You've won £1m - what do you do?
Discussion
Faust66 said:
TwigtheWonderkid said:
Faust66 said:
I'd retire...
I'm 49 and I've only got 75k left on the mortgage, so I'd pay that off and live off the interest from my winnings.
So you've got £925K and you're going to live off the interest. That's about £37K / year. That's ok for now but if interest rates don't increase, that £37K/year is not going to go up. Each year it buys less and less. And because you're living off the interest, your £925K is staying fixed. £925K is a lot today, but in 30 years time when you're 79, it's not going to be worth that much. And your £37K/year in 30 years won't even pay your council tax. I'm 49 and I've only got 75k left on the mortgage, so I'd pay that off and live off the interest from my winnings.
In all seriousness though, you make a good point. I'm not a money guy (obviously) so I'll revise my plan a spend a few quid on some financial advice and invest accordingly.
That being said, I don't need much. I put a fair chunk of my salary straight into a savings account as it is. I can easily manage on a lot less than I earn now.
If you assume interest at 3%, inflation of 3.5%, and spend £29k pa (rising by 3.5% each year), your £925k would last 29 years. And that's without making any sensible investments.
dundarach said:
If you're sub 50, very little will change in many people's lives, unless they're daft.
lol. I was hoping for this kind of comment. The only people who’s life this wouldn’t drastically change are those who likely have over £1m already (which I grant you is many many people in the UK, but not THAT many)
okgo said:
dundarach said:
If you're sub 50, very little will change in many people's lives, unless they're daft.
lol. I was hoping for this kind of comment. The only people who’s life this wouldn’t drastically change are those who likely have over £1m already (which I grant you is many many people in the UK, but not THAT many)
I sometimes forget PH is a different world but then once a month or so a thread like this appears and a large chunk of the posters remind It's not enough to live anymore than a modest life.
The number of of people who accrue a £1m+ pension pot must be under 2%.
The other 98/99% of people £1m is life changing.
My house is already paid (well in 4 more payments) I wouldnt want to work again.. not much but I'm only 35 so I'd buy 5 houses up here, leaving around 500k spare. That'll bring roughly £3k a month minus the odd repair etc. Hopefully everyone pays the rent... thatll cover inflation. I actually love DIY so would enjoy buying total wrecks and fixing them first anyway.
Then I'd obviously have to buy a car... something special. Probably take 150k for that.
Then it's a toss up. Use the rest for ultimate fun living, a few first class flights, a few weekends to Thailand on business without the wife... I mean some nice holidays... whatever the interest would be a healthy amount added to rental income to not bother working much more. May take a delivery job at the Indian one day a week for a free takeaway when I finish lol
Then I'd obviously have to buy a car... something special. Probably take 150k for that.
Then it's a toss up. Use the rest for ultimate fun living, a few first class flights, a few weekends to Thailand on business without the wife... I mean some nice holidays... whatever the interest would be a healthy amount added to rental income to not bother working much more. May take a delivery job at the Indian one day a week for a free takeaway when I finish lol
I'm 51 and if you gave me £1 million I could stop work now never work again. It would be no Rockefeller lifestyle but it would be plenty enough given I have no mortgage and given the existing assets me and Mrs Bigmon have.
If you already live an expensive lifestyle (I know someone who spent £100K net of tax last year and that didn't include substantial investments apart from the mortgage) then it would be nowhere near enough.
If you already live an expensive lifestyle (I know someone who spent £100K net of tax last year and that didn't include substantial investments apart from the mortgage) then it would be nowhere near enough.
ChocolateFrog said:
It's insane isn't it.
I sometimes forget PH is a different world but then once a month or so a thread like this appears and a large chunk of the posters remind It's not enough to live anymore than a modest life.
The number of of people who accrue a £1m+ pension pot must be under 2%.
The other 98/99% of people £1m is life changing.
That’s probably about right, I’d say for 99.9% of people it’s life changing in a big way - for top 1% of earners this would help massively. For top 1% of wealth (entry level to that club is apparently £3.6m) it would still be a circa 30% uplift. I sometimes forget PH is a different world but then once a month or so a thread like this appears and a large chunk of the posters remind It's not enough to live anymore than a modest life.
The number of of people who accrue a £1m+ pension pot must be under 2%.
The other 98/99% of people £1m is life changing.
Come at me nay sayers
Owing to growth in house prices there are probably quite a few people/couples with more than a million in total assets but you can’t live off your house so it probably doesn’t look as rosy when you look at houses net of property you live in.
