Retirement

[ragsie76]

Hi I have just joined the bonusplan maximum payment and flexiplan at £10 a week so I can retire EM at 60 just wondering if its worth buying say £10 a week in shares aswell so I got extra when I'm 60 or is it better to use the bed savings plan via the my benefits and advice be grateful

[RobertT]

Bonusplan, Flexiplan and the P&M share plan all benefit from tax relief and salary sacrifice(PSE), meaning each £1 gross(the amount on your payslip) only actually costs you 68p.

Bonusplan & Flexiplan will only exist while the current pension arrangements are in place as only active members of the RMPP can pay into them.

Once the new CDC pension starts, we'll get 2 new choices which are the Lump Sum Booster and AVC's(I assume similar to Flexiplan). See here for more info: https://www.myroyalmail.com/collective-plan

The P&M share plan is a great way of saving with the addition of free shares from RM too, especially if you can buy when prices are low. To get the full benefit you'll need to hold each batch for 5 years, or else be a 'good leaver'. Info here: https://www.myroyalmail.com/PartnershipandMatching

You don't say how old you are, but the sooner you start saving extra towards your retirement and the more you can save, the better!

Sorry but I'm not signed up to My Bundle and haven't got clue what the 'bed savings plan' is.

[ragsie76]

I'm 45 so do u think its worth waiting for the new pension is in place before I pay extra or buy shares now instead

[RobertT]

You don't say which pension you're currently paying into, but I'm guessing it might be section C of the RMPP?
If I'm right, and as you say you want to maximise your pension to retire at 60, personally I would suggest paying as much as possible into Flexiplan while you still have the chance.

Then think about the P&M shares and paying extra into the new CDC pension when the RMPP has closed, remembering that CDC will have a Normal Retirement age of 67 and your section C pension is NRA60 and NRA65.

But ultimately it's only a decision you can make.

[Hyrrokkin]

I'm 45 so do u think its worth waiting for the new pension is in place before I pay extra or buy shares now instead

I do not know your financial situation or pension provision - but if you want to retire at 60 i think you will need to pay in more than £10 pw

[Hawkey99]

The best time to invest in your future is ....today....

[NWpostie]

I think the max you can put in without falling out of PSE is £110 a week I believe it can go a little bit higher, it would depend on your particular circumstances as to how many hours a week and your hourly rate, the key thing is not to pay too much as it would look like you're on less than a minimum wage and fall out of PSE.

I'm sure Robert T our resident pension expert will advise better.

[RobertT]

An easy way to work it out is to use this simple bit of maths:

RM basic hourly rate – national minimum wage hourly rate x basic hours worked = max to stay within PSE.

So for a normal full time postie on 37 hours, that would currently be:

12.37 – 8.91 x 37 = 128.02

As NW suggests, things will vary a bit depending on circumstances, etc. Plus other deductions like the P&M share scheme would need to be factored in.
Also the national minimum wage is due to increase in April to £9.50 per hour.

Based on the above figures, personally I would suggest no more that £120 to stay safely within PSE.

[Decky Boy]

The above advice is sound though from April 2022 my figures suggest a total of no more than £106 per week should be invested in AVCs or a combination of AVCs and the Partnership and Matching Scheme ???
In an ideal world ( a timely) April 2022 pay increase/award would increase this amount but seldom if ever do we get our pay rise in April at the start of the new tax year.

Of more importance to me ( as I am already invested in AVCs and continue to do so ) is which Fund ( or Funds) I should be invested in given the current financial climate we find ourself in today. American stocks have enjoyed a significant rally since March 2020 and many commentators are predicting a significant market correction and a long and slow recovery thereafter.
This would impact the majority of funds open to us...some more than others...and a long slow recovery is not good for those close to retirement age ?

I've diversified recently...and am hoping I've made wise choices. Equities of course could continue to rally and any move away from funds with higher growth potential into more cautiously positioned funds will impact our returns " at the end of the day". I guess it's all about risk and reward.

The above post is not financial advice. I am but a humble postie...and this is my view currently.

[RobertT]

My figures for staying within PSE limits are based on current amounts, so changes in the national minimum wage and our hourly rate would obviously alter things. I agree with your £106 from April, assuming no pay rise for us!

'Market corrections' usually happen over a relatively short period of time, with the recovery taking longer, which for someone with time on their hands, should constitute a good buying opportunity. But as you say, might not be ideal for someone nearing retirement.

Fund choice will always vary on an individuals risk profile aswell as age, etc. But one thing to consider is what you're going to do with your cash after you've retired.

It's common to de-risk and 'lifestyle' as you approach retirement, which makes sense if you're going to buy an annuity(more for personal pension holders rather than AVC's) or use the money to live on in the shorter term. But if you're going to keep your money invested after retiring, is lifestyling the best thing to do?
Again, that will come down to the individual.

[donny11]

Is it to late to join bonusplan maximum payment and flexiplan?

I'm section C,joined in 1988,aged 56.

I already do the partnership and matching plan.

[RobertT]

Is it to late to join bonusplan maximum payment and flexiplan?

I'm section C,joined in 1988,aged 56.

I already do the partnership and matching plan.

It's not too late as the RMPP is currently still open.
But when the new CDC scheme starts(assuming it does), no more payments will be allowed into Bonusplan and Flexiplan.
That's expected to happen towards the end of this year or early 2023.

From then on two different AVC arrangements will be available via the CDC scheme instead.

[heapsy]

I'm currently paying in to Bonus plan and Flexi plan. 37 hrs, I'm paying £120.88 and still within PSE if that helps.

[rambo1]

The best time to invest in your future is ....today....

Actually, yesterday.

[TrueBlueTerrier]

The best time to invest in your future is ....today....

Actually, yesterday.

Tomorrow is definitely the worst choice.