I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
I was a stay at Home mom with no money in my IRA or any savings of my own, which was scary at 53 years of age. Three years ago I got a part time job and save everything I make. After 3 years, I am 56 yo and have put $9,000 in an IRA and $40,000 in my portfolio with CFA, Evelyn Infurna. Since the goal of getting a job was to invest for retirement and NOT up my lifestyle, I was able to scale this quickly to $150,000. If I can do this in a year, anyone can.
I know this lady you just mentioned. Evelyn Infurna Services is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. Evelyn Infurna has demonstrated expertise in investment strategies n has been involved in managing portfolios and providing guidance to clients.
I went from no money to lnvest with to busting my A** off on Uber eats for four months to raise about $20k to start trading with Evelyn Infurna. I am at $128k right now and LOVING that you have to bring this up here
higher taxes = higher inflation = government subsides to quell inflation, The rising interest rate can surely control inflation, but won't prevent erosion of the eroding purchasing power of the US dollar. I have learnt my lesson this time. The banks can't be making money off my money, while inflation eats into it. I have set aside 650k to invest in the stock market now, since that keeps up with inflation, but I don't know how to get started.
Yeah, things may be hard right now, but I've come to realize both bear and bull market, recessions and economic boom, all provide opportunities to make high gains, I used to call bluff on folks that bragged about making a fortune from such down-markets until I happened to do so myself
Keeping money in the bank is like paying banks and the Govemment. Here's how it works: The bank gives out your money as loan, and charge interest obviously higher than inflation rate, and then give you, the depositor, interest lower than inflation rate. That means net loss for you. That is why I prefer to invest, and on average, my advisor makes returns that always beats inflation!
To be honest, I've been wary of banks for a while, but I wasn't sure how to speak with an advisor first. Please let me know who your adviser is if it's okay; I need some recommendations.
Finding financial advisors like "Stacy Lynn Staples "who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
If you've achieved any financial security, savings, owning a house, a pension.... you'll find these are going to be a financial burden around your neck..... they'll tax you to oblivion..
In light of the global crisis, rising inflation, and economic instability caused by inadequate governance, stocks, ETFs, Mutual funds, and REITs, assets can serve as a viable path to achieving financial independence
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
No worries, we all start somewhere! First, grab a comfy chair and some popcorn , and dive into some beginner-friendly finance videos. Start with basics like "investing for dummies" and "how to trade stocks 101." When you're ready for more, think about a financial advisor like "Constan"-she's like the Yoda of finance! May the gains be with you!
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
Safest approach i feel to tackle it is to diversify investments. By spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown. its important to seek the guidance of an expert
It's true that many people underestimate the importance of advisers until their own feelings burn them out. A few summers ago, following an ongoing divorce, I needed a significant push to keep my company afloat. I looked for licensed advisors and found someone with outstanding qualifications. She has contributed to my reserve increasing from $275k to $850k regardless of inflation.
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
I have two pensions. I would much rather have had a Roth 401k throughout my working lifetime. $500/month invested from 25 - 65 at 9% is $2.3mil. I hate my job but can't leave because of I won't get my state pension. What do you think about doing a 70/30 stocks bond ratio?
I would avoid the index funds, mutual funds, or specific stocks for the time being. 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows signs of recovery
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
Generally speaking, a good number of people discredit the effectiveness of financial advisor in planning for retirement, For over the past 5years, I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $1million in gains… might not be a lot but retirement doesn’t seem so farfetched anymore.
I'm so glad I kept track of my old pensions. I had one from my first job that I thought was worthless, but it ended up being worth over £60,000! It took a while to track down, though - the fund had moved to five different providers
I work with Monica Mary Strigle, a financial planner, Her expertise in tracking down old pensions and navigating the financial market has been invaluable. I feel much more confident and in control of my finances thanks to her guide
Monica is brilliant. She takes the time to understand your goals and risk tolerance, then provides tailored advice on investments and pension consolidation. She's been instrumental in helping me make informed decisions and avoiding costly mistakes. She's got a deep understanding of the UK pension system and the financial market, so I trust her advice completely.
Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.
@HeltonsRasmussens I agree. From my own experience with an investment advisor, I've got $1 million in a diverse portfolio that's growing fast. It's not just about having money for stocks; you need to know your stuff, stay determined, and be resilient.
@BrentsHowells-r1w MARGARET MOLLI ALVEY is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
@@ConleysEvanses Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
@@clivewalker5465 I dont live in the UK Clive. However we do have money invested there. I am in the process of moving it away from the thieving liberal sh.t heads. Take care!
From $9K to $35K that's the minimum range of profit return every week I thinks it's not a bad one for me, now I have enough to pay bills and take care of my family
Creating multiple income streams that doesn't depend on gov't should be on every individual list. Thanks to Stacey Macken, the lady that changed my financial life.
Honestly, I'm surprised that this mrs Stacey Macken is mentioned here, came across a testimony about her from one of the beneficiaries on the CNBC news, she seems to be doing extremely well .
Stacey Macken is a retirement manager and investment/savings expert, in ranks with Cathie woods and Warren, has demonstrated expertise in investment strategies and has been involved in managing and providing financial guidance globally .
ive applied for drawdown to take the 25 pct tax free portion. You get a 30 day change of mind period which gives you a free option to change your mind depending on what is announced on the 30th oct
Money is not meant to control people, rather it is meant to be put to work producing more money for you. You cannot build wealth without putting money in its rightful place...
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
Yes! I'm celebrating £32K stock portfolio today... Started this journey with £3K.... I've invested no time and also with the right terms, now I have time for my family and life ahead of me.
Just turned 48 years old and in a job on 50k a year basic.I have no mortage or any debt and paying 26% of my wages plus my annual bonus into my pension to make sure I dont pay 40% on my earnings because I can earn a few extra quid in overtime over a year quite easily.I intend to up my contribution to 30% in the next year or two as I plan on taking out my 25% over a few years to build up a nice little amount in a isa so I can retire when I am 60,62. I plan on having around 150-170k available to keep me going for 7 to 9 years before my state and pension pots start to pay out. I enjoy working however I refuse to work until I drop for anyone other than my kids.
Even if you're no where near retirement age, make sure that you keep track of all your pensions. I had a "parked" pension that I thought was worthless because it only had 3.5 years of contributions, however over the years it was worth over £30k+. It took a while to track down as the fund had moved to 5 different providers!
Great video - I took my lump sum 6 years ago, didn't need it, still haven't spent it. I probably would not have done different but your clear explanation of the pro's and cons would have been very handy at the time I decided.
If I take any of it I plan to spend it on my home - install solar and battery, update 21 year old kitchen and shower room. Possibly update my heating system.
I’m going to b 52 in January and is planning to take 25% tax free lump sum when I’m 55 to pay off my mortgage, when my fixed deal ends a few months later. If Labour messes up my future, I’ll emigrate. I’ve worked extremely hard for my private pension and gone without over the years to top it up.
Have a look at this www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension
This is exactly the position I am in. I retired 2 years ago and combined my 2 pensions and left it to hopefully grow which did until the last couple of weeks. Surely the government wouldn't dare remove the 25% overnight, there would be a lot of furious people if they did.
But what would these furious people do? Starmer practically has a one-party state, and looks like he's keen to lock up anyone with thought crimes. He's made it pretty clear he's coming after anyone with "savings". My bet is they won't remove it but reduce it considerably.....say down to £100k and implement anti forestalling measures. I elected to take mine earlier this year.
I bet people said that about the Winter Fuel allowance. But they took that.. yes people were angry but now they've already given up and it's done. The government knows any anger blows over and we just take it.