I was looking at this recently it is reckoned that minimum annual income for a couple is around £20k (assumes mortgage free) for retirement with £60k being the sum if you want to live comfortably. That doesn’t mean in luxury but a couple of newish (standard) cars and a couple of holidays a year.
If you are near retirement then you probably only have 20-30 years left to live and once you hit 80 most people aren’t doing that much (apart from dealing with chronic illnesses) so spending drops dramatically. So £1 million should be plenty as long as you get a reasonable return and don’t spend down the capital too quickly.
I was looking at this recently it is reckoned that minimum annual income for a couple is around £20k (assumes mortgage free) for retirement with £60k being the sum if you want to live comfortably. That doesn’t mean in luxury but a couple of newish (standard) cars and a couple of holidays a year.
If you are near retirement then you probably only have 20-30 years left to live and once you hit 80 most people aren’t doing that much (apart from dealing with chronic illnesses) so spending drops dramatically. So £1 million should be plenty as long as you get a reasonable return and don’t spend down the capital too quickly.
okgo said:
ChocolateFrog said:
It's insane isn't it.
I sometimes forget PH is a different world but then once a month or so a thread like this appears and a large chunk of the posters remind It's not enough to live anymore than a modest life.
The number of of people who accrue a £1m+ pension pot must be under 2%.
The other 98/99% of people £1m is life changing.
That’s probably about right, I’d say for 99.9% of people it’s life changing in a big way - for top 1% of earners this would help massively. For top 1% of wealth (entry level to that club is apparently £3.6m) it would still be a circa 30% uplift. I sometimes forget PH is a different world but then once a month or so a thread like this appears and a large chunk of the posters remind It's not enough to live anymore than a modest life.
The number of of people who accrue a £1m+ pension pot must be under 2%.
The other 98/99% of people £1m is life changing.
Come at me nay sayers
But in terms of lifestyle changing it would be an either / or -
Either have a dramatically changed lifestyle for a short time or sustained time by remaining in employment
Or stopping working and maintaining a relatively modest lifestyle.
I suspect many would not get that and burn through it in a number of years.
Tango13 said:
At 52 years old I could take £30k a year income and drip £60k of the £1M into a pension for 10 years plus the governments 20% contribution to give a pension pot of £720k plus however much growth I managed to accumulate.
If you're not actually working, and not earning a salary, how are you going to pay £60K a year into a pension and expect the govt to chip in 20% tax rebate when you haven't paid tax? We have three mortgages between myself and my partner so I would instantly pay those off. That would leave about half left.
I'd stick £250k of the remainder in my Marcus account and invest the rest in shares, gold, Vanguard etc.
I am 50, I would plan on working for another five years and pay as much as I can into my pension.
There is nothing materialistic I want, the goal would be to get myself into a position where I could retire as soon as I could and not have to think about money again.
I'd stick £250k of the remainder in my Marcus account and invest the rest in shares, gold, Vanguard etc.
I am 50, I would plan on working for another five years and pay as much as I can into my pension.
There is nothing materialistic I want, the goal would be to get myself into a position where I could retire as soon as I could and not have to think about money again.
Seventy-Eight said:
Tango13 said:
At 52 years old I could take £30k a year income and drip £60k of the £1M into a pension for 10 years plus the governments 20% contribution to give a pension pot of £720k plus however much growth I managed to accumulate.
Whilst the £1M would be decreasing by £90k a year the remaining lump would still be earning interest. The pension would also be increasing by £72k a year plus growth/interest. Then aged 62 take 25% tax free from the pension and either take out an annuity or draw down on the lump sum.
Or take £30k income, £20k into an ISA and £50k into a pension so the ISA would have £200k plus growth and the pension £600k plus growth.
Plan carefully, play the long game, don't be a flash w
ker and £1M would set you up for life at any age.
£30k income and £60k into pension?........ Wouldn't your pension contributions be restricted?Whilst the £1M would be decreasing by £90k a year the remaining lump would still be earning interest. The pension would also be increasing by £72k a year plus growth/interest. Then aged 62 take 25% tax free from the pension and either take out an annuity or draw down on the lump sum.
Or take £30k income, £20k into an ISA and £50k into a pension so the ISA would have £200k plus growth and the pension £600k plus growth.
Plan carefully, play the long game, don't be a flash w
ker and £1M would set you up for life at any age.
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