What do you think about retirement and when will you do it?

[UnderOpenSky]

That's a pretty good annuity rate! Does it take into account the escalation? (I didn't look at the calculator.)

Good question (that I had to Google). I'll have to read more. I'd also assume it's got to be linked to inflation as well?

Neither of my parents got close to that age which probably colours my thinking more then it should

 

[Puddy_Tat]

Neither of my parents got close to that age which probably colours my thinking more then it should

my thinking on it all is a bit complicated.

i didn't bother joining the pension scheme when i started in local government, as a young gay man in the early 90s, i didn't really expect to reach retirement age. i did join a few years later when buying a place worked for me and the pension scheme's death benefit (without the 'lifestyle questions' you then got with standard life insurance) made it worthwhile.

in retrospect, i should have joined earlier and / or bought some 'additional years' as you could then.

dad got early retirement at 58 and didn't reach 60, his dad didn't reach 70. mum-tat will be 85 next month and shows every sign of intending to go on for some time.

 

[lazythursday]

Some random thoughts, subject to the disclaimer that I'm not a financial adviser or anything like that -

Defined contribution schemes will perform differently over time - you might consolidate in one that does better than average, you might not. Are some charging higher fees than others? Do any have fees for transferring out? Consolidating will simplify admin, and might lead to lower charges, or it might just mean you're paying X percent a year on a higher amount rather than about X percent on a few smaller amounts.

Some defined benefit schemes will allow transfers in - I went (back) in to local government a couple of years ago and the estimated (broadly guaranteed) pension at retirement on the transfer value on a few DC schemes I've picked up since I left local government was on average 40 - 50 % higher than the estimated (not guaranteed) pension if I'd left them alone, although it's possible the estimates were over-cautious and I might have done better staying with them.

Your scheme may not allow this, or may have a time limit on doing so (I think I only had the right to transfer in within a year of starting.)

Transfers in to DB schemes might 'buy service' as in will add the equivalent of X years' service to your pension calculation, it may just be that X pounds paid in will get you Y amount more pension. (the latter is how the local government scheme works now - it used to be a case of buying service, as happened when I first joined the pension scheme and transferred something else in, but that was in the early 90s.)

Some DB schemes allow additional payments in to the main scheme, either on the basis of buying service, or buying additional pension either as a lump sum or X amount per month. Some places with DB schemes offer an 'additional voluntary contributions' scheme (either only offering this, or offering it as an alternative) but this behaves like a defined contributions scheme. This may or may not be better than your current DC scheme/s and may or may not allow transfers in.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise may be worth a look.

With the USS there are two parts - the defined benefit element and another 'investment builder' pot which is voluntary and basically acts as a defined contribution pension. At the moment I'm not paying anything into that. You can only transfer money into that, you can't improve on your defined benefit element unfortunately. However the charges for the investment builder is only 0.30% which is a lot cheaper than my other pots so probably wise to put everything in there I think.

I can't see any way of putting additional large lump sums in though, so maybe I'm best off starting an additional SIPP with my savings.

It's all so mind-bendingly complex. But I have made a start, and have realised that it might not be as bad as I feared. I've paid enough NI for full state pension. After 67 I'll be ok. What I'm not sure of yet is it I have a chance of retiring earlier - 62 would be good, just ten more years. But I think that's a bit of a long shot.

 

[smmudge]

Good question (that I had to Google). I'll have to read more. I'd also assume it's got to be linked to inflation as well?

Neither of my parents got close to that age which probably colours my thinking more then it should

Yes how much they increase it in payment to keep up with inflation. Looks like from a quick search it's CPI+1.5% with no cap that I can see, which again is pretty generous and would bring the "years til you get your money back" down even more.

Sorry about your parents there are no easy answers for sure

 

[Puddy_Tat]

Yes how much they increase it in payment to keep up with inflation. Looks like from a quick search it's CPI+1.5% with no cap that I can see, which again is pretty generous and would bring the "years til you get your money back" down even more.

yes, i see what you mean. i assume it would get an inflation increase to match the standard pension. i'll have to check, but yes, that could make it more worth my while doing it.

 

[Hollis]

This tool provides hours of fun when it comes to retirement planning:

Guiide - Pensions made simple

Helpful in working out if you've got enough funds, and also shows how to use up your funds between ISA and SIPP when you're retired.

 

[Eric Jarvis]

Done it. This summer. Have never been as busy as I am now.

 

[redsquirrel]

I can't see any way of putting additional large lump sums in though, so maybe I'm best off starting an additional SIPP with my savings.

I'm almost certain you can do this in USS. If you go to the online tool, myUSS, I'm sure there's a link to make lump sum deposits (though depending on what you mean by large there might be limits) Investment Builder

Worth bearing in mind that this year your USS pension will be better with the unwinding of the detrimental changes the employers and trustees made in 2022.

 

[Numbers]

This tool provides hours of fun when it comes to retirement planning:

Guiide - Pensions made simple

Helpful in working out if you've got enough funds, and also shows how to use up your funds between ISA and SIPP when you're retired.

That's quite good, cheers.

 

[BoatieBird]

I'm another lucky one with a USS pension
I'll have been paying into it for 30 years in 2025, and I've recently set my retirement age to 58.
5 more years to go!

I've got quite a bit in the 'investment builder' pot as I transferred in an old personal pension a few years ago.
I currently do the extra 1% of my salary into the investment builder, and I can afford to up that a bit, but I'm wondering if I'll get a better return elsewhere?

