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Reply to CP....Everything was rebased in 2016
My bad
Base is 179.60
Any contracted out was added to company pension.
Thanx 4 correction
Reply to CP....Everything was rebased in 2016. People working who contribute NI payments can still reach the new total of £179.60p before they reach 66yo. People who were contracted out had a sum of money deduced but can't be paid less than the old system of £137.60p. Those are some of the people that have the chance to buy more NI before 66yo. Every year of NI will be added to £137.60 and not £179.60p. So basically you'll get between the two figures at 66yo.
£42 a week or 2K a year is a fair but when you consider how to replace it. You'd need a pension pot with at least 50K in. 25 years x 2k a year.
https://www.moneysavingexpert.com/savings/state-pensions/
Thank you for all your ( free) advise and work you have put in for the benefit of all. Much appreciated.
etank
onthecoast
Not Lloyd related Sorry to keep post going BUT
There's only one state pension
£155 per week paid 4 weekly.
Based on 35 years contracted-in
Less NI is proportionately less paid i.e. 30 in =6/7 * 155
Added years NI is possible. If early retired then keep paying NI
Once again Sry for posting non-Lloyd related
Just to add a few things . NI contributions. It's worth checking them now as there's two state pensions believe it or not. Millions of people with second company pensions were contracted out and paid less NI years ago and as a result won't qualify for the " new " higher pension. Chances they'll remain on the "old " rate . They'll need to build up NI yearly to catch up so to speak so all is not lost.
https://www.gov.uk/check-national-insurance-record
https://www.nidirect.gov.uk/articles/understanding-and-qualifying-new-state-pension
https://www.gov.uk/contracted-out
Savings, Investments, Short term share trading etc. The government has kindly given everyone an ISA allowance of £20,000 a year. Use it , build on it ,don't ignore it. Why mess on with paperwork regarding tax when you have a nice little shelter. It's accessible so you can get your cash overnight.
Pension plan. Maybe it is tied up until your 50's at the earliest but if you can afford it and your company are offering a matching contribution then go for it. Even a basic £100 a month matched would be £200 and you won't have paid any tax on your £100. So might as well say £80 paid in and up to £200 overnight before it hits the markets. I'm not at state pension age yet but I retired early using ISA's and pension plans. Time to do what you want and the sun is out today.
Bookmarks for DIY investing. Fees are important.
https://monevator.com/compare-uk-cheapest-online-brokers/
https://langcatfinancial.co.uk/publications/guide-to-isa-investing-2021/
Johnny TT
I would not invest in Carnival now
I had shares. Made a nice profit but I think they have run their course.
Their debt is gigantic but they didn’t really dilute they just borrowed more
Last count I think $12bn.
Nettles is wrong this time. But only time will tell. RR will outstrip Carnival
JTT. Yep. I remember my Mum and Dad always going on about stamps. My Dad bought extra stamps, so now my Mum gets an extra pension compared to normal amounts because Dad paid "extra" earlier on.
Don't think you can do that anymore.
Falk.
We have two cars, not "new", and no plans to change them either.
Holidays.....well....
Normally, we do 6 cruises a year usually International + 4 UK holidays.
Holiday spending is approx. £25,000 a year.
Of course, can easily save money by not going on as many holidays, I get that, but not working will mean I have more time.!
OnTheCoast.
Am currently still working, and have 37 years paid NI, so will get full Government pension, but thank you for the info.
Might be worth me looking at this for the wife, as she only has 27 years, including child NI qualification allowance.
Thanks.
PrawnCurry.
Thanks.
Have been tied up all day working.!
I'm an Ex Accountant, know finance very very well.
Have been invested for many many years.
I agree that a Financial Advisor would be good, but the issue is that 1) They usually charge compared to the pot size....that's way too much money. 2) They usually want you to invest in the stocks through them, so they can get their "commission". 3) I have out stripped the market for years, but of course, I have had nothing to lose and everything to gain with my investments to date.
