Planning for Retirement

[randomshenans]

I'm only 34, not like I'm hitting that point anywhere soon, but recently I've got really into planning for retirement. Not like counting down the days, but I made sure previous pensions were accounted for, transferred into my current scheme. I'm contributing the max amount I can to that pension as well.

I've got my wife to contact the NHS pensions, as she worked there for about 7yrs before we left the UK, so want to find out what she has still there.

I don't want to get to retirement, be that 55-60-65 and not be able to have a good life and enjoy myself. I am not just starting, I've been paying in for some time but it's only now I've started properly adulting and looking into ways to maximise income in retirement.

I read online that so many people don't have a single pension, or very little which I think is utter madness. State pension in the UK is 167 a week or something like that...!

I'd love to know who else plans for this and what age you are? Would be an interesting poll in some way!

Or maybe I'm the only weirdo that likes to plan this ****!

 

[Arsonist]

At 31 and with a recent young'un in tow, this is also something I've been looking in to.

For me, I'm contributing to the maximum amount I can at work that also gains employer contributions. So currently I think I put in 9% and they put in 10. Through successive promotions, I've also been putting half the additional 'new' earnings into pensions too. I've learnt to live on a wage prior to promotions, so the surplus gets split and I still get to enjoy half as additional cash.

On top of this, I think making sure you've fully purchased a decent property before you retire is key. Sitting on a few hundred thousand pounds of asset, particularly a family home, will pay dividends in the long run. Most people at retirement age don't have live-in kids anymore, so can downsize and recoup the cash difference into savings/stocks/even another small property for rental income.

Cash savings in bank accounts are more than pointless before you plan to retire. They'll only devalue over time as interest will likely never match inflation over many years again. I think if you plan properly even into your 30's, you'll be fine.

Ultimately you need to focus on either compound interest in a good pension pot, or assets that have a certain guarantee of inflation.

 

[Rroff]

I'm not confident of my situation - for various reasons I didn't really do much about it the first few years of working and my work pension is fairly small - I only switched focus to trying to improve it around a year ago (I'm 39).

 

[Narj]

What worries me is that nagging feeling that governments can't be trusted - there's always a chance of tinkering with/raiding private pensions. I must admit I'm a bit annoyed with the change now from 55->57 to access your own money from 2028 - plus they could move the goalposts again!

https://www.thisismoney.co.uk/money.../When-age-access-pension-cash-rise-55-57.html

I've been saving quite a lot the past 5 years especially in my private pension and have a reasonable workplace pension but it's something I wish I'd taken much more seriously from my 20's.

I agree that having your own house bought and paid for by retirement seems to be solid ground - you only then have bills to worry about and if the worst comes to the worst down the line you can downsize again or look at equity release.

 

[fobose]

I am 35. I've had pensions in mind since I was about 20 or so as I hated my job big time and when I looked to move the pension schemes were terrible and the pay was similar. I started working full time at 16 and my employer paid in 26.4% in to my pension (I paid 0.6% IIRC) for my first 16 years at the company. I changed to a lower pension to gain more salary about 3 years ago though so now my total is 15% (10.5% employer, 4.5% me). I can pay in more if I want to but I am keen to pay off more of my mortgage instead. I was a bit concerned that if I pop my clogs before retirement it will all be for nothing, you never know what is around the corner!

I live in an expensive area due to wife wanting to be near work, I am hoping that when we hit retirement age we can move somewhere much cheaper and have extra cash in the bank from the house sale.

 

[Rroff]

I agree that having your own house bought and paid for by retirement seems to be solid ground - you only then have bills to worry about and if the worst comes to the worst down the line you can downsize again or look at equity release.

Yeah definitely something I'm planning on even if it is only a small place. It is the one thing that can really make a huge difference in retirement.

 

[Narj]

I was a bit concerned that if I pop my clogs before retirement it will all be for nothing, you never know what is around the corner!

That's another thing that really bugs me - I have no dependents or anything so don't really have to think about "leaving" anything. I just want to enjoy myself. I'd be really bloody annoyed if I got something terminal before retirement.

The whole thing stresses me out tbh even though I'm on track to be reasonably OK. I would want to work part-time anyway.

