Early Retirement Pitfalls, Requirements etc Your opinions

[TAR]

In response to info given earlier, it's also important to remember that a pension is not part of your assets for inheritance tax but an ISA immediately attracts 40% tax. This is obviously important if you want to leave a legacy for your family.

I also have personal experience of the difference between council run care and private care. I wouldn't put my worst enemy into council run care.

 

[ChrisJ]

If you really want to minimise Inheritance tax, invest in shares that fall under Business Property Relief - mainly the AIM market. They only have to be held for 2 years before they fall out of IHT. You would not believe the amount my Mum's estate paid in IHT due to this. All the shares in her ISA were tax free as well.

 

[C8RKH]

9 hours ago, philcool said:

Wise words indeed but also remember that salary sacrifice into a works pension is also paid in tax free so if your like me rather than pay 40% tax stick it in the pension and I know I'll pay tax at 20% when I draw on it I'm still 20% better off.

Oh and would have also kept £6k child allowance as well if had started earlier 

Only if you earn less than £100k a year. More than that and your pension benefits and personal annual tax allowance get battered as your income rises.

As ever, the devil is in the detail which is why you need proper advice tailored to your own personal circumstances.

1 hour ago, Dan E said:

So, been looking after the MIL for at least 15 years worse in the last 5 years as she is house bound and 92 so we have to do everything and she has 3 care visits a day, oh and no life, now this brings me on to my solution (sorry @pete) 

Everyone gets to live to 85 and two days (to get over the hangover of your birthday), then we just take them somewhere nice and give them a very lethal injection with a pleasant Gin and Tonic. You know it is coming you can plan your birthday, live like you want because you know the date your aren't going to be here. This will solve pretty much all the pension schemes and NHS issues. 

vote for me 🤣

 

I would. Vote for you on this.

Sad fact is not all of us will make it to 85. Let alone 85 and two days.

[C8RKH]

1 hour ago, TAR said:

In response to info given earlier, it's also important to remember that a pension is not part of your assets for inheritance tax but an ISA immediately attracts 40% tax. This is obviously important if you want to leave a legacy for your family.

I also have personal experience of the difference between council run care and private care. I wouldn't put my worst enemy into council run care.

 

I do not intend to leave my family any inheritance other than the house, garage, and their contents.

I am supporting my kids now, whilst I am working, with deposits on houses, additional savings, cars, etc. Would rather they had the help when young and it was needed, than they have to wait till hopefully much later in my life. In essence, they benefit when I'm warm, not cold.

[pete]

10 hours ago, Dan E said:

So, been looking after the MIL for at least 15 years worse in the last 5 years as she is house bound and 92 so we have to do everything and she has 3 care visits a day, oh and no life, now this brings me on to my solution (sorry @pete) 

Everyone gets to live to 85 and two days (to get over the hangover of your birthday), then we just take them somewhere nice and give them a very lethal injection with a pleasant Gin and Tonic. You know it is coming you can plan your birthday, live like you want because you know the date your aren't going to be here. This will solve pretty much all the pension schemes and NHS issues. 

vote for me 🤣

 

I've still got 30 years then

[Sparky]

You're a dog???

[Kimbers]

11 hours ago, TAR said:

In response to info given earlier, it's also important to remember that a pension is not part of your assets for inheritance tax but an ISA immediately attracts 40% tax. This is obviously important if you want to leave a legacy for your family.

I also have personal experience of the difference between council run care and private care. I wouldn't put my worst enemy into council run care.

 

I never understood this need to leave worldly possessions to your kids. For a start my oldest earns twice my salary (at least) and, to be totally frank, when I am dead I won't give a shit! So who cares?

Nope, like my dad, his dad before him etc etc, there will be absolutely nothing in the pot when I go, including no house. Our house is part of our retirement plan. Selling it for the £650,000 and buying a small retirement flat for £150,000 then equity releasing it, so we live in it till we pass, is the plan! Kids get nowt apart from some of Wendys paintings and maybe some Lotus stuff I will inherit from my father! 

My dad worked for his money, I have worked for mine and my kids will have to work for theirs! Like @C8RKHI have been supporting them the last 15 years paying for 5 years at Uni for oldest, regular support for the other 3 as they didn't work or lost jobs etc etc. They've had their money!

