linakemp

Hi All

I am looking for some advice about pensions. I am here on a H1B visa half way through a 2 year contract, although there has already been talk of extending my contract and visa for another 3 years. Having spent a long time at university I havent really contributed to any pension scheme back in the UK. I would like to start up a pension, but I don't know whether I'll be in the US or the UK for the long term. Does anyone know any companies which would cater for me and not care what country I am in?

Thanks

Bob

Looking for a private pension or a government one?

Can't help for the former, not much for the latter either, but to make voluntary contributions, you've had to made three years worth before leaving the country, which is good value anyway.

Your issue with a private pension scheme is tax, is the tax taken before it's dump in the fund or not and when it's taken out etc...

There's been a few threads to mull over, though not sure how helpful they are to your situation.

linakemp

I am looking for a private one really, I am pretty clueless on this issue! I just thought that now I have started earning properly that it would be a good idea to start contributing to a pension scheme, the main problem is is that I have no idea where I am going to end up long term and don't want to wait until I move back to the UK before I start one so really one that is transferable.

Ray

Would be worth contributing to the UK Gov scheme if you can ..

Info here
http://www.thepensionservice.gov.uk/

and pretty good if you contact them ...

nun

Well you should pay voluntary NI contributions. I pay Class II and it was only 114 pounds for the whole of 2008 and 30 years of contributions will get me full state pension, only 10 more years to go! I assume you are paying FICA so after 10 years you will qualify for a US pension too. FYI you can use US FICA to top up your NI payments and vis versa because the US and UK have a reciprocal social security agreement.

Are you resident in the US for tax purposes? If so contributing to a UK pension might get complicated. Does your US employer offer a 401k? That would be the best option for you, but you'd have to leave it in the US until you are 59.5 to avoid early withdrawal penalties. You might also be able to contribute to a ROTH IRA or a regular IRA. So lots of options in the US.

Labhrais

When considering a 401k, you'll also want to ask questions about when your company will consider you "fully vested" in it with regard to contributions they make (if any) on your behalf.

What you might do is start by calling a few different life insurance companies and inquire about their retirement products available and what strategy they might recommend for your particular situation. There are a myriad of financial instruments available to you for retirement planning, so take notes. Then review what you've learned and start comparing interest rates offered vs. their independent financial strength ratings (Standard & Poor's, A.M Best, etc.). The higher the financial strength rating, the safer your money is but usually the safety is offset by lower interest rates. Great companies tend to brag about their great rating. Once you've decided on a retirement product that fits your needs, you can always get it from another vendor, not just a life insurance company. IMHO, that's a good place for you to start.

Although the advice you receive from the various companies will be "free" as opposed to paying a financial planner on your own - don't forget that they are in business to make money so don't get seduced on the first call by a clever pitch.

Good luck!

nun

Are you suggesting an annuity or after tax annuity? If so I wouldn't recommend this option as the fees are high. The best option is the company 401k. Its tax deferred and you vest immediately in your contributions and it's generally a year for the company contributions, but definitely check on that. Also a ROTH or IRA with a company like Vanguard is the way to go as the fees are negligible. You can learn lots at these sites

www.early-retirement.org
www.bogleheads.org
www.vanguard.com

Also remember you can also just save money after tax for your retirement. I'd recommend automatically investing money from each paycheck into some mutual funds, bond funds or a MM depending on your investment preference. Talk to Vanguard and www.fidelity.com. These are both good mutual fund companies with low fees and plenty of options.

linakemp

Thanks for all the replies, it gives me a really good starting point. I will look into the links that you have suggested nun.

nun

Before you do anything talk to your HR department. They will have literature on any company retirement benefits. What sort of work are you doing, what are the term of your employment? Does your company offer a retirement benefit. And definitely look into voluntary NI contributions here is some useful literature. The NI 38 leaflet is quite clear, but the people in the Newcastle Contributions Office are very helpful if you have questions. Fill in the form and they will send you an annual bill. As I said my bill last year for Class 2 contributions was 114 pounds which is amazingly cheap. You can pay this from a UK account or with a UK bank draft that you get from your US bank. I came over like you on an H1B on a 3 year contract and 20 years later I'm still in the US. I now have 20 years of US SS and UK NI contributions and I'll get state pensions form both counties.

http://www.hmrc.gov.uk/pdfs/nico/ni38.pdf
http://www.hmrc.gov.uk/cnr/osc.htm#3