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Retirement advice for the nearly 50

Discussion in 'Retirement' started by ferretmasta, Dec 7, 2018.

  1. PeterQuint

    PeterQuint Lead commenter

    I find our local Aldi & Lidl are too touch and go as to what's in stock.

    Much of the produce is good, but some is poor, and the lack of known brands, coupled with the constant changes in what's stocked, makes them too unreliable.
  2. Brianthedog

    Brianthedog Occasional commenter

    We also down sized 2 years ago. At first I was a bit anxious about having a smaller house, but we were able to use the equity from the sale to 'do up' the new house, bathroom, kitchen, garden etc. Probably spent more than the house is currently worth, but everything is brand new, its the first time we have refurbished every room from top to bottom instead of making do. We reduced our mortgage to enable us to pay it off by retirement, and have massively reduced our running costs. I was sad to eave our family home, but it was due for updating anyway.
    I'm now sat here in front of our new log burner, Christmas decs up, Baileys in hand and yes, life is very good knowing that our financial future is relatively secure.
  3. Guest

    Guest Guest

    FrankWolley. Have you checked your state pension forecast? I am surprised that you expect nearly the full pension having retired at 57 not worked since. Also you would have been contracted for lots years. Of course you may have been paying extra voluntary contributions! Best wishes.
  4. Guest

    Guest Guest

    I meant to say contracted out. Apologies keyboard was misbehaving!
  5. ferretmasta

    ferretmasta New commenter

    Blown away by the detailed comments people thanks all. As an ex PE now maths teacher I do like a number or two, but am going to take some time to do the "math". I think getting onto the TPS to do a bespoke detailed pension projection is a good way forward. Additionally I have a two yo son who is definitely going on ebay with no reserve as that'll save a fortune, hopefully he will sell before Xmas so I can return all the third hand gumtree gifts I've brought. Thanks again legends all.
    stopwatch and strawbs like this.
  6. FrankWolley

    FrankWolley Star commenter

    I did check when I retired a few years ago, and it seemed pretty generous (I think I got extra qualifying years because I worked for a year between school & university, plus some holiday jobs whilst a student). I was teaching for 32 years in all.

    I'm lucky in that whatever I get (& Mrs FW too) is really a bonus; now having downsized significantly (4 bed plus study Grade 2 listed building in heritage area to new 2 bed plus study chalet bungalow) we've more savings than ever... Ironically our last house 'earned' us more than twice my annual pension each year due to the rise in house prices. Maybe not fair, but that's what happened....
  7. Dorsetdreams

    Dorsetdreams Occasional commenter

    That's an excellent summary of our pension benefits but it doesn't include the above CPI annual adjustment of the accumulated average salary 'pension pot'. Being compounded year on year, this adjustment becomes increasingly significant over time. Furthermore, this article seems to suggest that the rules of the scheme will force the government to sustain that above CPI adjustment at generous levels. (I would be interested in other people's views on the article: am I misinterpreting it?)
    Anyway, the point is that one's final salary will be at least a bit better than PeterQuint's 7 x 1/57 calculation.
  8. davidmu

    davidmu Occasional commenter

    At 48 ferretmasta, you may have 40+ years ahead of you, so I would advise making a regular investment in a growth fund. 15 years in such a fund could well bring substantial returns. You need to look into it.
  9. AnotherDayTowardsRetirement

    AnotherDayTowardsRetirement Occasional commenter

    As someone who recently semi-retired aged 50, can I share a few important considerations that benefitted me and my circumstances -

    1 : Take the advice of an independent financial adviser. The sums of money over our future years we are dealing with here are mind blowing. Let the experts advise on options but act with their advice as you feel best. Do this before you retire, not when you have retired. Revisit things every year.

    2 : Pay off (or reduce as much as you are able) your mortgage and any debts/repayments etc. When we earn a salary we tend to have outgoings at a level supported by that salary. Once you clear these debts you will realise just how little an income you need to live reasonably comfortably on retirement income.

    3 : If necessary, take advantage of any refinancing deals whilst in work and only tell finance providers you are retiring if they specifically ask you. You’ll find it easier and cheaper to refinance if providers use your salary as a base rather than providers get twitchy over your retirement.

    4 : Start planning your retirement NOW. Start dreaming. Start researching. Start making little changes in readiness for retirement. Not only does this help you prepare for the magical day but also aids a positive mind set if you face any work pain in the run up to retirement.

    5 : my advice, for what’s it worth, access as much pension funds as you can now. No one knows our future and if fate goes against us we may lose out on funds we could/should have accessed now. Access them & invest/spend as we choose but don’t leave funds dormant and/or tied up in a fund.

    6 : Go on a longish holiday somewhere immediately after you retire! Let the mind settle and allow time before making any key financial decisions. Chill, enjoy, relax, reflect on your career good times & the not so good, and focus on the new exciting stage of your live.

