Retirement planning ? what's the right ratio of house/pension/ISAs ...

?Reader Question:

I have been working hard on my pension & using the carry forward rules will have a large sum put away ? higher than the value of my home. But my savings are not too high ? less than ?100k in ISAs. What might the right ratio of money in house/pension/isas be?

?

My response:

It?s an interesting question.

The first thing to do is to get independent financial advice as your wider personal and financial circumstances need to be taken into consideration.?For help in finding the right financial adviser read my article?10 tips on how to find a good financial adviser

But obviously I want to give you some sort of idea.

Going back to your question you need to make sure you are comparing apples with apples. A house is an asset whereas a pension and?ISAs are tax wrappers in which you can invest in assets (stocks and shares etc)

What is a tax wrapper?

When you invest, two things to consider are ?how? you invest and ?what? you invest in. The ?how? is whether you invest via pension, ISAs, investment bonds, collectives etc. While the ?what? is usually the underlying investment itself, such as equities, bonds, property etc.

Without trying to oversimplify investment but think of it like a car. In order to get from A to B (ie your current situation to your desired stage in life) you need to choose a car. The car that best suits you will depend on the journey you plan to take, your current budget etc. Every car will have different running costs, tax etc and not one car suits all. Think of this as the investment wrapper (pension, Stock and Shares ISA etc). Once you have chosen a car you need to put petrol in it to get you to your desired destination. This is akin to the underlying investment choices. Clearly the petrol drives performance but the car can enhance it. But obviously it?s no good buying a Ferrari if all you plan on doing is going to the shops and back each day. It?s a similar thing with investment ? excessive costs can wipe out any benefit. A good financial adviser can help you make the investment decision that suits you and your plans.

Pension or ISAs?

When it comes to saving for retirement most people will automatically think of a pension. However, using Stock and Shares ISAs as part of your retirement planning is another option. In my article Pension vs ISA ? which is best for you I cover the issue in more detail which should help answer the relevant part of your question.

How much do you need to save for retirement?

The short answer is that it depends on how much retirement income you desire as well as the amount of capital you want in the bank. The only way to work this is out is to carry out a financial plan and again I suggest you seek financial advice.

But to give you a steer the following calculator and can tell you how much a?personal pension or money purchase pot (which I?m guessing you have) might generate.

The calculator can also help answer the following questions:

• How much income will your current pension plan give me?
• How much should you be putting away each month?
• When can you retire?
• Should you be saving for my retirement now?

Once you have played with the calculator (and done your sums) you should not be left in any doubt as to how much you might need to save for your retirement and what that retirement might look like.

Where should you be invested in? ? (how much in property, shares etc)

You appear to have included your home in your retirement planning. That is fine if you plan on downsizing otherwise relying on the value of one asset which you also need to use for retirement planning is risky.

If instead you build a portfolio of assets it is possible to diversify your investments so as to not put all your eggs in one basket. Consequently, other than your investment amount, there is nothing to stop you spreding your risk by investing in a range of asset with which to provide an income. By choosing the right combination of assets and investment wrapper/product to suit your circumstances you can enhance your returns. This is what a good financial adviser would do for you. This value added is often overlooked by investors who concentrate solely on investment performance. While investment performance is important so is tax efficiency, suitability and risk.

However, I am fan of tools that bring complicated concepts to life. Fidelity have created an interactive (and fun) animated tool which asks you a few simple questions such as your age, what you are investing for (such as a rainy day or retirement), your view on taking risks etc and then design an example asset allocation for you.

By asset allocation I mean how much you should be investing in UK company shares, how much you should be investing in property unit trusts etc.

Interactive investment tool (give it a few seconds to load and turn the volume up)

I hope that helps.

Damien

The material in any email, the Money to the Masses website, associated?pages / channels / accounts?and any other correspondence are for general information only and do not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation. See full?Terms & Conditions?and?Privacy Policy.

Image: Danilo Rizzuti / FreeDigitalPhotos.net

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Switched On: When the smartphone giveth, Part 1

Each week Ross Rubin contributes Switched On, a column about consumer technology.

Part II of this article will be coming next week -- stay tuned!

The rise of smartphones hasn't been kind to makers of devices such as digital cameras, digital music players and portable GPS devices. Handsets with a rich selection of apps have been increasingly cannibalizing sales of these products, leaving few ways for these once hot holiday gift items to compete. In some cases, though, they have enabled functionality that was once envisioned for standalone products that either failed in the market or never went much beyond a niche audience. Here are five examples of failed devices that never made much headway. The concepts behind them, though, ultimately found acceptance on smartphones.

Continue reading Switched On: When the smartphone giveth, Part 1

Switched On: When the smartphone giveth, Part 1 originally appeared on Engadget on Sun, 15 Apr 2012 17:30:00 EDT. Please see our terms for use of feeds.

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Vacuum Powered Dragsters Should Make Short Work Of Housecleaning [Video]

Hearing stories about awesome places to work is always inspiring, and it's no surprise that working at Dyson sounds like a pretty sweet gig. To encourage creativity, and boost morale, the company had its engineers build model drag racers using nothing but vacuum parts. More »

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Japanese watchdog agency wants to fine Olympus $2.5 million

Wondering how this whole Olympus accounting scandal is gonna wrap up? Well, it might simply come to a close with a 200 million yen (about $2.5 million) fine. That's the seemingly tiny amount the Japanese SESC (Securities Exchange and Surveillance Commission) is recommending the company be fined. Ultimately the FSA (Financial Services Agency) will decide how large of a monetary punishment is appropriate for the $1.7 billion scandal. And, don't forget, there's still the drama of Olympus suing its own president and other executives to look forward to.

