Thoughts on life, death and when to retire...

Musicwolf

boogieman said:

Best advice I was given about retirement was to treat it like another job. You definitely need things to fill your time or it’s all too easy to end up watching re-runs of Bargain Hunt and Cadfael all day. Projects are a good idea.

I don't want to try to map it all out beforehand but I have given it some thought and, in the first three months at least, I'm planning to dedicate about a 25% of what would have been my working week to music (recording some original material but also more structured practice on guitar, keyboard and vocals).   Another 10 to 15% I intend to use to work on my fitness (running, swimming, walking etc)  and the same again will have to go on domestic chores.  At the moment my wife doesn't go out to work which means that I escape from a lot of the housework.  My retirement is actually our retirement so I'll have to pick up half of her domestic duties.  Whilst I'll be doing more music and fitness stuff over all I will no longer need to fit it all in during the evenings and weekends which should increase time spent with family (I don't know whether that's entirely a good thing).

I recon that I've got a couple of days a week as yet unaccounted for which could be for a bigger DIY project or I may take on a part time job after a few months.  We'll have to see.

HAL9000

RandallFlagg said:

I plan to make a list of things to do in retirement.

Map out towns and places in the UK we can drive or catch the train to and stay over night cheaply and do these as often as we fancy. Just go to a town or village, research it's history and have a potter around looking at things, buildings, markets, coffee shops, take some photos and see some stuff.

Also, list all the birds I want to see in their natural habitat and set goals for find reserves or lakes or areas where they are and set off with my binoculars and flask (hip flask).

List out the books I want to read, the films I want to watch, music I want to listen to.

check out what I can do to help the local area's wildlife. There's a duck pond up the road and a few years ago some local pensioners all clubbed together to tidy it up. add a foot path and bench and made it a really nice spot to go a feed the ducks. I would love to do that.

Join a local working mens/conservative type club and go for a pint with the old dudes there.

Grow my own veg, cook more, make homemade beer, wine, Cornish pasties, cakes, whatever...

There's so many things and it doesn't need to cost the earth.

Seriously, I’m impressed that you’ve thought about this and started making plans. Like I said in an earlier post I’ve cut down on my working week and freed up weekends and a bit more. Sadly, at the moment Mother-in-Law isn’t well so we need to look after her but (like you) our future plans definitely include visiting places in the UK and Europe for long weekends plus possibly doing some voluntary work of some description. Also definitely more guitaring (open mics, jam nights, etc). The point is to be doing something active - the last thing I want to do with the rest of my life is to spend it sat in an armchair watching Jeremy Kyle and that orange antiques guy.

RandallFlagg

HAL9000 said:

RandallFlagg said:

I plan to make a list of things to do in retirement.

Map out towns and places in the UK we can drive or catch the train to and stay over night cheaply and do these as often as we fancy. Just go to a town or village, research it's history and have a potter around looking at things, buildings, markets, coffee shops, take some photos and see some stuff.

Also, list all the birds I want to see in their natural habitat and set goals for find reserves or lakes or areas where they are and set off with my binoculars and flask (hip flask).

List out the books I want to read, the films I want to watch, music I want to listen to.

check out what I can do to help the local area's wildlife. There's a duck pond up the road and a few years ago some local pensioners all clubbed together to tidy it up. add a foot path and bench and made it a really nice spot to go a feed the ducks. I would love to do that.

Join a local working mens/conservative type club and go for a pint with the old dudes there.

Grow my own veg, cook more, make homemade beer, wine, Cornish pasties, cakes, whatever...

There's so many things and it doesn't need to cost the earth.

Seriously, I’m impressed that you’ve thought about this and started making plans. Like I said in an earlier post I’ve cut down on my working week and freed up weekends and a bit more. Sadly, at the moment Mother-in-Law isn’t well so we need to look after her but (like you) our future plans definitely include visiting places in the UK and Europe for long weekends plus possibly doing some voluntary work of some description. Also definitely more guitaring (open mics, jam nights, etc). The point is to be doing something active - the last thing I want to do with the rest of my life is to spend it sat in an armchair watching Jeremy Kyle and that orange antiques guy.

Thanks. Since we met we've always set and agreed a five year plan of objectives we want to achieve, the first one was buy a house, a brand new house, get married, have kids etc.... The latest 3 year plan starts this year and we have goals and targets we want to achieve in these 3 years. Retirement will be no different, we may not have the same money but enriching your mind and enjoying simple experiences doesn't need to cost a lot.

I can get excited and enthuse about life's simplest of things, a flower, a colour in a sunset, a building, it's all great.

RandallFlagg

So, back to retirement planning. Been tidying up the pension forecast spreadsheet and had to make some assumptions on projected growth of remaining funds in the pot as I draw down so it's a bit crude but while I was working out some formulas I had few thoughts that I wonder if anyone can help with.

