@Louis76 Hi, if you have gaps in your national insurance record, then you may be able to pay additional contributions to fill those gaps, which will then benefit the amount of state pension you qualify for. More info is available at: www.gov.uk/voluntary-national-insurance-contributions In terms of how much you pay all depends on your income and employment status. It is the number of years of qualifying NI contributions that counts, not how much you actually pay. More info is here: www.gov.uk/national-insurance/how-much-you-pay As for buying stocks when the market is down, it can be a really good time to buy, assuming no further major losses loom. Many investors take advantage of stock market crashes as it is like buying funds/stocks at sale prices.
@Louis76 The first thing to do is get a state pension forecast from the gov.uk website - as well as forecasting your pension you can select an option for it to tell you which years don't have full National Insurance Contributions. My wife had many years missing national Insurance contributions (because NIC is not charged on rental income). We think HMRC have miscalculated 1 or 2 years because they should have made up contributions while she was looking after our first child until he reached the age of 12 in 2002 - we have written to the Department of Work and Pensions about this for them to look into it. In addition to the 2021-22 tax year you can make voluntary contributions for the previous 6 tax years, if any of them do not have full contributions. In my wife's case she is eligible for the cheaper self-employed rate of voluntary contributions and is able to pay £158.60 for each of these 6 years. Each year's contribution is worth about £4.50 per week pension (in today's money) for the rest of her life; so for her the £158.60 rate is a particularly good deal. Furthermore, if she wants to make voluntary contributions for any years before those 6 years the cost is multiplied by about 4 times the amount. All voluntary contributions have to be paid by 5th April in the year before you are eligible to claim the state pension. I would recommend making the payments at least 3 or 4 months before that to allow enough time for HMRC to process the payments and for the pension forecast to be updated so that you can double check that the contributions have been applied correctly. Ask the Lord to bless your plans, and you will be successful in carrying them out. Proverbs chapter 16 verse 3.
@Louis76 Well done on taking the first step. If you phone DWP National Insurance Helpline they can advise you whether it is a good idea to make additional voluntary contributions or not. Working hard is good, but see if you can save at least 10% of your after tax income and use it to invest for your future.
The phrase "the last days" refers to the period of time between when Pentecost occurred (40 days after Jesus ascended into heaven) and when Jesus comes back again. If you want to find out more refer to www.crosswalk.com/faith/bible-study/what-does-the-bible-say-about-end-times.html I believe that at least some of the authors of the books in the New Testament believed that Jesus was going to come back in their life time. No-one can tell you accurately whether Jesus will come back again this year or in 30 years time or 300 years time or 3,000 years time! If you read Mark 13 Jesus prophesied the destruction of Jerusalem but without predicting a precise date for it to happen. Jerusalem was destroyed by the Romans in AD 70 about 40 years after Jesus stated that Jerusalem was going to be destroyed. Jesus also stated that before he would come back, the gospel message would be preached to every nation (literally in every language on the earth). I used to use this prophesy to reassure myself that the second coming was not imminent, however I have been informed that during the last 20 years or so the New Testament has actually been translated into to every known language. As far as I know every other prophesy that was a prerequisite before Jesus' second coming could take place has been fulfilled, so I believe that it could happen literally any day. I am absolutely convinced that that God exists and loves everyone on earth and that the Bible is true; but I also acknowledge that lots of terrible stuff happens (which is also predicted in the bible). The way that I reconcile the two is based on the verses in Daniel chapter 10 verses 11 to 14. I believe that these verses reveal that God's will is often obstructed by the devil and the forces of darkness, who prevent God's angels from delivering answers to prayers. That is why it is important to keep praying without giving up. I believe that the second coming of Jesus may be delayed by the forces of darkness longer than God wants. Some other Christians will disagree with my opinion, but in the Lord's prayer, Jesus tells Christians to pray "Your will be done on earth as it is in heaven" - this means that God's will is NOT automatically done on earth. Given that we don't know when Jesus is coming back, it is wise and prudent to put some money aside for when we retire. Proverbs 21 verse 20 says: Wise people live in wealth and luxury, but stupid people spend their money as fast as they get it). Proverbs 13: 22 says: A good man will have wealth to leave to his grandchildren [...]. I believe it is also prudent to pay for income protection insurance to provide you with an income if you can't work and also to pay for life insurance if you have other people who will struggle to pay bills if you were to die. You can get quotes for income protection policies and life insurance from lifesearch.co.uk I would also strongly recommend a book "The meaningful money handbook" by Pete Matthew to help you to budget your money and to sort out your personal finances. I suspect that a couple aged about 30 today would need at least £2 million in a pension by the time they are about 68 to be able to live a moderately comfortable life style (e.g. about £30,000 in today's money) without running out of money if one of them lives to be about 100.
