Great video, especially in September 2023, A video of where to put cash in a sipp that is very low or no risk and covers inflation would be helpful. I am thinking of putting my cash into a savings account until 55 then dumping it in a sipp. I have £30000 cash can I do this in one year at 55 I am 53 at the moment?
I have read that what you should think about when nearing retirement is to liquidate enough investments into cash to fund the first 3-5 years of retirement. You can then stand the sort of downturn we're now seeing with a realistic chance that the next time you need to do the same - liquidate investments for the following period - your investments have had a chance to recover.
Pete, normally good advice. The title RECESSION - you didn't mention this in video (we're not in one yet)??? Also to say assets are down? - which ones - the FTSE100 has been static for 7 years. If your talking S&P 500 US etc then context the discussion. Also if it's S&P 500 then context that it's been going up for 10 years plus. Simply not balanced - sorry.....NickForest (commented )- fund is down 20%...aye this year after MASSIVE gains... I sharper video on retirement management might help.
Noted Iain. Only comment I'd make is that the FTSE100 is largely static, but not the Total Return of that index, which is always the version to watch as investors usually reinvest dividends. Appreciate the feedback...
Big ups to everyone working effortlessly trying to earn a living while building wealth. I am 50 and my wife 44 we are both retired with the net worth of over $3million with no depts. Currently living smart and frugal with our money. Saving and investing lifestyle in the financial market made it possible for us this early even till now earn monthly through passive income.
Not quite long I started investing. I'm very curious and need help on how to enhance and increase my returns. Any good investment tips would be appreciated.
@@alyciagordon3447 Generally, investing requires higher knowledge. For this reason, It's important to have a solid support structure (financial consultant) to guide you through especially in asset picking. I operate with (Alexandra Diana Jose) a consultant who partners with a licensed wealth management firm. For the record, the experience has been the best for my finance. She made me financially stable investing through her help, now I earn on a monthly basis through her passive income strategy... So I'd advise you do get a good investment advisor for yourself. .
@@alyciagordon3447 She is easy to find , make a quick research of her on the internet with her name Alexandra Diana Jose . She works with anyone independent of their location.
Tnx for this info, I just looked up your investment professional and found her page. Her experience is pretty impressive. I wrote her and I'm waiting on her reply.
I retired last year. I kept 3 years' worth of dosh in cash (to see me through until I get a state pension on top of my DB one) & shoved the rest into more Vanguard funds / ISA. The only thing to do is . . . sit bloody tight!
Thanks Pete, this video is exactly what I needed to hear today…fund is down 20% and at 62 I’m preparing to make the final step off the corporate ladder but I sensibly took the decision to drop down to two days a week from 60 so as to have a glide path into full retirement and now I have the option to continue for another year or two if I wish so I’ll swallow my pride and extend out the period to 64 or 65 before I take the final plunge. I’m keen not to lock in losses and I don’t have to touch my main pension fund for a few years yet if I so wish plus I have other sources of income but you’re right when you say you feel you should be “doing something” and it feels counterintuitive to sit back and leave funds where they are but this video is a really timely reminder to learn to ride out the seismic shocks (hopefully) and the approach you’ve outlined is calming for us jittery investors.
Another good video Pete, a work colleague and I both subscribe to you but we are at different stages, he is 42 single no kids etc and saving at a good rate to provide as he does not want the low income his mother has as a pensioner. I am 62, 2 1/2 years from a DB scheme starting to pay, and then 1 Yaar later full state pension. I also have a decent amount of DC funds which I am adding to. I regularly am checking and re-working what monies will be available at retirement. Some of this is of course stock market dependant, but happily DB schemes are solid. We both see this period as a time where our investments are at low buy in periods and in 3-4 years time they will be bouncing back and we will have bought low. It reminds me of a scene in “it’s a wonderful life” where there is a panic on and he is telling people Not to panic, and the the mean spirited Mr Potter is buying and acquiring the whole of the town. As you often say think long term investments made now might repay very generously in 4+years. Delaying buying that retirement car it’ll be cheaper in 18 months as the over heated car market will cool
I put 3 years worth of living expenses into cash within my SIPP last year around the time I retired just in case the market dropped and sure enough it did shortly afterwards... phew!
