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Posted: Fri Oct 12, 2012 4:15 pm
by Simsy
In answer to the original question about how much you need...
It obviously depends on a number of factors, age at retirement, male or female, smoker or not, etc... but as a very rough rule of thumb, rates at the moment are such that you get about 1/30 of your fund as an annual pension...
So your pension of £1,600 per year, I'm guessing that your fund is somewhere in the region of £45k-£50k
For what it's worth, you can take 25% of your funds as cash, tax free... obviously that will reduce the amount left to provide a pension, but that tax free cash might be enough for you to invest more productively eleswhere... eg buying another property to rent out... or building an extension... another bedroom?
Though you pay tax on income from a rented out house, (less your espenses in running it), if you rent out just a room in the house you're living in that is completely tax free. In fact I believe, (but I'm open to correction on this), that you don't even have to declare it.
Regards,
Simsy
Posted: Fri Oct 12, 2012 9:55 pm
by lutonlagerlout
yes ,it is legal to rent out a room in your own home
didnt know the 3.3333 % rule simsy
are you in the financial game yourself?
LLL
Posted: Sat Oct 13, 2012 9:51 am
by Simsy
No, I'm not in financial game... just not too many years from retirement, and have been doing a lot of research in the past couple of years for my own benefit, including paying a fee based financial advisor last year. (Expensive, but probably worth it for what I learned!)
The "3.33% rule", as you call it, isn't a rule... it's just what happens to be the approximate annuity rate "at the moment".
Bear in mind that this is very very very much a ball park figure!
It's affected by all the things I previously mentioned, and also it's only a "starting point"... If you want it to increase with inflation, or have a spouses pension remaining if you die, or kids benefits, these will all have an impact.. and they vary from provider to provider.
An important fact to bear in mind when you come to take your pension is that there is absolutely no requirement to have your pension provided by the same company that the fund was accrued with. The providers tend to rely on the fact that most folk don't know/realise this, and wont change. Chances are that if you move, when the time comes, you'll do better...
e.g pay pension contributions for umpteen years to DoshForYou pensions, retire and do nothing but stay with them, and DoshForYou pensions give you a pension of £2k per year.... if instead, at retirement, you take the whole pot from DoshForYou Pensions and give it to DaleyBetterPensions, you may well find that for the same pot of money they'll give you £2.2k pension a year. Obviously completely arbitrary made up figures, but you get the point.
Note that, generally, you wont be able to get your hands on the whole pot of cash for yourself!
Regards,
Simsy
Posted: Sat Oct 13, 2012 6:40 pm
by lutonlagerlout
Tbh I wouldnt go near any kind of pension
my old fella has paid a fortune into his and now they are talking 3.5k a year
he could have bought a house the money he has paid in to it
of course the IFA gets a fee out of every payment
LLL
Edited By lutonlagerlout on 1350150050
Posted: Sun Oct 14, 2012 11:14 pm
by bobbi o
very difficult time to prophetise what the financial futures gonna hold. theirs talk of further recession in 2013,presumably this means even less money about than their is now,house prices to drop further and even less buying power for the money you do have in the bank.
probably not a great time to be ramping up pension contributions,which you have no control over and may be worth feck all in the future anyway.
guns,a bag of gold coins and a house with a high wall in the country might still be the way forward!:D
Posted: Mon Oct 15, 2012 9:08 am
by Carberry
bobbi o wrote:very difficult time to prophetise what the financial futures gonna hold. theirs talk of further recession in 2013,presumably this means even less money about than their is now,house prices to drop further and even less buying power for the money you do have in the bank.
probably not a great time to be ramping up pension contributions,which you have no control over and may be worth feck all in the future anyway.
guns,a bag of gold coins and a house with a high wall in the country might still be the way forward!:D
Still waiting for the euro, capitalism and democracy to collapse :laugh:
Glad all the hard work paid off when I started my business. I busted my balls so I never ran the business on debt, recession hit and I was still floating.
Not got a pension, won't put any money in to one. I will own my flat in 10 years, rent that out, buy a bit of land, build a house on it and live in that. My business is my pension 