Tirytory

So as most of you know, we moved here in our early 40's bringing our two NHS pensions to a full stop. My husband is now self employed and incorporated which means that pension planning is now down to us. I really enjoy where I live now and would like to gain citizenship for the children's sake if nothing else, but I'm not sure I see it as a forever home. Apart from anything else, it's too dam cold in winter to want to spend all winter here...

I had always seen myself in a little French cottage and travelling, and now with Brexit I'm not sure where that dream lies... Maybe we should be snowbirds but somehow I can't see it..

I have a house in the UK I continue to rent out, and some money we're pondering what to do with. Ideally investing in another property, but feel hesitant about moving money over to Canada even though it will just devalue sitting there- we could have moved it over when it hit two dollars to the £ but hesitated and now it's worth quite a lot less Also is it worth paying in to the UK NI state pension? How many of you do?

I suppose my question is how do you plan for your retirement if you're not sure where you will end up? Do you think you'll stay in your part of Canada in retirement too?

not2old

many factors in planning for retirement - lifestyle, location, pot of gold & regular retirement income (how much is enough)

As of today at age 69, we get along just fine on less than 40% of our income, kid you not - although we live a very modest lifestyle.

OP, on the basis its work till you decide to quit the daily grinds comes the cost of providing for the children till you as parents decide to retire, unless of course the children are factored into the retirement plan

- Health considerations, you never know what the future holds

OP, taking stock : what is it that you have now in assets?

- Property in the UK valued at x, with a regular income of y.

- Will you keep the same property forever right up to retirement, if so same property is your retirement nest egg, will you cash it in, or return to the UK?

- Assets in Canada, their value, will they appreciate or depreciate over time

- Cash assets today, are they earning income above inflation - if not, then they should be.

- Cash that you have to buy another property - what kind, is it just for you or will it also produce income? Where, how much will it cost, will it have a mortgage, what about its running costs & should you purchase that property ' what will the appreciation be 10, 20 years from now' to give you a capital gain on the investment.

- Earning power from now till retirement - factor that in. Will you be saving at least 10% of the net income (taking into account the cost of the kids from now till then)?

- Net income surplus cash year over year till retirement date, invested, return on that investment - at retirement (factor in inflation rates) where will you live & how much/year will you need?

- Personal/private/works pension plans etc: Private pensions, Company/Organization pensions, Canadian RRSP's, TFSA, just need to make sure the capital is intact & that at least some return on it

- Investing - speak to a financial advisor.

- Free money so to speak: CPP, OAS, UK state pension, NHS pensions. from many that have gone this route voluntary UK NIC have the best return on investment. As of 2016 fully paid in NI of 35 years gives you approx £150/wk. Cost of class 2 NIC's are cheap in the £150/ year approx

- Term life insurance in Canada for a 40 year old is not expensive & is good to have up until retirement date or when the kids leave home whichever comes first IMO

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JonboyE

The best financial advice I can give is to listen to my advice and then do the opposite.

That said, some random thoughts ...

cough *** BC *** cough.

It is hard to outguess currency exchange rates so until now I would have said the best advice is to get your money into the currency in which you expect to spend it. If you are not sure then maybe the best thing is to leave it where it is.

Depending on how they negotiate Brexit the UK might have a few years of turbulence and settle into a new norm or it might be into a sustained period of decline. You still have quite a few years left until you retire so you may benefit from a post-Brexit recovery. I don't think I will be around to see one.

I don't at the moment. There is a clause in the UK/Canada Social Security agreement that states that any year you are covered by NI does not count as a year for Old Age Security. As far as I can tell this is not enforced at the moment but who knows in the future? I don't want to give up a free pension in Canada, that does increase with inflation, and pay for one that doesn't. Especially one in a declining currency. That said, I will quite probably buy back an extra 6 years just before I qualify for the pension. That does seem good value.

You have to make the best decisions you can at the time and hope they work out for the best. If you are paying tax at higher rates here it makes sense to maximize your RRSP room. If you retire in another country you will have to pay a 25% withholding tax on withdrawal, but for higher earners this will be less than the tax they saved on the contributions. Plus, of course, tax free growth in the meantime. I would also make as much use of TFSAs as possible.

I also like real estate for long-term savings - let somebody else pay for your retirement fund. It is not without risk in a market like SW BC.