[Chillidoggy]

12 hours ago, Dan E said:

So, been looking after the MIL for at least 15 years worse in the last 5 years as she is house bound and 92 so we have to do everything and she has 3 care visits a day, oh and no life, now this brings me on to my solution (sorry @pete) 

Everyone gets to live to 85 and two days (to get over the hangover of your birthday), then we just take them somewhere nice and give them a very lethal injection with a pleasant Gin and Tonic. You know it is coming you can plan your birthday, live like you want because you know the date your aren't going to be here. This will solve pretty much all the pension schemes and NHS issues. 

vote for me 🤣

 

 

In this case, my mother is overdue by 4 years. But I'm not sure I could vote for you as I've seen the length of time any government takes to clear backlogs, and I can't wait that long.

[exeterjeep]

For some years we had 2 full time carers and other support for them at home. Then eventually mum went into a care home as she could no longer be supported at home. I had previously had to take over my parents finances etc when my mum had a stroke in late 2015, at that time my father needed full time care.

In total I spent over £250k on care. Seeing both my parents gradually get worse until they passed away was difficult. If I had not retired early, I would not have been in a position to help - particularly if I was still living and working a couple of hundred miles away.

[Dan E]

4 hours ago, Chillidoggy said:

 

In this case, my mother is overdue by 4 years. But I'm not sure I could vote for you as I've seen the length of time any government takes to clear backlogs, and I can't wait that long.

If you think about it, it makes total sense for pension planning point of view and frankly 85 is way old enough (sorry again @pete)  

[Dan E]

5 hours ago, Kimbers said:

I never understood this need to leave worldly possessions to your kids. For a start my oldest earns twice my salary (at least) and, to be totally frank, when I am dead I won't give a shit! So who cares?

Nope, like my dad, his dad before him etc etc, there will be absolutely nothing in the pot when I go, including no house. Our house is part of our retirement plan. Selling it for the £650,000 and buying a small retirement flat for £150,000 then equity releasing it, so we live in it till we pass, is the plan! Kids get nowt apart from some of Wendys paintings and maybe some Lotus stuff I will inherit from my father! 

My dad worked for his money, I have worked for mine and my kids will have to work for theirs! Like @C8RKHI have been supporting them the last 15 years paying for 5 years at Uni for oldest, regular support for the other 3 as they didn't work or lost jobs etc etc. They've had their money!

Kimbers, be very careful with equity release, you may not want to leave your kids anything but with that you may well, easily and very quickly leave them with a massive debt. 

[Kimbers]

3 minutes ago, Dan E said:

Kimbers, be very careful with equity release, you may not want to leave your kids anything but with that you may well, easily and very quickly leave them with a massive debt. 

Cool, sounds like a plan! 

[exeterjeep]

2 minutes ago, Dan E said:

Kimbers, be very careful with equity release, you may not want to leave your kids anything but with that you may well, easily and very quickly leave them with a massive debt. 

Wife's parents had equity release, and after the last one passed away the interest keeps accruing while house for sale, and so it puts much more pressure on getting the house sold before costs go up an up. It means you feel under pressure to take whatever offer you can get.

[Bazza 907]

3 hours ago, Dan E said:

Kimbers, be very careful with equity release, you may not want to leave your kids anything but with that you may well, easily and very quickly leave them with a massive debt. 

In the UK all equity release policies are sold with a No Negative Equity Guarantee (NNEG) which means the equity release provider cannot get back more than the value of the house. 

[SFO]

Debt cannot be "inherited". If you die owing more money than you have, that "negative equity" is not transferred onto your beneficiaries. 

[Dan E]

1 hour ago, Bazza 907 said:

In the UK all equity release policies are sold with a No Negative Equity Guarantee (NNEG) which means the equity release provider cannot get back more than the value of the house. 

ah never knew that. 

[C8RKH]

11 hours ago, Kimbers said:

My dad worked for his money, I have worked for mine and my kids will have to work for theirs! Like @C8RKHI have been supporting them the last 15 years paying for 5 years at Uni for oldest, regular support for the other 3 as they didn't work or lost jobs etc etc. They've had their money!

Hoo rah!  100% Kimbers. Give it while you are warm. Enjoy giving it and enjoy seeing them prosper as a result.  

[andyj007]

On 24/03/2022 at 12:00, gregs24 said:

I can give you an idea. I put £25k into a pension in 2008 and it is now worth just over £80k. Yes it went down significantly from time to time, but pensions are a long term investment. 

