Retirement advice (self employed)

[Partyvan]

The initial message was deleted from this topic on 26 July 2020 at 11:30

[The Leaper]

Go and get proper financial advice from an IFA rather than from the PH community, or DIY if you feel that you don't need that advice..

Nobody on here will give you "advice" because it needs specialist professional training etc..... you'll get guidance and gut reactions etc which I don't think will be helpful.

R.

[moles]

Live for now a bit no guarantee you will live to 60!, we paid our mortgage off at 35 and both went part time. I hope I’m so bored of everything by the time I’m 65 that I don’t care if I die. Seems more logical to do what you can now if you can afford it at least you should be in better health at younger age.

[JulianPH]

Partyvan said:

Hi all,

I'm trying to plan a retirement income. I'll try and keep this as brief as possible

- I'm 36
- I have two businesses that are doing well (Covid19 aside!!!)
- I'll have a nice house paid off before retirement
- I'm meeting the contributions for basic state pension. I have no other pension.
- I want to retire in my 60's and live a fairly frugal retirement (gardening, reading, listening to music). I'm not really interested in travel, fine dining or expensive holidays). I could be tempted to retire somewhere warmer if I can afford the healthcare.

One final note is I'll get around £400k inheritance when my parents go. Granted I could be very old myself when this happens.

What do I do?

1) Nothing. Through selling the business, downsizing the house and a possible inheritance I'll have more than enough to buy a decent annuity to give me a stress free income for the rest of my life.

2) Put something into a pension or savings plan now (which?) My issue with this is I genuinely think my money is working harder in my businesses than it is in a pension pot or LISA. I also have trust issues with investments, I prefer to control money myself or have guaranteed returns.

3) Invest surplus cash I have into other property to rent out, or sell, in retirement?

4) Sell everything now, get a Ferrari, party with strippers, die young.

All advice welcome, thanks!

What you seem to be seeking is financial planning, rather than financial advice. The two are usually confused by virtually everyone.

You are young and successful and so congratulations for your achievements to date. You have also identified that you need to plan ahead for this to continue into the future.

The options open to you are endless, but from a tax perspective pension/SIPP contributions are impossible tot beat.

Your companies can pay money into this with no income tax or national insurance contributions and then claim this back against their corporation tax bill.

If you prefer to control your money yourself you can select the underling investments without paying a financial adviser - and this includes direct commercial property/land holdings of your choice, including those you may already personally hold (whereby your pension/SIPP pays you to take over the assets on your behalf). It certainly doesn't have to be just investment funds.

With regard to strippers and Ferrari's then always remember you only need to pay for one, not both. The Ferrari may reduce the expenditure required for the strippers and the strippers won't care about the Ferrari, just the cash expenditure you have to undergo in paying them. I appreciate that diversifying is important, but it is always very sector specific.

[Wacky Racer]

Don't bank on your "inheritance".

a) They may get divorced, and the new spouse ends up with most of it.

b) They may need to sell their home to pay for nursing fees. (some places charge nearly £10,000 pm)

Both worst case scenarios, but don't include this money in your plans.

I know several friends who did and regretted it.

[CzechItOut]

You say your businesses are doing well. How well?

You can pay up to £40,000 per year into a private pension from your company as an Employer's Contribution which is tax deducible and has no Income Tax implications.

I'd look at that as a first port of call.

[chip*]

Definitely speak to a professional financial planner who can sit down with you to prioritise your goals / objectives, and formulate a plan to achieve your desired retirement lifestyle. I am a bit further down the line (retired), but I am in midst of a re-plan with a financial planning who specialise in retirement planning. We've completed the first stage assessing my baseline retirement plan using cashflow modelling (basically a forecast assessing my retirement plan viability taking into account all my investments/savings against my desired lifestyle/expenses). The financial planner I used far exceeded my expectation with his methodical approach and detailed analysis on my lifestyle/expenses. This level of expertise will cost (not as much as you think though), but it was worth every penny imo. By contrast, I performed the same exercise with another firm who offered "free" financial planning. All I can say is that they performed a task, but the level of care and diligence was severely lacking, in fact, they did a terrible job. Old saying, you get what you pay for..

If you fancy having a chat with my financial planner, feel free to drop me a PM.

Edit to add: I selected my financial planner after assessing 8 other's and have zero business connection with him, except been a satisfied client!