I fully expect to turn my toes up here. I can't imagine a better place to live (or die).

not2old

Agree, although having been in Canada forever, seen the fluctuations, markets up & downturns - I have said that the currency of choice is always where I spend 99% of my time, for us its in Canadian dollars. Our investments are in Canadian dollars, any income from outside of Canada that comes here is converted to Canadian dollars.

At some point, goodness knows when, should the $US & Swiss Franc be at par with the Canadian dollar, we shall take a small chunk & convert to those currencies equally

I am no expert on FX, can't crystal ball Brexit, where the GBP will go or be in relation to other currencies, where Gold, Silver or Oil will be 12 months from now.

Any small amount of 'mad play money' (I mean small) investing in commodities or equities, we will hedge for any downside for the reason that we do not ever want to lose any capital.

These days the majority of our 'nest egg' aside from the property that we live in is all in liquid cash, for the reason money over & above what we need is of zero importance because we are no longer 'saving for a rainy day'

The children can go work it out for themselves, do their own retirement planning without depending on any inheritance from us

scilly

My advice would be to go talk to a financial advisor.

We didn't have one until just before OH retired, when we needed advice about his pension from the university ........ one that he had paid into for around 45 years and which had been very well administered by faculty themselves. He/we had to make a choice at his retirement .......... move it over to the retired faculty plan or take it all out and hand to a financial advisor. The advice from all our friends was to do the latter, as the retired faculty plan was not as well handled.

We talked to the advisor most recommended by colleagues, and have been really satisfied with how our money has been handled for the last 12 or so years ........ even allowing for the amount that we lost in 2008.

It is entirely possible that we could have made better use of the savings we were making in addition to that pension (eg, insurance policies, RRSPs, etc) if we had had the advisor at a much earlier age.

As it is, we have no worries ......... we cashed in everyhthing we had paid in "stamps" when we left the UK (on the advice of an accountant), so we don't have any UK pensions. We have CPP and OAS each, and OH's pension and can afford to do whatever we want ...... including paying 5000 or more per month in "care" if needed.

Do not,please, talk only to the advisor at your bank, go to a reputable company ......... we use Assante.

It is definitely not too early to start planning and working out what to do and how to save for what you want to achieve.

Having put only one child through university ........... it will cost you!! Bank of Mum and Dad seems to be always open. You need to plan for that as well as retirement and what you want to do in retirement, plus as not2old said ............ you never know what health problems you may have, you need to think about how much per month it will cost if one or both of you has to go into care prematurely.

BristolUK

I'm looking forward to an increase in my income when I get to 65. (if I make it )
I don't mind the cold, but I would like to see less snow and I can lose a third to half of it by moving to somewhere between Kingston and Hamilton.

I'm not planning a move but I can foresee circumstances where downsizing becomes a possibility and I figure if I have to move, then maybe Ontario. Or Kelowna.

scilly

We ended up with more income per month after OH retired ............ don't have to pay CPP, OAS, various other deductions, parking at the university, etc. In fact, we took a larger draw than we needed from the investments to allow us to do what we wanted ............ travel .............. while we were young and fit enough to do it.

We only cut back last Fall because we now restrict our travel to Canada.

scilly

Sorry, a mistake ... I hit the wrong key and didn't notice.

This should be 35 years.

Shard

If you don't know where you'll end up, it seems sensible to keep options open, which in practice means maintaing assets in two places. The only proviso to that is tax and regulatory implications. These are known, so can be into account. Investment performance (funds, money, property) is a tough enough guess in one market, so trying to optimise for two markets is not realistic (and that's not even taking FX into consideration). Once you get to a point where you know where you will retire you can decide on consolidating assets.

The UK state pension is decling, but paying the annual Class 2 seems a no brainer given recent annuity rates, particularly if you can easily afford it. Brexit brings huge uncertainty in the short to medium term (next few years) and this again may be reason to wait and see.