You do need to be careful to take inflation into account. That £40k per year will be nearer £50k after 10 years of inflation (even shorter at current rates)

Ideally you don't want to use capital to live off as if you start hitting your capital too soon it will quickly vanish. That is the reason for the £1m figure to generate £40k per year. 4% return is achievable on longer term investments.

so what i did on  2014 was I  dropped that 30k onto a 3 bed terraced house that cost me 130k. 100k repayment mortgage over 15 years..  gave it striaght  the council who were gurantee to pay £750 month at that time . to rent it .   used that to pay the mortgage . house now worth 260k and pays me £975 month as over paid as mortgae was abouot 650.. so should be paid off end next year..   yes i have had to spend a coupel of k on it over tthe years.  i then did this twice more after  i saved up enough deposit to reduce the mortgage  payments & inusrance  so the rent covered it  (although the next 2 aill not be paid off for another 4 & 7 years respectively  unless i pay off early.)  relise i cant sell them as capital gains and are second homes, but in future , rents go up as do house values.. wa sthat better than a pension?  i have no idea.  but it worked for me ,  and someone else was paying off the mortgage,,  and money just seem exceptional cheap to borrow ..  having been around people in 91 who were giving keys to banks, i fixed my mortgaes to reduce risk.. 

Yes we have had to pay tax ,  but between  Mrs J & myself  we combine tax allowances so its was pretty small & manageable  with the rent income . im sure an accoutant could make it more benificial and some point may take some advice..  

it was drummed into me from young age, money safe in bricks and mortar..   if that  turns out to be true or not  only time will tell ...

[gregs24]

1 hour ago, andyj007 said:

so what i did on  2014 was I  dropped that 30k onto a 3 bed terraced house that cost me 130k. 100k repayment mortgage over 15 years..  gave it striaght  the council who were gurantee to pay £750 month at that time . to rent it .   used that to pay the mortgage . house now worth 260k and pays me £975 month as over paid as mortgae was abouot 650.. so should be paid off end next year..   yes i have had to spend a coupel of k on it over tthe years.  i then did this twice more after  i saved up enough deposit to reduce the mortgage  payments & inusrance  so the rent covered it  (although the next 2 aill not be paid off for another 4 & 7 years respectively  unless i pay off early.)  relise i cant sell them as capital gains and are second homes, but in future , rents go up as do house values.. wa sthat better than a pension?  i have no idea.  but it worked for me ,  and someone else was paying off the mortgage,,  and money just seem exceptional cheap to borrow ..  having been around people in 91 who were giving keys to banks, i fixed my mortgaes to reduce risk.. 

Yes we have had to pay tax ,  but between  Mrs J & myself  we combine tax allowances so its was pretty small & manageable  with the rent income . im sure an accoutant could make it more benificial and some point may take some advice..  

it was drummed into me from young age, money safe in bricks and mortar..   if that  turns out to be true or not  only time will tell ...

You can of course invest in commercial property and letting through a pension. This gains the tax relief on the initial cash used, as well as tax free growth on the property (no CGT) and no tax on the rental income. 

You can also invest in general property based funds in a pension

[pete]

