What to do with your lump sum?

[jake]

My old boss when he was frazzled he used to say he didn't know whether his ar**e was bored punched or countersunk! That's how I feel about my pension lump sum, what or where should I put it to maximise savings, reduce tax liability?

[Nightstaffer]

Put some into Premium Bonds
Maybe the amount that you would want to spend on a couple of holidays over the next twelve/ 18 months.
Whilst interest rates are low for easy access accounts you aren’t losing much and you have a chance of a wee win
Then when you need the money for the holiday you can draw it down and it’s in your account within a few days .
All can be done on line.
The only other advice would be to go and have a chat with a couple of professional independent financial advisors
Don’t be in a rush , put it away somewhere safe , whilst you have a think.


Take stock and decide how you want to spend your time rather than how you want to spend your money.
Once you have gotten used to retirement then you will have a clearer idea on how you want to spend your money.
You are likely to have as long a retirement as you spent in the job.

You can’t replenish your lump sum in your 70s
So have a break and then consider taking on another job for a couple of years and leave the lump sum to grow untouched , apart from the inevitable and enjoyable splurge with some if it in things you always wanted to do.
Enjoy retirement and you might find that the things you end up enjoying don’t cost much money anyway
Good luck

[melonhead]

Spend it! Enjoy it ! You could be dead tomorrow !

[harry]

Buy (another) Motorbike, ! o_O

[www.fbusurrey.co.uk]

Hi Jake,

Does your Service run a Pre-retirement course?

They are very helpful and show that there is no one right answer.
If you have loans or credit cards at high interest rates, then consider paying those off.
How much time left on the mortgage? What interest rate? Any penalties if you pay up early. Mortgage rates are at such a low rate it might be worth leaving the mortgage.
Like NS said, Premium Bonds are spot on whilst your thinking what to do with the money, however I think you can only put 50K in.

If you have any expenses like changing the car, or a really nice holiday planned for say a year after you retire, consider putting £10k to £20k in a high interest account. You won't be able to access the money instantly, but at least its paying a reasonable rate of interest until you need it.
Consider ISA's, or if you fancy a dabble on the FTSE have a go at that.

The important thing is to spread your risk across different products and also have different time scales for each products lifespan.

A financial advisor told me Larder/Fridge/Freezer

Larder (not the rubbish car) is your current accounts, every day spending.
Fridge are accounts you don't have instant access to but are paying a higher interest than current accounts. Typically you are looking to stay in them up to 5yrs. ISA's for example
Freezer are investments of 5 to 10yrs and will typically pay out more in interest/return. Stocks & shares or classic car/art/property.

Don't forget that your state pension kicks in at 67, so you will have an income buffer there.
Typically as you get older you spend less.

NS is right, see an independent financial advisor. They are much better regulated now and will typically give you the first consultation for free. If their good, you'll be quite surprised at all the options you have, and all the things you forgot you had to take into account. They should also give you some idea of how they will charge for any future meetings you may have/need.

But I think NS's greatest bit of wisdom (for he is a sage of most things knowledgable and worth knowing) is when he said:
"Take stock and decide how you want to spend your time rather than how you want to spend your money."

That's exactly what it's all about. And that's what a good financial advisor should be able to facilitate. (Love the word 'facilitate')

I share Melonhead's enthusiasm for living life, and you may die tomorrow, however, you are probably going to live until 84.
Of course the further North you live the less you life expectancy.
So it might be worth moving South to reach 84. If you already live South, what ever you do, don't move North. Nasty.
I blame the Tories for the North/South divide. Why does Chris Grayling still have a job!!

Do not get financial advice from anyone with the last name of Grayling. Or who suggest investing in Ferry's, Private Probation companies, Rail companies. (My toppest tip I think NS will agree)

Hope my really boring post helps in some small way.

Hope you are well Jake

Take care

wwwDot
(independent facilitator and North/South relocator............first session free.)
PS. Your old frazzled boss's ar** was 'countersunk'o_O

[noisycat]

When I left , I used some of my lump sum to pay off my mortgage as I wanted that burden from around my neck. Also,we had a conservatory built and went to Florida for a month, where we spent some time at the theme parks and the rest, travelling and seeing the real Florida. Wien my endowments paid out, less than they should have, I put that money away for a rainy day. I know some financial advisors, say not to pay the mortgage off, but I didn’t know if I would get another job, so I paid it off to ease the burden.

[melonhead]

Spunk the lot !!

[eddie]

Coke and hookers for me

[jake]

Thanks for the variety and quality of the advice

[knotty-san]

#2 for coke and hookers.

Squander whatever is left over.