Aren't you sure how many properties you have?
Planning for Retirement
- Thread starter randomshenans
- Start date
Aren't you sure how many properties you have?
Lol. I am sure, just don't need to say exactly how many to make my point.
Soldato
The minimum is 3% in the UK. Are you sure it’s only 1%. That goes against legislation.
lolled.Maybe it’s changed then, it was a few years ago. Even at 3% I’m not sure it would be worthwhile but it’s certainly more attractive than 1%.
Regardless of the age, I think everyone should have an ideal. I have contributed a lot in my work pension and hoping to buy my first property next year. I think I would be more secure if I own a mortgage free property by the time I retire. Everyone should think about the retirement and differently not rely on state pension. I have read to many horror stories where people who retired literally rely on state pension as they have no other income and I don't want to be in a position like that so the earlier you plan, the better.
I'll be going all in on every move I make until I retire, so it'll either be getting there in a lambo or a 1996 Nissan Micra.
Out of interest, did you buy these and do them up?
Soldato
I sacrifice 4% of my salary and my employer pays 12% which is a pretty good deal. I'm 40 now and I doubt I'll have enough to retire at 50 but from the projections I've done I should be able to retire fairly comfortably by 60.
My workplace pension is very flexible in terms of being able to change where my pension funds are invested with around 10 different funds being available.
My workplace pension is very flexible in terms of being able to change where my pension funds are invested with around 10 different funds being available.
Soldato
Must say that i get jealous of some employer contributions in this thread. I get 5%
I get 3%!!! Absolute minimum, and the company is very successful.
I just put my details into the Pensionbee calculator and it says I should expect a £26k, which isn't too bad considering there's two of us and we should be mortgage free by then. But to get to £40k a year where I think we'd be really comfortable I need to more than double my current contribution.
I think property is the only other thing. If the average joe can get on the property ladder instead of paying rent that will be in a much better position come retirement!
Holy smokes Gibbo. Hopefully you get to enjoy that in your old ageThe max going in to my pension is £5250 which I thought wasn't too bad!
Indeed, Gibbo sounds like my old boss who told me 30 years ago that if you didnt have a pension fund worth £1m before you retired then it wasnt worth doing. Me and my mate had a chat about it afterwards and with what he was paying us at the time we would have to put 100% of our salary into the pension to get to a £1m.
Caporegime
That's a helpful calculator.
I've looked into it again, and based on 3% employer contributions, I'm still not sure it's worthwhile.
It would equate to just over £1,000/year employer contributions, which sounds great. But comparing The People's Pension 100% Equities investment to Vanguard Target Retirement 2050 (which is what I'm currently using), the management and transaction fees are higher and the performance is lower.
I feel like I'd be better off just bunging in an extra £100/month to my SIPP, rather than changing to the workplace scheme.
The only downside I can see to my current setup is that, because I'm using salary sacrifice, I don't get the Government 20% top-up on my contributions…
It's not simple, is it!
Agreed. I only get 4% from my company. Last few days workplaces have all been the same too. The pay has been pretty reasonable, just not the pension offering.Must say that i get jealous of some employer contributions in this thread. I get 5%
As for me, as well as putting the 4% into my pension, I put just shy of 10% of my take home into a S+S ISA. I'm mid 30's. I know it's not enough for a decent retirement, but with 2 young kids and a wife not currently working that's not bad going imo. Once the kids are older and the wife is back at work, we'd look to bump up these numbers.
I'd always go up to my employers matching amount on the pension and anything else would go into the S+S ISA. That way we have way more flexibility if we want to take out some of the cash sooner. For example if we were to develop health issues which meant we couldn't enjoy the money as much once we get to retirement age.
Soldato
Out of interest, something i was thinking about recently.
I have a S&S ISA which similar the poster above, i try and use more than my pension. It seems tempting to withdraw money out of it when i'm close to 55 or even retirement age and top my pension up, up to the max for the year to get the tax top up. Then in theory at 55 you could withdraw 25% penalty free and then put that back into the Pension and double claim the tax top up or put it back into the ISA.
It feels like there'll be rules against the above, and i'm sure things will change in the next ~20 years. But it feels like an option.
I have a S&S ISA which similar the poster above, i try and use more than my pension. It seems tempting to withdraw money out of it when i'm close to 55 or even retirement age and top my pension up, up to the max for the year to get the tax top up. Then in theory at 55 you could withdraw 25% penalty free and then put that back into the Pension and double claim the tax top up or put it back into the ISA.
It feels like there'll be rules against the above, and i'm sure things will change in the next ~20 years. But it feels like an option.
This is where I struggle a bit with pensions - because we have no idea on the rules/age requirements at the point which we retire. It's basically a big Ponzi scheme and whilst I'll pay-in, I'm quite hesitant to go all-in.
Noticed this thread. My final slary scheme ends in June 2021 so looking at options with that one as it will only grow with inflation rather than salary. Was never going to last forever as the annual amount they were paying in was getting rediculous. Now will have the joy of exploring options and guessing the best option for the fund.
Was a non contribution 1/60th scheme. New one is DC with % on top of base to buy pension and other benefits with.
Was a non contribution 1/60th scheme. New one is DC with % on top of base to buy pension and other benefits with.
There are rules against it, HMRC classify it as recycling. Unsurprisingly, they take a dim view of people doing it and give them several inches of the fiscal marital aid to discourage it.
https://adviser.royallondon.com/tec...ns-and-tax-relief/recycling-of-tax-free-cash/