I retire next month at 53 so its early but I've been planning awhile. Mainly blue-chip dividend paying stocks averaging around 9% as brought alot during covid etc. I have been building my Isa for around 25 years as tax free income is very important then I can use the 12.5k capital gains allowance up on my buy to let etc. Then sipp at 55 .🙂
@MulberryEllie Hi My income from my Tennants rent won't exceed the gct allowance of 12.5k . My objective is to keep all my taxable income below that amount. The rest will come from my isa 👍
I have found out that i have possibly parkinsons , thing is i am 55 years old, all this happened and finished in december last year. Unfortunatly all this and being finished from my job and guess what i started to claim my pension only the 25% fed up of see my pot going down. But have sense enough to not do anything rash at all. Am i doing the right thing any suggestions would be great I WATCH all your videos and more imprtantly i have subscribed, YOUR THE MAN !
Hi Ox Man - Firstly, I'm sorry to hear of your diagnosis, that's rough. I wish you very well. I think you need to live even more in the moment, and while I can't give advice here, I can appreciate you wanting to have the cash in hand and also not wanting to do anything rash with it. Trust your gut, spend wisely, but enjoy the money sooner rather than later. 👊🏻
Great video as always Pete, can you make video about protecting wealth I.e passing it onto family with out paying / paying minimal tax. Are trusts a good way to go in the UK. Cheers. Keep up the good content.
I should have retired in April when I turned 66, but decided to carry on working for a while longer. I am doing four days a week at the moment, so I do at least get long weekends. My state pension is now being paid into my bank as well as my wages, and another added bonus is that I no longer pay NI on my wages. The downside is that I have to pay tax on the state pension, but I have decided to pay any additional funds over and above my wage straight into my own personal pension plan on a monthly basis so I can get the tax relief back on it. Does that sound like the right approach until things recover a bit ? Should I pay one large amount every month, or pay smaller amounts on a weekly basis into my pension pot ?
If you have a DC Pension Plan where you work, why not increase your payments into that to a maximum you are comfortable with, and maybe your employer matches your payment to a set % as well. If your payments are taken using the salary sacrifice scheme then this would ease your tax burden as well. Win Win!
Stable growth is an oxymoron, unfortunately. Volatility is what makes growth possible - it's impossible to have one without the other. Either you have stability or you have growth. (Sorry!)
Hi Pete, what are your thoughts on Premium Bonds generally as an investment ? Couldn't find anything on your channel so I assume they are a no-go ??? Great videos, thanks for the informative content 😁
They're a great place to hold risk-free money. They're a bit of fun and you might just win the big one (though you probably won't) - they're not really an investment because your capital isn't at risk, but for many people, that's the point!
using a £value of your portfolio as the trigger for declaring yourself able to retire just feels wrong to me. the portfolio could lose 30% of its value in your 3 month notice period. but you still own the same amount of each asset. and if everyone did it wouldn't no-one ever retire in down markets. it's the worst possible timing of the next bear market but it would have happened at some point and will again many time in most retirements. the plan before giving notice should be able to get through this scenario. enough cash to cover and a belt tightening plan for it. if that plan was right i don't think the retirement plans should be changed at all. you're closer to the next recovery. get the first period like this out of the way early could be a blessing physiologically.
I’d agree with all that, Lee. Many people do have a magic number in mind though, so it happens more than you’d think. I think your comment here is very pragmatic 👍🏻
Thats good advice Pete as usual. I am on a phased retirement plan and have no option but to retire in October. Yes the way things are going are worrying As regards the housing market I agree a readjustment is overdue and I feel for the youngsters with big mortgages, seen it in the early 90's.
Hi Pete, could you do a video on early mortgage repayments and the different ways of the extra money being used. Eg reducing the principal, the savings through reducing term V reducing repayment amount.
@@MeaningfulMoney hi Pete I’ve watched this, my question is more about which is better with overpayments for reducing how much you pay. Lump sum that reduces the monthly amount but term stays the same, or lump sum that reduces the term but monthly amount stays the same? Eg I paid £5000 into my mortgage and payments reduced by £50 month. 12 and half years left is 150 payments which is £7500 saved. As my mortgage will have some remainder when I retire is the lower payment for a couple of years a better plan. I have the opportunity to put some more cash in just under £10K and then be overpaying via my wife’s contribution as well which as it’s a smaller amount the building society automatically reduces the term.
Hi Pete! Love your videos. I have a DB and DC pension and I'm keen to clear my mortgage. Apart from the (huge!) tax liability, can you think of any potential issues in using (crystalising?) the DC pension (which should just be enough for the mortgage) and leaving the DB pension untouched? Thanks
You’d trigger the Money Purchase Annual Allowance, so you’d be very limited about how much you could add to pensions in future. And ALL THE TAX, obviously! I can’t imagine any scenario where it makes sense to do what you’re proposing, but…. Your money, your life!
@@MeaningfulMoney Thanks, Pete. Does it make any difference that I'm less than eight years away from 'retirement' and wanted to be debt-free before the recession hits? Following redundancy I'm not contributing to any pensions at the moment, but I still have my DB pension to look forward to...
