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Planning for Retirement

Discussion in 'General Discussion' started by randomshenans, 4 Sep 2020.

  1. mattx2

    Wise Guy

    Joined: 21 Jul 2005

    Posts: 1,388

    Location: New York

    Yep I quite enjoy the work I do and no reason I wouldn't work into my 70s. I'm not the type to potter round the garden watching daytime TV.
  2. SPG


    Joined: 28 Jul 2010

    Posts: 7,148

    Yep, i enjoy what i do as well its not physically taxing apart from the flights of stairs to get to my desk. So hopefully will keep on learning till i am well into my 70s.

    Besides a Japanese guy is still doing ironmans in his 80s and i want his record biatchhhh.
  3. Mr^B


    Joined: 25 Nov 2002

    Posts: 3,434

    They generally are, but you can't argue with the tax incentives and employer contributions.

    Annuities are just one option, another one would be to transfer it into a reasonable income-style drawdown fund, and if you can manage to get 4%-5% performance out of it, that's a simple route to £40k a year without touching the original investment.
  4. krooton


    Joined: 9 May 2004

    Posts: 26,908

    Location: Leafy outskirts of London

    8% + 8% matched, wish I had started much earlier as I only have £23k in there now, with 30 years left of work (if I don't retire early)
  5. flea.rider

    Wise Guy

    Joined: 7 Aug 2017

    Posts: 1,155

    as long as the house is paid for .. and you have a few £100 a week spare cash i wouldn't bother so much ..
    your going to be doing less on average after 65-70 anyway ..a few trips looking after grand kids ..
    and thats if you get to 70 .. which if things continue down the road we are on most wont ..
  6. Pipe & Slippers

    Wise Guy

    Joined: 4 Jan 2004

    Posts: 1,098

    Location: Finally, Swindon

    54 Now
    22-24 small DC scheme - put in about £3k, and it isn't worth much more than that now
    25-30 a better DC scheme with about 50% of it subject to a guarantee that's currently much better than the open market
    31-35 1/60th DB scheme - wish I'd done AVC's now that would have moved it to 1/50ths
    36-38 1/60th DB scheme non-contributory
    39-54 with the same employer, a hybrid scheme giving effectively 1/80th, non-contributory, but with massively generous AVC scheme, that'll provide approx another 1/80th. Folks that didn't do this are now very unhappy
    54-now with the same employer, DC scheme 9% base + up to a further 3% that is matched
    I've been in reasonably well paid roles and regularly recalculate my retirement income
    I was aiming for around 2/3 of my final salary @ 60, but it looks like it'll be nearer 50%
    Hate my job at the moment so can't see me being there in a couple of year's time, but by then I think I'll be a shell and unfit for further work - I'm not that far from it now, or so the OH tells me
    Paid off the mortgage about 18 months ago and have zero savings

    The situation I'm in now is deciding when I reach the tipping point of having 'enough' income/savings to last me to when I get the state pension. These will be the most active/expensive years

    By the time I get the state pension (67), it'll just be a massive bonus. Believe it or not, I apparently still have another 4 years to work before I get the full entitlement. I'm not quite sure where I slipped up on that one
    First world problems, eh? I do realise how fortunate I am to have options

    Looking at my friends who are the same age as me, I'm the only one that will be retiring before 60
    One of them was saying the other day that he's got £90k in his (one and only) scheme. I didn't have the heart to tell him what annuity rates are
    Given their poor projected pension income, their non-pension retirement plans are a mixture of:
    • inheritance - a bit of a long shot in some cases, and nothing is guaranteed, especially not the date of receipt
    • working until they are 67 - people shouldn't underestimate how poor their health may be or how exhausted they may be, that could prevent this
    • working until they drop - as above
    • downsizing - doing the maths with one of them, this isn't really an viable option unless you own an v expensive property and are content to get a much less expensive one. People like to try and maintain their living standards
    So for them, it's all compromise and lack of options, especially lack of options to improve their positions this late in the game

    If I was advising someone in their early working life now, at a minimum they should maximise what they can get out of any company pension scheme - ultimately it's free money, and try and pay their mortgage off a few years before they think they'll stop work

    Anything above that is a bonus
  7. billysielu


    Joined: 9 Aug 2009

    Posts: 12,112

    Location: Oxfordshire

    I'm 34 and I basically let the 40% tax band dictate what I pay into my pension. Currently something like 20%. Anything beyond that I invest myself in S&S ISA, basically the same thing pensions do but I can access it if I need to.