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $450k gains with months, I'm really just confused at this point.....
Yes, a good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge/professional
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $850k with the help of my advisor from an initial $120k investment.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.......
There are a lot of independent advisors you might look into. But i work with Stephanie Kopp Meeks” and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her...........
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.......
Well that would be impossible to do considering I'm in my late 50s and I'm more interested in investments that could set me up for retirement in my 60s, my goal is at least $2million.
Very true, If you're looking for help building a retirement nest egg, you most likely want a certified financial planner with expertise in retirement planning. With the aid of a coach, I grew my reserve from $160k to almost $600k during this Red season.
How can one find a verifiable financial Planner, I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.
*PRISCILLA DIANE AIVAZIAN* . On the internet, that’s the financial advisor I use. She’s verified and you could also read more about her and then communicate with her. it’s always good to do your personal research before putting your money into any investment.
@@danieljamal3709 I just looked up this person out of curiosity, and surprisingly she seems proficient. I thought this was just some overrated BS, I appreciate this.
Unfortunately we do not know how long we will live in retirement therefore planning will be difficult, however I do agree that if you can drawdown as much as you can while you are healthier and fitter than you will be in later life. Regarding drawdown, I wanted to transfer a works pension into a Flexi drawdown scheme but was prevented by my IFA who stated that his public indemnity would not allow this and that the FCA would also block this as they did not want individuals running out of works pension money and relying on the state pension plus benefits, which would suggest the state pension is not enough. The IFA quoted a story of a person with over 1 million in funds and having a terminal illness being knocked back from Flexi drawdown by FCA. It's our pension and we should be able to use as we see fit. Another example of our controlling state.
I suspect many people drawing down relatively high percentages will be in trouble if a sustained financial crash takes place. How many will be able to live on much lower or even nil drawdown amounts in order to maintain their investment? It's interesting how people who wouldn't take much of a gamble in other areas of life - are prepared to risk their pension savings.
Hi Helena. Picked up your item by chance. Some mention of the current legacy benefits wouldn’t go amiss. All drawdown holders should ensure they have nominated beneficiaries/successors so that any funds left when they die are distributed to whom they wish to benefit, as tax efficiently as possible.
Hiya , are you drawing a pension atm? Using drawdown ? Did you get an IFA? The 3yrs cash sounds similar to the 3 bucket system - what do you think of that system? What system do you use ? Oh, and I have lots more questions !
Hi, very interesting article. I am nearly 71 and by 2025 will only have a pension pot of about £73,000. If I took out 25% tax free would you recommend an annuity. I am also due over £65,000 from a will which is below the limit for Inheritance Tax. Would this inheritance be lumped with the annuity income by the tax office? I'm like many others, confused by the system. Thank you.
Thank you Helena for another quality video. For someone planning to be retired for 40 years, do you think a drawdown rate of 4% is too risky or about right?
As a general rule of thumb 4% is ok however, with the uncertainty over the coming decade, another school of thought is a rate of 3%. Taking a more flexible approach, if possible, may be wise by being willing to drawdown less when the markets are down or performed poorly in given years during retirement. When my time comes, I will take a conservative and cautious approach and certainly drawdown no more than the natural yield and allow for inflation too.
Check out the book ‘Beyond the 4% rule’ which discusses this. Two websites that are useful are RetireEasy.co.uk and EvolveMyRetirement.com, which both will show cash flows based on your pension amounts and projected inflation and investment growth. The latter does Monte Carlo analysis to consider portfolio disasters. MeaningfulMoney on RU-vid is also launching a pension site which will give you access to a cashflow tool commonly used by advisors.