It would be unpopular and political suicide to go after pensions; but Labour are known for making these stupid fiscal decisions . Plan for the worst, hope for the best.
They have already said they will stop the tax free cash, but 24 hours later a treasury staffer said Starmer was getting mixed up. Also Rachel Thieves said it was unfair to get tax on the way in and out so they would be looking at removing it. They cannot take it once you have.
Very useful explanation of this topic put in plain language. Have not taken my lump sum yet, as do not specifically need the funds. It would seem that the government would cause more complications for itself by scrapping the scheme. Maybe more likely to reduce the percentage, if they were to do anything. They are currently playing with fire at the moment with pensioners. Hopefully time will not cause people to forget.
What gets me is pensions and their planning are over many decades and these numpties, Con and Labour keep changing the goal posts short term …… how are you supposed to plan 🤷🏻♂️
Exactly. I wish I'd emigrated after I graduated in the 1980's. Also in the UK we've been living in austerity since the Lehman Brothers induced financial crisis. As I approach retirement I've no idea if I should take a lump sum or leave it in my pension pot because the laws/regulations keep changing. Also how is it right that someone like me with almost zero financial knowledge is allowed to be in charge of their own pension pot in the first place?
Planning exactly the same with my wife's pension in next couple of months. Get the tax free part out of pension and straight into her ISA with the same investments. Knowing our luck and this greedy government though, they'll start taxing ISA's 🙄.
Important to make financial decisions when the facts are known. Anyone trying to get you to do something other than this tends to be doing it for their benefit and not yours.
The possibilities are frightening when you have been planning your retirement for a long time,and they change the rules ,this could be devastating to pensions , you may have to either retire early or have to work at least another 4 years.
Nicely explained. Let’s see if labour are silly enough to crash the bond markets by Joe Public panicking and taking the 25% lump sum tax free. Knock on effect will be value of remaining pension pots dwindling as stock markets go down as a consequence of the panic ?
I have always thought one should take a balanced approach to this although my IFA disagreed with me because of IHT. There are currently ISAa available for upto £20k a year, and any gains within it are tax free, but unlike a SIPP withdrawals are not taxed. So I have always felt that the 2 should be used together. So you can park £20k of your tax free cash in an ISA each year. There is also the Gilt option, a bit more complicated but there is no CGT on the gains portion of a gilt although the income is taxed. So theoretically you could park some cash in say the TN25 gilt where most of the yield to maturity will be gain as the coup[on is only 0.25%. Of course we have no idea what the government will do. The super rich are far brighter than our chancellor or her treasury civil servants and employer far brighter advisors so Reeves won't be getting much more tax out of them. A large swathe of the population doesn't pay enough to pay for the House of Common' toilet paper, so the chancellor is left with taxing people who have tried to be prudent and saved.
I have been using Drawdown to withdraw TFC since age 66, using it to live on. I have had 3 years "tax free" income and currently due to the extra growth I've had in the unccrystalised sums remaining. There is enough left to last me another 2 years so I have decided to withdraw it to protect it from Reeves and I will put half in a cash ISA with the remainder placed in a S&S ISA.
The tax free lump sum can be invested in tax free ISAs and/or P Bonds to get returns. Also leave a small amount of the tax free allowance in pension pot to get further tax free rewards as pension pot grows over time.
I just took mine in early July. I suppose it is down to whether you need the tax free cash to be part of a wider more regular retirement income, also has your planning for future income assumed some growth on that TFC amount. Personally I paid off the mortgage, made myself debt free, paid off daughters uni loans and put some into ISAs, but fortunately was not relying on that chunk to generate a ‘living’ income. Paying off the mortgage, and being debt free was my main aim and feels so good to be free and clear and knowing my daughter is not burdened. Your advisors / investment companies will of course tell you to stay invested (as they normally see a % of funds invested as a fee) but I have a very jaundice view already of 2 Tier and Ms Thieves and previous form would indicate they are coming after whatever people have worked hard to save up.
My SIPP has a total charge of .25% capped at £200 a year. Hardly making the fund manager rich. The stock market on the other hand is doing very nicely.
Taken tax free lump sum today. Will re-invest in our ISA's and my wife's SIPP where she will get the 40% tax relief. Not great for the IHT planning. I also suspect there could be a lifetime gifting allowance / cap introduced if SIPPs are brought into estates for death duty liabilities - as people will see gifting as more viable way to pass on wealth. All will become clearer after October 31st - we hope 🤞
I tend to agree. The use of stocks and sharesISA’s effectively keeps the tax free element growing at a similar rate to the pension investments. Until of course this gormless government caps ISA wealth in some form. Luckily, it is a much smaller target compared to the pension tax relief.
I’ve just taken my personal pension out, the full amount, I am 62, I think it would of been means tested in future and I wouldent get my old age pension in full because I tried to look after myself, so I’m going to Thailand until it’s gone, I’m making shure Starmer dosent get a penny of it, I’m going to blow the lot on wine women and song, good luck with what ever you choose to do !
You’re really not that smart are you? Personal pensions have nothing to do with how much old age pension you’ll get. Your old age pension is determined by your National Insurance contributions - if you’ve paid the full amount of years then you’ll get your old age pension.
Thanks for sharing , straight talking great advice from someone who knows the pensions world, most of us don’t. Appreciate the video and will check in on some more
I have played the risk reward game. Not much I can do after new regulations come in. Taken some tax free cash - maybe some of this tax free cash will grow tax free in a stocks and share ISA in the same fund it was in in my pension, maybe some 0% gilts , maybe a bank account. Whatever when the cards are dealt I am getting a good price for my bet. Gains/losses in my pensions vs gains/losses elsewhere. If tax free tax is eliminted or reduced to say 100K then I lose big , if I pay a bit of extra tax in the short term it's a small marginal loss.
My biggest worry is that a Labour think tank are thinking of means testing the state pension. My advisor worked out that I could retire early and in 10 years time I would get an uplift from the state pension. If it's means tested then I fear that I cannot retire early and will have to continue working.
I'll get screwed if they do implement a block on taking it, can't take mine until November and have been waiting do do so for a couple of years, will be so frustrating if they implemented it a month before I could take it
I was hoping to live off my savings for a while but withdraw every year £16 K. £4K tax free and £12K taxable …. But it’s not because it’s my personal allowance
Reeves won't fiddle with the tax free cash. What she will do is make pensions eligible for IHT, for sure, and perhaps introduce a common tax relief of 30%, or 25%. Even that is unlikely though, in my view.
Common tax relief is complex for salary sacrifice which hasn’t previously even had NIC EE’s or ERs applied due to complexity. My guess will be stamp duty land tax being removed from purchase of property and applied at a lower rate as an annual charge for owning property
@@tancreddehauteville764 they promised not to alter council tax bands. They didn’t promise not to introduce a new tax. Large earners can relocate to Dubai or older large earners can slow down. People in council tax band H can’t move their property abroad. Taxing SIPPs and ISAs could reduce investment. The large properties of Mayfair and rural country piles might be just what the looters have in their sights. Stating a hunch is not to be confused with an endorsement.
@@iMetal87 Those lucky enough to live in mansions have little sympathy from me. They call sell up and move to a normal property or just leave the country. Up to them.
