So it's my latest mild obsession, my new SIPP, with the clock ticking towards retirement I am liking the idea of having some monies that can bring my retirement forward to say 58 or maybe even 57, that's the earliest I can claim.
I don't see my SIPP as something I want to convert into an annuity, rather just money to draw down, 25% I think) of which would be tax free....
And if I can stuff £30K into a SIPP by the time I'm 57, that's £10K a year to draw down on until my TPS kicks in, £10K means, post mortgage, a couple of days less working a week from then on.
Of course I might choose to carry on working too... we will have to see!
For now my dilemma is over how much to stuff into my SIPP for the current tax year, I've got a month left to decide...
One only gets the 20% add on from the government on one's income, so in other words one can only put in what one earns as a max to get that extra.
So if the max I earn in a year is £20K I can only put in £20K to the SIPP, I think this is worth maxing out as far as possible as it's basically roughly like paying 15% tax compared to 20%, given that 75% of what I take out will be taxed again. (Don't think about it, it's too weird.)
I mean this SHOULDN'T BE A PROBLEM....
I'm unlikely to earn < £20K in any one year, and I don't need to put in even half that to meet my £30K target, so I don't think I need to be any rush to STACK more this tax year.
I might at some point sell my house.... (this would only be if I inherit another one), say I net £120K then what would I do with it...
Assuming I'm still earning £20K a year then...
That means I'd need to keep something in order of £60K on average in a high interest account, non ISA; NON SIPP AND @5% that would = £3K earnings in interest, £6K over 2 years, so £1.5K tax on that (OUCH!)...
OKIES so my 'worst case' inheritance scenario means my likely earnings mean I don't pay that much in tax on any non ISA or SIPP interest.
Just over £1K is annoying but given the relatively large sums involved above its OK.
And of course, I may NOT inherit so this may all be moot!
