Ralph Ferrett Pension Presentation - FAQ

[TrueBlueTerrier]

[RobertT]

Well said.

[mark.cup]

I often wonder if people think about this properly... You take it at 55 and you go brilliant lets say an extra £400 a month then at 60 for instance your legs are shot and you need to give up work! It's going to be a hard struggle till your state pension kicks in?

[RobertT]

I often wonder if people think about this properly... You take it at 55 and you go brilliant lets say an extra £400 a month then at 60 for instance your legs are shot and you need to give up work! It's going to be a hard struggle till your state pension kicks in?

Personally I don’t think they think it through at all. I’ve seen people on here give all sorts of reasons to justify why they should take their pension early. Like, ‘a friend of a friend died young so I will too’, ‘I want to use it to go on some nice holidays’, ‘old people don’t need money’ or ‘I want to buy a new motorbike with the lump sum’. There’s probably quite a few more that I can’t remember off hand!

The one thing they seem to forget is that a pension is designed to provide an income when you stop work. They’ve probably paid into it for a decent chunk of their working life, and then age 55 comes along and they seem to think they’re 18 again and want to throw it away.

I firmly believe many of the ‘early takers’ will live to regret their decisions. Many are forcing themselves to work for longer and potentially making their retirement years much harder financially than they would of otherwise been. And as Ralph says in the video, you could live for 20 or 30 years in retirement – that’s a long time to be struggling on not enough.

[daveyeff]

its entirely a matter of opinion. but the 5% he says you are losing is made up in the pension you receive.

[fishtank]

Have kids, spend all your money making sure they get the best education possible and a good career, choose the one who irritates you the least and move in for "a couple of weeks".

Invest in your children, that's been my retirement plan from the start.

[daveyeff]

what if you are ''seedless'' in the bollock department?

[jetblack]

1) the state pension kicks in at 66/67. So if you were to take the RM pension at 55 and to stop working at 55 (the guy in the video only talks about those that carry on working and the subsequent tax hit) then you'll really only have to live on that amount for 11/12 years.

2) what price do you put on your time ? I put a very high price on my time - my time is the stuff that my life is made up of. I have a thousand better ways to spend it than delivering mail.

3) the reasons the guy cites for being better off at 55 (generally) are also the reasons it becomes more feasible to take early retirement.

If, like me, you want to get out and spend your day as you desire ASAP, then you need to start cutting spending now on your current lifestyle, and start to save/invest as much as possible for future years.

Of course its the right and proper financial decision to keep going till state retirement age - and if you want to travel the world and drive that sports car you've always fancied when you are 70, then there is no other way - but I suspect that for a lot of us here there's a lot more to it than that.

[fishtank]

It's not always a matter of choice, I can't see myself physically managing this particular job on full time hours into my mid to late sixties. I may have to look at other employment options including part time so it may make sense to take my pension early.

The important thing is that you seek professional advice and are fully aware of the consequences.

[heapsy]

A bloke I know, who retired at 60 back in 1988, is still drawing his pension. So Ralph is right. What people are forgetting here, is cost of living. Yes it is true that many may not be going out that much, drinking etc. however, heating bills are the single biggest cost for most pensioners. Mainly because they spend more time at home than when they were working, so are generally less active. I also have heard many on here make ridiculous statements as to why they should take a pension early, and tbh it doesn't really stack up. Remember this, just as the state pension age is moving up, so is the age at which you might be entitled to any benefits. I did hear someone in my office, (aged 50) say, "I'll do what everyone else does and go down the social". The problem with that plan is that it probably wont be there. They are not moving the goal posts for nothing. NO political party is prepared to admit that a basic rate of about 40p in the pound is the only way to solve the issues. It would be political suicide. That is why we have stealth taxes such as VAT. If people are thinking of getting out of RM early, let me point you in the direction of one of my earlier posts. It really is what I have done, and am doing to build my own pension. It was posted deliberately in order to help those who might have the same idea, but maybe not really know how to do it. See below.