If your already at the Lump Sum Allowance then it is very very unlikely that any government is going to increase this figure in the foreseeable future. You might as well take that now, put it into whatever investment vehicle it was in before and just be prepared to pay CTG on the gains. You also have the ability to decant it to ISA’s each year and remember if your ‘married’ you can put it in your partners ISA as well and also put a little (£2880) back into both your pensions (that amount should not trigger the recycling rules) and get 20% tax credit back from HMRC.
agree, ive just done excatly that.I am old enough to remember that every labour giverment eventualy runs out of money and cant keep thier hands off Pensions becayse the sums are so large and few understand them. How many people know that the average train dirvers pension just increased by £170k at retirement due to the above inflation rise labour just gave them ?
Be quick! The word is Labour are looking at taxing it. I took mine in March at 55 and best thing I did. It's making 4.5% in the bank and Labour have missed my boat!
@@enigma7791I assume you need that money in the near future? Makes sense to have it in cash if so - low volatility more important than growth. If not, you’re losing a lot of potential growth (especially if interest is taxed) by not having it invested for the long term - a globally diversified fund would be averaging 10% or so a year. I’ve taken the maximum tax free cash each year that I can put in stocks & shares ISAs. No tax and it continues growing at the same rate it did in my pension as it’s invested the same. Would seriously consider looking at something similar if you want to beat inflation by a decent amount - inflation has only just come down from 7-9% - even the very best interest rates meant you were still losing money in real terms recently.
@@enigma7791Not advice to remove but taking your 25% tax free entitlement would also have the effect of reducing your annual pension charges by (Typically 1+% on remaining pension pot capital) by 25%. With one caveat that the pension funds may (or may not) outperform your cash isa.
Hold on! He highlights the con of taking out your money but then losing out of 10 years of growth if things don't change. The assumption is that your money will grow enormously. Well I calculated my Standard Life annual growth over 18 years at my true rate of return at 0.45%. It worked out at about £26 per £50,000 after fees.. ( Verified with Standard Life in 2013).The majority of ACTUAL monetary return was taken away for their 1.5% fee of the pension pot. The "growth" was down in the main to my annual contributions and a rising stock price at that moment in time. ie. IF THE STOCK MARKET GOES DOWN 10% SAY THEN YOUR POT GOES DOWN 10%. ie The value in your pension is dependent almost entirely on the value of the stock market stocks. There is a big stock market crash and reset just around the corner which will decimate the private pensions of everybody, though probably not government employees who will be ring fenced as usual. And what is annual inflation doing to your pot? Don't believe Govt. figures on inflation. We all know that it is nearer 8% or more and not going to go down any time soon. I took out my whole pension pot and bought some rental property gaining a risk free 4% profit income while making my capital investment inflation proofed as well. Your fiat currency in the bank or pension is not inflation proof in the slightest. GET IT OUT NOW!.
Standard Life & other providers use age profiling system now So the closer you are to your chosen pension age funds are moved across annually to low risk "pots" such as fixed interest to reduce volitility. Also pension returns vary enormously depending on the funds invested into. That low net return & 1.5% annual charge is uncompetative now.
What if someone is over 74 and approaching 75 with an uncrystallised DC pension. Surely it's best to take the full 25% tax free as after 75 you can still take the 25% but its taxed. Or is that wrong?
Are you not cnfusing this with the fact that pension death benefits are taxable after age 75 (ie if you die before 75 there is no IHT). There used to be a benefit crystallisation event (BCE) test at 75 when the LTA existed. Maybe the LTA will come back. Who knows.
@@radiantinred Thanks. I'm aware of the tax implications for beneficiaries of dying prior to or post 75 but my recent understanding is that your 25% lump sum, if not taken before, is taxable after 75. To the best of my knowledge there is still a BCE test at 75.
If you have already exceeded the max amount in your sipp and thus tax free lump sum limit is less than 25% does it not make sense to take out the tax free lump sum so as to reduce potentially tax rate on future taxable withdrawls?
I retired 3 years ago, I didn’t take any lump sum , half my monthly income is tax free the other is my tax free allowance from my pension, if they abolished the tax free millions would pay tax on their pension, labour won’t get another term if they do that.
I think Labour will up the % both employers and employees will need to pay in, IHT protection will be removed. , and flat 30% tax relief on contributions , and possibly go back to old fashioned annuity purchase for part of the pot.?
My instinct is that most people should probably take the tax-free cash before Reeves can axe it, in the next tax-year. And the money should then be invested in a more flexible ISA. Bonds and gilts? Attractive right now, with stockmarkets looking toppy and interest-rates edging down. Excellent video, which I'm forwarding to a family member.
nice video. I've subscribed for more. Still puzzled on one thing though. I'm still in work, for another few years, but will soon have an older (generous) pension starting. I'd like to make a 25% drawdown on the lump sum from this older pension for renovations. But I'd like to make AVCs into my current employer pension. But I'm confused about whether taking a drawdown from one pot, will affect my ability to get tax relief on my AVCs into my current pension. It's hard to google as it's a slightly odd situation
Rolling any unused part of a tax free lump sum into an ISA is tax efficient too as you will not pay tax on any income from that ISA nor any capital gains as well as having the option to spend that amount later as required.
Thank you so much, Carl! I recently received a letter from my pension provider saying that they had recently put the retirement age on my pension up to up 70 years of age. This was due to a technical error. They apologised and moved it back to the original date. I’m nowhere near that age by the way but it did set off alarm bells. Do they know something the public does not?
I can confidently say - YES. Take the money. Do some things. Only 50% of men still have their health at 63. Why wait? There's no point getting to 80+ with a stack of cash left, regretting being "careful"...
Plan on retiring in a couple of years so I am very tempted to take the 25% now just in case, and use to supplement a possible reduced working hours for a at least a year..
take it now before its gone - this govt handed it all over to united nations they would rather human traffic put ppl in hotels than look after the people who worked all there lives
I'm with you...58..planning on hitting the ripcord 2.5 years from now.. Very much considering taking my 25% 50% of which would pay off my mortgage..50% to help my son and a little fun... The prospect of waking up not able to access the portion i had planned makes me shudder ..
Congratulations on an excellent video. I subscribe to your school of thought vis a vis withdrawing the 25% TFLS. I say this, mindful of the fact that I have benefited significantly from 40% tax relief over many years and really if I have to pay tax then thats OK.
I took my full 25% tax free lump sum in March despite my financial adviser saying he was against me doing so. I used £20k of it to top up my stocks and shares ISA giving me 5% tax free income. I invested the rest in a savings account paying 4.5% interest which is entirely free of income tax because of the combination of the £1k Personal Savings Allowance and the £5k starting savings rate. I will transfer £20k each year into the ISA, slowly increasing my tax free income from the ISA. The result is that I also take a much smaller monthly pension income which means I don't pay income tax at all on my monthly pension withdrawals. Also I pay less in charges on the remaining pension fund. I worked out that taking no lump sum but taking a higher monthly pension with a 25% of each pension withdrawal tax free would result in much higher charges which would not make the pension last any longer and wouldn't give me a higher net income than I currently receive. Plus I have the remaining lump sum to spend as I wish and don't have any fear of what may happen to pensions in the future.
What do you think of maxing out your isa and then maxing out premium bonds to avoid paying tax on savings, then when the new tax year starts cash in the bonds and add to your isa?
Does taking the TFLS mean you trigger the MPAA, so can only put away a max of 10K/annum? If so, this could seriously impact higher rate tax payers trying to use their pension to reduce their PAYE tax liability.