dave_j

For what it's worth.
My wife and I were never high earners, she a clerk and me an engineer, but what we did do was realise before it was too late that pension schemes could be bad news. I never liked the idea of giving other people my money and then if I lived long enough to retire having to rely on their good nature to give me some of it back. The realisation that pension providers always made a healthy profit was enough evidence for me that they weren't playing fair.
We chose to miss out on government allowances but instead saved in accounts, trusts and ISAs etc that meant we always had access to our savings, and saving became much easier when we had paid off our mortgage early.
What this has meant is that in our later life is that we have enough money to do whatever we want with and our state and employment pensions now meet our needs quite easily. Saving enabled me to semi-retire (working 2 days a week) at the age of 55 and fully retire at about 60, something I always planned for and something I would recommend and it also enabled us to move here, something not planned for but well within our resources.
My experience with financial advisors has not been good. The only advisor we ever used lost us money and I can do that quite easliy for myself, but we may have chosen badly.
It's a truism that money makes money, although these days it makes less than it used to.
I wouldn't say we were rich but we have enough. If there is one dollar left in the bank when the last of us goes, then it doesn't really matter how much money you have because you had sufficient. Money only assumes importance when you don't have enough of it. My daughter will inherit the house I own and that will ensure her family security, a benefit that I never had.
As an aside, when I retired at 55, a number of my colleagues expressed the wish that they could do the same. As I explained to them, it was a lifestyle choice I had made. If you want a new car every year, frequent holidays in the Bahamas and expensive everything then you'll need a never ending flow of cash to support it.

not2old

dave_j @post # 10

Good info & a very good position to be in for those fortunate enough to have [from the many selections] of savings, investments, UK state pension, CPP, OAS in Canada. Others may have income from extra savings, private or occupational pensions, down to an offshore property, cottage, or property rented out in the UK, in Canada or wherever.

For this thread & the many Brit expats reading it that are looking ahead or already in retirement, most [I believe] are not fortunate to have an occupational pension (company, works etc) - to those lucky folks that have ... well done

Its my [unqualified] belief that most expats retired in Canada have just the basics in income in retirement & again, depending on how long they have lived here, time spent in the UK before emigrating - any UK Occupational and/or state pension.

Most I believe may just have CPP, OAS, GIS top-up's, maybe some UK state pension (if they contributed to NIC's) plus, if they are fortunate to have some savings, maybe also a few bucks in an RRSP's or TFSA & live rent/mortgage free

Each has different circumstances, how they lived their lives, the occupations & wages they earned, how fortunate they were in their financial planning to retirement & of course along the way up to & after retirement health related issues that will affect everything.



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dave_j

Yes I understand.
One point I was trying to emphasize was that you have to set realistic goals for your retirement based on what you think you can achieve, obviously the earlier you start to plan the better.
We are of a post war working class sgeneration that saw the thrift advantages of make-do-and-mend and this has influenced how we have lived ever since, I'm afraid it's difficult the break out from the mould.
The result is a lifestyle that doesn't need a great deal of income to be comfortable and of course over the years you acquire the skills to support this together with a degree of self reliance.
Out of this arises the view that my money is better off in my grubby hands than someone elses and since I live by the mantra that 'you can't trust anyone to anything right', I naturally extend this to financial advisors who live by extracting a premium from those they try to represent.

So before you give your nestegg to someone else to manage it for you, have a long think about whether you couldn't do the job as well, if not better, yourself.

Our approach has allowed us to accomodate our daughter's move to Canada and our unplanned subsequent move to join her after our retirement. The flexibility of having a liquid fund we could draw on has made this possible. Had we invested all in pension plans we might have had a substantially increased pension but at the expense of liquidity that could have limited the help we could have offered her.

Of course one disadvantage of our approach has been the variability in the exchange rates. We have drip fed our funds across the pond as they have become available in an attempt to iron out some of these uncertainties, but we haven't always been lucky and if this is the object of the OP posting then, like us, it'll be pot luck.

Snowy560

If I'd moved to Canada when I was younger, Brexit hadn't happened and we hadn't sold the UK house (a very difficult moment for me), the chances of moving back would be higher.

Retirement planning for me involved buying a house here (after selling the UK house) with a suite downstairs that we could rent out.

As Jonboy says, BC has better weather (less cold winters anyway).

S

dave_j

I have this night viewed this as my daughter yesterday introduced us to John Oliver.
I strongly, no very strongly, suggest that those thinking about pension planning invests a few minutes on the following..
It'll be well worth it.

Shard

Can't see that John Oliver video as it's not licenced for UK, but in any case, I can't really stand that guy. He seems to have hit the big time in the US out of nowhere. Had never heard of him in Britain.

Not sure I understand your investment strategy DaveJ. You've been frugal for many years, fine, butover the decades, have you maximised your investment growth by staying so liquid?