all?

Not really. A trip back to academia is one possibility of interest. Or civil service. I’m in the fortunate position of a full LTA by 55 since I saved hard in AVCs, so future pension contributions will incur full tax liability.

Alpin – looks like you have a decent plan.

Does it? Feels like I’m winging it.

However, speaking to friends a good 15 years older than me I would say I’m in a good position.

Hitting my numbers into a compound interest calculator says my 200k should be around 450k when I’m 57 (based on 5% annual growth (up till now I’ve averaged between 7-10% growth pa))

I think 5% is a sensible number to use, but don’t forget to throw in the effects of compounding inflation. 2% pa inflation takes net growth down to around 3% per year (effective spending power), and if doing drawdown the same thing needs to be considered

I don’t know how pensions work in Germany, but there must be some tax breaks for pension input. It might be worth some professional advice to find a way of inputting money from your savings to your pension & reducing your tax liability.

If it was the uk, you could pay money into your pension, and claim tax relief via your tax return.

There is talk that next year there’ll be a rule meaning all self employed in Germany have to pay into a state pension pot.

Mate just got given advice from a pension adviser. The funds he was suggested had an average growth of an amazing 3.5%!

Need to talk to my accountant regarding tax breaks and pensions/efficient savings.

However, speaking to friends a good 15 years older than me I would say I’m in a good position.

Scary isn’t it, I’m 49 now and have been saving into a DC pension since I was 25. I’m not going to be rolling in it when I decide to retire but we’ll be ok, but the number of friends my age and older who have nothing other than the state pension, some of them banking on inheritance to save them…

Sadly that’s all too common. For some, money is so tight there is no choice, but many have chosen to live for now instead. Every penny spent on booze, fags, holidays, bikes, satellite tv, Netflix, iPhones etc is a choice. With choice comes consequences.

If you plan on inheritance, hope your elderly relatives don’t need care for another two years. Because social caremageddon is coming with increased NI payments and a lifetime cap of £80k (per person of course).

When is an 80k cap not an £80k cap? When you add the accommodation & food costs too! The £80,000 social care cap is only for actual care costs, so you will pay double that in total. Each.

Alpin can u buy some gap years back from uk good, I think u can buy back up to the last 7 but that may have changed. I m not sure what the min years is to get something, it’s 15 here in Spain and you can add years from another country.

I would be making my own provision then you can do what you want.

if i had done what some of you fellas are doing, looking into figures and percentages, i dont ever think i would have retired. would have confused the hell out of my self.

stop overthinking it all. just do it. spend less, spend time doing nice things. it is easy.

stop overthinking it all.

very much this

stop overthinking it all. just do it. spend less, spend time doing nice things. it is easy.

Pah, we’ve read loads of books and Internet posts on investment and money advisors. What makes you think you know anything about retiring, enjoying yourself and getting on with living the best life you can?

😉

stop overthinking it all. just do it. spend less, spend time doing nice things. it is easy.

Most definitely this IMHO

Well, I retired yesterday – for the second time. This time I’m going to do it properly.

My previous experience was probably a bit spoiled by the first lockdown coming soon after, so I didn’t get a lot done, and ended up letting tasks expand to fill the time available. I got a bit bored so went back to making furniture for money. See the “What have you made” thread for pictures of what might be my last job. But that’s given me a much better perspective, so there’ll be no time-wasting now. I spent today tidying up the workshop and fitting mudguards to a couple of bikes so there’ll be no excuse not to ride. I’ve sorted out the neck of my winter wetsuit so I can windsurf all year round without cold water pouring in and my first day of a “make your own guitar” course is booked for Tuesday. Wish me luck, guys!

^^ think if you’re handy with your hands then there’s always the option of carrying on working…. you just get to be a little more selective with what you do.

For all the “just do it” comments, here’s a confession. I’m a bit scared of retiring. I am fortunate to be in a financial position where I could quit tomorrow but something is stopping me and I think it’s the fear of boredom, isolation and depression (I’ve got lots of history with the black dog and am not good with people). So at the moment my plan is to drop to 3 days a week next spring then see how I’m going in the autumn.

one thing I’ve not seen anyone mention is the advantage of having free time to look after your parents

That’s an interesting idea that had never occurred to me, and I’ve never considered that my parents might still be alive when I retire.

But as the average UK retirement age is 64, I imagine it’s only a consideration for the lucky few who are wealthy enough to retire significantly earlier than that, or perhaps people whose parents were young.

My dad was 28 when I was born- not particularly old but he will/would be about 90 if I manage to retire in my early 60s, as I currently hope. Which, statistically, him reaching that age is unlikely to happen.

That’s an interesting idea that had never occurred to me, and I’ve never considered that my parents might still be alive when I retire.

The other point I mentioned is the health of your partner – and that definitely applies to more of us.

Yep, true, and as MrsDoris is a few years older than me I’m quite mindful of that. Hence being very keen on retiring by at least 62, i.e. when she reaches state pension age.

I’m 47, and not allowed to draw my pension until 57 under current rules so no matter what I can’t retire until then. My window to choose is between 57 & 60.