Last Labour govern robbed pension pots - so short sighted given our aging population and need for the elderly to be able to afford things the state will no longer provide, through choice or necessity
I have about £24,000 works pension and £12.000 in my sipp.. the tax allownce is £12,500 a year, i can live off £12,000 a year meaning I can just draw out £1000 a month without even worring about tax allownce and spend it before your state pension comes into play at 67.. oh and i have about £20.000 in an isa ... no morgage all done..so im happy in my retirment ..Basic needs is all i need lol
Once you start taking the taxable remainder for example from drawdown then you can’t take more tax free cash. However, you can take 25%, leave the rest, add up to £60k a year and take another tax free lump sum from that. Or, take the lump sum and add it back into your pension.
Gret video ..Thanks. Question please: I have an old pension of £300,000. If i take the 25% , what happens in lets say 5 years if i transfer the remaining 75% into my "current" salary sacrifice pension ? Would this then effectively "reset" the 75 % and thus i could then take a 25% of a greater amount tax free = (75% legacy pension + Current pension * 25% tax free = ) ??
No. You cannot combine the crystallised funds where you have taken the TFcS with other uncrystalised funds where you have not. The administrator would need to hold the two amounts separately.
Thaks for a very clear and easy to understand video. If you were to take the tax free cash is there any form of trust it could be put into get round teh enheritance tax?
I am looking at taking a tax free lump sum but am an Australian resident now. Will I have to pay tax on it in Australia? If so, at what rate will I be taxed?
I have 3 separate employee pensions, I have already taken 25% tax free from one. I now plan to take 25% cash free from a final salary pension which is separate. Can I do this without being taxed. I think I understood the maximum tax free is £268k. The pension is only small and I’d like the tax free cash if possible.
My pension pot fell 30% and now only 10% less than what it was 2 years ago. Better off putting it in ISA over the years. Might as well take what I can now methinks.
I have a teachers pension which is dormant as I no longer teach. Is this fund still growing or are the benefits frozen. If so should I take my 25% tax free lump sum and invest it for a better return?
Every week I buy more of whatever is the lowest percentage of my portfolio and try to keep everything around 10%. Please what could be my safest buys with $400k to outperform the market in 2024?
I'd avoid the index funds, mutual funds, or specific stocks for the time being. The 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows sign of recovery.
This is why I entrusted a fiduciary with my investmnt decisions. Many underestimate advisors until emotions lead to losses. My advisor crafted a tailored strategy aligning with my long-term goals, guiding entry and exit points for the equities I focus on. This has grown my portfolio to over $850k. My personal best so far
That's really great. I've tried doing some research myself to hire a financial advisor, but it's really overwhelming. Could you recommend who you work with please?
more people will inevitably reach the £1m pot over the next few years, the tax free element in real terms will diminished so even at 3% inflation means it loses £8k tax free benefit in real terms each year
Bit of a question. If I put in for my public sector pension earlier than anticipated. Shoukd labour try to tax us will I pay tax on it if I submit it before the deadline, should it happen? Does that make sense? Do you have an email address?
YES - you should take the lump sums from your "parked" pensions and start claiming from them if you're 55. It is illegal to use the money from one pension to top another up, however, if you're still working then you can do this ie. you pay as much as you can into your company pension (you get 20% uplift from the government on any contribution) and start claiming your "parked" pensions to top up your salary.
If you have reached the max £268k tax free available, then jackpot, no more tax free advantage to be had, cash out take this cash now for sure , inflation will eat it away..
What if my pension is final salary and is effective static - I’ve taken income and no cash on one but have another I need to decide on. I’m 60 and reached normal retirement age for those plans.?
Take the 25% rather than the higher annual pension payment as by the time you draw level with the instant capital you would have got, you will be at pension age anyway (probably/hopefully)...
I have a pension with NEST - they don't offer a Draw Down facility, so I'm unsure whether or not I could draw my 25% tax free without changing to another pension provider, who does offer Draw Down.... (I did email an enquiry to NEST, but the answer left me none the wiser!)
Hi, I have to pay a shared equity loan and need some cash should I take the maximum tax free cash from my pension pot or take a loan from my current mortgage lender or my bank.? Please advise
A friend is taking his prison service pension,and also started taking his state pension.Now finds his prison service pension is being taxed at £400 per month. I am.in the process of taking my 25% tax free. That a five figure sum the government won't get gas on.
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
pls how can I reach this expert, I need someone to help me manage my portfolio
Sophia Maurine Lanting is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up on google, and I have sent her an email. I hope she gets back to me soon.
I was a stay at Home mom with no money in my IRA or any savings of my own, which was scary at 53 years of age. Three years ago I got a part time job and save everything I make. After 3 years, I am 56 yo and have put $9,000 in an IRA and $40,000 in my portfolio with CFA, Evelyn Infurna. Since the goal of getting a job was to invest for retirement and NOT up my lifestyle, I was able to scale this quickly to $150,000. If I can do this in a year, anyone can.
I know this lady you just mentioned. Evelyn Infurna Services is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. Evelyn Infurna has demonstrated expertise in investment strategies n has been involved in managing portfolios and providing guidance to clients.
I went from no money to lnvest with to busting my A** off on Uber eats for four months to raise about $20k to start trading with Evelyn Infurna. I am at $128k right now and LOVING that you have to bring this up here
As a newbie, what do I need to do? How can I invest, on which platform? If you know, please share. I'm new to this, please how can I contact her?
Use her name to quickly conduct an internet search.
SHE’S MOSTLY ON TELEGRAMS APPS WITH THE BELOW NAME.
higher taxes = higher inflation = government subsides to quell inflation, The rising interest rate can surely control inflation, but won't prevent erosion of the eroding purchasing power of the US dollar. I have learnt my lesson this time. The banks can't be making money off my money, while inflation eats into it. I have set aside 650k to invest in the stock market now, since that keeps up with inflation, but I don't know how to get started.
Yeah, things may be hard right now, but I've come to realize both bear and bull market, recessions and economic boom, all provide opportunities to make high gains, I used to call bluff on folks that bragged about making a fortune from such down-markets until I happened to do so myself
Keeping money in the bank is like paying banks and the Govemment. Here's how it works: The bank gives out your money as loan, and charge interest obviously higher than inflation rate, and then give you, the depositor, interest lower than inflation rate. That means net loss for you. That is why I prefer to invest, and on average, my advisor makes returns that always beats inflation!
To be honest, I've been wary of banks for a while, but I wasn't sure how to speak with an advisor first. Please let me know who your adviser is if it's okay; I need some recommendations.
Finding financial advisors like "Stacy Lynn Staples "who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing.
If you've achieved any financial security, savings, owning a house, a pension.... you'll find these are going to be a financial burden around your neck..... they'll tax you to oblivion..
In light of the global crisis, rising inflation, and economic instability caused by inadequate governance, stocks, ETFs, Mutual funds, and REITs, assets can serve as a viable path to achieving financial independence
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
I KNOW NOTHING ABOUT TRADING/ INVESTING AND I'M KEEN ON GETTING STARTED . WHAT ARE SOME STRATEGIES TO GET STARTED WITH ?
No worries, we all start somewhere! First, grab a comfy chair and some popcorn , and dive into some beginner-friendly finance videos. Start with basics like "investing for dummies" and "how to trade stocks 101." When you're ready for more, think about a financial advisor like "Constan"-she's like the Yoda of finance! May the gains be with you!
I just googled her now and I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
I'm beginning to think it's best to spend the lot and claim benefits and pension credits for the rest of my life!
I think it’s best to get out of the country
@@fanfeck2844 I think you're right!
depending on the size of your pot, you could end up paying more in tax than you will get from the benefit system
Get 25% every other year
That has actually become a trend.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
Safest approach i feel to tackle it is to diversify investments. By spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown. its important to seek the guidance of an expert
It's true that many people underestimate the importance of advisers until their own feelings burn them out. A few summers ago, following an ongoing divorce, I needed a significant push to keep my company afloat. I looked for licensed advisors and found someone with outstanding qualifications. She has contributed to my reserve increasing from $275k to $850k regardless of inflation.
