What do you think about retirement and when will you do it?
- Thread starter RubyBlue
- Start date
muscovyduck
Good IT skills and food hygiene competent
I was very ill for a very long time as a teenager and after god knows how many thousands of hours with just a laptop to keep me company while I was stuck in bed it was inevitable I'd stumble across here eventually!
shakespearegirl
just worked out taglines
I think the no kids thing has a massive impact as well. Can’t imagine I’d be able to retire now (even if I choose not to) if I’d done so
Athos
Well-Known Member
I think a lot of people overpay their mortgage, rather than put it into pension, which, whilst having an emotional appeal is probably financially sub-optimal in most cases.
Great that you are. We're mostly very old now and I always assumed everyone was also!
I dunno, Becoming mortgage free is a massive expense dealt with.
marty21
One on one? You're crazy.
My father-in-law retired at 55 after a life in the Military , 5 years in the Canadian Air Force (during WW2) then after a few years in England , joined the Australian Army. He had a fantastic pension (retired as a Major) . He also lived to 93 so got decent value out of retirement, his army pension towards the end was £4k a month (helped by strong Aussie currency) . I've never earned that much working!
Athos
Well-Known Member
Yeah, but if you've got a spare £100 at the end of the month and you overpay the mortgage you'll save a bit of interests in the long run. But if you put it into a pension, in many instances the employer will match it, plus you get tax relief (20% basic or 40% higher). Adding to a pension by £280 a month, plus the growth of the fund, will likely see you tens of thousands better off in the long term versus paying an extra £100 a month off your mortgage. Particularly over the recent past when interest rates were very low. Also, you can draw a tax free lump sum of 25% of your pension pot at 55 of your want to pay off your mortgage then. I guess it also depends on your risk appetite, as well as the emotional appeal of being mortgage free.
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marty21
One on one? You're crazy.
This is true ! My mum worked til she was 74 , although I think part of the reason for that was she didn't want to spend all day with Dad
LDC
On est tous des pangolins
Just to add that I'm clueless (been in denial) about pensions, and only recently even thought about one at all. I nearly withdrew from the NHS pension a handful of years ago when I started as thought I'd rather the cash in my hand now as never considered being old and retired. Luckily someone more financially sensible told me that was a stupid idea.
kebabking
Not a Girly Swot, but I like them....
Do you wanna join our commune
It's very kind of you, but I want to live a long way from people...
muscovyduck
Good IT skills and food hygiene competent
Am I right in thinking it's probably better to focus on getting a mortgage rather than paying into pension, then once you get your mortgage pension becomes a priority again? Does it depend on a few other things?
I'm going to get proper advice in a month or so by the way, just trying to get my head around it all
I'm going to get proper advice in a month or so by the way, just trying to get my head around it all
I don't have a mortgage. I don't own property. Yes you're right that a mortgage is probably the best loan you'll ever get and any extra money should be funnelled into savings than paying off a mortgage if you're in a financial position to do that.
muscovyduck
Good IT skills and food hygiene competent
Student finance is technically the best loan you'll ever get iirc
I don't have a mortgage. I don't own property. Yes you're right that a mortgage is probably the best loan you'll ever get and any extra money should be funnelled into savings than paying off a mortgage if you're in a financial position to do that.
kebabking
Not a Girly Swot, but I like them....
I think that's probably fair - Athos is right to say that money lobbed into a pension is the most profitable money you can spend, but a mortgage is cheaper than rent, and once you've got the mortgage, you can then pile on the pension - and you've still got the mortgage.
Ah, my knowledge is prior to them doing the whole finance on education thing which obvs I think is wrong. There's no point in overpaying a mortgage only to take out a loan to improve the kitchen or whatever as that'll be a higher interest rate. Anyway, I don't own anything just those bits of advice ring in my head.
muscovyduck
Good IT skills and food hygiene competent
I think the mortgage thing is dependent on the risk of you ending up on benefits too, there's some odd rules about whether you can use housing benefit to pay a mortgage?
The two most financially savy but now dead people I knew, one of them had mortgage outstanding after their death in their 90s and had presumably done the whole maxing out their pension thing as they lived very comfortably that whole time, the other managed to pay their mortgage off by the age of 40 right in time to raise two disabled kids on her own before dying in her early 60s. It's all a bit of a gamble in the end innit
The two most financially savy but now dead people I knew, one of them had mortgage outstanding after their death in their 90s and had presumably done the whole maxing out their pension thing as they lived very comfortably that whole time, the other managed to pay their mortgage off by the age of 40 right in time to raise two disabled kids on her own before dying in her early 60s. It's all a bit of a gamble in the end innit
Athos
Well-Known Member
Are you asking if it's better to buy a property with a mortgage versus renting?
Athos
Well-Known Member
Can't you get some benefits to cover mortgage interest?
muscovyduck
Good IT skills and food hygiene competent
No, more wondering should you prioritise building up a deposit vs putting the money into a pension.
Home ownership is Conservative ideology. I can see benefits to it but they aren't interested in those, just that it reinforces their political position.
Puddy_Tat
naturally fluffy
yes at the tax relief bit, although the employer matching tends only to be up to a certain amount - employers will generally only match up to a certain percentage of your pay, and if you put more in, either regularly or one-off, then you wouldn't get any more out of them.
again, i'd say it depends. if you're paying (plucking numbers out of the air) 6 percent interest on your mortgage, but getting 3 percent on savings, then i'd have thought it would make sense to pay a bit more off your mortgage.
but not if that means you'd have so little in savings that you'd be taking out a more expensive loan if there's some sort of emergency.
yes, that's my understanding.
not quite sure what the rules are about shared ownership, whether you can get anything towards the bit that's rented.
there used to be something under income support where you could get mortgage interest paid, but i'm not sure if that's still the case - for most people housing benefit and income support have been rolled in to universal
What happens if you become unemployed when you have a mortgage? Are you forced to sell your house then?
the money lobbed into a pension still has to be invested to keep up and go beyond inflation otherwise by the time that you retire it won't seem like anything that was worth thinking about... all those year ago.
It comes down to whether you figure you can live cheaper in a house that you rent or that you own: if you are handy with repairs, arn't too princessy about new kitchens, and are somewhat hefted to the local area then buying a house and sitting it out has always been the most lucrative option, unless of course you work for some government department that offers a 'final salary' pension - in which case fuck the house idea.
Athos
Well-Known Member
There's a lot of variables, and unknowns. But, generally speaking, my instinct would be to get a deposit together, because you'll be spending less on mortgage than rent; you can put the extra into a pension, then. And your mortgage payments are building up equity for you rather than a landlord.
Puddy_Tat
naturally fluffy
there may be an expectation to take out mortgage protection insurance (although it tends to come with a lot of get-out clauses)
there does still appear to be something called 'support for mortgage interest' - i can't face reading it all
I'd agree, in a capitalist context, depending on how much work may need doing on said property.
ska invita
back on the other side
Ive just had a look
Im in the £185 a week club...this better go up with inflation as my pension start date is 2043!!
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