Have you cancelled that holiday or postponed your retirement? Be happy to know that the pension fund managers looking after your pension fund will still be going on holidays and filling up their Porsches and Bentleys due to their management fees from your fund regardless if your pension fund is diminishing in value.
That is the downside with ad valirem fees, and yet most clients - in my experience anyway - prefer it because it does, in part, tie the adviser’s success with the investments’ value.
I am some way off but some very useful tips for furture planning. I am currently in a DB scheme, my biggest fear is that im over 30 years away from accessing it and hopefully it stays fully funded! (such as the current state with USS). Hopefully it will provide a safety net if the markets crash when I reach retirement, but shows the importance of using every available tool you can to protect yourself; ISA's, Pensions, Property etc..
Fortunately there are some really great protections for DB schemes if they do fail - it'll still be a decent pension when you get to take benefits, I'm sure...
I retired in April. Clearly I’m the reason US markets are crashing! Sorry for that my fellow yanks. That said, I prepared a strict fix cost budget and a defensive portfolio a year ago. Lots of cash and equivalents and balance mid and long term risk portfolio. I’m still going to Scotland next year I don’t care.
Hi Pete, I've only recently discovered your channel and from the videos I've watched there always seems to be a large pension pot plus other things like property rental, sadly most people I know don't have these, they pay minimum into there company pension and have no other income, by the way I pay more into my pension and I also have small isa and company shares through share save scheme but I still have no where near the amount of money you use as examples, would it be possible to do a video using smaller amounts and how best use them, I have about 130k in pension fund and about 70k in shares and I'm 57 looking at retirement in hopefully 5 years,thanks in advance and loving the channel.
Hi Richard - I often have to use big figures to get the point across, but it sounds like you're doing lots of things right. I'll bear in mind a video about 'smaller' retirement pots, so watch this space and thanks for watching and commenting!
@@MeaningfulMoney hi Pete that would be good as the average salary is £30K in the UK which for many does not leave large amounts for investment which is why it is even more critical workers at this level pay in for a long time, maximise company contribution etc I was “lucky” in that my parents told us children we would inherit on their death except for a few bequests. This gave each of us a 6 figure sum, I have used mine pension mortgage and a rental property. Retirement is only a few years away now and I’m looking forward to it
#1. If you thought stock markets never go down you should take an Economics 101 class at your local Community College. #2, If you think "recession"is the end of the world you should take an Economics 101 class at your local Community College. Recessions are fairly minor things for most people. Losing a job would be a big event but being retired...kind of not a big risk. If you own your home (imo you should if retired) then increasing rents isn't a risk. Rising gasoline prices...you're retired so almost all travel is discretionary spending. Most retired people should be able t sail through a recession with hardly noticing.
Thanks, Pete, great overview and the timing is perfect. One question. In terms of rung 2 on the Cash Flow Ladder, what lower-risk asset classes, above and beyond cash, would you recommend at the moment instead of bonds? I've been looking at Property Unit Trusts and of course gold, but anything else?
Hi Pete, I have a drawdown fund but due to the volatile markets, I am at present using savings to live on. My question is should I still draw out of the fund my taxable allowance(12.5K) before the end of the year to replenish my savings with tax free cash or should I leave the money invested?
Hi Dave. I can’t tell you what you *should* do. In fact there are very few ‘shoulds’ in finance, more like a bunch of options you can choose from. I think it depends on what proportion of your total fund would be taken if you draw the £12,570 and how distressed your pot is currently. Seek advice if unsure.
I am by no means an expert so this is not a recommendation I just wanted to share my similar experience Dave, as an FYI I also did not\do not take financial advice. I am in the UK and retired early (no other income), so I had the same dilemma this year, fortunately I didn't need the money as I am 2 years into living off a 3 year emergency fund which was part of my retirement plan prior to the crash - part of the plan was to withdraw the tax free allowance annually from my DC pension - purely for the tax benefit. Although I was loathe to take funds from a portfolio that was crashing this year I had a lucky opportunity to withdraw it all from a specific US fund in the portfolio at a time that luckily had spiked upwards mid crash (almost recovered before crashing again). So essentially lucky timing - I then promptly put back in the maximum portion allowed to again take advantage of the tax relief on contributions. The rest ended up in an ISA. I think if you want to take the money and can take it from the least stressed fund (Pete mentions this in his video) then it may be worth doing. Hope this helps in your decision.