@@BouncingBack Thank you Helena. So at a 3% withdrawal rate we are looking at a SIPP with about £1.34 million in the pot to generate £40,000 per year from private pensions! It amuses me that most people don't aspire to be "a millionaire or anything like that" but do aspire to have £40,000 to £50,000 income in retirement - presumably after they have taken their 25% tax free lump sum! I also note that £1.34 million is above the lifetime allowance, so I guess we will all need about £270,000 in ISAs as well as just over £1.07 million in our pensions if we want £40,000 per year plus our state pension....
@@AndrewDCDrummond Thank you Andrew. I have consumed a huge amount of meaningful money's RU-vid content and have almost finished Pete's investment course and about to start my subscription to voyant go. I am also on the waiting list for the retirement planning course. My previous comment arose because i am part way through 'Beyond the 4% rule". Your reply is clearly on my wavelength, so I will definitely check out RetireEasy.co.uk and EvolveMyRetirement.com Thank you for taking the time to reply.
Please could you post the table you had showing how charges affect the size of your pension pot over a 20 year period, I have seen it on your video but cant find it now Thank s
you forgot to mention when you take out money from your drawdown pension you get charge for it, they make money out of your money and you have to pay to withdrw your own money
Hi I have 2 pensions A DB scheme and DC scheme The DC scheme will give me a handsome monthly income the DC not so good Can I draw down the DC pension until my state pension kicks in
Good advice Helena, I like the idea of keeping pension invested in stocks and shares and inside an ISA. What happens if pension investments reach a million, or two million pounds, how does that affect one's tax? Or are you only taxed if cashed? I heard there is a penalty of sorts if the pension goes over a million.
Hi, the rate of tax you pay on pension savings above your lifetime allowance depends on how the money is paid to you - the rate is: * 55% if you get it as a lump sum * 25% if you get it any other way, for example pension payments or cash withdrawals. This is on top of income tax at your marginal rate. Fidelity provide a nice easy to follow light read on the LTA as well as a guide you can download: www.fidelity.co.uk/lifetime-allowance/#2382013 For a more detailed account, there is an article by Investors Chronicle here: www.investorschronicle.co.uk/managing-your-money/2020/08/06/how-to-manage-the-lifetime-allowance/ Be aware that the Chancellor is considering reducing the LTA to just £800K in the Autumn Statement - see my vid on tax raid on pensions is you haven't already. Thanks for watching.
Personally I'm thinking that all my money is best off in the pension pot. If something happens during retirement and I need a bunch of cash quickly, I could take out a loan at 3% interest, which is half as much interest as the pension pot is making, and then up my drawdown by just enough to pay off the loan. By having any money outside of your pension, it's earning so little interest that it's probably less than inflation, so will shrink in real terms. Obviously that will change as and when interest rates exceed pension earnings.
Hi, that is one way for sure and should help shield your money against inflation. It would not suit more risk averse people though due to stock market fluctuations.
3 years salary in cash I’m not sure about given inflation eroding it, and low interest rates. I was thinking of having 2 years invested in bonds instead with 12 months as cash as emergency fund in a cash ISA. Need to think this through I think, and save up more or use some of the tax free pot at 55 to do this..
Thanks for your comment. Working out what best suits your personal circumstances is important and everyone has different needs. Having a good readily available cash pot is important for retirement, whether you split it between a cash ISA, gold, bonds or other means comes down to personal choice. Thanks for watching.
@@BouncingBack I am age 60 and I've been investing since I was 30, first in the stock market and then in residential property. Looking back i believe my biggest mistake was ploughing money into investments without being patient enough to first build up a very large cash fund, before investing. I am about to raise some capital from re-mortgaging a buy to let property; and prior to reading your reply I had already decided to hold 3 years' worth of expenditure as cash and premium bonds. I then plan to live on the rental income in retirement while investing the pension pot 100% in equities until I am 74, as funds in pensions are outside of my estate (I have nominated my children as beneficiaries of my pension).
I have 100,000 in my pension when I'm 60,, im going to take 8000 out a year with no tax free lump sum,, if the rest of the fund make 5% a year how long will my pension last, thanks
If you want to talk specifics such as this, you need to seek professional independent financial advice. There are too many variables for anyone to risk giving you an answer and avoid overstepping the fine line between financial education and financial advice.