If I take the tax free lump sum from one preserved pension at age 55:

1) Can I just take the lump sum and defer taking the annual pension payments until later, or does it have to start paying out from then?

2) Can I still carry on working and paying into my current pension (and my employer keep paying in) even though I am receiving income payments from another pension? I know I will be taxed at the higher rate on it unless I can defer it as per point 1.

3) is it correct to assume that my and my wifes tax free allowances are processed separately by HMRC, so we both get the £12,500 allowance (I think that's the new amount for 2019) each and only pension incomes paid in our own names, including state pensions are declared agianst it, ie not treated as a combined income?

I'm trying to get as much of this worked out without incurring the cost of professional advice, which I will probably get nearer the time anyway but the more sorted I am before I go the less hours they will need to charge hopefully.

viz

Just watch this and have hope. Old people are fun just like us!

https://youtu.be/gOEHefkds2w

Roland

RandallFlagg said:

If I take the tax free lump sum from one preserved pension at age 55:

1) Can I just take the lump sum and defer taking the annual pension payments until later, or does it have to start paying out from then?

2) Can I still carry on working and paying into my current pension (and my employer keep paying in) even though I am receiving income payments from another pension? I know I will be taxed at the higher rate on it unless I can defer it as per point 1.

3) is it correct to assume that my and my wifes tax free allowances are processed separately by HMRC, so we both get the £12,500 allowance (I think that's the new amount for 2019) each and only pension incomes paid in our own names, including state pensions are declared agianst it, ie not treated as a combined income?

If I’ve understood the questions correctly then:
1) It depends on your pension scheme, and you really need better advice than you’d get from a load of guitarists, even if some of us have been through this.
2) yes
3) yes

Roland

RandallFlagg said:

So, back to retirement planning.

This thread has been tidied up. Comments related to the Phantom LOL incident have been split out and moved to BCD

RandallFlagg

Cheers @Roland

EricTheWeary

God, I woke up at 4am trying to do the maths. 

The brief version is that if we both retired at 55 there would be money ( lump sums) in the bank, mortgage paid off and we would have an income that would be something like a living wage each ( not that we earn a fortune now).
The kids being still dependant upon us makes this more difficult in practical terms. In philosophical terms it's the idea that there would be a point when we say this is our fixed income, each bite out of the lump sums ( work on the house, car, bailing out the kids, holiday) won't be replaced, there will be no promotions, wind falls or applying for second mortgages, car loans, etc. Until we are 100. Or have a good time and die at 60. 

I think I'm back to where I started - cut my hours at 55, MrsTheWeary to retire at 55 ( her pension should be roughly equivalent to what she earns working part time now) and eventually retire.

There is also a Brexit issue - the idea of bumming around Southern Europe for six months looking more difficult at the moment so I wouldn't have that to retire to anyway. 

WiresDreamDisasters

Y'know, even though I'm 34 and I'm not facing any serious hardship or health issues, this thread does give me pause for thought. Without going into details my big thing right now is trying to figure out a way to get out of the foxhole that I'm hiding in; that's a metaphor yo.

Sometimes you're faced with opportunities and options and you don't know what to pick, and they're all as scary as each other, so you just opt for stasis. Which leads to a sort of unconscious apathy, lethargy, and eventually bitterness. Which is where I have been for the last couple of years.

I need to give myself a kick up the arse really, and threads like this are a good reminder.

Strat_a_tat_tat

RandallFlagg said:

So, back to retirement planning. Been tidying up the pension forecast spreadsheet and had to make some assumptions on projected growth of remaining funds in the pot as I draw down so it's a bit crude but while I was working out some formulas I had few thoughts that I wonder if anyone can help with.

If I take the tax free lump sum from one preserved pension at age 55:

1) Can I just take the lump sum and defer taking the annual pension payments until later, or does it have to start paying out from then?

2) Can I still carry on working and paying into my current pension (and my employer keep paying in) even though I am receiving income payments from another pension? I know I will be taxed at the higher rate on it unless I can defer it as per point 1.

3) is it correct to assume that my and my wifes tax free allowances are processed separately by HMRC, so we both get the £12,500 allowance (I think that's the new amount for 2019) each and only pension incomes paid in our own names, including state pensions are declared agianst it, ie not treated as a combined income?

I'm trying to get as much of this worked out without incurring the cost of professional advice, which I will probably get nearer the time anyway but the more sorted I am before I go the less hours they will need to charge hopefully.

With regard to whether you can still contribute to a pension if you've started taking money from another pension... I think there are some extra rules to consider (but I'm not an expert).