Hi Pete. My mother has recently retired and short of NI contributions for a full state pension. She’s above state pension age and I’ve recently found out that grandparents can claim NI contributions if help with child care. My questions are can it be claimed for previous years that she hasn’t been claiming this and if she is already above state pension age? Many thanks J.
I have no idea, sorry Jordan. best way is to call HMRC direct. You'll be on hold a while, but you'll get the answer from the horse's mouth and they're always very helpful, in my experience.
Great video Peter, meeting with the money man next week to discuss the mechanics of triggering my retirement. I only work 4 days at the moment, might have to see if a 3-day week will fly.🤣
Hi Pete, One thing you forgot is, taking a higher tax free amount, but leaving the taxable part invested. More money for the investments that are disposed of. Or rather, less sold for your desired amount. Great, timely video mate.
The great thing about DC schemes is the timing is up to you, if your able to you can leave it all Invested, defer taking any money out for years, take small amounts of tax free cash as and when etc. I have three years until DB scheme matures and 4 till state retirement, but then two DC schemes I can access when I want to eg if I retire early
@@guyr7351 I have 14 years until state pension. I intend to retire at 60, on a DB and wife's State pension. I may go earlier if my DC recovers quickly, but I'm using that as insurance, for when one of us dies. After that, hopefully the kids get a decent inheritance. Good luck in your plans.
@@slayerrocks2 I wish I had not missed nearly ten years of pension contributions, one where my contributions were returned rather than transferred, which was 1/10 of the transfer value. Another where I did not join the company scheme 7-8 years both would have boosted DC pot. Luckily I got a good job on a higher salary and earned good bonuses which I saved rather than just spent on holidays. As I have £100K still on mortgage I am still working and we’re overpaying it, it will be a modest amount at retirement which will be manageable or we could pay it off in full. Time will tell. Remortgaging last year onto a new 5 year deal was the best thing I did, it saved £350 a month
@@guyr7351 when my DB closed, I contributed the minimum required to get a full employer match. Chose a safe, low return investment and forgot about it. I changed jobs, and opted out for 2 years, because I believed in conspiracy bullshit. When I came to my senses and cleared my mortgage, I started ramping up contributions, and switched to 100% equities. If I'd had my current mindset, I reckon I could have been retiring at 56-57 with the same income as I get for working. As it is, I can achieve that by working until 60. Not too upset though. Some people never catch on. Let's hope the economy is sorted out, when we do retire. I could still earn a bit self-employed, if needs be, but I feel worn out now.
Really feel for anyone who was just about to retire. It must be remembered we see these dips every 3 or 4 years, this is just a bigger one than normal. I'm in a fortunate position where I'm currently 30 so have been taking advantage the last 6 months by allocating more of my spare cash into my ISA and PIP than normal, and less into cash and paying off the mortgage
I'm 62, was planning to retire at 65, my pension assets have - like for all, taken a negative hit - your straightforward practical advice here is excellent. Thank you, Peter
I'm increasingly seeing psychological freedom in just accepting I'm going to be poor. I try not to overthink it. I put away 1/3 of my wage each month in an ISA or Premium Bonds, and if there's enough when I retire then great, if not, I'll just live poorer.
Sensible. Real world. As you say, no one said life would be easy. Being able to react in a realistic way when things are tough will help.
Best advice on the internet THANKS
Great video, especially in September 2023, A video of where to put cash in a sipp that is very low or no risk and covers inflation would be helpful. I am thinking of putting my cash into a savings account until 55 then dumping it in a sipp. I have £30000 cash can I do this in one year at 55 I am 53 at the moment?
No risk means no real returns. Investing is a long term project
I have read that what you should think about when nearing retirement is to liquidate enough investments into cash to fund the first 3-5 years of retirement. You can then stand the sort of downturn we're now seeing with a realistic chance that the next time you need to do the same - liquidate investments for the following period - your investments have had a chance to recover.
Sound advice
HAHA- i retired about 5 months ago. Just saw your video. OOPS. All is well so far.
great thanx...does help
Glad it helped!
Pete, normally good advice. The title RECESSION - you didn't mention this in video (we're not in one yet)??? Also to say assets are down? - which ones - the FTSE100 has been static for 7 years. If your talking S&P 500 US etc then context the discussion. Also if it's S&P 500 then context that it's been going up for 10 years plus. Simply not balanced - sorry.....NickForest (commented )- fund is down 20%...aye this year after MASSIVE gains...
I sharper video on retirement management might help.
Noted Iain. Only comment I'd make is that the FTSE100 is largely static, but not the Total Return of that index, which is always the version to watch as investors usually reinvest dividends. Appreciate the feedback...
