Mortgage Rate Rises

413x said:
But my friend raises a valid point of if you put too much in you get the uplift from tax avoiding but you also can't access it freely.
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The question to your friend is, what kind of penison pot and life style does he have at the moment?

I think it was Warren Buffett himself that said, "never take financial advisor from someone you don't want to be..."

If you are putting money in that should be taxed at 42% and taking at back out at 32% that's at 10% saving right there, let alone the interest and capital gains that it's made over the period.

What my plan is... and this isn't financial advise and it may change depending on situation is that once I hit 55, in ten years time. My house will be paid off. At the point I will decide if I want to move house to a nicer area, downsize or buy another either to move into and rent the current one out or vise vicer.

What I may do, if I'm that hacked at my current job, if I'm still in the current job is to take a look for one that is less demanding to keep the job centre off my back.

My personal stocks and shares ISAs is there to be used during the period of 55 to 67 to help me during this period.

Once I hit the state pension age, I'm going to start taking it asap; stats show that it takes 12-17 years to make up for the lost amount of even one year of delaying it over the increased amount by delaying it.

My smaller pension pots I'm going to buy pension annuity, to ensure that I have some form of fixed income for the rest of my long life, we have a history of living for a long time in my family. Or transfer it to my main pot.

I'm going to do lump sum draw downs on my main pension pot, 25% of it is tax free each time, it's a balancing act but as long as I don't hit the 40% tax bracket (or what ever it will be at the time), I'm better off. Any additional money will go into a SIPP, as long as I don't break the pensioning recycling rules or into ISAs. Then I will have access to it when I want/need it.
 
413x said:
Once you hit 40 odds just go up every year of something.
Be it terminal or something else.

I'm 38 now and beginning to become aware of mortality really. Probably for the first time.
Not meaning "omg I'm gonna die in a few years".. But more that I need to start living a bit more.

Can't think of much worse than dieing with loads in the bank + regrets.
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Yep, I turned 40 a few weeks back. First thing I did, got myself an full body health check. Everything is all good as I always looked after my health, paid off my mortgage last April. No longer need to worry about those crazy mortgage rates or my health (for now).

I'm enjoying holidays while I still can plus putting abit of money away for emergencies.
 
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Calpol said:
Everytime I tot up our monthly costs, I shudder. Don't get me wrong, we can afford but it makes early retirement look a challenge and that's without a mortgage.
Council Tax £240
B/Band TV etc £100
Insurance Cars/House £150
Dogs Food/Insurance/Vet £150
Petrol £100
1st Car Lease £300
2nd Car depreciation £300
Utilities £200
Mobile Phones (x4) £50

Thats £1550 before we eat, clothe, go out or fund the children.
Currently I reckon we spend c£800/month on food, £100 on clothes, make up! and maybe £100 on birthday's/Christmas so call it another £1000.
£2.5k net is near £38k gross pay which is quite a lot of money considering that State pension at 67 is only c£21k for a couple.
Realistically you also need to factor in a depreciation factor on your assets also, for things like new appliances, soft furnishings, property maintenance, family events (kids weddings etc) and holidays. All of which is easily £500/month.

So I reckon to live comfortably as a couple with two grown up kids you will need in the region of £50k/year in today's money. Not quite the £72k quoted but that level would be subject to more tax anyway.
To have £50k gross a year you'd need a fund of c£1.25m excluding any state pension.
Personally my biggest challenge is to fund a gap between getting the state pension and a deferred DB scheme that kicks in at 65 as I can't see me lasting at work into my 60s!

As stated, most people underestimate their expenses and it can be a sobering exercise to actually track them, especially if you have two children!
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Will two people in their 70/80s really be spending £800 a month on food and £100 on clothes? £200 a week on food?
 
sigma said:
Will two people in their 70/80s really be spending £800 a month on food and £100 on clothes? £200 a week on food?
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with inflation probably yes! but I take your point. My point's are illustrative rather than absolute. Most people overspend between 60 and 75 so it probably nets out.
 
Calpol said:
with inflation probably yes! but I take your point. My point's are illustrative rather than absolute. Most people overspend between 60 and 75 so it probably nets out.
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In fairness, I definitely agree with your overall statement. Also, it's far better to plan/aim to have more than less.

The other option is to move in with your kids, I can see this being more commonplace. Or sell house and downsize. Maybe pick up a part time job doing light work to top up/stave boredom.
 
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slinxy said:
The question to your friend is, what kind of penison pot and life style does he have at the moment?

I think it was Warren Buffett himself that said, "never take financial advisor from someone you don't want to be..."

