Retirement advice
Discussion
Hi, I have a LONG way to go until retirement, but I just want to make sure I'm putting money away in the correct area.
I work for a large car manufacturers, and I put in 10% of my monthly salary, and company put in 16%. I've doing so for an odd 15 years. Now I'm wondering if I should continue putting money into my the company pension, or lower the tier I'm putting on ( to 1%), and carry on putting money into S&P500.
Thanks
I work for a large car manufacturers, and I put in 10% of my monthly salary, and company put in 16%. I've doing so for an odd 15 years. Now I'm wondering if I should continue putting money into my the company pension, or lower the tier I'm putting on ( to 1%), and carry on putting money into S&P500.
Thanks
Stopping or reducing what you pay into a pension to invest elsewhere i.e. an ISA is generally a bad idea in most cases, especially a workplace pension.
Presumably if you reduce what you pay the employer will too? That's like taking a pay cut. Plus you're most likely getting 20% tax relief on your contribution too, more free money.
If you want to invest in the S&P 500, you can do that via your pension. I'd wager a proportion of your pension probably already is.
Presumably if you reduce what you pay the employer will too? That's like taking a pay cut. Plus you're most likely getting 20% tax relief on your contribution too, more free money.
If you want to invest in the S&P 500, you can do that via your pension. I'd wager a proportion of your pension probably already is.
Bloody hell!. 16% from your manufacture, that’s bloody really good. Mine was capped at 8% and just this past month I’ve only increased my contribution to 12%. Plan to use the next couple of performance review rises to reach 25%. Hopefully this will stop me creeping over and into the 40% tax band.
I'm just thinking of doing the opposite ... 50 now . Mortgage free and no debt so bulk of salary just building up and sitting in bank . Considering upping contribution to about 70% of salary to avoid paying any tax for next 5 years , then drawing it out 25% tax free at 55 and then reducing payment back down . By my calc I'll be up £6k a year tax ....(obviously then need to work out best way to draw the remaining 75% in a tax effiecent way) . Whats the downsides other than tieing the cash up for a period ? (Apart from the obvious of dying at 54yrs and 11months old )
^ good strategy, as long as you're under the £40k p.a. allowance with your 70% of salary contributions.
I'm 56 and recently did the same and it was very successful and felt sweet to take that big tax free lump at 55
Obv you need to live off the cash you've built up but I think you know that already
I'm 56 and recently did the same and it was very successful and felt sweet to take that big tax free lump at 55
Obv you need to live off the cash you've built up but I think you know that already
Lannister902 said:
I made a mistake with the figures, it's 10% for me, and 6% by the company
Can you see how the pot has performed over the years?. Mine is now with Zurich/Mercer. Within it we now have the option to change where the money gets invested. I’ve now spilt 50/50 my money going in to two separate funds. Weather it’s a good idea in the long term who knows. 50% in the fund I’ve started in and 50% in a high growth fund. Granted the later will go up and down like a yo-yo but long term should do well. The fees for each fund were exactly the same. I’m looking at it for 5 years.
I only started paying into a pension at 35 so playing a game of catch-up. Hence why I’ve cranked up the maximum payments in I can afford, which I’ll stop increasing once I reach 25% combined.
A pension is just a 'wrapper' - you can put money into it tax free (subject to limits) and it is then sheltered from tax until you want to take it out again (or exceed certain limits).
The current rules have a minimum age you can access the money and allow 25% to be taken tax free.
However, inside that wrapper, you should have some flexibility on what it is invested in. Most people seem to go for the default option, but if you want greater exposure to some particular product or market, you can usually do that. Most employer type schemes will usually not go as far as single stock holdings, but you should be able to go heavier in US Equity etc.
The current rules have a minimum age you can access the money and allow 25% to be taken tax free.
However, inside that wrapper, you should have some flexibility on what it is invested in. Most people seem to go for the default option, but if you want greater exposure to some particular product or market, you can usually do that. Most employer type schemes will usually not go as far as single stock holdings, but you should be able to go heavier in US Equity etc.
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