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
Her name is “Rebecca Nassar Dunne’” can't divulge much. Most likely, the internet should have her basic info, you can research if you like
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I have two pensions. I would much rather have had a Roth 401k throughout my working lifetime. $500/month invested from 25 - 65 at 9% is $2.3mil. I hate my job but can't leave because of I won't get my state pension. What do you think about doing a 70/30 stocks bond ratio?
I would avoid the index funds, mutual funds, or specific stocks for the time being. 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows signs of recovery
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
Generally speaking, a good number of people discredit the effectiveness of financial advisor in planning for retirement, For over the past 5years, I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $1million in gains… might not be a lot but retirement doesn’t seem so farfetched anymore.
Mind if I ask you to recommend this particular coach you using their service? Seems you've figured it all out.
Her name is Annette Marie Holt can't divulge much. Most likely, the internet should have her basic info, you can research if you like
I'm so glad I kept track of my old pensions. I had one from my first job that I thought was worthless, but it ended up being worth over £60,000! It took a while to track down, though - the fund had moved to five different providers
That's incredible! I've been trying to get my finances in order, but I don't know where to start. How did you manage to track it down?
I work with Monica Mary Strigle, a financial planner, Her expertise in tracking down old pensions and navigating the financial market has been invaluable. I feel much more confident and in control of my finances thanks to her guide
I've been trying to get my head around my own finances, but it's overwhelming. How does Monica help with navigating the financial market?
Monica is brilliant. She takes the time to understand your goals and risk tolerance, then provides tailored advice on investments and pension consolidation. She's been instrumental in helping me make informed decisions and avoiding costly mistakes. She's got a deep understanding of the UK pension system and the financial market, so I trust her advice completely.
impressive,What other ways did she assist you?
I took mine the day Labour came into power, Love from sunny Tenerife :)
Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.
@HeltonsRasmussens I agree. From my own experience with an investment advisor, I've got $1 million in a diverse portfolio that's growing fast. It's not just about having money for stocks; you need to know your stuff, stay determined, and be resilient.
@BrentsHowells-r1w MARGARET MOLLI ALVEY is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
@@ConleysEvanses Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
63 year old bloke here. We have 500000 combined. House paid off. I intend to spend the lot!
Better hurry up , Labours appetite for others Peoples hard earned Money is never ending .
@@clivewalker5465 I dont live in the UK Clive. However we do have money invested there. I am in the process of moving it away from the thieving liberal sh.t heads. Take care!
@@hannible1002thinking of doing the same! In the meantime I’ll courier some of your cash for you for a free flight & hotel 👍🏾🤣
I love to hear this sort of thing. Good for you, enjoy and good luck!
@@tilly.....editssssss8056 Thank you. We do support a dogs home too. Take care!
From $9K to $35K that's the minimum range of profit return every week I thinks it's not a bad one for me, now I have enough to pay bills and take care of my family
Creating multiple income streams that doesn't depend on gov't should be on every individual list. Thanks to Stacey Macken, the lady that changed my financial life.
Honestly, I'm surprised that this mrs Stacey Macken is mentioned here, came across a testimony about her from one of the beneficiaries on the CNBC news, she seems to be doing extremely well .
I've seen different people talking about this Stacey Macken she must be very amazing for people to talk this good about her.
That woman has changed my life for good. I attended her investment class couple of weeks and she's the best when it comes for guidance
Stacey Macken is a retirement manager and investment/savings expert, in ranks with Cathie woods and Warren, has demonstrated expertise in investment strategies and has been involved in managing and providing financial guidance globally .
ive applied for drawdown to take the 25 pct tax free portion. You get a 30 day change of mind period which gives you a free option to change your mind depending on what is announced on the 30th oct
Generally, pension changes aren’t immediately and come into effect in the new tax year !
Money is not meant to control people, rather it is meant to be put to work producing more money for you. You cannot build wealth without putting money in its rightful place...
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
I'm surprised that you just mentioned and recommend Mr Brian Nelson. I met him at a conference in 2018 and we have been working together ever since.
Yes! I'm celebrating £32K stock portfolio today... Started this journey with £3K.... I've invested no time and also with the right terms, now I have time for my family and life ahead of me.
Just turned 48 years old and in a job on 50k a year basic.I have no mortage or any debt and paying 26% of my wages plus my annual bonus into my pension to make sure I dont pay 40% on my earnings because I can earn a few extra quid in overtime over a year quite easily.I intend to up my contribution to 30% in the next year or two as I plan on taking out my 25% over a few years to build up a nice little amount in a isa so I can retire when I am 60,62. I plan on having around 150-170k available to keep me going for 7 to 9 years before my state and pension pots start to pay out. I enjoy working however I refuse to work until I drop for anyone other than my kids.
Used mine to pay off my mortgage, saving me mortgage interest payments and giving me peace of mind
Even if you're no where near retirement age, make sure that you keep track of all your pensions. I had a "parked" pension that I thought was worthless because it only had 3.5 years of contributions, however over the years it was worth over £30k+. It took a while to track down as the fund had moved to 5 different providers!
Great video - I took my lump sum 6 years ago, didn't need it, still haven't spent it. I probably would not have done different but your clear explanation of the pro's and cons would have been very handy at the time I decided.
If I take any of it I plan to spend it on my home - install solar and battery, update 21 year old kitchen and shower room. Possibly update my heating system.
That's what I'm doing aswell
I wouldn’t be so quick to do environmental changes. Get this government to subsidise the changes.
I’m going to b 52 in January and is planning to take 25% tax free lump sum when I’m 55 to pay off my mortgage, when my fixed deal ends a few months later. If Labour messes up my future, I’ll emigrate. I’ve worked extremely hard for my private pension and gone without over the years to top it up.
As long as you understand your state pension will not rise every year if you live outside the uk.
@@frankieRandle8779 Not entirely accurate - Whether or not the state pension is indexed is based on the country that you move to.
@@2pb yes sorry you’re right
I've thought about this but where do you go ? And the cost of healthcare insurance abroad as you get older is a bit of a show stopper.
Have a look at this
www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension
This is exactly the position I am in. I retired 2 years ago and combined my 2 pensions and left it to hopefully grow which did until the last couple of weeks. Surely the government wouldn't dare remove the 25% overnight, there would be a lot of furious people if they did.
But what would these furious people do?
Starmer practically has a one-party state, and looks like he's keen to lock up anyone with thought crimes.
He's made it pretty clear he's coming after anyone with "savings".
My bet is they won't remove it but reduce it considerably.....say down to £100k and implement anti forestalling measures.
I elected to take mine earlier this year.
They would!
I bet people said that about the Winter Fuel allowance. But they took that.. yes people were angry but now they've already given up and it's done. The government knows any anger blows over and we just take it.
It would be unpopular and political suicide to go after pensions; but Labour are known for making these stupid fiscal decisions . Plan for the worst, hope for the best.
They have already said they will stop the tax free cash, but 24 hours later a treasury staffer said Starmer was getting mixed up. Also Rachel Thieves said it was unfair to get tax on the way in and out so they would be looking at removing it. They cannot take it once you have.
Take it out and buy gold, they can't find that .
Very useful explanation of this topic put in plain language. Have not taken my lump sum yet, as do not specifically need the funds. It would seem that the government would cause more complications for itself by scrapping the scheme. Maybe more likely to reduce the percentage, if they were to do anything. They are currently playing with fire at the moment with pensioners. Hopefully time will not cause people to forget.