Obviously when the repeating money (my salary) stops, I cannot "Play" in the stock market anymore, I have to protect my balance and become old :-)
Some great advice given here today, but honestly I would always advise anyone to seek professional finance advice. I know some of their fees are expensive, but their advice should give you the maximum return on the lifestyle you predict your going to have. Also to boot, my friends have lost their families wealth all to care home fees, if you have children set up trust funds to at least protect 50% of your joint wealth, that again isn't cheap to set up, but I like to think that this wealth we have accumulated over the years is at least going to my children. Oh yes, get some good hobbies too. ATB
JTT ...joined here a while ago as a shareholder and ex RR worker. Didn't expect most posts to be about short term trading ? Maybe that's what the internet does ? Never mind hope it works out for everyone.
Not all folk will get a steady pension pot as you need 100's of thousands these days. Even 100k divided by 25 years is only 4K a year without inflation. I'm sure the government want employees to buy a second pension simply to reduce state benefits. If your employer offers a matching contribution then I'd go for it. Free money.
Inflation has been a big problem in the past but who knows where we go from here.? Can anybody seriously see base rates much higher to try and combat a return of inflation. They did this decades ago but the link was broken during the 2008 financial crash. Even more so with the pandemic governments are stacking up hundreds of billions in national debt. Look at 2011 in the link inflation was 5% and base rate 0.5%.
https://www.economicshelp.org/wp-content/uploads/2012/01/inflation-interest-rates-1945-2011.png
I can't see banks or Gilts paying out much cash so more risk in the markets might be needed to get those compound returns.? All depends how old you are I suppose. More in equities when you are young but there again your retirement might be 30 years or more. ? So maybe equities the major part of the portfolio ?
I 'd have a global tracker as a core holding 50% or more with some funds , ETF's, or Investment trusts along side. How much in the likes of RR ? Not that much. If you are experienced with single shares then maybe up to 20% of your total portfolio. Mind if you are struggling pack it in and move the lot over to a global tracker fund. You only get one go at this.
https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
Calculator to play with regarding inflation but it's history really and that's all we have to go off.
http://www.moneychimp.com/features/market_cagr.htm
Onthecoast
Clear now
Missed the part that we are talking about retired already at 53.
So this makes sense
Thanks
SR
I never expected to make it past 40 so everything else is a bonus :)
Question: Percentages discussed below...and thanks for the information everyone...are percentage returns/inflation right ?
Kind Regards
The Jimster
The Jimster
Botbot has retired at 53 yo so if you're not working then you won't be paying any NI contributions. You can still build them up if it's needed by paying around £800 a year . When you get to retirement age every full year of NI gives you around £5 a week or £250 a year. In less than 4 years you're money is paid back. An investment if you like. £800 in and 10 years into retirement you've had £2,500 back from the government. What's not to like apart from the getting old bit . ?
https://www.gov.uk/voluntary-national-insurance-contributions
Onthecoast
Thanks mate
Not sure what you meant if someone making a NI contribution ?! It is a suicide if you don't do that beside is a mandatory, isn't it?
Correct me if I am wrong!
Not know anyone who doesn't unless you have no job at all.
NI is a must ,
Couldn't follow what you meant by make a voluntry contributions or 800 a year !! To achieve what exactly ?
Can you elaborate please
Thanks mate
SR
1. Have you both got full NI contributions at 53 yo. ? If not make voluntary NI at a cost of around £800 a year. Every £800 gives you £250 a year from 66 yo . 2 x state pension is around £16,000 a year.
2. If you've managed on 30 K ask yourself what were you spending 60 K on ? Throw in that 16K and we are now eating into the total in years to come. No doubt you've got to enjoy life and spend a bit while you're healthy.
3. Have you got DB pensions or DC pension pots ? This can make the difference ? Nice to have a stable income.
4. Markets are unpredictable as we know and there's been sideway periods for years.
https://pbs.twimg.com/media/EhCv7GqUwAACMF8?format=jpg&name=900x900
A balanced portfolio should be somewhere between the two on the chart. Global Index is over 10% per year historically. Trouble is Gilts will return very little for years now.
https://www2.trustnet.com/Tools/Charting.aspx?typeCode=NM990100,F0ZDP
Back test
https://www.portfoliovisualizer.com/
A bit about the 4% rule.
https://www.charles-stanley.co.uk/group/cs-live/safe-withdrawal-rate-and-sequencing-risk-retirement
A few ideas here
https://www.theaic.co.uk/income-finder/dividend-heroes
https://www.retirementace.co.uk/p/i-operate-number-of-different.html
https://earlyretirementnow.com/2019/10/30/who-is-afraid-of-a-bear-market/
herforchat.
