Practical post retirement: tracking things?

[Gilgongo]

I realise this might be an "each to their own", but for those who are in decumulaiton - how (or even do) you track your income from your assets?

I'm planning on living mainly off dividends from an ISA (and a few from a SIPP) and some buffer cash until state pension comes in. I won't be getting an income higher than the taxable threshold until state pension comes in a decade later, but I assume I'll need to keep some kind of record.

So is it enough to just go into my online account, hit the "previous tax year" button and get a total on the credits (in case HMRC want to know), then walk back to the beach? Or are there some tricks I should be aware of?

[kempiejon]

My de-accumulation hasn't started, though hopefully soon, so this is in my mind. My records for accumulation are pretty good, I have monthly rolling 12 month income records and a tally of my investment worth. I keep a fairly up to date spending projection and actuals and I know where I could cut back. I do predict my income and should generate more than I expect to spend and have planned to hold 3 years of base spending for market turmoil.
If I continue with my accumulation spreadsheets I should see the totals plateau and drift downwards. Provided that fall is gradual enough I can see that I'll run out of life before I run out of money.

[Urbandreamer]

With significant effort!

Seriously I have three platforms/brokers and login to identify dividends. I then enter the amounts on my spreadsheet.
To some extent I need to login on a regular basis anyway, as while two of the 5 accounts are paying dividends into my bank account that is not enough to live upon. I'm also trying to spend ISA capital as should I die before intended I may be subject to IHT.

Like you, I no longer have taxable income, remember to let charities know that you can't gift aid standing orders etc and that they need to stop claiming that tax.

You should only need to let HMRC know if you make enough taxable income to pay tax, or capital gains tax.
I track my hobby on the same spreadsheet as it is not impossible that it could lead to a CGT liability, though it currently does not. I believe that the CGT allowance is dropping to £3k.

In terms of planning/prediction:

Downloading my annual bank statement is good enough to estimate expenses. While HYPTUSS is great for roughly predicting annual dividend income.

[swill453]

I realise this might be an "each to their own", but for those who are in decumulaiton - how (or even do) you track your income from your assets?

I'm planning on living mainly off dividends from an ISA (and a few from a SIPP) and some buffer cash until state pension comes in. I won't be getting an income higher than the taxable threshold until state pension comes in a decade later, but I assume I'll need to keep some kind of record.

So is it enough to just go into my online account, hit the "previous tax year" button and get a total on the credits (in case HMRC want to know), then walk back to the beach? Or are there some tricks I should be aware of?

You do know that income from your ISA doesn't count towards your taxable threshold, and HMRC won't ever need to know about dividends in them?

Scott.

[DrFfybes]

Probably not the best answer for you, but I don't bother much. I keep an eye on our current accounts to make sure we have enough coming in, and as MrsF is still working part time we're not touching ISAs or SIPPs so the only thing of interest there is total value.

I think that is the difference between TR and Dividend investors, whilst I like tinkering and do have a smaller account that I play with, I'm no better or even worse than your average fund manager, so we're going towards the Global Tracker route and I can focus on other things.

The non-wrapped dividends are on my Tax Certs. I don't check dividend amounts or dates, I work on the assumption my platform provider has good systems and if they do start to mess up, the far more fastidious people like Dod will spot it and alert them and me

We have significant unsheltered assets following an unexpected inheritance which automatically sell down at a few hundred quid per month into the bank, so I do periodic valuations of those, but don't factor in the dividends nor the amount withdrawn as that isn't the point of them. The sell down will increase when MrsF retires, and the intention is a buffer to last us until SP. This has made the biggest difference to our plans, selling down those assets rather than taking ISA and SIPP income means all that cash we saved for years is probably hardly going to be touched.

Paul

[xxd09]

All income from ISAs is tax free
Tip-keep your living expenses cash in an Instant Access Cash ISA
Tax only applies when you withdraw cash (income) from SIPP
Easy calculation-if overcharged tax just reclaim via online via P55 online from -this is the only tax work and records needed
I often don’t draw from a SIPP for a year or two cos got a lot of ISAs
If you have investments and cash outside ISA and SIPP tax wrappers then recording your income generation is required as taxable charge could be generated -get that money bin tax free wrappers!
Make your SIPP withdrawals when you do them once a year and it all becomes very simple
Don’t forget to use all your tax free personal allowance each year
xxd09

[swill453]

If your only taxable income is on or below the personal allowance (and it should be exactly on it to make full use of it) then you can earn £6,000 tax-free in interest (£1,000 allowance and £5,000 at the "starting rate" of 0%).

For this reason I wouldn't recommend using a cash ISA for living expenses in these circumstance - better to keep money tucked away in ISAs (cash or stocks and shares) until you've exhausted other tax-free possibilities.

Scott.

[SalvorHardin]

Most of my dividends come from shares held outside ISAs and many of these are American and Canadian where there is withholding tax. As I have to submit a tax return every year and have a fairly substantial foreign income section to complete, I take quite a bit of care in tracking dividends.