    Best wishes all. What a wonderful scheme the TPS is.
  10. FrankWolley

    FrankWolley Star commenter

    Agree with this - I did no.s 2, 4, 5 (definitely) and wish I'd done no. 6!! (Did one 2 + years after retirement, following a bout of serious illness...That focused the mind!) As for no. 1, I was lucky enough to have a (brief) free session with an expert put on for all staff of my age by the (independent) school I was working at, about 18 months before I retired. It did help me sort out my thinking.
    frangipani123 likes this.
  11. Gainingcontrol

    Gainingcontrol New commenter

    Yes. Start clearing debt as soon as possible, especially credit card debt. It obviously reduces/eliminates interest costs as well as clearing debt. It helps to have a road to retirement in mind. Clearing debt reduces stress and increases income/cash flow. I cleared my mortgage at 52 and effectively got a big pay rise. I only have one credit card now that I clear asap (usually monthly) but it is useful to smooth cash flow and cover unexpected bills in the short term if used wisely. Reduce expenditure to all but essential bills and think twice about whether (especially large) purchases are necessary. Who needs a new Audi if a 6 year old Golf Plus etc. is sufficient (and more comfortable)? Have an investment approach. A pound spent today can't be re-spent tomorrow. A short-term pain for longer-term gain mindset is essential. I had 56+ in mind as a retirement age since well before turning 50 and things have come into place to allow me to gain financial independence at the end of March 2019. Think of it as financial independence (taking control) rather than retirement. Have plans to have FREEDOM to do what you want when you want!
  12. eljefeb90

    eljefeb90 Senior commenter

    @Gainingcontrol . Excellent post. Rename 'retirement ' as 'gaining financial independence '. Getting rid of the debt , mortgage and, crucially, the offspring(!) means you can live better for far less. It doesn't mean massively scrimping, just thinking twice and not being extravagant. A pension of between £10K and 20K is enough to live on, especially at the top end of that scale, as long as you are debt free. The pension and lump sum constitutes both a safety net and a springboard.You can then explore other options that take your fancy.
    FrankWolley likes this.
  13. binaryhex

    binaryhex Lead commenter

    "Of course now the personal allowance goes to £12.5 k from April 2019 meaning that you could draw£16666 from your SIPP tax free."

    I must have missed that one. With an annual personal allowance of £12.5k, you can have a total income including from any SIPP of £12.5k each year before paying tax. Where has the £16666 come from please?
  14. stopwatch

    stopwatch Lead commenter

    Lots of great pieces of advice from a number of posters here.
    • Getting rid of debt is the number one priority. Even consider renting a room in your house (if you have one spare) for periods of the year to bring around £350 per month in to pay towards your mortgage. There is a separate tax allowance for this (about £7,000 pa?) so you don't need to pay tax on it.
    • Do a full expenditure review of things you pay out on. Things like TV packages, newspapers etc can add large amounts over the year/s. Cut back wherever you can
    • Once debts are paid, look at additional ways of investing any extra cash - in the ways that others have advised.
    The key things which stand out for me in retirement are:
    • You don't need as much money as you think in retirement as your life simplifies and there are things you no longer have t pay so much for - petrol, clothes (work), lunches
    • Look at adapting your mindset in retirement - looking at simpler ways of being satisfied - escape the consumerist attitude.
    The good thing is that you are looking at this early and in time to make any necessary adjustments to have maximum impact - well done!!
  15. FrankWolley

    FrankWolley Star commenter

    I've just double checked this, and (at current values, which will presumably go up due to inflation) and our joint State pension will nearly double my TPS pension once we are both 66. So something quite nice to look forward to! (Which makes me even happier to have retired at 56 & 10 months!)
  16. jonnymarr

    jonnymarr Occasional commenter

    #binaryhex - I'm assuming:
    £16,666 = 25% from SIPP is not taken as a tax free lump sum but rather as 25% tax free per drawdown / annually keeps you just below the 12.5k personal allowance. I'm hoping the maths here is correct & this option is still available when Mrs JM and I get there!
  17. heldon

    heldon Occasional commenter

    Exactly right jonnymarr. Binaryhex, if you look at the link which I provided, this explains my strategy. My drawdown will start in April next year and I will run the 80k to zero over three years when I'll take my teachers pension. My wife will do something similar when she hits 55.
  18. PeterQuint

    PeterQuint Lead commenter

    This is certainly something I've factored in for me and Mrs Quint.

    The new state pension should be £570 each a month after tax, or £1,140 total for the two of us. That's enough to pay for a car and a couple of holidays, as long as my teaching pension (+ Mrs. Q's works pension) is enough for everything else. That leaves us needing a pension when we retire big enough to live on and a lump sum big enough to keep us in cars and holidays for the years between retirement and 67.
  19. catmother

    catmother Star commenter

    @heldon I am doing something similar to what you did,leaving at the end of summer term (I will be 57) but only intending to take teaching pension aged 60. Do you know if my husband would still get a pension from the teaching pension if I died before accessing my pension? Not that I'm planning to die for a long long time,of course.
  20. Sundaytrekker

    Sundaytrekker Star commenter

    I don’t think so. I think the death benefits grant would be paid instead as a lump sum.

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