If you are putting money in that should be taxed at 42% and taking at back out at 32% that's at 10% saving right there, let alone the interest and capital gains that it's made over the period.

What my plan is... and this isn't financial advise and it may change depending on situation is that once I hit 55, in ten years time. My house will be paid off. At the point I will decide if I want to move house to a nicer area, downsize or buy another either to move into and rent the current one out or vise vicer.

What I may do, if I'm that hacked at my current job, if I'm still in the current job is to take a look for one that is less demanding to keep the job centre off my back.

My personal stocks and shares ISAs is there to be used during the period of 55 to 67 to help me during this period.

Once I hit the state pension age, I'm going to start taking it asap; stats show that it takes 12-17 years to make up for the lost amount of even one year of delaying it over the increased amount by delaying it.

My smaller pension pots I'm going to buy pension annuity, to ensure that I have some form of fixed income for the rest of my long life, we have a history of living for a long time in my family. Or transfer it to my main pot.

I'm going to do lump sum draw downs on my main pension pot, 25% of it is tax free each time, it's a balancing act but as long as I don't hit the 40% tax bracket (or what ever it will be at the time), I'm better off. Any additional money will go into a SIPP, as long as I don't break the pensioning recycling rules or into ISAs. Then I will have access to it when I want/need it.
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Not great at the moment. But he's done well for him self. Especially last year or 2.
He's on course for 100k-200k plus salary very soon. He is very smart though. (tech jobs, machine learning, stats )

I don't see retiring early without help from parents. But that help may be there later.

If you do get help (my partner definitely will) is it really worth sacrificing today for later when life might be garbage anyway?

Often there's a middle ground. But I don't feel comfortable overpaying into my pension to much.
 
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413x said:
Often there's a middle ground. But I don't feel comfortable overpaying into my pension to much.
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It is a balance, but given that a little invested now means so much more later the reward side of the risk vs reward equation is really rather high. While something could happen, there's a much higher chance that you could have many years of healthy retirement to enjoy.

Maybe take a step back. Figure out what kind of income you want in retirement and when you want to retire. Taper it off as you get older and less able to travel etc. See what you would need to do to achieve it, including your house downsize strategy. Then make a more informed decision about the additional pension contribs you'd need to make to get there.
 
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413x said:
Same as me.
My pension pot is much lower than it should be. Because I didn't really start paying in until 30.
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Same here. My pension pot relative to my age and salary is tiny, so I'm heavily overpaying it in recent times. So much so I was asked if I'd made a typo in the contribution percentage I filled out :)
It was projected to pay me under £10k/year. I earn about 3-4x what my wife does, but her pension dwarfs mine.
 
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EvilRob said:
It is a balance, but given that a little invested now means so much more later the reward side of the risk vs reward equation is really rather high. While something could happen, there's a much higher chance that you could have many years of healthy retirement to enjoy.

Maybe take a step back. Figure out what kind of income you want in retirement and when you want to retire. Taper it off as you get older and less able to travel etc. See what you would need to do to achieve it, including your house downsize strategy. Then make a more informed decision about the additional pension contribs you'd need to make to get there.
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I'm not so sure.

In a deep dark place in my mind I'm concerned long term that once I can't do my hobbies (ie getting older) I'll stop caring at all About stuff (depression/mental health cripples my family).

And if I end up like my mum is now it doesn't matter how much/little I'd have then. I'd basically just be existing.

Right now I'm keen to go on holidays, explore, want to emigrate etc. But it's always a battle mentally.



Only really thought about it in last 6 months. Sure to salary increases of recent it's only just become a thing to think of. Before it was just saving for a house. Then building up savings. Now it's more of a "future vs present" question.


Anecdotal evidence is never great but my Parents and my partners dad (get mum passed suddenly this year) were both very well off but neither are happy. I heard the "of only we had done more" from her dad after.

Its blown a hole in my previous "save, save, save" mantra. And I guess i'm just navigating this mentally.
 
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413x said:
I'm not so sure.

In a deep dark place in my mind I'm concerned long term that once I can't do my hobbies (ie getting older) I'll stop caring at all About stuff (depression/mental health cripples my family).

And if I end up like my mum is now it doesn't matter how much/little I'd have then. I'd basically just be existing.

Right now I'm keen to go on holidays, explore, want to emigrate etc. But it's always a battle mentally.



Only really thought about it in last 6 months. Sure to salary increases of recent it's only just become a thing to think of. Before it was just saving for a house. Then building up savings. Now it's more of a "future vs present" question
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You need a slap man. You earn a bunch of money and have super low outgoings. You can do both quite easily.
 
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