As part of my portfolio valuation spreadsheet (Excel 365, I really like its facility to set up automatically updating share prices), there is a page with a separate row for every dividend payment, segmented by country and if it is tax-free. I get the dividend announcements when they are made on Investegate and via Seeking Alpha for my American and Canadian holdings. I set up the dividends for each company when I buy shares. I also have a "timetable" spreadsheet with the anticipated dates for ex-dividends, payments and results announcements, ticking off these as they are made.

Enter the dividend and date due from the announcement, the spreadsheet automatically calculates the gross, net and withholding tax and keeps a running total of everything for the current tax year (again split by country and if it is taxable). When the dividend is received, change the row to bold text to differentiate it from the as yet unreceived ex-dividends. The same spreadsheet template gets reused for every tax year, I just copy and paste each tax year to a separate worksheet for my records.

I also keep track of every payment in Microsoft Money (which I use for all cash accounts, but not investment). As soon as I see a dividend announcement an entry is made for when the dividend is expected, though I don't credit the dividend to the account until it is received.

Hope this helps. It may seem like a lot of work but once the spreadsheets are set up (and the company alerts on Investegate), it becomes relatively easy.

[Dod101]

I live off my dividends and the annual income from them now exceeds my spending so I generate surplus most years. That allows me to be generous to charities ( including my five grandchildren!)

I track dividends weekly and my spreadsheet shows where they come from( mostly ISAs and thus tax free; ditto of course from my SIPP) I transfer into my ISA unprotected shares annually of which there are now not many. My dividends include highlighting unprotected dividends for my tax return.

I also keep a monthly expenses spreadsheet so that I can see where my money is going. I suppose it may help my executors in due course as it will show that regular ‘charity’ giving is coming out of income without affecting my lifestyle. I do not touch my SIPP and regard myself as more or less custodian of it for the next generation.

I use my State Pension as a travel fund and tend to accumulate most of it. Of course all of this may change if I ever have to go into a care home. Currently though I am accumulating notwithstanding having been retired for almost 30 years.

Dod

[Adamski]

Morning Gilgongo,
I'm early retired / part time working. I'm streamlining down to -

1st spreadsheet - track net worth monthly in Excel - investments, pensions etc by month. With a chart showing progress monthly over last 5 years.

2nd spreadsheet - for tax returns.

Going to discard other workings in a folder, as trying to get away from over analysis, thinking about minutiae, as dont think productive.

Cheers Adam

[Steveam]

I didn’t really change anything when I stopped having employment income … just a line on a spreadsheet which happened to (gradually) tend towards zero. The property income line also went to zero once the last btl went. Other income lines like dividends and interest continued much the same; new income lines such as the SP appeared. There is no chance everything will be protected (ISAs or SIPPs) so my records always have to be kept for HMRC anyway.

This is all managed by an old set of linked spreadsheets which I used when I was a much more active investor (including properties and options). I do have a plan to reduce and rationalise the spreadsheets at some point but idleness may intervene.

Best wishes,

Steve

[kempiejon]

If your only taxable income is on or below the personal allowance (and it should be exactly on it to make full use of it) then you can earn £6,000 tax-free in interest (£1,000 allowance and £5,000 at the "starting rate" of 0%).

For this reason I wouldn't recommend using a cash ISA for living expenses in these circumstance - better to keep money tucked away in ISAs (cash or stocks and shares) until you've exhausted other tax-free possibilities.

Scott.

Thank you for this pointer. I am a big fan of using all the tax efficiencies I can, I removed myself from income tax while employed with my SIPP and I think I can manage at least a few years income tax free post employment by only using the SIPP up to the personal allowance. The interest on unsheltered cash, which has recently been at risk of a tax liability, looks more interesting with another £5k at starting rate.

[Dod101]

Talking of tax, I have just paid HMRC for tax owed to 31 January, all of £119.

Dod

[Urbandreamer]

I realise this might be an "each to their own", but for those who are in decumulaiton - how (or even do) you track your income from your assets?

As you expected, it's each to their own.

In many ways it depends upon what each of us wants to do.

Some may wish to track expenses, as income is only one side of a "balanced budget".

I use to manually enter items from the shopping list into a spreadsheet to calculate what I "NEEDED" to spend. I no longer do that, having decided that I won't need to cut back and I simply need to base predictions upon what is on bank and credit card statements.

However my wife is still interested in what we spend upon XYZ, and as I pay supermarket and petrol bill's I've had to provide her with what she needs.

Off topic, but such spreadsheets can have their own interest. Nothing really brought home the cost of a slow leak on a tyre than the drop in mpg during the delay in getting it fixed. I also found it interesting to actually sum up the amount that I spend a year on books.

