Retirement...when, how old and how much??

flook said:
I'm in a similar position to you I think, planning on the basis of a savings pot of circa 350k, wife has a pension she starts to draw in October, original plan was to retire March 22, now its March 24. S&S ISA hasn't moved in 18 months (well it has, a lot, but it's been equal in both directions) Finally got a decent rate on my cash ISA which will help a little, but I'm by no means confident of the current target date
Click to expand...
It does get a little nervy pumping as much as I can into my company pension and seeing it pretty much flatline for a couple of years.
 
abu13 said:
It does get a little nervy pumping as much as I can into my company pension and seeing it pretty much flatline for a couple of years.
Click to expand...
I guess the theory is buy low, but the trick is knowing how low it's going to go :/
 
Anyone give me an indication of how I'm doing for a 37 year old in relation to where I should be at this stage.

Currently, I'm going to be getting £6,671pa from my teacher pension (presuming that is at today's rate not the rate in 30 years or it'll be worthless).

I also have a total of £15,478 in my current workplace pension. I am putting in 7% at the moment and this is matched by my employer. I can opt for any amount between 4% and 10%.

Then obviously my state pension - hopefully that's still a thing by the time I retire.
 
117 M34 said:
Anyone give me an indication of how I'm doing for a 37 year old in relation to where I should be at this stage.

Currently, I'm going to be getting £6,671pa from my teacher pension (presuming that is at today's rate not the rate in 30 years or it'll be worthless).

I also have a total of £15,478 in my current workplace pension. I am putting in 7% at the moment and this is matched by my employer. I can opt for any amount between 4% and 10%.

Then obviously my state pension - hopefully that's still a thing by the time I retire.
Click to expand...
You are doing fine; I didn’t start a proper pension until I was 38 and it’s looking good now at 50…but I’ve been putting 16% in and my employer the max 12% annually.


The size of the pot you need depends on a few factors such as the type of lifestyle you plan to have, and when you plan to retire…..
 
117 M34 said:
Anyone give me an indication of how I'm doing for a 37 year old in relation to where I should be at this stage.

Currently, I'm going to be getting £6,671pa from my teacher pension (presuming that is at today's rate not the rate in 30 years or it'll be worthless).

I also have a total of £15,478 in my current workplace pension. I am putting in 7% at the moment and this is matched by my employer. I can opt for any amount between 4% and 10%.

Then obviously my state pension - hopefully that's still a thing by the time I retire.
Click to expand...
If you can afford the other 3% then it's a no brainer. Compound interest is your friend so max out as soon as you can.
 
Pension related question. Maybe to simplistic a question to answer but …

Would you bang all your spare money into clearing your mortgage asap,
Or leave the mortgage payments as they are, go full term, and bang the money into pension pot instead
 
Bluesince1979 said:
Pension related question. Maybe to simplistic a question to answer but …

Would you bang all your spare money into clearing your mortgage asap,
Or leave the mortgage payments as they are, go full term, and bang the money into pension pot instead
Click to expand...
My thoughts on this were if you pay the mortgage off your lump sum is gone forever,l got a break down month by month from the building society and saw as the mortgage was decreasing something like 7byears to go the actual interest part was actually very little something like £20 a month
My thinking was keep my lump sum that I could pay the mortgage off with in an account to attract interest and set a direct debit against this earn more interest than I'm paying on the mortgage and keep my lump sum if I fancied a holiday or new car .etc
 
mrtwiceaseason said:
My thoughts on this were if you pay the mortgage off your lump sum is gone forever,l got a break down month by month from the building society and saw as the mortgage was decreasing something like 7byears to go the actual interest part was actually very little something like £20 a month
My thinking was keep my lump sum that I could pay the mortgage off with in an account to attract interest and set a direct debit against this earn more interest than I'm paying on the mortgage and keep my lump sum if I fancied a holiday or new car .etc
Click to expand...
He's not drawn his pension yet
The question is, which should he prioritise, pension contributions or reducing the outstanding mortgage
 
117 M34 said:
I am planning on upping it to 10% next year but I'm paying a small fortune in childcare costs at the moment so probably not feasible just yet.
Click to expand...
Upping the pension pot by 3% won't hit your pocket by much presuming you have a student loan. Probably in the region of 50 quid but you'll get an instant 3% pay rise of a maybe a grand a year. It's a no brainer to match the employers maximum contribution Try and do it asap. Go to https://listentotaxman.com/ and enter in your details to get exact reduction of monthly net income. Just double the pension numbers as that's will be adding on the employers contribution as well
 
Bluesince1979 said:
Pension related question. Maybe to simplistic a question to answer but …

Would you bang all your spare money into clearing your mortgage asap,
Or leave the mortgage payments as they are, go full term, and bang the money into pension pot instead
Click to expand...
If you're a higher rate income tax payer then it's usually the pension route that pays off. What I would do though is make sure you're on the lowest LTV rate first, so 60%. Get to this as quickly as possible especially with the interest rates being higher at the moment then start looking at pensions.
 
halfmist said:
I am afraid not.
If you fuck up as an employee it’s not taken from your wages.
If you fuck up as a boss you lose the business, the buck stops with you.
Click to expand...
If I seriously fuck up as an employee, it’s not just my pay cheque I might lose. My CFO in 2006(?) lost over $1BILLION on fuel hedges. He “lost” his CFO position, but gained a multi-million dollar role as a “consultant”!

Not always the way you paint it, but I think I understand your main point.

Hiwever, while I’m with you that a very small business owner carries significant risk from employee mistakes, he/she is often also the person who does all the hiring, aren’t they? And, set the qualifications and salary for the position? Often, the “value” proposition in hiring turns into a bad one…just not always immediately…but until then, the productivity cost of employees is often seen positively, no?

Like many things, including investing for retirement (to get back on track!), it all looks great until it doesn’t! Experience suggests reducing one’s financial risks while weighing them against the desired financial rewards is not only prudent, but also preferred. Unfortunately, one person’s “prudent” can be another person’s reckless! To each their own, but there are professional paid to help everyone understand their entire risk/reward spectrum and thus help them not only minimize surprises but manage their risks sufficient to allow them to sleep well at night!
 
Bluesince1979 said:
Pension related question. Maybe to simplistic a question to answer but …

Would you bang all your spare money into clearing your mortgage asap,
Or leave the mortgage payments as they are, go full term, and bang the money into pension pot instead
Click to expand...
What’s your opportunity cost, including tax advantages and disadvantages. to each option?

In its simplest form, can you make more investing the pension money than the interest you’re paying on the mortgage after tax and other costs?

Which course of action would make you more comfortable and able to feel good about your decision?

I have a similar, but different, issue. Should I pay off a 3% fixed mortgage or invest the money in an account that can guarantee me more than a 3% return over the same period as the mortgage payments?

I chose the latter option, knowing that if anything were to happen that changed my calculus, I could take the money and pay off the mortgage at any time.

However, in your situation it appears the money would be captured behind a retirement/pension firewall with withdrawal penalties. That’s where you have to consider the opportunity costs, because they may end up being real costs.

I’d invest in the pension and just keep paying the mortgage…as long as it’s not about to dramatically readjust upwards, and I could still sleep well knowing the potential pitfalls of my choice.

Good luck with your decision.
 
Last edited:
You must log in or register to reply here.
Unread Posts

Don't have an account? Register now and see fewer ads!

SIGN UP
Back
Top