Enjoying Retirement
Discussion
I've happily paid IFA's for specific advice when I felt I needed it.
I really can't see the value being gained from ongoing fees. Once a year meeting and some pretty graphs - things have done well due to IFA being g a genius, things have done badly because, well it's the markets and everyone is down.
IMHO a proper retirement savings strategy rarely changes and shouldn't need tweaking constantly. There are absolutely times when you should take advice, so find a specialist for those circumstances and pay a one time fee.
I really can't see the value being gained from ongoing fees. Once a year meeting and some pretty graphs - things have done well due to IFA being g a genius, things have done badly because, well it's the markets and everyone is down.
IMHO a proper retirement savings strategy rarely changes and shouldn't need tweaking constantly. There are absolutely times when you should take advice, so find a specialist for those circumstances and pay a one time fee.
okgo said:
Possibly because you’re not younger they’re focussing on big impact, given ‘time in market gains’ not on your side? Reducing tax usually quite a good first port of call you’d imagine.
I've asked him to show me what income I can expect - I'm battling my wife who really wants to see a monthly pay check coming in. I think the most tax effecient way of doing that is failry obvious but who knows, maybe it isn't and the IFA will be illuminating.
Tax planning may or may not include the use of vehicles such as VCT and / or EIS type investments but of course also need ready cash to actually invest.
Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
Am I over simplifying this. But isn’t the most tax efficient way to live off an isa and draw the tax free amount from a pension every year? Not sure what the limit is before you need to pay tax. £12k ish?
That’s what I am planning but I maybe completely wrong. Also I have a while to go yet so things change!
That’s what I am planning but I maybe completely wrong. Also I have a while to go yet so things change!
keo said:
Am I over simplifying this. But isn’t the most tax efficient way to live off an isa and draw the tax free amount from a pension every year? Not sure what the limit is before you need to pay tax. £12k ish?
That’s what I am planning but I maybe completely wrong. Also I have a while to go yet so things change!
That’s certainly a good start for most people with normalish savings/pension provisions, plus the 25% that you can pull tax-free from the pension, in stages if you prefer. Once you get state pension that will use up most of your allowance so some tax is likely depending on where you have it all stashed. That’s what I am planning but I maybe completely wrong. Also I have a while to go yet so things change!
Being tax efficient as you are still working is also important and not too complicated on the basics. If you are breaking into higher tax rates and will likely be at normal rates when you retire then paying enough into your pension gets you the 40% back now and you would only be paying 20%, at most, later.
keo said:
Am I over simplifying this. But isn’t the most tax efficient way to live off an isa and draw the tax free amount from a pension every year? Not sure what the limit is before you need to pay tax. £12k ish?
That’s what I am planning but I maybe completely wrong. Also I have a while to go yet so things change!
Supposing you have no other income you can drawdown £16,760 p.a without paying tax. The first £4,190 is your 25% tax free allowance. The other £12,570 is your personal allowance. Of course, if you’ve already taken your full 25% tax free lump sum it's just the personal allowance. That’s what I am planning but I maybe completely wrong. Also I have a while to go yet so things change!
mikeiow said:
Gordon Hill said:
Lovely part of the world the IOW, I loved living in Shanklin in the 1990's, I still get back to visit friends yearly in Bembridge and Brading. Just avoid Ryde and Chale Green, complete sh@t holes.
All the best to you Phil, I know how serious that condition can be through sad, painful experience of my late father.
Never heard a bad (or good) word about Chale Green - there is bugger all there apart from the mobile Jolly Fryer on Weds - it’s only a couple of miles from our place down there.All the best to you Phil, I know how serious that condition can be through sad, painful experience of my late father.
We do prefer the west half of the Island: much more remote, but the odd trip to that overpopulate East does happen
Good news Phil: onwards & upwards!
& HB for tomorrow, Steve - nice to have the ability to dial your work down, even if it does feel a bit wrong. Remember: leisure is for pleasure
Talking of which….dinner with pals and MORE comedy this evening, with the hilarious Marcel Lucont. That’ll be 5 nights out in a row…..we need a holiday, & I might go teetotal to give the liver a break
loafer123 said:
Gordon Hill said:
Lovely part of the world the IOW, I loved living in Shanklin in the 1990's, I still get back to visit friends yearly in Bembridge and Brading. Just avoid Ryde and Chale Green, complete sh@t holes.