Exactly, they wound not remove it altogether they'll just reduce the tax free % amount if anything
What gets me is pensions and their planning are over many decades and these numpties, Con and Labour keep changing the goal posts short term …… how are you supposed to plan 🤷🏻♂️
Exactly. I wish I'd emigrated after I graduated in the 1980's. Also in the UK we've been living in austerity since the Lehman Brothers induced financial crisis. As I approach retirement I've no idea if I should take a lump sum or leave it in my pension pot because the laws/regulations keep changing. Also how is it right that someone like me with almost zero financial knowledge is allowed to be in charge of their own pension pot in the first place?
Excellent thank you, confirms my thought process.
If only the Government of which ever type stopped fiddling with private pensions.
i will take my 25% and put 20k into my ISA holding the same USA tech stocks my SIPP had
I wouldn’t be surprised if they reduce the ISA allowance too.
Planning exactly the same with my wife's pension in next couple of months. Get the tax free part out of pension and straight into her ISA with the same investments.
Knowing our luck and this greedy government though, they'll start taxing ISA's 🙄.
@@fanfeck2844 That’s another option. A cap in the allowance would raise so much more,
Excellent video, thanks. Shows the real value of the often derided ‘middle man’ Financial Adviser.
Important to make financial decisions when the facts are known. Anyone trying to get you to do something other than this tends to be doing it for their benefit and not yours.
I took mine a while ago but it did pay off the mortgage and leave me 1k a month better off.
The possibilities are frightening when you have been planning your retirement for a long time,and they change the rules ,this could be devastating to pensions , you may have to either retire early or have to work at least another 4 years.
Nicely explained. Let’s see if labour are silly enough to crash the bond markets by Joe Public panicking and taking the 25% lump sum tax free. Knock on effect will be value of remaining pension pots dwindling as stock markets go down as a consequence of the panic ?
Carl thank you for a good dose of common sense.
Draw out your 25% tax free because they WILL remove that allowance!
I have always thought one should take a balanced approach to this although my IFA disagreed with me because of IHT. There are currently ISAa available for upto £20k a year, and any gains within it are tax free, but unlike a SIPP withdrawals are not taxed. So I have always felt that the 2 should be used together. So you can park £20k of your tax free cash in an ISA each year. There is also the Gilt option, a bit more complicated but there is no CGT on the gains portion of a gilt although the income is taxed. So theoretically you could park some cash in say the TN25 gilt where most of the yield to maturity will be gain as the coup[on is only 0.25%.
Of course we have no idea what the government will do. The super rich are far brighter than our chancellor or her treasury civil servants and employer far brighter advisors so Reeves won't be getting much more tax out of them. A large swathe of the population doesn't pay enough to pay for the House of Common' toilet paper, so the chancellor is left with taxing people who have tried to be prudent and saved.
I have been using Drawdown to withdraw TFC since age 66, using it to live on. I have had 3 years "tax free" income and currently due to the extra growth I've had in the unccrystalised sums remaining. There is enough left to last me another 2 years so I have decided to withdraw it to protect it from Reeves and I will put half in a cash ISA with the remainder placed in a S&S ISA.
The tax free lump sum can be invested in tax free ISAs and/or P Bonds to get returns. Also leave a small amount of the tax free allowance in pension pot to get further tax free rewards as pension pot grows over time.
I just took mine in early July. I suppose it is down to whether you need the tax free cash to be part of a wider more regular retirement income, also has your planning for future income assumed some growth on that TFC amount. Personally I paid off the mortgage, made myself debt free, paid off daughters uni loans and put some into ISAs, but fortunately was not relying on that chunk to generate a ‘living’ income. Paying off the mortgage, and being debt free was my main aim and feels so good to be free and clear and knowing my daughter is not burdened. Your advisors / investment companies will of course tell you to stay invested (as they normally see a % of funds invested as a fee) but I have a very jaundice view already of 2 Tier and Ms Thieves and previous form would indicate they are coming after whatever people have worked hard to save up.
My SIPP has a total charge of .25% capped at £200 a year. Hardly making the fund manager rich. The stock market on the other hand is doing very nicely.
Taken tax free lump sum today. Will re-invest in our ISA's and my wife's SIPP where she will get the 40% tax relief. Not great for the IHT planning. I also suspect there could be a lifetime gifting allowance / cap introduced if SIPPs are brought into estates for death duty liabilities - as people will see gifting as more viable way to pass on wealth.
All will become clearer after October 31st - we hope 🤞
I tend to agree. The use of stocks and sharesISA’s effectively keeps the tax free element growing at a similar rate to the pension investments. Until of course this gormless government caps ISA wealth in some form. Luckily, it is a much smaller target compared to the pension tax relief.
I’ve just taken my personal pension out, the full amount, I am 62, I think it would of been means tested in future and I wouldent get my old age pension in full because I tried to look after myself, so I’m going to Thailand until it’s gone, I’m making shure Starmer dosent get a penny of it, I’m going to blow the lot on wine women and song, good luck with what ever you choose to do !
Good lucky buddy...fill your boots :)
You’re really not that smart are you? Personal pensions have nothing to do with how much old age pension you’ll get. Your old age pension is determined by your National Insurance contributions - if you’ve paid the full amount of years then you’ll get your old age pension.
Thanks for sharing , straight talking great advice from someone who knows the pensions world, most of us don’t. Appreciate the video and will check in on some more
Option to take tax free lump sum and reinvest in a stocks & shares ISA. Idea to rebalance SIPP and ISA accounts/portfolios. 🤔
Never save , spend what you have , never purchase a private Pension , sign on , and do work on the side , the Government will throw benefits at you .
I have played the risk reward game. Not much I can do after new regulations come in. Taken some tax free cash - maybe some of this tax free cash will grow tax free in a stocks and share ISA in the same fund it was in in my pension, maybe some 0% gilts , maybe a bank account. Whatever when the cards are dealt I am getting a good price for my bet. Gains/losses in my pensions vs gains/losses elsewhere. If tax free tax is eliminted or reduced to say 100K then I lose big , if I pay a bit of extra tax in the short term it's a small marginal loss.
My biggest worry is that a Labour think tank are thinking of means testing the state pension. My advisor worked out that I could retire early and in 10 years time I would get an uplift from the state pension. If it's means tested then I fear that I cannot retire early and will have to continue working.
this is the one that no one is talking about - but you know its on the plan - means test = take it away
I'll get screwed if they do implement a block on taking it, can't take mine until November and have been waiting do do so for a couple of years, will be so frustrating if they implemented it a month before I could take it
If you are 3 months away from 55 bday you can apply . That’s what I have done
@@flustered1939 thanks for that information I didnt know that and am actually 3 months away as of today so I’ll get on it 👍
@@flustered1939 presumably this means you can apply so that all the paperwork is done and its ready to be paid on your birthday ?
@@craigsketo this is my understanding
@@flustered1939I’m 55 next April - ask the obvious but am I buggered?
I want my 45 years of ni contributions back and they could keep the pittance they pay pension
I was hoping to live off my savings for a while but withdraw every year £16 K. £4K tax free and £12K taxable …. But it’s not because it’s my personal allowance
Correct 👍
Great video Carl. Showing all the nuances surrounding this issue
Reeves won't fiddle with the tax free cash. What she will do is make pensions eligible for IHT, for sure, and perhaps introduce a common tax relief of 30%, or 25%. Even that is unlikely though, in my view.
