How to Start a Pension in the Face of Economic Armaggedon - The Bear and Badger

GooberTheHat

acemuzzy wrote:

As in, before you've retired? Ah maybe that's a good thing if it's salary not contribution based... otherwise isn't it kinda going against the point of having money for when you've stopped earning? The income is still taxable, right?

Yeah, the income stream is taxable. The lump sum isn't.

Funkstain wrote:

Yes - goobs will need to complete self assessments every year I would’ve thought

I think I have to do that anyway because of child benefit.

acemuzzy

Ten years from now my youngest will be A-Level age, if she does them, and my elder two into their twenties. Doubt any will be fully financially independent by then, but that's the vague horizon I have for winding down work etc. Would be nice if my employer IPOed on the meantime... either that or I sell my games collection to find my luxury retirement lifestyle...

acemuzzy

GooberTheHat wrote:

I think I have to do that anyway because of child benefit.

Yep that's me too

Diluted Dante

Up 24.24%.

hylian_elf

acemuzzy wrote:

hylian_elf wrote:

There’s a difference between actual retirement (in life) and taking ‘retirement’ from a pension pot/scheme. The minimum ‘retirement age’ in the U.K. is currently 55. That is, you can’t access your pension before that age. Government has been thinking for a while to increase it. If your pension is a DC pot (like in a SIPP), no penalties for when you take it out as you’re just taking whatever it’s grown to. If it’s a workplace pension based on salary and service (a rare beast), your scheme will have its own ‘normal retirement age’. Usually 65-ish. If you want your pension earlier or later, it will be adjusted for the fact the scheme has to pay you for longer/shorter period (using estimated life expectancies and mortality rates and scheme assumptions etc etc).

So what pension can't you access before 55? Sounds like you can with both DC and DS (obviously neither we big as of you waited), and state pension is later right?

You can’t access any pension before 55. At all. Only if you die, then your family/nominated beneficiaries will get the pot value/lump sum. Tax free as its discretionary (and also now that the lifetime allowance has been scrapped!).

acemuzzy

Ah right, even from a sipp / DC scheme?

hylian_elf

Nope. Locked in till 55!

hylian_elf

Anyone tell you they can help you access before that age, you just have to transfer to another scheme they can help you with… it’s a scam. You will gain some up front, lose the rest most likely, and eventually get caught up by HMRC for tax and pension libertarian etc.

GooberTheHat

Yeah, mine's an armed forces pension so slightly different. Not enough to retire on by any stretch, but it'll help for sure.

acemuzzy

Don't think I knew that. Early retirement plans on ice. Fuck you Elf.

SpaceGazelle

Diluted Dante wrote:

Up 24.24%.

Yay. You got in early iirc, which helped.

Funkstain

I use excel’s XIRR (iterative rate of return) formula which gives me an annualised % return rate on my investments. This is useful as you can then directly compare it to savings interest / inflation / other annualised rates. An absolute % increase or decrease won’t let you take into account compound interest for example on a savings account.

Over the long term, you’re looking for a XIRR of >5% which has historically been easily achievable over any given twenty year period on any low cost wide exposure equity fund

None of us will be able to access a SIPP or workplace plan of any kind as Elf says until we hit whatever age we need to at the time. For me, born in 1978, that will be 57 (age of being able to take pension from 2028). If Goobs is on the 2005 army pension then I believe he’ll be exempt from that raise. State pension is currently 67, rising to at least 68 before we can get it

GooberTheHat

I'm on the 75 and 15 pensions, but will probably be exclusively 75 once the dust settles on the McCloud remedy.

hylian_elf

Fuck, minimum age is going up to 57 isn’t it. Somehow blanked out of my brain, that did. For some reason, I thought the change was rejected.

My SPA is 68. No doubt it will go up to 70, maybe that’s the one that got rejected but could still happen soon?

acemuzzy

57?! Fuck this shit. I can just stop writing and party off my savings tho, right?!

Armitage_Shankburn

Just go on holiday and let chatgpt do your work 4 u

Funkstain

GooberTheHat wrote:

I'm on the 75 and 15 pensions, but will probably be exclusively 75 once the dust settles on the McCloud remedy.

The 75 is a damn good pension (er, compared to what counts as a workplace pension these days anyway). Sounds like you’re planning to retire from the Army before 55, so you’ll get that smaller amount for a while right?

You can buy extra years, which could work out to be very lucrative?

Not sure how long you’ve been in the army, what rank you are (and where you’ll be when you retire), and whether you commissioned from the ranks (never mind all the complexities surrounding role- and rate-adjusted pay, what a palaver) but it’s about as good as still exists out there (other than spending two months as a PM obvs)

RamSteelwood

My pension plans are much simpler in that i think i will just be working until i die.

on the topic of my investment, it's actually up 30%, but since i've not been adding to the pot that's just based on increase from back when this started.
so a better increase than the money being in the bank, but i'm not sure i can retire yet on the extra £200

the place i signed up with (iweb, possibly same as dante?) doesn't seem to allow the automated monthly contributions, plus i think it works on a flat £5 charge for each transaction which makes small additions not feel worth it - i could chuck in the odd £50 say, but losing 10% each time feels like a foolish way to go

LivDiv

Started my SIPP in 2017, one of the funds I have had since the off (AXA Framlington American Growth) is up 98% since then.