    At some point there's meant to be a pensions portal from the govt to help you find old pensions you forgot about.
  8. Selekt0r

    Wise Guy

    Joined: 18 Oct 2002

    Posts: 1,733

    Location: Kent, UK

    Just passed 50 and looking to retire somewhere between 55 and 60.

    I would echo previous comments about maximising whatever you can get out of a company scheme. Any matched contributions are indeed free money, and whilst it can be difficult to see a chunk of your income going out every month for your own contributions, it is definitely worth it in the long term.

    I'm very lucky to have a couple of defined benefits pensions from previous employers which will pay out a couple of grand a month from age 60, and a good defined contribution pot from my current employer - currently matching my 6% contribution plus adding on a further 9.5% - so 21.5% total contributions going in :D Mind you - the covid-related market crash earlier this year saw that pot down nearly 20% at one point... :eek: Thankfully mostly recovered (for now at least).
    With a bit of luck I'll be hitting the lifetime allowance limit before 60. Just hoping that they don't introduce other pension 'reforms' in a post-covid tax grab which scupper things.

    Ideally I'd like to be able to take a chunk of tax-free cash from the defined contribution pot to help the kids out and tide me over until the defined benefit ones kick in at 60. State pension at 67 still seems like a long way away, but would hopefully just be some extra income likely to be passed on to the kids at that point. With a bit of luck and decent market performance there will be a nice chunk of defined contribution pot to pass on to the kids on my demise too.
  9. randomshenans


    Joined: 11 Sep 2009

    Posts: 12,322

    Location: France, Alsace

    I just got an updated statement through from my company based on my 2% over payment and based on my previous pot being transferred. Based on current income etc. I should retire with a 68k (CHF, so 57,5k GBP) a year pension and about 210k CHF (177k GBP) payment chunk, which isn't too bad! One reason I really like paying social contributions in Switzerland means that I get a Swiss state pension. I did my calculations and as a couple, we are maxed at 3556 CHF a month state pension (3k GBP).

    We've also started some investments, which should end up as a nice pot come retirement. They ramp up past 40, so another 5yrs which then should give me a nice pot to clear mortgage, or mortgages, depending on how I get on with buying other properties along the way.

    I didn't even consider inheritance to be honest. My mum remarried, and he has 3 kids, so they have a house in the UK worth probably 750k? Which I'd get 25% of, as well as a chalet in the alps, which is worth about 800k, which I'd get 25% and also Mum has an apartment probably worth 250k with my sister, which I'd get 25% of, which I'm sure will annoy my sister haha - I have a real bond for the 2 houses though, as I grew up in one and the other I spend a lot of time at, so we've been trying to workout how our above investments could lead us to buy out others when the time came.
    God knows about my dad; he remarried but they have no kids, so not sure what the will is setup like. He has a couple of houses in cornwall and a house in Spain. Hadn't even given it a thought to be honest, I focused really on my own things I can control.

    Nah man, I'll pack in earlier and don't want a couple of hundred quid, I want to see the world more. Live! Not sit with and wait to frigging die at home.
  10. Hagar


    Joined: 1 Mar 2010

    Posts: 10,164

    Location: 5 degrees starboard

    I began my pension saving at age 29 in 1981.
  11. flea.rider

    Wise Guy

    Joined: 7 Aug 2017

    Posts: 1,155

    already done that ..lol most of Europe ,canada .. bit of the states ..anywhere else will be far to long of a flight now .. over 50 ...
    then again if i win the lottery a one way to austrailia i could handle ..
  12. SexyGreyFox