Big ups to everyone working effortlessly trying to earn a living while building wealth. I am 50 and my wife 44 we are both retired with the net worth of over $3million with no depts. Currently living smart and frugal with our money. Saving and investing lifestyle in the financial market made it possible for us this early even till now earn monthly through passive income.
Not quite long I started investing. I'm very curious and need help on how to enhance and increase my returns. Any good investment tips would be appreciated.
@@alyciagordon3447 Generally, investing requires higher knowledge. For this reason, It's important to have a solid support structure (financial consultant) to guide you through especially in asset picking. I operate with (Alexandra Diana Jose) a consultant who partners with a licensed wealth management firm. For the record, the experience has been the best for my finance. She made me financially stable investing through her help, now I earn on a monthly basis through her passive income strategy... So I'd advise you do get a good investment advisor for yourself. .
@@davidreus9321 please how do i get in touch with her
Impressive. Would you mind sharing some more details. I’d like to have a talk with her.
@@alyciagordon3447 She is easy to find , make a quick research of her on the internet with her name Alexandra Diana Jose . She works with anyone independent of their location.
Tnx for this info, I just looked up your investment professional and found her page. Her experience is pretty impressive. I wrote her and I'm waiting on her reply.
Great calming advice…thankyou
You're welcome - thanks for watching!
I retired last year. I kept 3 years' worth of dosh in cash (to see me through until I get a state pension on top of my DB one) & shoved the rest into more Vanguard funds / ISA.
The only thing to do is . . . sit bloody tight!
Absolutely, Tony. I believe in you (and in the relentless forward motion of markets)!
Very good advice Pete keep the videos coming.
Cheers Kevin - thanks for watching! 🙏🏻
Thanks Pete, this video is exactly what I needed to hear today…fund is down 20% and at 62 I’m preparing to make the final step off the corporate ladder but I sensibly took the decision to drop down to two days a week from 60 so as to have a glide path into full retirement and now I have the option to continue for another year or two if I wish so I’ll swallow my pride and extend out the period to 64 or 65 before I take the final plunge.
I’m keen not to lock in losses and I don’t have to touch my main pension fund for a few years yet if I so wish plus I have other sources of income but you’re right when you say you feel you should be “doing something” and it feels counterintuitive to sit back and leave funds where they are but this video is a really timely reminder to learn to ride out the seismic shocks (hopefully) and the approach you’ve outlined is calming for us jittery investors.
Glad it was helpful, Nick - wishing you well!
Why does the picture keep zooming in and out? So irritating!
It has been said…
@@MeaningfulMoney Doesn't bother me at all
Brilliant
Thank you, Narinder!
Very useful informative and pragmatic video
Thank you - I really appreciate it!
Another good video Pete, a work colleague and I both subscribe to you but we are at different stages, he is 42 single no kids etc and saving at a good rate to provide as he does not want the low income his mother has as a pensioner. I am 62, 2 1/2 years from a DB scheme starting to pay, and then 1 Yaar later full state pension.
I also have a decent amount of DC funds which I am adding to. I regularly am checking and re-working what monies will be available at retirement. Some of this is of course stock market dependant, but happily DB schemes are solid. We both see this period as a time where our investments are at low buy in periods and in 3-4 years time they will be bouncing back and we will have bought low.
It reminds me of a scene in “it’s a wonderful life” where there is a panic on and he is telling people Not to panic, and the the mean spirited Mr Potter is buying and acquiring the whole of the town.
As you often say think long term investments made now might repay very generously in 4+years. Delaying buying that retirement car it’ll be cheaper in 18 months as the over heated car market will cool
I put 3 years worth of living expenses into cash within my SIPP last year around the time I retired just in case the market dropped and sure enough it did shortly afterwards... phew!
I retire next month at 53 so its early but I've been planning awhile. Mainly blue-chip dividend paying stocks averaging around 9% as brought alot during covid etc. I have been building my Isa for around 25 years as tax free income is very important then I can use the 12.5k capital gains allowance up on my buy to let etc. Then sipp at 55 .🙂
@MulberryEllie
Hi
My income from my Tennants rent won't exceed the gct allowance of 12.5k . My objective is to keep all my taxable income below that amount. The rest will come from my isa 👍
Great overview as always! Thanks for your insights.
Thanks for being here, Nicola!
A very useful video - illustrating various options available to everyone in a very practical, informative and definitive way 👍 👌
Glad it was helpful - thank you!
I have found out that i have possibly parkinsons , thing is i am 55 years old, all this happened and finished in december last year.
Unfortunatly all this and being finished from my job and guess what i started to claim my pension only the 25% fed up of see my pot going down. But have sense enough to not do anything rash at all. Am i doing the right thing any suggestions would be great I WATCH all your videos and more imprtantly i have subscribed, YOUR THE MAN !