Good points
Common tax relief is complex for salary sacrifice which hasn’t previously even had NIC EE’s or ERs applied due to complexity. My guess will be stamp duty land tax being removed from purchase of property and applied at a lower rate as an annual charge for owning property
@@iMetal87 We already have an annual charge, called Council Tax. There is no need for another one, and it would be massively unpopular.
@@tancreddehauteville764 they promised not to alter council tax bands. They didn’t promise not to introduce a new tax. Large earners can relocate to Dubai or older large earners can slow down. People in council tax band H can’t move their property abroad. Taxing SIPPs and ISAs could reduce investment. The large properties of Mayfair and rural country piles might be just what the looters have in their sights. Stating a hunch is not to be confused with an endorsement.
@@iMetal87 Those lucky enough to live in mansions have little sympathy from me. They call sell up and move to a normal property or just leave the country. Up to them.
This is really clear, great video. Are you covering anything on the advantages of drawdown versus a annuity at any time?
If your already at the Lump Sum Allowance then it is very very unlikely that any government is going to increase this figure in the foreseeable future. You might as well take that now, put it into whatever investment vehicle it was in before and just be prepared to pay CTG on the gains. You also have the ability to decant it to ISA’s each year and remember if your ‘married’ you can put it in your partners ISA as well and also put a little (£2880) back into both your pensions (that amount should not trigger the recycling rules) and get 20% tax credit back from HMRC.
agree, ive just done excatly that.I am old enough to remember that every labour giverment eventualy runs out of money and cant keep thier hands off Pensions becayse the sums are so large and few understand them. How many people know that the average train dirvers pension just increased by £170k at retirement due to the above inflation rise labour just gave them ?
I am 55 but not taken any of my pension yet.I may withdraw tax fee cash and put in my ISA with the same ETF
Be quick! The word is Labour are looking at taxing it. I took mine in March at 55 and best thing I did. It's making 4.5% in the bank and Labour have missed my boat!
@@enigma7791I assume you need that money in the near future? Makes sense to have it in cash if so - low volatility more important than growth.
If not, you’re losing a lot of potential growth (especially if interest is taxed) by not having it invested for the long term - a globally diversified fund would be averaging 10% or so a year.
I’ve taken the maximum tax free cash each year that I can put in stocks & shares ISAs. No tax and it continues growing at the same rate it did in my pension as it’s invested the same.
Would seriously consider looking at something similar if you want to beat inflation by a decent amount - inflation has only just come down from 7-9% - even the very best interest rates meant you were still losing money in real terms recently.
@@enigma7791Not advice to remove but taking your 25% tax free entitlement would also have the effect of reducing your annual pension charges by (Typically 1+% on remaining pension pot capital) by 25%.
With one caveat that the pension funds may (or may not) outperform your cash isa.
No it wouldn't! The charges on the remaining pot will stay the same as they currently are on that part of the pot. Maths.
With Liebour circling i’d take as much as you can asap 🤬
Hold on! He highlights the con of taking out your money but then losing out of 10 years of growth if things don't change. The assumption is that your money will grow enormously. Well I calculated my Standard Life annual growth over 18 years at my true rate of return at 0.45%. It worked out at about £26 per £50,000 after fees.. ( Verified with Standard Life in 2013).The majority of ACTUAL monetary return was taken away for their 1.5% fee of the pension pot. The "growth" was down in the main to my annual contributions and a rising stock price at that moment in time. ie. IF THE STOCK MARKET GOES DOWN 10% SAY THEN YOUR POT GOES DOWN 10%. ie The value in your pension is dependent almost entirely on the value of the stock market stocks. There is a big stock market crash and reset just around the corner which will decimate the private pensions of everybody, though probably not government employees who will be ring fenced as usual. And what is annual inflation doing to your pot? Don't believe Govt. figures on inflation. We all know that it is nearer 8% or more and not going to go down any time soon. I took out my whole pension pot and bought some rental property gaining a risk free 4% profit income while making my capital investment inflation proofed as well. Your fiat currency in the bank or pension is not inflation proof in the slightest. GET IT OUT NOW!.
Standard Life & other providers use age profiling system now
So the closer you are to your chosen pension age funds are moved across annually to low risk "pots" such as fixed interest to reduce volitility.
Also pension returns vary enormously depending on the funds invested into.
That low net return & 1.5% annual charge is uncompetative now.
Why are you paying 1.5%? My SL fees are only 0.8%.
What if someone is over 74 and approaching 75 with an uncrystallised DC pension. Surely it's best to take the full 25% tax free as after 75 you can still take the 25% but its taxed. Or is that wrong?
Are you not cnfusing this with the fact that pension death benefits are taxable after age 75 (ie if you die before 75 there is no IHT). There used to be a benefit crystallisation event (BCE) test at 75 when the LTA existed. Maybe the LTA will come back. Who knows.
@@radiantinred Thanks. I'm aware of the tax implications for beneficiaries of dying prior to or post 75 but my recent understanding is that your 25% lump sum, if not taken before, is taxable after 75. To the best of my knowledge there is still a BCE test at 75.
If you have already exceeded the max amount in your sipp and thus tax free lump sum limit is less than 25% does it not make sense to take out the tax free lump sum so as to reduce potentially tax rate on future taxable withdrawls?
I retired 3 years ago, I didn’t take any lump sum , half my monthly income is tax free the other is my tax free allowance from my pension, if they abolished the tax free millions would pay tax on their pension, labour won’t get another term if they do that.
Labour won't get another term and they no it , that's why they will do as much damage as possible
I think Labour will up the % both employers and employees will need to pay in, IHT protection will be removed. , and flat 30% tax relief on contributions , and possibly go back to old fashioned annuity purchase for part of the pot.?
They won’t reintroduce compulsory annuity purchase, but they might do your other suggestions.
My instinct is that most people should probably take the tax-free cash before Reeves can axe it, in the next tax-year. And the money should then be invested in a more flexible ISA.
Bonds and gilts? Attractive right now, with stockmarkets looking toppy and interest-rates edging down.
Excellent video, which I'm forwarding to a family member.
That is OK if you can only take £20k tax free cash and have not already used this years £20k ISA allowance.
nice video. I've subscribed for more.
Still puzzled on one thing though. I'm still in work, for another few years, but will soon have an older (generous) pension starting. I'd like to make a 25% drawdown on the lump sum from this older pension for renovations. But I'd like to make AVCs into my current employer pension. But I'm confused about whether taking a drawdown from one pot, will affect my ability to get tax relief on my AVCs into my current pension. It's hard to google as it's a slightly odd situation
What was the rationale behind govts allowing 25% tax free in the first place? Was it compensation for some earlier tax raid on pension investments?
It has always been there - I guess as an incentive.
its a percentage because the rich get richer... the bigger the pot, the bigger the percentage
@@jimmoriarty9714well it’s capped quite low
It injected money into the economy.
Rolling any unused part of a tax free lump sum into an ISA is tax efficient too as you will not pay tax on any income from that ISA nor any capital gains as well as having the option to spend that amount later as required.
That’s Interesting! Thank You so much!
Thank you so much, Carl! I recently received a letter from my pension provider saying that they had recently put the retirement age on my pension up to up 70 years of age. This was due to a technical error. They apologised and moved it back to the original date. I’m nowhere near that age by the way but it did set off alarm bells. Do they know something the public does not?
I can confidently say - YES. Take the money. Do some things. Only 50% of men still have their health at 63. Why wait? There's no point getting to 80+ with a stack of cash left, regretting being "careful"...