I'm doing the same thing. I have a stake holder pension with a retirement age of 60. Currently worth just short of £30k. There is also part of a frozen private pension I was unable to transfer to RM, with an NRA of 65, currently worth about £18k. I'm also investing in a stocks and shares ISA, fast approaching the £15k mark. I will use this to provide the bulk of my lump sum. With about a month short of 20 years in the NRA60 pension, section C, I am reluctant to take a lump sum from this. Around £38k. The exception will be my AVCs, currently worth just under £1500. Will be contacting pensions today to increase, (yet again) my contributions to this. I also have about £30k of assorted shares in a share account, I will sell these as and when conditions and share prices are right, and use the money as cash. There is also a decent size pot in a cash ISA, in excess of £25k. I've been putting all overtime over 10 hours into a separate bank account for this purpose. Due to divorce, I was reluctant to put more away into my pension, as this was my financial undoing back then. In some ways, the changing pension situation may prove to be a blessing. I could end up with more the 25% of my overall pension pot as cash. I intend to leave the pensions until the relevant retirement ages, therefore taking them in stages. Not sure if this is relevant, but it might give some a few ideas as to how to manage their own situation. There does seem to be a number of people who haven't got 30 years plus service with RM, and therefore might have a similar situation as mine, but with little idea as to what to do or when.

[jetblack]

I'm doing the same thing. I have a stake holder pension with a retirement age of 60. Currently worth just short of £30k. There is also part of a frozen private pension I was unable to transfer to RM, with an NRA of 65, currently worth about £18k. I'm also investing in a stocks and shares ISA, fast approaching the £15k mark. I will use this to provide the bulk of my lump sum. With about a month short of 20 years in the NRA60 pension, section C, I am reluctant to take a lump sum from this. Around £38k. The exception will be my AVCs, currently worth just under £1500. Will be contacting pensions today to increase, (yet again) my contributions to this. I also have about £30k of assorted shares in a share account, I will sell these as and when conditions and share prices are right, and use the money as cash. There is also a decent size pot in a cash ISA, in excess of £25k. I've been putting all overtime over 10 hours into a separate bank account for this purpose. Due to divorce, I was reluctant to put more away into my pension, as this was my financial undoing back then. In some ways, the changing pension situation may prove to be a blessing. I could end up with more the 25% of my overall pension pot as cash. I intend to leave the pensions until the relevant retirement ages, therefore taking them in stages. Not sure if this is relevant, but it might give some a few ideas as to how to manage their own situation. There does seem to be a number of people who haven't got 30 years plus service with RM, and therefore might have a similar situation as mine, but with little idea as to what to do or when.

TLDR; Heapsy has got money all over the show

Good on yer.

[mark.cup]

Suppose what I was trying to say is if you want to get out early and I include myself in that you need to work much harder at it using AVC''s,ISA's and possibly a house you can downsize and release some cash from... I would like to think 60 would be long enough for me and if my AVC covers my lump sum for both NRA60 & NRA65 pensions I will take the 25% hit in the latter hopefully this will give me a decent monthly pension to live off

[stephen500]

Suppose what I was trying to say is if you want to get out early and I include myself in that you need to work much harder at it using AVC''s,ISA's and possibly a house you can downsize and release some cash from... I would like to think 60 would be long enough for me and if my AVC covers my lump sum for both NRA60 & NRA65 pensions I will take the 25% hit in the latter hopefully this will give me a decent monthly pension to live off

I plan to take both pensions at 60, with a 25% hit on the 2nd. But my pension as a night worker (MC) should be about £10 k and a lump sum (max) of around £67k. So that gives me around £200 a week and as long as I spilt the lump sum in to 7 years that gives me another £185 per week. I am lucky enough not to pay rent or have any mortgage. It's enough for me to live on.

[RobertT]

I plan to take both pensions at 60, with a 25% hit on the 2nd. But my pension as a night worker (MC) should be about £10 k and a lump sum (max) of around £67k. So that gives me around £200 a week and as long as I spilt the lump sum in to 7 years that gives me another £185 per week. I am lucky enough not to pay rent or have any mortgage. It's enough for me to live on.

Another option might be to take your NRA65 at 65 so preserving its full value for your lifetime. And take more out of your lump sum from 60-65, but less from 65+ until state pension kicks in. That way you’ll be maximising your guaranteed inflation proofed pension. Just a thought!

[stephen500]

I plan to take both pensions at 60, with a 25% hit on the 2nd. But my pension as a night worker (MC) should be about £10 k and a lump sum (max) of around £67k. So that gives me around £200 a week and as long as I spilt the lump sum in to 7 years that gives me another £185 per week. I am lucky enough not to pay rent or have any mortgage. It's enough for me to live on.

Another option might be to take your NRA65 at 65 so preserving its full value for your lifetime. And take more out of your lump sum from 60-65, but less from 65+ until state pension kicks in. That way you’ll be maximising your guaranteed inflation proofed pension. Just a thought!

Thank you