Hi Ox Man - Firstly, I'm sorry to hear of your diagnosis, that's rough. I wish you very well. I think you need to live even more in the moment, and while I can't give advice here, I can appreciate you wanting to have the cash in hand and also not wanting to do anything rash with it. Trust your gut, spend wisely, but enjoy the money sooner rather than later. 👊🏻
Great video as always Pete, can you make video about protecting wealth I.e passing it onto family with out paying / paying minimal tax. Are trusts a good way to go in the UK.
Cheers. Keep up the good content.
Noted, SS - watch this space...
I should have retired in April when I turned 66, but decided to carry on working for a while longer. I am doing four days a week at the moment, so I do at least get long weekends.
My state pension is now being paid into my bank as well as my wages, and another added bonus is that I no longer pay NI on my wages.
The downside is that I have to pay tax on the state pension, but I have decided to pay any additional funds over and above my wage straight into my own personal pension plan on a monthly basis so I can get the tax relief back on it.
Does that sound like the right approach until things recover a bit ?
Should I pay one large amount every month, or pay smaller amounts on a weekly basis into my pension pot ?
If you have a DC Pension Plan where you work, why not increase your payments into that to a maximum you are comfortable with, and maybe your employer matches your payment to a set % as well. If your payments are taken using the salary sacrifice scheme then this would ease your tax burden as well. Win Win!
@@alanspringett1799 I forgot to mention that I have already done that as well.
Can you talk about types of portfolio structures provide stable growth during retirement?
Stable growth is an oxymoron, unfortunately. Volatility is what makes growth possible - it's impossible to have one without the other. Either you have stability or you have growth. (Sorry!)
Hi Pete, what are your thoughts on Premium Bonds generally as an investment ? Couldn't find anything on your channel so I assume they are a no-go ???
Great videos, thanks for the informative content 😁
They're a great place to hold risk-free money. They're a bit of fun and you might just win the big one (though you probably won't) - they're not really an investment because your capital isn't at risk, but for many people, that's the point!
@@MeaningfulMoney Thanks for your time replying, appreciated
Great points as always Pete👍🏻
I have a few years to go before they become really important to me but it's always good to think about "how to retire"
using a £value of your portfolio as the trigger for declaring yourself able to retire just feels wrong to me. the portfolio could lose 30% of its value in your 3 month notice period. but you still own the same amount of each asset. and if everyone did it wouldn't no-one ever retire in down markets. it's the worst possible timing of the next bear market but it would have happened at some point and will again many time in most retirements. the plan before giving notice should be able to get through this scenario. enough cash to cover and a belt tightening plan for it. if that plan was right i don't think the retirement plans should be changed at all. you're closer to the next recovery. get the first period like this out of the way early could be a blessing physiologically.
I’d agree with all that, Lee. Many people do have a magic number in mind though, so it happens more than you’d think. I think your comment here is very pragmatic 👍🏻
Thats good advice Pete as usual. I am on a phased retirement plan and have no option but to retire in October. Yes the way things are going are worrying As regards the housing market I agree a readjustment is overdue and I feel for the youngsters with big mortgages, seen it in the early 90's.
Hi Pete, could you do a video on early mortgage repayments and the different ways of the extra money being used. Eg reducing the principal, the savings through reducing term V reducing repayment amount.
Not sure if this: ua-cam.com/video/dzDxHdtUAcE/v-deo.html or this: ua-cam.com/video/KX5vipC0Xms/v-deo.html ...might help?
@@MeaningfulMoney hi Pete I’ve watched this, my question is more about which is better with overpayments for reducing how much you pay. Lump sum that reduces the monthly amount but term stays the same, or lump sum that reduces the term but monthly amount stays the same? Eg I paid £5000 into my mortgage and payments reduced by £50 month. 12 and half years left is 150 payments which is £7500 saved. As my mortgage will have some remainder when I retire is the lower payment for a couple of years a better plan. I have the opportunity to put some more cash in just under £10K and then be overpaying via my wife’s contribution as well which as it’s a smaller amount the building society automatically reduces the term.
Hi Pete! Love your videos. I have a DB and DC pension and I'm keen to clear my mortgage. Apart from the (huge!) tax liability, can you think of any potential issues in using (crystalising?) the DC pension (which should just be enough for the mortgage) and leaving the DB pension untouched? Thanks
You’d trigger the Money Purchase Annual Allowance, so you’d be very limited about how much you could add to pensions in future. And ALL THE TAX, obviously! I can’t imagine any scenario where it makes sense to do what you’re proposing, but…. Your money, your life!