Excuse me! My sister lives in Ryde!Err..actually, yes, good point…as you were.
Our friends live at Wootten Bridge and had managed to avoid Ryde for years.
alscar said:
Tax planning may or may not include the use of vehicles such as VCT and / or EIS type investments but of course also need ready cash to actually invest.
Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
I've seen those various schemes and the idea of getting tax back is attractive but aren't they pretty risky - are there "safe" versions?Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
Gordon Hill said:
loafer123 said:
Gordon Hill said:
Lovely part of the world the IOW, I loved living in Shanklin in the 1990's, I still get back to visit friends yearly in Bembridge and Brading. Just avoid Ryde and Chale Green, complete sh@t holes.
Excuse me! My sister lives in Ryde!Err..actually, yes, good point…as you were.
Our friends live at Wootten Bridge and had managed to avoid Ryde for years.
Bigger problem on the Island appear to be the f
king awful driving on the Island! Yesterday there were 4 major crashes where vehicles ended up on their side, in a field or upside down. Just incredible! The roads aren’t great, granted, but the standard of driving is just awful
Rarely a week passes these days without someone flipping a car somewhere….
Sheepshanks said:
alscar said:
Tax planning may or may not include the use of vehicles such as VCT and / or EIS type investments but of course also need ready cash to actually invest.
Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
I've seen those various schemes and the idea of getting tax back is attractive but aren't they pretty risky - are there "safe" versions?Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
I would hope a decent IFA would help people make use of all safe tax avoidance mechanisms safely. Paying tax is of course right….but paying tax unnecessarily is perhaps less desirable!
Meanwhile….good to read CAH706 enjoying family time - I agree 100%: being able to devote time with family is the amongst the best things you can do, & not having to juggle work things to do so makes it even more sweet. If you can do it, don’t put it off - those days can never be made up!
Sheepshanks said:
I've seen those various schemes and the idea of getting tax back is attractive but aren't they pretty risky - are there "safe" versions?
Safe as in companies offering them or the underlying investments or both ?Yes pretty much to the first and whilst the companies seeking investment are usually fledgling or fairly new and hence the risk that they don’t make it , track record of the various Managers can be a good guide.
Obviously the ( current ) 30% relief is good to have but it shouldn’t just be about that imho.
EIS also has loss relief claiming ability and these were also useful when I wanted to offset capital gains on some company shares my wife sold for instance.
Past performance not a guide etc but the various VCT’s I have held for nearly 20 years ( includes sells and buys of funds themselves ie recycling every 5 years or so ) have also returned tax free dividends of circa 7-10% nett pa of the amount invested once tax relief has been claimed.
EIS investment you generally get to see every company invested in as a separate contract note and a tax relief certificate per company is usually supplied. KI EIS is similar although only one certificate issued.
Pretty much all of the Funds I have been with are therefore investing into somewhere between 8 to around 20 companies so there will obviously be winners and losers.
When the winners come up trumps the return on original investment can be chunky and the gains are also tax free.
In terms of biggest wins / gains I would say definitely under EIS rather than VCT so I suppose you could consequently consider EIS maybe as more risky by default.
Fwiw I don’t think either should be held unless considered a part of overall investment strategy.
You can buy shares in certain individual companies under EIS rules assuming they meet the criteria but having the security of a Fund Manager involved has always seemed a safer option.
^ Thanks for that.
It doesn't sound like it would really be my sort of thing. I think the IFA is a bit horrified by the tax we (wife & I) paid on a large one-off dividend when one of the owners of our company decided he needed some money so we should empty the bank account. But it was all allowed for, and now we have the money unencumbered.
I think it's too late to do anything about it anyway - it was 22/23, so just paid the bill.
It doesn't sound like it would really be my sort of thing. I think the IFA is a bit horrified by the tax we (wife & I) paid on a large one-off dividend when one of the owners of our company decided he needed some money so we should empty the bank account. But it was all allowed for, and now we have the money unencumbered.
I think it's too late to do anything about it anyway - it was 22/23, so just paid the bill.
Sheepshanks said:
^ Thanks for that.
It doesn't sound like it would really be my sort of thing. I think the IFA is a bit horrified by the tax we (wife & I) paid on a large one-off dividend when one of the owners of our company decided he needed some money so we should empty the bank account. But it was all allowed for, and now we have the money unencumbered.
I think it's too late to do anything about it anyway - it was 22/23, so just paid the bill.
