Retirement
- Thread starter Shieldsman
- Start date
Will e
Central Defender
That's mad but not surprising, you would think they would be a lot more professional than that given the fees they get, I think of them like I do insurance companies, they would screw you for every penny if they could get away with it.
42
Striker
If its a DC pension then returns aren't guaranteed anyway & just based on average market returns, so a small rounding difference rounded down could well just be built in added prudence. If we have a long run on a bear market people would kick off that they hadn't got what they were told they would've had.
I don't think they're massively complicated, theyre just very mathsy & think most people don't like maths so switch off when it comes to the explanations
Matt Hopkins
Midfield
Imo it's the likes of the PLSA who are scaremongering with their figures. who'd have thought a body that represents massive pension funds would suggest people need to save more?
One woman at my last place read one of their reports and thought she had to have £2000ish/ month pension to be able to retire, even though she was only earning about £1600/ month at the time?????
42
Striker
I do wonder with these, is it just down to a sort of southern middle class bias. The poverty charities are exactly the same when they publish their figures for whats needed for a basic standard of living. What they claim someone on the breadline needs to spend on food for the very basic standards is more than I currently spend.
archiesdad
Midfield
I know personal finances are exactly that but has anyone shared their pension / savings pot levels? I know our life styles and expectations are all different but I'm curious how much people have deemed 'enough' and at what age they took the plunge. Apologies if the is already covered in the previous posts.
OldNewtown
Midfield
It's all relative
If you're on a salary of 100k, then you're not going to adjust well to a pension of 20k
If your mortgage still has 5 years to run, then you need more, no mortgage less.
What I'm trying to say is that there is no simple one size fits all answer.
It's what you are comfortable with.
archiesdad
Midfield
No I understand that and you're right but, I'm guessing here, if you get mid to late 50,s onward and looking to retire there's a fair chance the kids are up, the house is paid for and you are looking at a number that keeps you 'comfortable'. Everyone's comfortable is going to be different but I'm just curious. We are 54, my Mrs wants to pack in tomorrow and 'make it work' but I'm more nervous and never feel like we have 'enough'
42
Striker
Think that's fairly natural that most feel leading upto retirement. But also most tend to over estimate how much they need. When it comes to personal pension (if you're on drawdown) then don't forget to factor in that you can load what you take out early on as later on you won't need as much & have state pension on top.
archiesdad
Midfield
Im sadly not as clued up on the subject as I should be. My Mrs has always been a pension person and built what I'd guess is a decent amount where my pot is shit, I've always been a 'saver' where she hasn't much (ISAs and stuff), I really need to start figuring out the savy way to use what we have.
This isn’t a bad guide to start thinking about ballpark numbers:
How much will you need to retire? - Which?
We reveal our retirement income targets to help you work out if you're on track for the lifestyle you want when you stop working
42
Striker
You say you've always been a saver but Mrs isn't. But Mrs has pensions & you haven't. The thing is they're kind of the same thing, just different tax wrappers & investment risks. Pensions (and S&S ISAs) are invested in the markets & over the long term will generally get better returns than cash (but not guaranteed)
If between the 2 of you, have a canny whack in cash in the bank & decent amount invested in the markets, its spreading your risk & will probably be OK. Its just a matter of sitting down & crunching the number, working out investment returns & cash flow etc. Just make sure what you do have saved in cash is getting the best interest rates available, and don't do what many do & just keep it with 'your' bank. The Internet only banks usually offer the market leading rates.
Fletch
Striker
Some refer to the 4% rule .
So if your pot was 100k as an example
Year 1 you take out (drawdown) 4% of that , so 4K , and increase that by inflation rate each year and using that your pot should last.
It’s an old fashioned basic model but still gets quoted .
Remember you both get SP although to be prudent would assume it will be 69 say rather than 67/68, it’s gonna keep rising.
So you need to work out how much money you both need a month - essentials then social hols etc - then from that get your yearly amount - this is where everyone will be different .
Remember with the pension money 25% you take out is always tax free . Remember you have no NI or pension conts to pay now .
It’s not easy I’m in similar scenario to yourselves. 10 year back I didn’t give a thought about pensions, I had a decent company one but wife self employed had nowt , big wake up call a few year back to get hers not up . I reckon loads of self employed won’t have pensions or very little .
Remember also you’re better off, if possible , both of you having similar size pensions than just one of you , then pay less tax (just like salaries )
So if your pot was 100k as an example
Year 1 you take out (drawdown) 4% of that , so 4K , and increase that by inflation rate each year and using that your pot should last.
It’s an old fashioned basic model but still gets quoted .
Remember you both get SP although to be prudent would assume it will be 69 say rather than 67/68, it’s gonna keep rising.
So you need to work out how much money you both need a month - essentials then social hols etc - then from that get your yearly amount - this is where everyone will be different .
Remember with the pension money 25% you take out is always tax free . Remember you have no NI or pension conts to pay now .
It’s not easy I’m in similar scenario to yourselves. 10 year back I didn’t give a thought about pensions, I had a decent company one but wife self employed had nowt , big wake up call a few year back to get hers not up . I reckon loads of self employed won’t have pensions or very little .
Remember also you’re better off, if possible , both of you having similar size pensions than just one of you , then pay less tax (just like salaries )
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I think I shared something like this a while ago.
I used the Which guide as a baseline and looked at my own spending over last year and put together my own budget. Something between their Comfortable and Luxurious levels.
For context I have no mortgage but own my house.
Don't know how to shrink columns to make it more readable.
£25k a year sees my kicking back and doing whatever I like whenever I like.
| Council Tax | £2,050.00 |
| House Repairs | £1,000.00 |
| Gas | £960.00 |
| Electricity | £960.00 |
| Water | £360.00 |
| Internet | £420.00 |
| Mobile | £120.00 |
| Petrol | £720.00 |
| Car Insurance | £450.00 |
| House Insurance | £250.00 |
| Car Tax | £180.00 |
| TV Licence | £159.00 |
| MOT | £60.00 |
| Car Service | £350.00 |
| Food | £4,500.00 |
| Clothing | £600.00 |
| Entertainment | £3,150.00 |
| Holidays | £6,000.00 |
| Household Goods | £1,000.00 |
| Total | £23,289.00 |
| Contingency | £2,328.90 |
| Grand Total | £25,617.90 |
SPUFF
Striker
Its a shame holidays have rocketed so much! Looked st somewhere we paid £850 a head 4 year ago n its trebbled!
Benefit of retirement etc is going when cheap i guess.
bomber
Striker
That's a grim read.
How so?
bomber
Striker
It's more than double state pension.The £6k of holidays seems excessive tho
I like holidays and happy to compromise in other areas to afford them.
I agree though, we are allegedly one of the richest economies in the world but have one of the lowest state pensions in Europe.
15th of 30 for European countries.
Source How does UK pension compare to the rest of Europe? | Almond Financial
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