@@MeaningfulMoney Thanks, Pete. Does it make any difference that I'm less than eight years away from 'retirement' and wanted to be debt-free before the recession hits? Following redundancy I'm not contributing to any pensions at the moment, but I still have my DB pension to look forward to...
Another great post Pete, common sense advice that puts people's minds at rest
Thank you Stuart!
Have you cancelled that holiday or postponed your retirement?
Be happy to know that the pension fund managers looking after your pension fund will still be going on holidays and filling up their Porsches and Bentleys due to their management fees from your fund regardless if your pension fund is diminishing in value.
That is the downside with ad valirem fees, and yet most clients - in my experience anyway - prefer it because it does, in part, tie the adviser’s success with the investments’ value.
just postprone your retirement!
Easier said than done if you’ve been planning it for ages! But yes, that’s one option, for sure
@@MeaningfulMoney Or you could consider retire aboard, cost of living, warmer climate and lower taxes!
I am some way off but some very useful tips for furture planning. I am currently in a DB scheme, my biggest fear is that im over 30 years away from accessing it and hopefully it stays fully funded! (such as the current state with USS). Hopefully it will provide a safety net if the markets crash when I reach retirement, but shows the importance of using every available tool you can to protect yourself; ISA's, Pensions, Property etc..
Fortunately there are some really great protections for DB schemes if they do fail - it'll still be a decent pension when you get to take benefits, I'm sure...
I'll give you all some financial advice , don't spend what you haven't got .
Yup
I retired in April. Clearly I’m the reason US markets are crashing! Sorry for that my fellow yanks. That said, I prepared a strict fix cost budget and a defensive portfolio a year ago. Lots of cash and equivalents and balance mid and long term risk portfolio. I’m still going to Scotland next year I don’t care.
That’s the spirit, Cato!
Invested my savings in January. Jesus what timing, wish I’d hung on a month and re-thought things.
Nah. That was the best time. So you could learn a lot
Not easy, @johnboyginger, but if you’re investing over decades, it won’t matter in the long run. Hang in there…
@@MeaningfulMoney well I’m 52 and wishing I was 32 now 😄
Hi Pete, I've only recently discovered your channel and from the videos I've watched there always seems to be a large pension pot plus other things like property rental, sadly most people I know don't have these, they pay minimum into there company pension and have no other income, by the way I pay more into my pension and I also have small isa and company shares through share save scheme but I still have no where near the amount of money you use as examples, would it be possible to do a video using smaller amounts and how best use them, I have about 130k in pension fund and about 70k in shares and I'm 57 looking at retirement in hopefully 5 years,thanks in advance and loving the channel.
That’s still a good starting point especially if you keep adding into DC pot over the next 5 years. I assume you will get a state pension as well
Hi Richard - I often have to use big figures to get the point across, but it sounds like you're doing lots of things right. I'll bear in mind a video about 'smaller' retirement pots, so watch this space and thanks for watching and commenting!
@@MeaningfulMoney hi Pete that would be good as the average salary is £30K in the UK which for many does not leave large amounts for investment which is why it is even more critical workers at this level pay in for a long time, maximise company contribution etc
I was “lucky” in that my parents told us children we would inherit on their death except for a few bequests. This gave each of us a 6 figure sum, I have used mine pension mortgage and a rental property. Retirement is only a few years away now and I’m looking forward to it
#1. If you thought stock markets never go down you should take an Economics 101 class at your local Community College.
#2, If you think "recession"is the end of the world you should take an Economics 101 class at your local Community College. Recessions are fairly minor things for most people. Losing a job would be a big event but being retired...kind of not a big risk. If you own your home (imo you should if retired) then increasing rents isn't a risk. Rising gasoline prices...you're retired so almost all travel is discretionary spending. Most retired people should be able t sail through a recession with hardly noticing.
Didn’t watch the video, did ya?! 🤣
Thanks, Pete, great overview and the timing is perfect. One question. In terms of rung 2 on the Cash Flow Ladder, what lower-risk asset classes, above and beyond cash, would you recommend at the moment instead of bonds? I've been looking at Property Unit Trusts and of course gold, but anything else?
Bonds! Seriously - they’re not dead, just distressed. If anything hold more cash. Gold is volatile. Property fund potentially illiquid.
Hi Pete, I have a drawdown fund but due to the volatile markets, I am at present using savings to live on. My question is should I still draw out of the fund my taxable allowance(12.5K) before the end of the year to replenish my savings with tax free cash or should I leave the money invested?