 

[yogibear88]

I was a bit concerned that if I pop my clogs before retirement it will all be for nothing, you never know what is around the corner!

Just to let you know your wife will inherit the pension funds if you pop your clogs so wouldn't be for nothing as she would be out enjoying all your hard work

 

[Azza]

I have a decent work pension (1/49th) and SIPP. There's a number of rental properties in the family so come the time they'll be useful. I don't put a massive amount into my SIPP, but if I changed job I'd probably contribute more. The only 'issue' with my work pension is the reductions, as it stands at the moment if you were to retire at 55 you'd see a 46.3% reduction! Apparently it's at the discretion of the employer but I doubt any would be different to the regulations set


I know many people from school who went into 'trade' professions after GCSE or A-levels and have never considered what they'll do for retirement, just think they'll get to what ever age and they'll get some money from the government to see them through My cousin is a heating engineer and has been since he finished school, doesn't have a plan at all. Up until a couple of years ago his boss (very dodgy) at the time was still paying his guys cash in hand, never provided payslips obviously they didn't care so much because they've got loads of cash but he hadn't been making NIC!

 

[fobose]

Just to let you know your wife will inherit the pension funds if you pop your clogs so wouldn't be for nothing as she would be out enjoying all your hard work

Yeah I appreciate that. I spent a lot of my youth going with out things I wanted so now I like to have a bit of cash to buy things I want. 15% pension is good enough for me for now, especially as I had a lot of years with a much higher amount being paid in. I doubt I will ever earn enough to worry about the 40% tax but if I do I would start paying more in to the pension, salary sacrifice of course.

 

[Theophany]

The whole thing stresses me out tbh even though I'm on track to be reasonably OK. I would want to work part-time anyway.

That's what critical illness cover is for.

 

[chroniclard]

Probably grow weed in my greenhouse or something.

 

[randomshenans]

Glad I'm not the only one thinking about this!

We don't own our family home here currently, and that's on the 5yr plan to sort out, but we want to find the right thing, which is hard to do when we know where we want to live, so it's a waiting game really. At the same time we bought an apartment in the alps when we moved over here, only a small 1 bed place, but paid that off in March of this year, so that's a bonus. We are looking to see if we can purchase another 2 bedroom apartment near where we live and viewed one today. Would be for investment of course, as I know we aren't paying for a family home and building that as an asset so want to make sure I am somewhere else.

 

[randomshenans]

Probably grow weed in my greenhouse or something.

Sounds like a plan though.

 

[chorse]

I was on the FIRE track for a while, as I lucked into a high paying niche, and was naturally frugal. Spreadsheet said I could retire at 42. However that all went to pot, when I had a baby a year ago, and I havn't opened the spreadsheet for a while.

I don't really trust pensions, not sure how rational that is. Yes the tax benefits of a SIPP are too great to ignore. But a little part of me stops me from going all in on the SIPP due to probably unfounded fears about not having control.

 

[Jae-So]

Yeh I've been thinking about it too and I'm 33. I get about 15% of my gross going in per month. 9% from my employer and 6% from my contribution. Have to step it up to 20% soon.

 

[moon man]

very sensible to plan early ,i ploughed all my excess money into paying off the mortgage (took 9 years) sort of foolishly neglected the pension , although i only really need to work part time (overheads maybe 200 a month) it would have been great to retire at 50 or at least have the choice.
i hit drawdown age this year , it was about 70k in old pension pots ,obviously not worth buying an annuity but if i worked part time i could top up with drawdown to my tax code limit.
However with covid i will have taken a mighty battering

 

[vanandjuanunited]

My biggest concern is the state pension. If they change it I could be screwed.

My plan is to partially retire in the next 6 years which gives me 10 more years to get to state pension age assuming it doesn't change again. Work three days a week and start drawing my work pension etc. Enjoy life and see the world a bit more

Always something I wish I had better laid plans for but hey ho.

 

[DXP55]

If you have worked out what you would need in retirement - double it and add as much as you can as you go.

I know I am retired and skint.

 

[bakes0310]

Dont really have plans to fully retire, probably keep working 1-2 days a week to have some pocket money and to keep the brain and body going. I have paid into state and work pension, see what happens when i turn 70 and look at my situation.