Discussion
Here's my situation I'm 36 and have most of my ducks in a row (I think). Apart from my pension.
I invest heavily in the Vanguard Lifestrategy 100 fund. The aim is to create enough passive income to retire in the next 10 years, hopefully, 5 or 6. With the 4% withdrawal rule, 20k a year should be comfortable for me to be financially independent and maybe get a part-time job to top up the investments.
My mortgage is less than 40% LTV and the payment is small with 14 years remaining. The plan would be to pay this off when I decide to retire at 45 hopefully.
My pension I have no idea about. I'm currently invested in Standard Life Active PLus III Pension Fund through my employer. The fee is 0.75% which seems high and the return over the last 5 years has been less than 6% a year.
What can I do? Is this a decent pension or should I be looking to change? FYI I'm a 40% tax payer I know that can make a difference.
Thanks in advance if any other info would be helpful feel free to ask.
I invest heavily in the Vanguard Lifestrategy 100 fund. The aim is to create enough passive income to retire in the next 10 years, hopefully, 5 or 6. With the 4% withdrawal rule, 20k a year should be comfortable for me to be financially independent and maybe get a part-time job to top up the investments.
My mortgage is less than 40% LTV and the payment is small with 14 years remaining. The plan would be to pay this off when I decide to retire at 45 hopefully.
My pension I have no idea about. I'm currently invested in Standard Life Active PLus III Pension Fund through my employer. The fee is 0.75% which seems high and the return over the last 5 years has been less than 6% a year.
What can I do? Is this a decent pension or should I be looking to change? FYI I'm a 40% tax payer I know that can make a difference.
Thanks in advance if any other info would be helpful feel free to ask.
TCX said:
Seems like your we'll set up,only general point I can add is getting into a sipp,yes it's proactive,no sitting back,but I put three pensions into a sipp and haven't regretted it,control your own investment decisions
I've no idea where to start with this. I take it I'd need to speak to my employer once I've found a fund You have two options, stop paying into the company pension and use that money yourself. Work out what the company contribution is and see if that is worth keeping, suspect it will cover the fees and some more. If you are aiming for independent financial security then the work pension becomes the icing on the cake. When you leave work, it comes into its own at 55 or 57, whatever rule is in force.
Am I missing something?
Am I missing something?
If your employer gives you matched funding then keep that, it's free money.
If you contribute more than they match, you could put that else where, such as you own pension.
It not, then maybe consider moving out of the company pension, depending on the benefits it provides. As an example you could hold LS100 in a Vanguard pension and as a 40% tax payer you could get a nice extra bonus.
You have to remember that a pension, like an ISA is just a tax wrapper, so you just need to know how to take advantage.
If you contribute more than they match, you could put that else where, such as you own pension.
It not, then maybe consider moving out of the company pension, depending on the benefits it provides. As an example you could hold LS100 in a Vanguard pension and as a 40% tax payer you could get a nice extra bonus.
You have to remember that a pension, like an ISA is just a tax wrapper, so you just need to know how to take advantage.
softtop said:
You have two options, stop paying into the company pension and use that money yourself. Work out what the company contribution is and see if that is worth keeping, suspect it will cover the fees and some more. If you are aiming for independent financial security then the work pension becomes the icing on the cake. When you leave work, it comes into its own at 55 or 57, whatever rule is in force.
Am I missing something?
They match up to 5% I believe I think I currently pay 10%. Am I missing something?
Are you saying if I went along the lines of a SIPP would I lose my employer contribution?
supersport said:
If your employer gives you matched funding then keep that, it's free money.
If you contribute more than they match, you could put that else where, such as you own pension.
It not, then maybe consider moving out of the company pension, depending on the benefits it provides. As an example you could hold LS100 in a Vanguard pension and as a 40% tax payer you could get a nice extra bonus.
You have to remember that a pension, like an ISA is just a tax wrapper, so you just need to know how to take advantage.
That's the issue I have no idea how to take advantage. If you contribute more than they match, you could put that else where, such as you own pension.
It not, then maybe consider moving out of the company pension, depending on the benefits it provides. As an example you could hold LS100 in a Vanguard pension and as a 40% tax payer you could get a nice extra bonus.
You have to remember that a pension, like an ISA is just a tax wrapper, so you just need to know how to take advantage.
Stu-nph26 said:
That's the issue I have no idea how to take advantage.
Do you know the tax rules for money going in to and out of a pension?Do you know what is in the fund you're invested in?
Do you know if other fund options are available?
The 2nd and 3rd items you need to find out. This may help for the 1st item https://monevator.com/pensions-versus-isas/
2 GKC said:
Why the rush to retire on £20k a year? That's not going to go that far when you start spending rather than earning
So I can enjoy life and do what I want. I probably won’t retire but I’ll do a more rewarding less demanding job. I’m chasing financial independence more than early retirement xeny said:
Stu-nph26 said:
That's the issue I have no idea how to take advantage.
Do you know the tax rules for money going in to and out of a pension?Do you know what is in the fund you're invested in?
Do you know if other fund options are available?
The 2nd and 3rd items you need to find out. This may help for the 1st item https://monevator.com/pensions-versus-isas/
halo34 said:
Will your employer let you self select a SIPP and still contribute?
If not your stuck with that arrangement.
Its worth seeing if they let you select different funds within the portfolio regardless. You may find its on a modest return low risk affair, with better performing funds.
Yeah I’m pretty sure they’ll allow me to invest in a SIPP and continue my contribution If not your stuck with that arrangement.
Its worth seeing if they let you select different funds within the portfolio regardless. You may find its on a modest return low risk affair, with better performing funds.
Stu-nph26 said:
So I can enjoy life and do what I want. I probably won’t retire but I’ll do a more rewarding less demanding job. I’m chasing financial independence more than early retirement
You’ve not mentioned marriage and children. If you can retire at mid 40’s with them then very well played. If you’ve not and not financially planning that way you’ve a massive hole in your plans.
leef44 said:
Allow for inflation so have a margin of tolerance i.e. either aim for say 25k or assume you can manage on 15k for 10 years' time.
Inflation is factored into the 4% rule and I'll also have my private pension 10-15 years later then hopefully my state pension in a further 10 years which will all help. My intention is to work still but something I enjoy maybe ever volunteer work. I would check if you can self select some funds in standardlife, looks like the normal vanilla lifestyle fund option from a quick scan.
I did this when I was with an employer that used SL and made a huge gain just by being a bit more risky, but I was working on basis something is more than nothing
Their online facility is quite good if you can get access to it, to mix/match and compare what funds might be available to you.
If you do decide to move them around, try and drip feed from one into the other.
I did this when I was with an employer that used SL and made a huge gain just by being a bit more risky, but I was working on basis something is more than nothing
Their online facility is quite good if you can get access to it, to mix/match and compare what funds might be available to you.
If you do decide to move them around, try and drip feed from one into the other.
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