Hi Dave. I can’t tell you what you *should* do. In fact there are very few ‘shoulds’ in finance, more like a bunch of options you can choose from. I think it depends on what proportion of your total fund would be taken if you draw the £12,570 and how distressed your pot is currently. Seek advice if unsure.
I am by no means an expert so this is not a recommendation I just wanted to share my similar experience Dave, as an FYI I also did not\do not take financial advice. I am in the UK and retired early (no other income), so I had the same dilemma this year, fortunately I didn't need the money as I am 2 years into living off a 3 year emergency fund which was part of my retirement plan prior to the crash - part of the plan was to withdraw the tax free allowance annually from my DC pension - purely for the tax benefit. Although I was loathe to take funds from a portfolio that was crashing this year I had a lucky opportunity to withdraw it all from a specific US fund in the portfolio at a time that luckily had spiked upwards mid crash (almost recovered before crashing again). So essentially lucky timing - I then promptly put back in the maximum portion allowed to again take advantage of the tax relief on contributions. The rest ended up in an ISA. I think if you want to take the money and can take it from the least stressed fund (Pete mentions this in his video) then it may be worth doing. Hope this helps in your decision.
@@k.e.9816 thanks for your reply.
Hi Pete. My mother has recently retired and short of NI contributions for a full state pension.
She’s above state pension age and I’ve recently found out that grandparents can claim NI contributions if help with child care.
My questions are can it be claimed for previous years that she hasn’t been claiming this and if she is already above state pension age?
Many thanks J.
I have no idea, sorry Jordan. best way is to call HMRC direct. You'll be on hold a while, but you'll get the answer from the horse's mouth and they're always very helpful, in my experience.
Great video Peter, meeting with the money man next week to discuss the mechanics of triggering my retirement. I only work 4 days at the moment, might have to see if a 3-day week will fly.🤣
Hi Pete,
One thing you forgot is, taking a higher tax free amount, but leaving the taxable part invested.
More money for the investments that are disposed of. Or rather, less sold for your desired amount.
Great, timely video mate.
Thank you. If taking a higher tax-free cash amount means disinvesting *distressed* assets though, it would need careful thought and planning…
The great thing about DC schemes is the timing is up to you, if your able to you can leave it all Invested, defer taking any money out for years, take small amounts of tax free cash as and when etc.
I have three years until DB scheme matures and 4 till state retirement, but then two DC schemes I can access when I want to eg if I retire early
@@guyr7351 I have 14 years until state pension. I intend to retire at 60, on a DB and wife's State pension. I may go earlier if my DC recovers quickly, but I'm using that as insurance, for when one of us dies. After that, hopefully the kids get a decent inheritance.
Good luck in your plans.
@@slayerrocks2 I wish I had not missed nearly ten years of pension contributions, one where my contributions were returned rather than transferred, which was 1/10 of the transfer value. Another where I did not join the company scheme 7-8 years both would have boosted DC pot.
Luckily I got a good job on a higher salary and earned good bonuses which I saved rather than just spent on holidays.
As I have £100K still on mortgage I am still working and we’re overpaying it, it will be a modest amount at retirement which will be manageable or we could pay it off in full. Time will tell.
Remortgaging last year onto a new 5 year deal was the best thing I did, it saved £350 a month
@@guyr7351 when my DB closed, I contributed the minimum required to get a full employer match. Chose a safe, low return investment and forgot about it.
I changed jobs, and opted out for 2 years, because I believed in conspiracy bullshit.
When I came to my senses and cleared my mortgage, I started ramping up contributions, and switched to 100% equities.
If I'd had my current mindset, I reckon I could have been retiring at 56-57 with the same income as I get for working. As it is, I can achieve that by working until 60.
Not too upset though. Some people never catch on.
Let's hope the economy is sorted out, when we do retire.
I could still earn a bit self-employed, if needs be, but I feel worn out now.
Really feel for anyone who was just about to retire. It must be remembered we see these dips every 3 or 4 years, this is just a bigger one than normal. I'm in a fortunate position where I'm currently 30 so have been taking advantage the last 6 months by allocating more of my spare cash into my ISA and PIP than normal, and less into cash and paying off the mortgage
Sounds like you're doing the right things, James!
I'm 62, was planning to retire at 65, my pension assets have - like for all, taken a negative hit - your straightforward practical advice here is excellent. Thank you, Peter
Thank YOU, Peter - hopefully you'll still be able to do that. Three years is a long time...
I'm increasingly seeing psychological freedom in just accepting I'm going to be poor. I try not to overthink it. I put away 1/3 of my wage each month in an ISA or Premium Bonds, and if there's enough when I retire then great, if not, I'll just live poorer.