[DrFfybes]

Thank you for this pointer. I am a big fan of using all the tax efficiencies I can, I removed myself from income tax while employed with my SIPP and I think I can manage at least a few years income tax free post employment by only using the SIPP up to the personal allowance. The interest on unsheltered cash, which has recently been at risk of a tax liability, looks more interesting with another £5k at starting rate.

As xxd09 points out and I practise (now!), spend or shelter unsheltered assets first.

I had started taking income from an ISA as that was our plan, our/my Focus was on living on Dividend Income. Then I spoke to an IFA a few years ago who asked why was I putting £20kpa into an ISA then taking a chunk of it back out again. The switch to selling unsheltered assets and rebuying them with the Dividend income WITHIN the ISA was so blindingly obvious, but I had become focussed on yield and Dividend.

A similar principle can apply to SIPPs, except in that case you can roll £2880 ISA income back into a SIPP to £240/month and then take the £3600 back or as much as your personal allowance has left.

[SebsCat]

I realise this might be an "each to their own", but for those who are in decumulaiton - how (or even do) you track your income from your assets?

I'm planning on living mainly off dividends from an ISA (and a few from a SIPP) and some buffer cash until state pension comes in. I won't be getting an income higher than the taxable threshold until state pension comes in a decade later, but I assume I'll need to keep some kind of record.

So is it enough to just go into my online account, hit the "previous tax year" button and get a total on the credits (in case HMRC want to know), then walk back to the beach? Or are there some tricks I should be aware of?

The only thing I do specifically related to retirement is that I have a spreadsheet for the rolling forecast dividends for the next 12 months for my wife's SIPP. It tracks each expected dividend and the regular payments from the SIPP to her bank account plus account fees, showing the minimum cash balance at any point during the next 12 months. That way there's no risk of accidentally not having enough cash in the SIPP to meet the regular payments. That's not really an issue at present since she's just taking enough to utilise the personal allowance, but in a year or so she'll likely be taking an amount that will be much closer to the amount of dividends received. In the meantime it shows when there will be enough spare cash to safely top up one of the holdings.

Her SIPP is fully invested in ITs which have regular payment schedules and for which it's relatively easy to extrapolate the likely dividend increase from the past few years.

NB: Obviously shares can be sold to meet the payments, but I'm trying to set things up so that if I'm not around my wife doesn't have to worry about making decisions if she doesn't want to.

[Golam]

At the end of each month I carry out a spreadsheet entry so as to update my monetary position. I simply reconcile my bank statements and download my investment valuations. Total all then deduct liabilities. Have been doing this for many years. Probably easier for me than most as I have only income from dividends via single broker and expenditure via two bank accounts. I produce a cash-flow occasionally to remind me, in advance, of liabilities. All simple and works for me.

[swill453]

A similar principle can apply to SIPPs, except in that case you can roll £2880 ISA income back into a SIPP to £240/month and then take the £3600 back or as much as your personal allowance has left.

Not forgetting the £900 of tax free cash it has "earned".

Scott.

[TUK020]

I try to separate 3 different things
- managing an investment portfolio, and gathering dividends from it
- Paying out from a SIPP into current account
- deciding on the level of income to take, and what to re-invest.

Managing Portfolio/Dividends
I use HYPTUSS to track my overall portfolio (which is split across ISA, SIPP & SIPP Drawdown), I use HYPTUSS to give me a forecast dividend figure for the year to determine what I then do for the following. I am too lazy to try and track/verify all of the individual dividend payments.

Pay out from SIPP
The level of payout from SIPP to current account I determine by tax thresholds.

Deciding on income level
I follow Luniversal's ideas on income de-risking, and am fortunate in that I can afford to onlyu take the majority portion of my dividend income, and leave a 'cash buffer' to allow for dividend variationn ups and downs. I can then decide periodically whether to reinvest surplus.

What the above means is that I am drawing more of my SIPP than I need, but then can afford to reinvest some of that into the ISA. At the moment I am still earning part time. When I stop, this may change into drawing extra from the ISA

[Dod101]

Thank you for this pointer. I am a big fan of using all the tax efficiencies I can, I removed myself from income tax while employed with my SIPP and I think I can manage at least a few years income tax free post employment by only using the SIPP up to the personal allowance. The interest on unsheltered cash, which has recently been at risk of a tax liability, looks more interesting with another £5k at starting rate.

As xxd09 points out and I practise (now!), spend or shelter unsheltered assets first.

I had started taking income from an ISA as that was our plan, our/my Focus was on living on Dividend Income. Then I spoke to an IFA a few years ago who asked why was I putting £20kpa into an ISA then taking a chunk of it back out again. The switch to selling unsheltered assets and rebuying them with the Dividend income WITHIN the ISA was so blindingly obvious, but I had become focussed on yield and Dividend.

A similar principle can apply to SIPPs, except in that case you can roll £2880 ISA income back into a SIPP to £240/month and then take the £3600 back or as much as your personal allowance has left.

You only get tax relief on contributions to a SIPP up to age 75 though.

Dod