Edited by chip* on Wednesday 25th March 18:19

Edited by chip* on Wednesday 25th March 18:19

[JulianPH]

chip* said:

The financial planner I used far exceeded my expectation with his methodical approach and detailed analysis on my lifestyle/expenses. This level of expertise will cost

It doesn't have to cost though.

[chip*]

JulianPH said:

chip* said:

The financial planner I used far exceeded my expectation with his methodical approach and detailed analysis on my lifestyle/expenses. This level of expertise will cost

It doesn't have to cost though.

Yes, and I still rather pay after my back-to-back comparison.

chip* said:

The financial planner I used far exceeded my expectation with his methodical approach and detailed analysis on my lifestyle/expenses. This level of expertise will cost (not as much as you think though), but it was worth every penny imo. By contrast, I performed the same exercise with another firm who offered "free" financial planning. All I can say is that they performed a task, but the level of care and diligence was severely lacking, in fact, they did a terrible job. Old saying, you get what you pay for..

[mikeiow]

chip* said:

JulianPH said:

chip* said:

The financial planner I used far exceeded my expectation with his methodical approach and detailed analysis on my lifestyle/expenses. This level of expertise will cost

It doesn't have to cost though.

Yes, and I still rather pay after my back-to-back comparison.

chip* said:

The financial planner I used far exceeded my expectation with his methodical approach and detailed analysis on my lifestyle/expenses. This level of expertise will cost (not as much as you think though), but it was worth every penny imo. By contrast, I performed the same exercise with another firm who offered "free" financial planning. All I can say is that they performed a task, but the level of care and diligence was severely lacking, in fact, they did a terrible job. Old saying, you get what you pay for..

Interesting. You're more persistent than I would be!
Sounds like you are a doggedly persistent person: 9th time lucky....NINETH!!

Implication being that (in your experience!), 8 out of 9 planners are lacking in care and diligence.

Doesn't bode well for people looking to find someone to follow your success. I doubt many towns even have a handful of such people!


Maybe your planner will be just what the OP needs.
Meantime, I'd recommend 2. followed by 4.

& even if you do take chip* up on his kind offer, I'd still recommend a chat with Nik at IM.

Not sure if chip* meant he had a bad experience speaking with IM, but it certainly helped me a lot to clarify my thinking. Things don't need to be complex.
Cost me a cup of tea!
& yes, whilst my "main" pot remains with my Aviva work scheme (very low cost, decent choice of funds), I (& my immediate family) *have* taken out some IM investments, which could be seen as the underlying plan from Nik ()....but seriously, the decisions are all your own to make - I am firmly of the belief that the BEST financial advisor for you can easily be YOURSELF.
Arm yourself with knowledge and make decisions based on that. & if that decision is you need the help of an IFA/FA or a Financial Planner, that is fine too!

Edited by mikeiow on Thursday 26th March 21:00

[Simpo Two]

Partyvan said:

- I want to retire in my 60's

Why not do your sums based on 50's - then if the plans fall short you've got some overshoot, as it were. If a target of 60's goes wrong you'll still be working at 70+.

[Derek Chevalier]

mikeiow said:

I am firmly of the belief that the BEST financial advisor for you can easily be YOURSELF.

I'd say the opposite which is why a lot of financial planners have their own financial planner.

[superlightr]

Simpo Two said:

Partyvan said:

- I want to retire in my 60's

Why not do your sums based on 50's - then if the plans fall short you've got some overshoot, as it were. If a target of 60's goes wrong you'll still be working at 70+.

I planned on 50 but then the govt changed the goal posts to 55 for personal pensions.

OP good position to be in - as others have said diversity is the key. Ive favoured properties when I was your age - now 50 and just getting into stocks and shares via IM - the finance page sponsor. Wish I had done so 15 years ago.

[Derek Chevalier]

mikeiow said:

Implication being that (in your experience!), 8 out of 9 planners are lacking in care and diligence.

Doesn't bode well for people looking to find someone to follow your success. I doubt many towns even have a handful of such people!

I think it's worth clarifying that, generally speaking, there are 3 types of financial planners.

1. People that call themselves financial planners, but don't do any financial planning and sell products.
2. People that call themselves financial planner but only undertake rudimentary planning in an effort to sell products.
3. Genuine financial planners.

It's quite easy to tell the difference if you know what to look for. Website content, charging structure, number of clients, planning software and investment approach all give a good idea of the offering.