 

[lazythursday]

I'm almost certain you can do this in USS. If you go to the online tool, myUSS, I'm sure there's a link to make lump sum deposits (though depending on what you mean by large there might be limits) Investment Builder

Worth bearing in mind that this year your USS pension will be better with the unwinding of the detrimental changes the employers and trustees made in 2022.

I've looked at that and it seems to be lump sums from your salary - an instruction to your payroll, rather than a way of transferring money in from your bank. I guess I could make a large monthly payment via payroll and live off savings but seems unnecessarily complex. Though I think there could be additional tax benefits via salary sacrifice?

 

[BoatieBird]

I've looked at that and it seems to be lump sums from your salary - an instruction to your payroll, rather than a way of transferring money in from your bank. I guess I could make a large monthly payment via payroll and live off savings but seems unnecessarily complex. Though I think there could be additional tax benefits via salary sacrifice?

Of course, I was forgetting about this!
If I up the percentage into the investment builder then it's not taxed.
Hmmm, I shall have to give it some thought...

 

[izz]

lazythursday, it takes ages to understand all this business and ages to decide what to do, so well done on starting it.

Do you have any option of transferring one or more of your pension pots into the gold standard pension you're currently paying into ? May be worth thinking about. Also, take breaks from thinking about it as it all needs a good percolation

 

[marty21]

This tool provides hours of fun when it comes to retirement planning:

Guiide - Pensions made simple

Helpful in working out if you've got enough funds, and also shows how to use up your funds between ISA and SIPP when you're retired.

Couldn't remember the total funds in my LA pension pot , but if I want to retire at 63

 

[Puddy_Tat]

another thought that has occurred to me about considering transferring DC pension schemes in to a DB scheme and / or paying extra contributions -

it may also be worth comparing the life insurance / surviving partner's pension aspects. i hadn't really given any thought to this, on the basis i'm pretty damn unlikely ever to have kids, and i don't think i'm the marrying kind even now.

with local government scheme, death before retirement, and you're worth X times current pay. adding contributions / service won't increase this. not quite sure how it works with a DC scheme. Likewise I've never really given much thought to the surviving partner's pension angle.

 

[mx wcfc]

another thought that has occurred to me about considering transferring DC pension schemes in to a DB scheme and / or paying extra contributions -

it may also be worth comparing the life insurance / surviving partner's pension aspects. i hadn't really given any thought to this, on the basis i'm pretty damn unlikely ever to have kids, and i don't think i'm the marrying kind even now.

with local government scheme, death before retirement, and you're worth X times current pay. adding contributions / service won't increase this. not quite sure how it works with a DC scheme. Likewise I've never really given much thought to the surviving partner's pension angle.

I'm on a DC scheme, but the death in service is unconnected to the pension. It is is 10x salary.
I used to joke about this, but given I'm now 60, the maximum I'm likely to earn before I retire, and given the insurance payout is tax free, I am worth a lot more to my wife and daughter dead than I am alive.

I'm keeping an eye on both of them.

 

[Johnny Vodka]

I'll be 49 this year. I wouldn't mind retiring on the early side, but I would need to ensure I could afford to do so. My wage is okay for someone who doesn't have kids and doesn't have particularly expensive tastes. (I don't expect ever to be earning more relatively than I am now.) My pension by reputation should be decent enough (local government scheme), though I couldn't tell you the exact amount/fine details. I've started monitoring my finances a lot more carefully to get an idea of what retirement could look like and when that could happen.

 

[Silas Loom]

Is there a word or phrase which neatly encapsulates the state of being out of work, not seeking work, but not necessarily forswearing it for ever? One with more weight and permanence than “sabbatical” but with less finality than “retirement”?

 

[Magnus McGinty]

Is there a word or phrase which neatly encapsulates the state of being out of work, not seeking work, but not necessarily forswearing it for ever? One with more weight and permanence than “sabbatical” but with less finality than “retirement”?

Lucky?

 

[Silas Loom]

Lucky?

Looking for something more specific and less enigmatic.

 

[MickiQ]

I was originally expecting to (finally) retire at the beginning of October there is currently talk of releasing me early from my contract at the end of May or June, if that's agreed then it's over and I will be a pensioner very soon.

 

[MickiQ]

Looking for something more specific and less enigmatic.

Unemployed?

 

[Silas Loom]

Unemployed?

Suggests some interest in working.

 

[brogdale]

Is there a word or phrase which neatly encapsulates the state of being out of work, not seeking work, but not necessarily forswearing it for ever? One with more weight and permanence than “sabbatical” but with less finality than “retirement”?

Resting

 

[Silas Loom]

Resting

Thanks. That fits perfectly. The light irony associated with its use in the acting profession is not unhelpful.

 

[Magnus McGinty]

Contemplating future activities?

 

[pseudonarcissus]

Is there a word or phrase which neatly encapsulates the state of being out of work, not seeking work, but not necessarily forswearing it for ever? One with more weight and permanence than “sabbatical” but with less finality than “retirement”?

gentleman

 

[Silas Loom]

gentleman

Ugh. Even worse with the qualifier “of leisure”.

 

[pseudonarcissus]

Ugh. Even worse with the qualifier “of leisure”.

...of independent means

 

[Silas Loom]

Contemplating future activities?

People would just read future activities as one’s navel.

No, Brogdale has won the prize and that’s all there is to say on the matter.