FOR THOSE WHO ARE 60 yrs OLD AND ABOVE PLEASE READ THIS.
This is for you. I really like what is said here and am going to try my best to follow it. Thank you to the person who wrote this. May God bless us all as we strive to be a blessing to others at this age, especially to our children.
LW
🚩Between 60 and death. It's time to use the money you saved up. Use it and enjoy it. Don't just keep it for those who may have no notion of the sacrifices you made to get it. Remember there is nothing more dangerous than a son or daughter-in-law with big ideas for your hard-earned capital.
🚩Warning: This is also a bad time for investments, even if it seems wonderful or fool-proof. They only bring problems and worries. This is a time for you to enjoy some peace and quiet.
🚩Stop worrying about the financial situation of your children and grandchildren, and don't feel bad spending your money on yourself. You've taken care of them for many years, and you've taught them what you could. You gave them an education, food, shelter, and support. The responsibility is now theirs to earn their own money.
🚩Keep a healthy life, without great physical effort. Do moderate exercise (like walking every day), eat well, and get your sleep. It's easy to become sick, and it gets harder to remain healthy. That is why you need to keep yourself in good shape and be aware of your medical and physical needs. Keep in touch with your doctor, do tests even when you're feeling well. Stay informed.
🚩Always buy the best, most beautiful items for your significant other. The key goal is to enjoy your money with your partner. One day one of you will miss the other, and the money will not provide any comfort then, enjoy it together.
🚩Don't stress over the little things. You've already overcome so much in your life. You have good memories and bad ones, but the important thing is the present. Don't let the past drag you down and don't let the future frighten you. Feel good in the now. Small issues will soon be forgotten.
🚩Regardless of age, always keep love alive. Love your partner, love life, love your family, love your neighbor and remember: "A man is not old as long as he has intelligence and affection."
🚩Be proud, both inside and out. Don't stop going to your hair salon or barber, do your nails, go to the dermatologist and the dentist, keep your perfumes and creams well stocked. When you are well-maintained on the outside, it seeps in, making you feel proud and strong.
🚩Don’t lose sight of fashion trends for your age, but keep your own sense of style. You’ve developed your own sense of what looks good on you – keep it and be proud of it. It’s part of who you are.
🚩ALWAYS stay up-to-date. Read newspapers, watch the news. Go online and read what people are saying. Make sure you have an active email account and try to use some of those social networks. You'll be surprised at what old friends you'll meet.
🚩Respect the younger generation and their opinions. They may not have the same ideas as you, but they are the future and will take the world in their direction. Give advice, not criticism, and try to remind them that yesterday's wisdom still applies today.
Never use the phrase: “In my time.” Your time is now. As long as you’re alive, you are part of this time.
🚩Some people embrace their golden years, while others become bitter and surly. Life is too short to waste your days on the latter. Spend your time with positive, cheerful people, it'll rub off on you and your days will seem that much better. Spending your time with bitter people will make you feel older and harder to be around.
🚩Do not surrender to the temptation of living with your children or grandchildren (if you have a financial choice, that is). Sure, being surrounded by family sounds great, but we all need our privacy. They need theirs and you need yours. Even then, do so only if you feel you really need the help or do not want to live by yourself
🚩Don't abandon your hobbies. If you don't have any, make new ones. You can travel, hike, cook, read, dance. You can adopt a cat or a dog, grow a kitchen garden, play cards, checkers, chess, dominoes, golf.
🚩Try to go. Get out of the house, meet people you haven't seen in a while, experience something new (or something old). The important thing is to leave the house from time to time. Go to museums, go walk through a park. Get out there.
🚩Speak in courteous tones and try not to complain or criticize too much unless you really need to. Try to accept situations as they are.
🚩Pains and discomfort go hand in hand with getting older. Try not to dwell on them but accept them as a part of life.
🚩If you've been offended by someone – forgive them. If you've offended someone-apologize. Don't drag around resentment with you. It only serves to make you sad and bitter. It doesn't matter who was right. Someone once said: "Holding a grudge is like taking poison and expecting the other person to die." Don't take that poison. Forgive, forget, and move on with your life.
🚩Laugh. Laugh away your worries Remember, you are one of the lucky ones. You managed to have a life, a long one. Many never get to this age, never get to experience a full life.
My valued friends, enjoy peaceful life at this point in your life ...
Don't worry... be happy. 🥰
Credit. M Sanchez Jr.

[Chillidoggy]

Good to see you adhering to all those principles, Pete.

[C8RKH]

For you @pete, that's a whole lifetime of "posting" words in one Post. I know time is short but...

[LotusLeftLotusRight]

I was talking to a financial advisor the other day. He echoes the earlier points. He has lost count of the number of times he has met people with complete financial security and more money coming in from investments than they have ever spent before, but their mentality is still not to spend. He gave some examples, like

“when was the last time you both had a nice day out in London?”.
 

“Oh ages ago. Have you seen the price of train tickets nowadays?”

”stuff the train. Get a bloke in a limo to pick you both up, drive you there, wait until you’re ready and then drive you home. As for holidays, go long-haul and Business class.”

Treat yourselves FFS.

[pete]

57 minutes ago, C8RKH said:

For you @pete, that's a whole lifetime of "posting" words in one Post. I know time is short but...

Been saving them all up

[Chillidoggy]

Retiring was one of my best ever moves. Never regretted it once, it’s allowed me to spend more time with my wife.