Obviously there are lots of rules and differences between the vehicles but the KI EIS type investments allow you to go back as far as 21/22 tax year when I did it ( ie 2 years ) to get back some of the income tax I paid during my last working year - whether that means it is something you want to look into though is personal. It doesn't sound like it would really be my sort of thing. I think the IFA is a bit horrified by the tax we (wife & I) paid on a large one-off dividend when one of the owners of our company decided he needed some money so we should empty the bank account. But it was all allowed for, and now we have the money unencumbered.
I think it's too late to do anything about it anyway - it was 22/23, so just paid the bill.
My FA suggested I could invest twice what I did but I was uncomfortable with that.
Funnily enough he’s just emailed me to suggest another investment in VCT’s for the tax year coming should see my tax bill wiped out completely but as I’ve said it him that would still mean finding the capital sum to invest so not sure I want it do that !
alscar said:
....
Funnily enough he’s just emailed me to suggest another investment in VCT’s for the tax year coming should see my tax bill wiped out completely but as I’ve said it him that would still mean finding the capital sum to invest so not sure I want it do that !
In Googling it last night there's chat about some right dodgy sounding schemes where you don't put any money in, it's funded from a loan which is repaid when the investment pays out. In the meantime you get the tax rebate paid back.Funnily enough he’s just emailed me to suggest another investment in VCT’s for the tax year coming should see my tax bill wiped out completely but as I’ve said it him that would still mean finding the capital sum to invest so not sure I want it do that !
Sheepshanks said:
In Googling it last night there's chat about some right dodgy sounding schemes where you don't put any money in, it's funded from a loan which is repaid when the investment pays out. In the meantime you get the tax rebate paid back.
Yes that sounds extremely dodgy to say the least and along the lines of tax evasion as opposed to avoidance schemes and certainly nothing like conventional VCT / EIS investments. I’m sure I’ve seen schemes mentioned where it was designed for the self employed / contractors etc and paid advisors a large chunk of change with fab promises of tax savings but the only flaw in the cunning plan was the simple fact that HMRC had not actually approved any of them.
mikeiow said:
Gordon Hill said:
loafer123 said:
Gordon Hill said:
Lovely part of the world the IOW, I loved living in Shanklin in the 1990's, I still get back to visit friends yearly in Bembridge and Brading. Just avoid Ryde and Chale Green, complete sh@t holes.
Excuse me! My sister lives in Ryde!Err..actually, yes, good point…as you were.
Our friends live at Wootten Bridge and had managed to avoid Ryde for years.
Bigger problem on the Island appear to be the f
king awful driving on the Island! Yesterday there were 4 major crashes where vehicles ended up on their side, in a field or upside down. Just incredible! The roads aren’t great, granted, but the standard of driving is just awful
Rarely a week passes these days without someone flipping a car somewhere….
Sheepshanks said:
alscar said:
Tax planning may or may not include the use of vehicles such as VCT and / or EIS type investments but of course also need ready cash to actually invest.
Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
I've seen those various schemes and the idea of getting tax back is attractive but aren't they pretty risky - are there "safe" versions?Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
I would hope a decent IFA would help people make use of all safe tax avoidance mechanisms safely. Paying tax is of course right….but paying tax unnecessarily is perhaps less desirable!
Meanwhile….good to read CAH706 enjoying family time - I agree 100%: being able to devote time with family is the amongst the best things you can do, & not having to juggle work things to do so makes it even more sweet. If you can do it, don’t put it off - those days can never be made up!
Edited by Gordon Hill on Wednesday 14th February 16:08
Gordon Hill said:
So you will be familiar with Mary Rose Avenue and Fernside Way. Even when I was down there the standard of driving was deplorable, it's as if a lot of people had never driven off the island before (maybe they haven't) mixed with aggressive tourists in the spring/summer.
Indeed....although the newer ones there were built after I had moved away.Skim the last few Island Echo Breaking News stories to see how bad the past couple of days have been for driving down there
Sheepshanks said:
alscar said:
Tax planning may or may not include the use of vehicles such as VCT and / or EIS type investments but of course also need ready cash to actually invest.
Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
I've seen those various schemes and the idea of getting tax back is attractive but aren't they pretty risky - are there "safe" versions?Also possible to go back further than just 1 year with the use of KI EIS's ie perhaps to mitigate some of the tax paid in the last year of paid employment.
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