Pension stuff, how's it all looking ? HAve you prepared ?

[Mr Moofo]

PS Having the mortgage paid off is BUT I sometimes wish I'd not done it so soon and kept moving/upgrading up until I retired - then paid it off because it's the one investment that keeps on giving in terms of rising asset value. Once you get off that escalator you're pretty much in downsizing territory each move or moving to cheaper areas to maintain the standard/improve your accommodation.

I am not sure I understand the logic of that. Keep on paying for an asset on raised mortgage or have said asset - with no risk to it being taken away. It is still a rising asset!

In simple terms, I've seen a house I'd like to move to but, unless I completely empty the coffers, can't buy and can't get a mortgage obvs. If I'd kept moving 'up' for a few more years instead of saying 'this'll do' I'd probably be able to move/downsize and pocket the difference.

@weeksy you might be surprised how little £800k - 1M gets you in some locations.

Okay - fair do's , I understand now.

800k buys a 3 bed semi in these parts

[mangocrazy]

Personally I'd always pay off the mortgage, having a house all paid for is a massive weight off my mind.

This, absolutely. There was no way I was going to retire while still having a mortgage. Doubly so, with current mortgage increase horror stories.

As for 25% tax-free cash, I'm currently withdrawing a set amount of it each month from my pension pot to top up the State Pension. At current rates I'll be around 80 y.o. before I need to dip into the taxable component. Works for me...

[Yambo]

PS Having the mortgage paid off is BUT I sometimes wish I'd not done it so soon and kept moving/upgrading up until I retired - then paid it off because it's the one investment that keeps on giving in terms of rising asset value. Once you get off that escalator you're pretty much in downsizing territory each move or moving to cheaper areas to maintain the standard/improve your accommodation.

But lets say you upgrade to a 1,000,000 house... what's the actual point ? You've then got too big a house for your old age, by the time you die your kids don't need it as they're 50 years old.... so where's the plan going ?

I know a few people who bought big houses for their retirement. Most of them have sold them and downsized - a big house can be a lonely place when there's just you and the missus.

A friend of mine has a big house at the back of the village, it would be a fantastic family house except his son who is in the UK doesn't talk to him (I have a similar issue), one of his twin daughters is happily married and staying in the UK and the other twin lives in her own place in the village with her Turkish husband and son. They don't want to live with their dad. To cap it all off, his wife is still working in the UK and has no plans to retire yet.

That big house is simply a burden.

[Potter]

PS Having the mortgage paid off is BUT I sometimes wish I'd not done it so soon and kept moving/upgrading up until I retired - then paid it off because it's the one investment that keeps on giving in terms of rising asset value. Once you get off that escalator you're pretty much in downsizing territory each move or moving to cheaper areas to maintain the standard/improve your accommodation.

It's only an asset if you're going to sell it and collect the money, otherwise it's a liability that costs you money to keep.

Although I suppose that's the point of your point (if that's not a tautology) buy the biggest house you can afford, because you can't afford it once you retire and you can always downsize and collect the surplus cash.

We never even considered retirement until we owned our dream house - or even if it's not your dream house, then at least the house you intend to keep until you die. Our house is our dream place, in fact it's beyond what we would have dared dream for all those decades ago when we met and decided to make a life together. I'd love for it to stay in the family.
But our kids have been straight with us, it's not their dream house and it will be getting sold upon our deaths.

[Horse]

I cringe inside whenever I hear someone talk about their 'forever home'.

[v8-powered]

Although I suppose that's the point of your point (if that's not a tautology) buy the biggest house you can afford, because you can't afford it once you retire and you can always downsize and collect the surplus cash.

Exactly what we have done - 10 year plan to buy, live like a Lord and Lady (well not quite, but you get my drift) and then sell in advance of me hopefully packing in work and my wife selling her business.

[Yorick]

We maxed right out to buy our big house in UK. We knew were retiring to here and wanted the equity as profit and we got to live in a beautiful house for a few years.

[Taipan]

Re: should you take the lump sum?- Only you can answer that, will you do anything with it, or do you just want a decent chunk of money in your pocket?

A little of both currently, but a lot of 'doing anything with it' will depend on what and where the lad is with things. If he's racing, then yes, it'd be useful potentially... If he's not, then maybe less useful.

Using it to pay off the mortgage again may be useful as that frees up a huge chunk each month. There's obviously arguments for both sides and counter arguments for each again.

Thing is, i don't wanna sit there when i'm 75 with shit loads of money and be a useless old fucker who only goes to the Wetherspoons.

You can, and to my mind should, flip that argument on its head. You're relatively young now and have an earning capability and presumably a decent current income. What is wrong enough with that, that you need an income of a lump sum? I'd look to make changes, better job(s), tighten your belts etc.

When you're in your 70s and don't have an earning ability or any hope of getting re-employed, you may be very glad of your little pot of money, should you need it for health or property maintenance etc or just simply maintaining a decent lifestyle. I can't think of anything worse than enduring self-imposed financial hardship due to the "I wants" of my younger self. YMMV...

[Count Steer]

I cringe inside whenever I hear someone talk about their 'forever home'.

I cringe outside. (My new neighbours said it when they moved in. They've got primary school aged kids It's a nice enough gaff with woodlands etc but to consider, at that age, 'Oh, I think I'll die here' is just bizarre.).

[Cousin Jack]

I'm 73 and I can't see any reason to sit in a corner, smelling of wee and waiting for 'Spoons to open.

I'm 77, going on 78 and I sure as hell don't sit in the corner, and I don't do 'Spoons. Others can decide if I smell of wee.

I do spend money, another motorcycle tour is on the stocks for this year, we enjoy decent hotels and restaurants so holidays in the UK are pretty expensive, and 2 cars will need changing before ICE/hybrids disappear.

