Pension help needed please

Has anyone on here retired?
I am off to bed now, but I have lots of questions tomorrow for anyone who knows much?
I need an idiots guide though, as most of it goes right over my head
Soooo, if anyone is willing to help, then please reply.

 

What's up like? You're not retirement age yet are you? I seem to remember from your other posts that your only a few years older than me.

 

I want to retire at 60 though
Just have lots of questions and need some guidance

 

If you can, invest in land or houses. That's my advice. We've seen too many horror stories about what can happen to pension funds. Plus the government keeps introducing little bits of legislation that allows them to steal more and more from our private pension pots. By the time you and I retire it will be a full time job just to fend off the government with their grubby mits wanting our savings. I have two pension pots, worth a total of around £45k. That's the result of 10 years of paying in about £300 - £400 per month (between me and my employer), and some stock market gamblers investing it. I could have saved that myself instead of paying into a pension. At one point the value of my fund dropped to about £3k, during the last financial crash (a financial crash happens roughly every 20 years, and if one coincides with your retirement, you're stuffed).

I have absolutely no control whatsoever over that money, because UK laws dictate that I can't take my pension fund out of the hands of a pension company until I'm 55, so I have to trust others entirely with my future. The estimate by the way on my pension, based on what's in there is that I'll get around £3k per year if I retire at 65. If I had direct access to that £45k, I'd buy a house, immediately rent it (covering the small mortgage payments I'd need on it), have it paid for itself within 10 years (by the time I'm 50), then it would be bringing in around £500 per month, or £6k per year (twice my pension estimate) after maintenance, all the while the property would still be (on average) rising in value, and mine, so that I could just sell it and live off the lump sum in my last few years.

Not everyone can buy a spare house (I can't). I bought a small plot of land. That money is safe. The land is already worth considerably more than I paid for it. What I don't understand is why groups of friends or colleagues don't buy together. There seems to be an aversion to it, and I don't know why. My idea is (and I have yet to convince my colleagues), is instead of saving individually, we collectively buy a house or two, and simply hand it over to a letting agency to sort everything out. Once paid off we get the income from rent, and we still own the actual asset which is the property, so there is nothing to lose.

 

Yeah that sounds good advice, especially to younger people. I understand your frustration at the group purchase too.
How much do you lose if you retire early? say 5 years early? someone told me its about 4% per early year? so it would be 20%. Does this sound right?
Do you lose that from your lump, as well as your yearly payment?

 

Based on the online pension calculator provided by one of my two pension companies (both company pension schemes), If I retire at 62, that £3k per year becomes around £1500 per year. In other words, my pension fund is worth exactly nothing, because having it means I wont qualify for the various state benefits (other than the basic £92 per week basic statutory pension).

If I was a man of lesser integrity, I'd ask my wife to initiate divorce proceedings. That's the only way (except me dying) that my pension fund can be liquidated. Then having re-married the wife I'd do something more useful with those savings.

 

If you retire early, you still get state pension at normal retirement date. Is that right?
So after 5 years, my income would get a boost of about £400+ a month?
Also, if the calculator says 6k pension at retirement, is that likely to be worth very little due to inflation?

 

Thanks @JWK any info would be appreciated. I have a final salary pension, and wish to retire at 60/61.
I would only be looking to live an 'ok' existance. Holidays/travel/cars won't matter, as long as I have a roof over my head and can comfortably pay the bills (with a little savings for emergencies etc) Thats all I ask .... mortgage paid with any lump sum naturally

 

I retired early and still have many years to go until I reach state pension age when I'll be quids in with my 2 (occupational + state)) pensions, but it's 12 years before Mrs Scrungee gets her 2 pensions. You don't pay NI on pensions, just income tax. If you've paid off your mortgage and got some savings then go for it.

Would you be on a fixed or index linked pension? Even with index linked a pensioners inflation can be much higher that what the ONS say it is as the stuff the spend their more limited income always appears to go up far more than other things.

 

Sadly due to the divorce, my mortgage is till I am 65, but it isnt a huge mortgage anyway. Any lump sum I get at 60 would hopefully take care of it.
As for index linked, I am not sure. I will have to find out.
So if the plan estimate says 6k yearly, do I then have to take tax off of that?If so, at what rate.

 

You won't pay tax on £6k a year, if that's your total income - you can currently 'earn' £10k before you have to start paying.

 

Cool I just wasn't sure if you paid tax. I didn't know it worked the same as employment