Japanese watchdog agency wants to fine Olympus $2.5 million originally appeared on Engadget on Fri, 13 Apr 2012 10:27:00 EDT. Please see our terms for use of feeds.

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Mom drops son at day care, returns to find 3 dead

Elizabeth Flores / Star Tribune via Zuma Press

People in the street reacted to the scene of a triple murder in a suburban Minneapolis home, Monday.

By The Associated Press

MINNEAPOLIS -- A woman who became suspicious and called 911 after dropping her son off at a suburban Minneapolis day care provider's home stayed on the line as she went back to the house and discovered three people shot to death, according to transcripts of the call.

The Brooklyn Park Police Department released the transcript of the call that took place Monday, minutes after investigators believe a lone male fatally shot DeLois Brown and her elderly parents.??

?

---

The transcript provides a chilling account of how the mother became suspicious after seeing a man in a hooded sweatshirt and a glove on one hand on a bicycle outside Brown's home. She told police she called Brown to warn her but spoke to her only briefly before she heard the word "no" and the phone went dead.

?

When she turned around and returned to the house, she spotted the man riding away with something under his coat. Her alarm grew as she told the dispatcher that her son was inside and that the door was open.

Police were still searching for the lone suspect in the shooting deaths of Brown, 59, and her parents, James Bolden, 82, and Clover Bolden, 81.

'No! No!'
The Hennepin County Medical Examiner said Wednesday that all three victims died of gunshot wounds, and that Brown and her mother had been shot in the head.

The caller stayed on the phone with the 911 dispatcher while she went inside to see if Brown, her son and the others were OK.

She quickly found her son, who was uninjured, but she couldn't find the day care provider right away. She called out to Brown repeatedly, her voice imbued suddenly with horror as she came upon Brown and her parents in a bedroom.

??Zimmerman to plead not guilty to second-degree murder

"No! No!" the mother exclaimed to the dispatcher. "They're in their bed. ... There's blood all over them."

The dispatcher instructed the woman to go outside. The transcript shows her crying and praying as she called to her son and told him to get in the car as police arrived on the scene.

?Prosecutor: ?Doctor shoots colleague dead, then kills self

Police are offering a $10,000 reward for information leading?to an arrest and conviction in the case. Authorities were still saying little else about the slayings because the investigation is ongoing.

Inspector Todd Milburn said authorities are still looking for a man in his 20s who they believe fled on a BMX bicycle. He was wearing jeans and a blue sweatshirt or jacket with a gray hood and white stripes on the back near the shoulders.

Quiet neighborhood
Milburn said police do not believe the suspect was still in the immediate vicinity, and they were working with a number of agencies on the case. The FBI said it was providing assistance to Brooklyn Park police when requested.

The triple slaying is not related to the death of a woman shot in a domestic-related incident Tuesday night just a mile and a half away, Milburn said.

?Police: Tulsa shooting rampage suspects confess

Ashantai Finch, 32, died of a gunshot wound. A man was arrested in that case and remained in custody Wednesday pending possible charges.

"We're focused on solving both crimes, both events," Milburn said. "That's our focus right now."

Milburn said both incidents happened in neighborhoods that are relatively quiet and have few problems with police.

Monday's homicides were the first this year in the Minneapolis suburb. There were five killings in 2011, but Brooklyn Park reported a 20-year low in overall crime in 2011.

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? 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Chocolate Straws Add Flair And Flavor ? Article Squadron

Your next cocktail party can be more memorable than the last when you take advantage of this unusual and tasty garnish for drinks. Chocolate straws can be used in place of traditional items like paper umbrellas or wedges of fruit to add that extra flair. Of course, due to the flavor, they will suit some drinks better than others. Chocolate Straws

Flavored vodka has become all the rage in recent times. An extremely simple and extremely tasty cocktail is the simple milkshake. To a glass of milk or cream, add vodka that is chocolate-flavored. You can make a frozen version as well by combining with ice in a blender. The straw for garnish adds extra color, flavor and interest.

Hot drinks also do well when garnished with a straw. As the drink is stirred, the stick will melt, leaving behind rich traces of flavor throughout the drink. Irish coffee is one great example of a delicious hot drink. Mix Irish cream and Irish whiskey into coffee to make this popular after-dinner cocktail.

A scrumptious and luxurious martini can be made with the combination of vodka and creme de Cacao. Instead of a swizzle stick, use a straw as a garnish. Not only will your guests get a delicious treat, they will enjoy the unique appearance of their drinks.

Naturally, you do not need to limit yourself to alcoholic drinks. In fact, kids are likely to absolutely love these sticks in most of their favorite beverages. While they lend themselves best to milk or a shake, kids can even use them with sodas or juices if they like. They will get a kick out of drinking through the straw before eating it.

Chocolate straws are an easy and inexpensive way to add a whole new layer of fun to drinks for kids and adults alike. They are inexpensive and an easy way to get a quick fix of something sweet without adding the calories of a candy bar or a pastry. With a little experimentation, you are sure to develop your own signature drink to show off to friends and family.

Find out more about Chocolate Straws at our website

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