Thank you.
Will give it a go.
The reality is that I don't think it's possibly for me to run out of money, but I believe I am now at the "Do I / Don't I" stage of concern.
Obviously throughout life you try to save, and then you get to this point in life where the "saving" becomes "spending" and you watch your savings dwindle.
My oldest brother retired when he was 46, but honestly, I don't have days to listen to his rants. :-)
It depends if you are talking about an recommended portfolio service or you are managing your own pensions and investments.
The biggest mistake people make is overestimate their ability to make investment decisions. If you are an experienced investor with time to seriously manage an account then fair enough but if you are asking this question I’m not sure you would be in this category.
Diversification is key but this needs to be managed, a lot of managed funds will provide you with the diversification you need to provide a balanced portfolio. I would set aside what you need to give you a net return of 5% and invest in a ranged of managed funds. Or look at a managed portfolio service.
Then with what you can afford invest in direct equity. A few wrong investment decisions can have a serious effect on your financial position.
You may want to look at selecting a range of balanced and tracker funds, this is a good method to provide reasonable returns with security of tracking the markets.
A managed Cautious Portfolio service I believe it be reasonable to expect 5% per annum net of fees over a 5/10 year period. Anything less you need to look for a new adviser
Leas.
Thanks
Agreed currently the majority of all my investments are in RR and IAG so a very dangerous game currently but I believe in RRs receivers at least to £1.61.!
What type of return have you had from a sensible diversified investment over the last few years?
Yep
I'm not retired, I'm in my 30s but I'm interested in planning early retirement and loosely follow 'FIRE' priciples.
You can take out any amount you like from your pension, but obviously the more you take the higher the risk you reach old age with nothing left. The 4% guideline was based on a retrospective american study that concluded that over a 25 year retirement, with a sensible split of bonds and equities you shouldn't run out of money. A lot have people have concluded that the 4% value is a bit over optimistic for the uk and 2.5% or 3% might be more appropriate, but these people tend to be more cautious. Another factor to consider is that the cost of living in retirement in the UK is lower, healthcare is provided and the state pension kicks in eventually.
Expecting to spend 30-60k pa puts you right in the top bracket of retirees - most will retire on far less. Even if you dont expect to spend that much throughout the whole retirement, 10 years of spending on that scale will eat a huge chunk of capital, which you may need later for care/nursing homes, or that you may wish to pass on. The pattern of aging in western economies is now tahtw e live longer but with poorer health and poorer quality of life. Sustaining yourself during that period is actually remarkably expensive.
Have a play around with this site https://engaging-data.com/fire-calculator/ and it sister site https://engaging-data.com/will-money-last-retire-early/
The numbers are in dollars but you can treat it as pounds if you set up the tax etc properly.
bobot
I retired at 50 and moved my investments on the stock market into companies with less risk and paying a good yield from Capital invested. No strategy as such but protection of your retirement pot is essential.
Serious question….
I am 53. Have a sizeable pension. Wife has a sizeable pension. Both have a very reasonable ISA. and both have a reasonable investment/ trading account.
My question is….
What is a realistic annual return on the stock market with logical diverged investments.
The “rule of thumb” has always been retirement you can assume you can take 4% per annum and never run out of money….. is that “true” or can you take 5% or 6%..
The logic is that the 4% every year you add inflation… but why would I need the same amount of money with inflation in 15 years when my lifestyle would have dramatically slowed down.
During lockdown we spent about 30k a year.
Before lockdown we spent 60k a year.
So does that mean I need 750,000 to 1,500,000 depending on my lifestyle ? Or can I use a 5% rule therefore being 600k to 1.2m.?
I know this isn’t RR but would appreciate views from anyone who has actually retired.