Take it now take it now don’t wait because it’ll be too late
Hi Carl,
Another great video clear, concise information as always thank you
Thanks so much for the feedback!
Very well explained
Plan on retiring in a couple of years so I am very tempted to take the 25% now just in case, and use to supplement a possible reduced working hours for a at least a year..
take it now before its gone - this govt handed it all over to united nations they would rather human traffic put ppl in hotels than look after the people who worked all there lives
I'm with you...58..planning on hitting the ripcord 2.5 years from now..
Very much considering taking my 25%
50% of which would pay off my mortgage..50% to help my son and a little fun...
The prospect of waking up not able to access the portion i had planned makes me shudder ..
Update..
Pulled my 25% tax free...hurrah...
Mortgage free..at last..with a few quid to help my son .
I'll take my chances...
@@jamieclay6026 I have a meeting with my FA on monday. It will be interesting to see what he suggests..
Thank you. Very helpful.
Congratulations on an excellent video. I subscribe to your school of thought vis a vis withdrawing the 25% TFLS. I say this, mindful of the fact that I have benefited significantly from 40% tax relief over many years and really if I have to pay tax then thats OK.
I took my full 25% tax free lump sum in March despite my financial adviser saying he was against me doing so. I used £20k of it to top up my stocks and shares ISA giving me 5% tax free income. I invested the rest in a savings account paying 4.5% interest which is entirely free of income tax because of the combination of the £1k Personal Savings Allowance and the £5k starting savings rate. I will transfer £20k each year into the ISA, slowly increasing my tax free income from the ISA. The result is that I also take a much smaller monthly pension income which means I don't pay income tax at all on my monthly pension withdrawals. Also I pay less in charges on the remaining pension fund. I worked out that taking no lump sum but taking a higher monthly pension with a 25% of each pension withdrawal tax free would result in much higher charges which would not make the pension last any longer and wouldn't give me a higher net income than I currently receive. Plus I have the remaining lump sum to spend as I wish and don't have any fear of what may happen to pensions in the future.
What happens when interest rates fall again? The ISA and savings may suffer, right? Then again, I suppose it depends on the amount in the bank.
What do you think of maxing out your isa and then maxing out premium bonds to avoid paying tax on savings, then when the new tax year starts cash in the bonds and add to your isa?
Does taking the TFLS mean you trigger the MPAA, so can only put away a max of 10K/annum? If so, this could seriously impact higher rate tax payers trying to use their pension to reduce their PAYE tax liability.
Very helpfull & logical advice , well presented . Thank you
Thank you for this information
Last Labour govern robbed pension pots - so short sighted given our aging population and need for the elderly to be able to afford things the state will no longer provide, through choice or necessity
I have about £24,000 works pension and £12.000 in my sipp.. the tax allownce is £12,500 a year, i can live off £12,000 a year meaning I can just draw out £1000 a month without even worring about tax allownce and spend it before your state pension comes into play at 67.. oh and i have about £20.000 in an isa ... no morgage all done..so im happy in my retirment ..Basic needs is all i need lol
I was always planning to take mine while it was still there,..... Looks like im going to run out of time by a year or two 😡......
Based on what?
Once you start taking the taxable remainder for example from drawdown then you can’t take more tax free cash. However, you can take 25%, leave the rest, add up to £60k a year and take another tax free lump sum from that. Or, take the lump sum and add it back into your pension.
True but you need to be careful of the tax free cash recycling rules.
@@carlrobertsifa i thought that once you had started to draw your pension, the maximum you could put back in was 10K not 60K??
Very useful. Subbed.
Gret video ..Thanks. Question please: I have an old pension of £300,000. If i take the 25% , what happens in lets say 5 years if i transfer the remaining 75% into my "current" salary sacrifice pension ?
Would this then effectively "reset" the 75 % and thus i could then take a 25% of a greater amount tax free = (75% legacy pension + Current pension * 25% tax free = ) ??
No. You cannot combine the crystallised funds where you have taken the TFcS with other uncrystalised funds where you have not. The administrator would need to hold the two amounts separately.
thanks
Sunak kept warning us about Labour 😂😂
Thaks for a very clear and easy to understand video. If you were to take the tax free cash is there any form of trust it could be put into get round teh enheritance tax?
I am looking at taking a tax free lump sum but am an Australian resident now. Will I have to pay tax on it in Australia? If so, at what rate will I be taxed?
I have 3 separate employee pensions, I have already taken 25% tax free from one. I now plan to take 25% cash free from a final salary pension which is separate. Can I do this without being taxed. I think I understood the maximum tax free is £268k. The pension is only small and I’d like the tax free cash if possible.
My pension pot fell 30% and now only 10% less than what it was 2 years ago. Better off putting it in ISA over the years. Might as well take what I can now methinks.
I have a teachers pension which is dormant as I no longer teach. Is this fund still growing or are the benefits frozen. If so should I take my 25% tax free lump sum and invest it for a better return?
YES YES YES
Every week I buy more of whatever is the lowest percentage of my portfolio and try to keep everything around 10%. Please what could be my safest buys with $400k to outperform the market in 2024?
I'd avoid the index funds, mutual funds, or specific stocks for the time being. The 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows sign of recovery.
This is why I entrusted a fiduciary with my investmnt decisions. Many underestimate advisors until emotions lead to losses. My advisor crafted a tailored strategy aligning with my long-term goals, guiding entry and exit points for the equities I focus on. This has grown my portfolio to over $850k. My personal best so far
That's really great. I've tried doing some research myself to hire a financial advisor, but it's really overwhelming. Could you recommend who you work with please?
Stacy Lynn Staples is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
more people will inevitably reach the £1m pot over the next few years, the tax free element in real terms will diminished so even at 3% inflation means it loses £8k tax free benefit in real terms each year
Really interesting, can I still contribute if I take the 25% lump sum now? Can my company still contribute to my directors pension? Thanks
Bit of a question. If I put in for my public sector pension earlier than anticipated. Shoukd labour try to tax us will I pay tax on it if I submit it before the deadline, should it happen? Does that make sense? Do you have an email address?
YES - you should take the lump sums from your "parked" pensions and start claiming from them if you're 55. It is illegal to use the money from one pension to top another up, however, if you're still working then you can do this ie. you pay as much as you can into your company pension (you get 20% uplift from the government on any contribution) and start claiming your "parked" pensions to top up your salary.
Pension recycling is not illegal but maybe the lump sum is. Been doing it for 10 years with my IFA, another 25% pot available to take tax free. 40
If you have reached the max £268k tax free available, then jackpot, no more tax free advantage to be had, cash out take this cash now for sure , inflation will eat it away..
What if my pension is final salary and is effective static - I’ve taken income and no cash on one but have another I need to decide on. I’m 60 and reached normal retirement age for those plans.?
Take the 25% rather than the higher annual pension payment as by the time you draw level with the instant capital you would have got, you will be at pension age anyway (probably/hopefully)...
I have a pension with NEST - they don't offer a Draw Down facility, so I'm unsure whether or not I could draw my 25% tax free without changing to another pension provider, who does offer Draw Down.... (I did email an enquiry to NEST, but the answer left me none the wiser!)
You could open a sipp with the drawdown option and just transfer the lot.....
Definitely, I did exactly 12 years ago
Hi, I have to pay a shared equity loan and need some cash should I take the maximum tax free cash from my pension pot or take a loan from my current mortgage lender or my bank.?
Please advise
A friend is taking his prison service pension,and also started taking his state pension.Now finds his prison service pension is being taxed at £400 per month. I am.in the process of taking my 25% tax free. That a five figure sum the government won't get gas on.