    Man of Honour

    Joined: 29 Mar 2003

    Posts: 51,690

    Location: Stoke on Trent

    Let's see how you feel when you're 62 and a half :)
  13. smeemi


    Joined: 8 Jan 2010

    Posts: 402

    This generation is uber screwed. No defined benefit schemes, just defined contribution and not many people even max out their contributions to match employers... I'm doing 6% and my employer does 12% which is alright. But to get to £1m pension pot (c 30k a year on a defined benefit) it is damn difficult..
  14. Garp


    Joined: 18 Oct 2002

    Posts: 10,573

    Location: Seattle

    Wife and I got sorted out with a financial adviser about 4 years ago. Totally shook up our finances and got us in to a much better place, as well as getting good life insurance policies etc. set up. We were doing a good job of squirrelling away money, but a bad job of making that money actually work for us in any meaningful fashion. All low interest rate stuff. I'm on track now (about to turn 40) of being able to retire in my early 50s, and maintain existing quality of life, which is shockingly close.

    I'm not sure when I'll actually retire, though. Maybe I'll retire early, and pick up some random work?

    The goal is not about retirement, per se, it's about being in a financial position where I don't have to work. That way if that decision is made for me somehow, my family won't be struggling.
  15. smeemi


    Joined: 8 Jan 2010

    Posts: 402

    Amazing well done. What did you cut down on most by the way? I've found I spend the most on electronics and holidays.... But since lockdown Ive saved enough to move house.
  16. Garp


    Joined: 18 Oct 2002

    Posts: 10,573

    Location: Seattle

    Nothing, honestly. We're fairly frugal types already. If anything our expenditure has increased since we started seeing a financial advisor, since we've started funds for our kid's college educations (yay USA). We just weren't making effective use of what we had. It wasn't in any tax deferred or free savings accounts, wasn't in any index funds or similar. Just sat in various bank accounts not working for us. Compound interest is a hell of a thing, and we were just not getting any of it, let alone capitalising on market growth via index funds and what not.

    Main thing both my wife and I do is to keep asking "Do I really need that, or just want that", and be strict about it, and ask each other about it.
  17. Nutty_Death


    Joined: 5 Apr 2004

    Posts: 801

    Mid 30s and put in 14% whilst my employer puts in 6%. No real strategy at the moment other than to benefit from the higher rate tax benefits.

    Not sure what my total pot is currently as I'm in the process of merging 5 pensions. None offer any additional benefits.

    Plan is to have our current house paid off in the next 10 to 15 years. Would have been in the next couple of years but we recently got a larger family house.

    Obviously would like to retire as early as possible. Pre 60 would be great. I would also like to have money to give to my kids for deposits on houses for them, which were separately saving for each month.

    Probably need to look at what else we need to do, to tied us over before we can take out private pensions.
  18. ivrytwr3


    Joined: 25 Aug 2006

    Posts: 4,231

    I'll be 52 when i will have the option to take an immediate pension of £18.5k and lump sum of around £60k. Mortgage will be paid off by then, wife works part time, about £14k, but kids will probably be still at Uni.

    I don't think that's enough to retire on, but it may mean i will be able to go part time?

    Haven't really looked too much retirement figures!
  19. Narj


    Joined: 19 Feb 2010

    Posts: 12,950

    Location: London

    I'm now a couple of months away from paying my mortgage off and am mulling over how I change career to something much less stressful (maybe something more fulfilling in the civil service) without sabotaging my retirement prospects tbh. I'm really hoping I can wangle redundancy this year and I should be golden. :p

    In total I've got about 230K in pensions and a fair lump of cash in S&S ISA/Savings/other investments. It sounds like a lot but when you look at annuities it's peanuts. :(

    I don't really buy much "stuff" and like some others have said, I'd be happy spending my time pottering around in the garden, going for countryside walks and having the odd pint in the local boozer alongside some part-time work when it comes to retirement.
  20. Uther


    Joined: 16 Jun 2005

    Posts: 15,100

    Don't look at annuities, look at what you could do with drawdown.
    I consolidated all my old pensions into one SIPP a few months ago. I certainly won't be rich in retirement but I won't starve hopefully. Currently 55 and work 3 days / 21 hours a week, which I've been doing or the last three years and quite happy with my work / life balance (although currently on furlough...)