Switched out a UK based fund when we got Trussed as I have no confidence in uplift in the UK for at least a decade, it wouldnt have lost long term but wouldnt have made as much as it could. The UK has plateaued at best and thats the long term decades long Div prediction.
That was 9-10 months ago, picked up Stewart Inv Asia Pacific Leaders Sustainability which is up 33%.

I have a few others which are doing fine but those are the highlights.
I still keep things diverse. At least one fund in each of America, Europe and Asia.

GooberTheHat

Funkstain wrote:

GooberTheHat wrote:

I'm on the 75 and 15 pensions, but will probably be exclusively 75 once the dust settles on the McCloud remedy.

The 75 is a damn good pension (er, compared to what counts as a workplace pension these days anyway). Sounds like you’re planning to retire from the Army before 55, so you’ll get that smaller amount for a while right?

You can buy extra years, which could work out to be very lucrative?

Not sure how long you’ve been in the army, what rank you are (and where you’ll be when you retire), and whether you commissioned from the ranks (never mind all the complexities surrounding role- and rate-adjusted pay, what a palaver) but it’s about as good as still exists out there (other than spending two months as a PM obvs)

I didn't know Project Managers got paid so well!

Yeah, I'll have about 12 years at the reduced rate, but don't intend to stop working until 60 odd so will have a few years to build up a private pension too.

RedDave2

I'm generally worried that the next economic armageddon will be the pension one, at least in Ireland. Way too many people my age have no pension and quite a few are still renting (I'm 44.) In some cases its not there fault, in others they have avoided the issue all their life.

Economic management needs to be taught in schools.

LivDiv

The student loan bubble is my concern over here.
£50k of debt, linked to inflation (or is it base rate, either or) which has now rocketed.
Completely stagnated wage growth and crap starting salaries.

No way the kids are paying that shit off.

Might come a bit later but I cant see it not being a big thing.

Funkstain

You are both correct, and there is also the big housing correction which will happen when demand does eventually fall (which it certainly will in the end due to finally falling population and dying old people), and Liv's other predicto which is that in the UK specifically we are long term buggered until a government sorts its arse out and stops talking bullshit about sovereignty, protectionism, immigration and making legal threats against our largest trading partner - gets a LOT closer to said trading partner - invests in things (big things, not fucking crypto or proto-AI that it understands nothing about: education, renewable industry, nuclear industry, agriculture, education, justice system, education, health, education, infrastructure, education) and waits approx 10-20 years to yield fruit

In other words if you have spare cash invest almost anywhere else unless you have an insider tip

Finally iWeb is a bit sucky with the £5 per trade - for small investors (anyone with portfolio under £20K or so, or a SIPP of under £65K or so) I would recommend a flat % fee rather than flat rate. For me, iWeb works great cos I don't invest regularly and don't get money taken out of my account every month for 'management' fees

RamSteelwood

Funkstain wrote:

For me, iWeb works great cos I don't invest regularly and don't get money taken out of my account every month for 'management' fees

it was this that appealed, and has been fine in the sense i threw a bit money in with no real idea what i was doing, and just left it sitting there and it's now worth more and isn't costing me anything.

hylian_elf

RedDave2 wrote:

Economic management needs to be taught in schools.

Like what these guys are doing?

https://redstarteducate.org/

They support one of our local primaries.

RedDave2

hylian_elf wrote:

Economic management needs to be taught in schools.

Like what these guys are doing? https://redstarteducate.org/ They support one of our local primaries.

Thats great stuff - but I think it is needed in every area, not just disadvantaged. Bearing in mind my social group are not those on the breadline. They just hit adult age around the Celtic Tiger era - everything was (relatively) low cost, Wages were good and Credit Cards were flying around everywhere. They've had money, but in many cases no training on what to do with it. Some were smart, many lost the head and have not gotten out of that state of mind.

Even now, I tried to get a pension group in for staff which the owner agreed to help with as part of a PRSA - sadly no-one wanted to take it up (bearing in mind with tips and incentives it is not hard for a waiter earning 60k per year with a chunk of that being cash tips and therefore untaxed)

RamSteelwood

60K per year as a waiter? WHAT?

LivDiv

RamSteelwood wrote:

60K per year as a waiter? WHAT?

Could open 3 Gamestops with that.

Funkstain

first: euros
second: it's a good career for those who take it seriously and advance into decent restaurants. in France for example it's a proper thing, qualifications and everything. can earn good tips but more importantly the basic is good
third: top class serving staff can earn far more than €60K. there are master sommeliers out there (yes it's specialist but) earning well over £100K

RamSteelwood

60K euros is still over 50K sterling which to my mind is a great wage, and a lot more than i (and the majority of people) earn...and my job would be considered a lot more 'skilled' than waiting (no offence waiters but i mean that in a general view than dissing your skills)

and perhaps Dave is running (?) a particularly posh place and just meant in that environment, it just seemed a casual and general 'yeah waiters earn that much' which seems mind boggling to me.

using master sommeliers as a comparison seems a bit ridiculous too.

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