What are the typical costs for managing a pension drawdown pot? Is this a SIPP? I have a good defined benefits pension pot, but I am tempted to surrender this to get the pot in my financial estate, which would benefit my wife and children after my death.
he Vanguard platform has low charges - their platform fee os 0.15% capped at £375pa, you'd then have your investment charges on top of that. With DB schemes, you do need to take financial advice before transferring those.
You get taxed on any income from Pensions or earned income. So, that is rubbish, I'm afraid. Drawdown for People reaching 55 or over, is one of the best things you can do! You have control over your pot, you don't loose any tax advantages on the way out & your dependents can receive money tax free on Death. Further more, your fund is managed by an Investment Company, so you will get a return per annum of at least 5%. over 5 years. The only downside, you loose around 2.5% of your initial investment, in the transfer. This is unavoidable, as far as I'm concerned & is Governed by the FCC.
Raymond, are you talking about the UK because I, as a retired IFA, recognise nothing as correct in most of what you write? As Helena does appear to be UK based from what she says, your version of pension drawing is wrong, from a taxation point of view, from a legacy point of view and the UK regulator is the FCA not FCC. As for a guaranteed return of 5% over any amount of time, I never came across a drawdown offering that ever. By their very nature, stock market based, there are no guarantees!
@@briansimon4363 Hi Brian, You are right about one thing. It is the FCA, which I apologise for. In my day, it was FSCA & yes, I am from the UK & retired. Some 4 years now. IFA's have very limited knowledge & much more, less knowledge about other investment opportunities. I don't profess, to understand them all. As far as return is concerned on an FPP, 5%, that is conservative. I sometimes wounder, if I should have gone down the Self Administered route. But, trust me, I do know my stuff. :)
Hi, this would depend on individual circumstances. If you have a smaller pension pot then it may make sense to take 100% but for most people it would be very tax inefficient. Let's say you had a pension worth £100k, and your income was £25k / year. You could take £25k of pension tax free, but after your personal allowance of £12.5k you would pay tax on the balance of your salary (£12.5k) + the balance of your pension (£75k), in total £87.5k eligible for tax. £50k @ 20% = £10k tax and £37.5k @40% = £15k tax, total = £25k tax. Ouch!
If I took a specific amount from my private pension each year to keep me from paying any tax at all (£12570 per year) would my state pension add to this taxable income and take me over this amount?
Hi. after taking the 25% out of my pension when I was 60 Im now 62 and now on the sick with hopes of goin back to work I get £96.35 sick pay per week.how much could i get from my drawdown each year without payin tax on it. Any help would be much appreciated many thanks
Anything you have as income all added together over £12570 per year, will be taxed - at the basic rate of 20% If your income goes just over £50,000 ish per year, then you enter the 40% bracket, anything as income over £50K ish. If you can live on an income of £12570 or under a year you won’t pay tax.
I am 62, based in England and yearly take £12,500 private pension drawdown ! I have been stuck in Thailand for 2 years lockdown, but managed to get my £12,500, online in March 21, now Ascot Lloyd, Wolverhampton, tell me that they are not allowed to give overseas clients advice and I have to apply in person ! I do NOT want advice, just access to my monies (£74,000), is this a new regulation or can I gain access to MY £12,500 ? THANKS 👃 🇬🇧 🇹🇭
My strategy will be from 44 thou pot ,,,obviously take 11 tax free then ,,,,,stop working say about 64 then take 12 k out each year ? May even just keep working to the end and just put up with taxing
True they are not good rates at present but they may be very different when people watching this vid actually come to retire. Also some people like the security of a guaranteed income and would buy an annuity regardless to reduce risk in their life. If annuity rates are low, fixed terms ones using a portion of the pension pot is an option in the hope rates would improve by the time the fixed-term annuity runs out.
@@BouncingBack even fixed term won’t keep up with inflation. I never understand how people don’t learn to simply pick up etfs, bonds and sit on it. Even in a market crash you are still only ever DD up to 5% so it’s really no big concern, you are losing value not units. The best days always follow the worse