If you look up MPAA (Money Purchase Annual Allowance) you'll see there's now a limit on how much you can pay into a money purchase pension scheme - if you've already started taking money out of a defined contribution pension scheme. 

thing

@RandallFlagg . Make sure you dont make yourself ill working out your retirement plan...

I'm 63 next week, no mortgage, dependent kids or debts and have some very modest savings, plus a small pension from a previous job. It's surprising how little you can get by on once all of the major financial millstones have been discarded.  I've had some health issues (who hasn't at 63?) and the usual regular funerals for friends who are now dropping left right and centre, or seem to be.

Don't work a second more than you need to, unless it's a job you love but then that's not work is it? There is a life after work.

You don't need shedloads of money to lead an interesting and productive life in retirement You just have to pick the right things and prioritise your spending.

RandallFlagg

thing said:

@RandallFlagg . Make sure you dont make yourself ill working out your retirement plan...

I'm all right mate! I love piddling about with spreadsheets.

I've only really looked at my pensions and given retirement some thought over the last 12 months and it's been good for a few reasons:

• I now know what each pension we have is, have the details in order, up to date statements of current values, potential future payouts, what the 25% tax free lump sums could look like and what year we could draw them.
• Have a broad plan that will need refinement with professional financial advice which I will get in the next year or 2.
• I now regularly check on our pensions performance and investment growth
• It's made me realise that I need to start make additional provisions for retirement - ie savings, and mortgage/debt pay off.
• I now think about what I want to do when I retire
• It's put work into perspective and made me appreciate the salary I'm on and the fact that my employer pays in 11% contributions!

When I started my first real long term job I was 21 and for the first 6 months I resisted joining the pension scheme as I needed every penny at the time, as all young people do. Looking back from over 30 years later, a manager persuading me to join it was a smarter decision that I could ever have realised at the time. 

The key thing I've learned from this thread is to think about the balance between time and money and try and find that sweet spot as a target retirement date and have a plan of what you will do with your time. I plan to take a 25% lump sum sooner rather than later to get the house in order, new kitchen, bathrooms etc but also plan to stay working long enough to give a reasonable standard of living in retirement.

This has been a great thread!

ESBlonde

With respect to the 25%, you can take it anytime after age 55. It is also percentage based so you can have 5% of the balance at 55, then 7% at 58 etc. But if the pot gets smaller so is the sum received. Plan this aspect with care. If you have multiple pensions, perhaps hit them one at a time for the tax free lump sum.

RearWing

I retired in my fifties, a great leap into the unknown, and it has been fantastic. It is very difficult to describe the seismic shift that comes with not having to work to live, yes my income is reduced to about a third of my previous existence, but I don't have to spend out on fuel to get me to work or any of the other work related expenses. I have time to do the niggling jobs around the house and garden and I find that with help and advice from organisations like the Mens Sheds Association, I can get most jobs done without having to bring in professionals.

I have more time to help my kids with their lives (when asked), more time to enjoy walking the dogs, looking at the sky, building speaker cabs, playing my guitar, etc

The only downside is my wife is still at work and it does cause the occasional bit of friction when I try to explain how wonderful it is to be retired!

mattdavis

Really interesting thread. I’ve been working way too long hours for about 10 years and at only 41 have decided to cut back a day. Have hit that time in life where I’m seeing friends getting ill, and parents now having problems, which has really made me question my life. Classic mid life crisis stuff. 
Fundamentally it came down to not wanting my kids to remember their dad as a completely burnt out irritable grumpy wreck. We will see how it goes. 
Similarly I am surround by people at work with kids at private schools, going in exotic holidays driving much nicer cars to smarter and bigger houses - but the idea of maintaining our comparatively privileged lifestyle and becoming mortgage free sooner is very appealing, if seemingly at odds with all the financial advice that gets thrown at me which seems fixated on borrowing to the hilt. 

hywelg

Musicwolf said:

boogieman said:

But if you retire early and don’t make any NI contributions between the time you give up work and your pension entitlement date, they will reduce the payout. Don’t assume that just because you’ve paid NI for the 35 qualifying years that you’ll still get the full amount. You can make top-up payments to fill in the missing years, but it’s a balancing act of course: you could pay in £thousands extra and then die the day after you’re able to claim.

I’d heard something to this effect a few weeks ago but I’ve not found anything on the gov website to confirm.  Worst case for me is that I’ll need to do something in the next decade but it won’t be anything as stressful as I do today.

Get a pension forecast. Seriously. It costs nowt and will tell you how you stand. If at anythime in your career you have been in a workplace pension you might have 'opted out' and paid reduced NI contributions. Those years DO NOT count to your pension. So even though you might be due to get a workplace pension, your old age pension will be reduced. You can limit the amount by which it is reduced by adding more years of contributions.