I am lucky, 1 decent index-linked pension and 2 smaller (one very much smaller) pensions + Govt pensions means we are comfortable enough, but my costs are at least keeping pace with inflation. Even in my 80s I expect to have to be able to go out and spend money, so don't spend it all by 65.

[JackyJoll]

I hope your memory is long enough to recall our recent bout of inflation, vaulting prices and fund plans ceasing to yield any gains.

You can bet that put a lot of old gits into queer street; people who thought they had a fair safety margin of more money/income than they needed.

[JackyJoll]

Absolutely agree.. but i do wonder to an extent with IFAs as to how independent they actually are... they must get kick-backs etc from somewhere?

The thought of removing 25% sounds ace to re-invest say 50% of that short term... but there's something about a maximum you can put in then as being £10,000 a year into the continuing pension ? or have i mis-read that ?

There are bound to be crooked IFAs, but I think in theory they live on money from their clients (you).

I’ve heard of that £10k limit on payments into pension schemes when you’re drawing a pension, but you can invest in things that are not pensions.

[Potter]

I hope your memory is long enough to recall our recent bout of inflation, vaulting prices and fund plans ceasing to yield any gains.

You can bet that put a lot of old gits into queer street; people who thought they had a fair safety margin of more money/income than they needed.

A family member on my mums side had done reasonably well in life and he planned to retire at fifty-five, just as the 2008/09 crash happened and he found himself looking at a huge loss on his investments, plus the double whammy of no interest on his cash savings. It took him another ten years to get back to where thought he was.

So yes, the world can turn upside down pretty quickly.

[Horse]

I hope your memory is long enough to recall our recent bout of inflation, vaulting prices and fund plans ceasing to yield any gains.

So yes, the world can turn upside down pretty quickly.

The Oct 2022 financial shenanigans certainly adversely affected my pension planning. The three small individual savings pots all took 25-35% reductions. Luckily, I have a reasonable (but not great) final salary scheme, so can afford to wait.

[Skub]

Just had to fork out a ween o' grand to get the full state pension. If my (dodgy) maffs is correct,I need to live another 3 years or so to see the benefit. Probably should have paid up ages ago.

[Potter]

I cringe inside whenever I hear someone talk about their 'forever home'.

I cringe outside. (My new neighbours said it when they moved in. They've got primary school aged kids It's a nice enough gaff with woodlands etc but to consider, at that age, 'Oh, I think I'll die here' is just bizarre.).

I dunno, I think it's cool that someone is so in love with the house they've just bought that they feel like they'll live there forever.

It's probably a massive cringe but we feel like we've lived in this house forever, which would be scary because it's hundreds of years old

[Count Steer]

I cringe inside whenever I hear someone talk about their 'forever home'.

I cringe outside. (My new neighbours said it when they moved in. They've got primary school aged kids It's a nice enough gaff with woodlands etc but to consider, at that age, 'Oh, I think I'll die here' is just bizarre.).

I dunno, I think it's cool that someone is so in love with the house they've just bought that they feel like they'll live there forever.

It's probably a massive cringe but we feel like we've lived in this house forever, which would be scary because it's hundreds of years old

I just think a house is a bit like a good pair of shoes, you have to live with them a while before they 'fit' properly. To move in and declare it's the 'forever home' on day 2 seems a bit premature. (The neighbours have been finding out the hard way that the previous owners used some dodgy/cheap roofing bods, so might be reconsidering. Fortunately her father is a builder. ).

[Horse]

I cringe inside whenever I hear someone talk about their 'forever home'.

I cringe outside. (My new neighbours said it when they moved in. They've got primary school aged kids It's a nice enough gaff with woodlands etc but to consider, at that age, 'Oh, I think I'll die here' is just bizarre.).

I dunno, I think it's cool that someone is so in love with the house they've just bought that they feel like they'll live there forever.

It's probably a massive cringe but we feel like we've lived in this house forever, which would be scary because it's hundreds of years old

We've been here since 1998 and have spent a lot of thought, time and money getting it how we want it.

We could have gone into bigger mortgage and maintenance costs etc but kept it manageable.

And, because it's how we like it (and we like the town) We've decided (twice, 10 years ago and a year ago) to stay here rather than 'move to the coast' or whatever.

Soon after we moved in and modernised the place, a neighbour said to me "Seeing what you have done, I've realised that I'll probably live here for the rest of my life." Sadly, he was right, a brain tumour took him far too early.

We could fit a stairlift, walk-in shower, ramps etc. but, if it comes to that I'm happy to move. If I need care on a substantial basis, I'll go in a home.

It's only bricks, mortar, wood and tiles. I don't need a particular building for me to be happy and comfortable.

I know a couple who had (for the wife, at least) a near life-long dream to live in Cornwall. They bought their forever home in 2021. They won't be there in 2025.

[mangocrazy]

I just think a house is a bit like a good pair of shoes, you have to live with them a while before they 'fit' properly.

Absolutely agree with this. You have to live in a house for a while before you become used to its good points and it bad points (and there will always be some). Then you have to live there a bit longer before you figure out what needs doing to the house to tailor it to your needs/wants.

People who buy a house, gut it and decorate it before moving in will invariably find themselves re-working substantial parts of the place later on.

Wasn't it the German Bauhaus movement that stated a house should be a machine to live in; i.e. a house should be an efficient tool to help provide for the necessities and requirements of life?

[the_priest]

This year I will have chucked around £10k into the bigger pension fund, it is creeping over the 200k value mark now, we want to get it over 300k before retiring as that will give us a better chance of living comfortably. Still keeping savings so that we can do stuff and help our children.