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

[Gorton_Tubster]

Iv semi retired. Earnt my shares and now working to keep fit and have framework around my life.

 

[Stephen Ireland's pants]

I think you will find a lot of people are in jobs they hate and can't don't want to carry on doing it.
Sadly some people don't have a choice, theres no chance I am working another 20 years they can fuck off

Possibly the only good thing to come from covid is that people re evaluated some things in life . I've been to loads of places <pubs > and staff have changed jobs/careers. I've jokingly retired at 35 and 45 but I will have nothing when I am 55 unless I win the lottery or go back to work. Or I meet my maker before 55 then it won't be a issue anyhow. If you see a miserable old man at city selling programs in 30 years that will probably be me . Up the blues

 

[asahartford1]

You talk a great deal of sense mate. I always promised my wife I would retire early as I could so we could spend time together and with our kids and grandkids. I went at 55 and have had the last 10 years enjoying that, good holidays, fishing, doing stuff I just never had the time to do before. I could have stayed on another few years and we would have been considerably more wealthy but what is the point? I have seen too many knock their pan in to build a career, work until their mid sixties and then die within a couple of years. What’s life for?

Thank you.

Have just come off the golf course and read your very sensible post.
Off to my house in Spain for 3 weeks late Oct and again in Jan.
A good " corporate " buddy of mine diagnosed with Kidney failure last week, age 55, doubt if he will spend his pension pot.
Time is the most valuable thing you can have.

 

[BongoBlue]

Over here in the US, while I can claim Social Security now, if I wait until I am 67, I get the full benefit. That's 4.5 years away now. Luckily I actually like my job (defence contractor) so it's not like I am itching to retire. But it is coming up and I am looking forward to it. I am still pretty healthy and play league football still. Because if you retire unhealthy, you sure won't enjoy it...;)

The biggest problem is the extraordinary college debt that I have cosigned for my kids. I am trying to pay off as much as I can for them so that they won't be saddled with too much debt which is sadly commonplace here. And while I had significant retirement savings built up, the stock market slide has very much adversely affected it.

The solution? Live somewhere nice that doesn't cost too much; i.e. Costa Rica or Panama. Or even Mexico. Of course I would love to come back home to Ireland but I fear that it's way too expensive now. There's still time for the old markets to come back and I will be considering my options over the next few years.

 

[Stephen Ireland's pants]

Just had a look at my pension statement, now i knew it wasn't going to make good reading but it has dropped by £30k since January despite me putting in over £6k this year. I wouln't want to be setting out on retirement at the moment.

So that's quite a positive thing for someone like me who has no pension. It means I've not lost £30 k . Every cloud and all that . I hope it recovers for you as that's a big number. It confirms that I might be best putting of this pension thing for another 20 years

 

[SebastianBlue]

Never if Kwarteng has anything to do with it.

 

[urban genie]

Never going to be able, won't be able to afford it will be working till I die

 

[Manchester33]

It confirms that I might be best putting of this pension thing for another 20 years

Actually, it probably confirms that now is the best time to start investing in a SIPP.

The stock market has taken a beating, so if you fancy buying some stocks on sale (with great tax incentives too), then now is arguably the best time in the last decade to get started.

 

[Manchester33]

Never going to be able, won't be able to afford it will be working till I die

Can I suggest reading "your money or your life"... a great book, might change your outlook a little.

 

[abu13]

Pensions are a long game investment. You’re currently buying shares/investment cheap which will recover once the current turmoil subsides. It’s a problem if you want to retire within the next few years but if you are 7-10yrs away then you will be fine.

Thats why i'm not panicking too much at the moment, i keep claasing it as buying shares at a discounted price. My plan was to retire in 8 years but if the figures worked possibly take a couple of years earlier.

That said Putin may make the whole subject moot if he goes full Tonto.

 

[abu13]

Well I'm 47 and I've already had enough of working! I'd pack it in tomorrow if I could
It's disgraceful that they expect you to work until your nearly 70, they sure as hell know what they are doing to us
Twats

It's not a good position to be in mate, this is exactly where i was. Around 46 / 47 I realised that the kids had left home my debts were coming to an end and I had a good level of disposable income for the first time in my life.

All of a sudden i was in a position where if I came out of work it wouldn't really matter, I could get by for a few months and take a job on pretty much 1/2 my current salary. The need to work suddenly wasn't as important, i wasn't going to lose the house or have the ballifs coming around.

I then started to save as much as possible with the aim of retiring early, the trouble then being that this becomes a goal and a target to work towards, Now if you are 64 it isn't too bad but in your late 40's it is still a long time to go especially if you are in a job you hate.

 

[urban genie]

Can I suggest reading "your money or your life"... a great book, might change your outlook a little.

You can, but I respectfully won't

Said I would be working till I die, never said I was bothered by the fact.

Not having money to sit around all day in my old age doesn't bother me, also I will be long dead before my retirement age anyway.

Thank you for the advice though

 

[abu13]

So that's quite a positive thing for someone like me who has no pension. It means I've not lost £30 k . Every cloud and all that . I hope it recovers for you as that's a big number. It confirms that I might be best putting of this pension thing for another 20 years

Dont get me wrong, the figures look grim at the moment but I knew they would be, the positive is that while geep investing the number of shares each month are increasing. In time the market will correct itself and i will see huge gains, now that may take 3 years, 5 years or 10 years but they will bounce back.
I would encourage everyone to pay into a pension and start it as early as possible.

 

[GornikDaze]

It is bound to rise sooner or later.

Any defined benefit pension scheme works back from the state pension age if you retire early.

Early retirement age is 55 and moving to 57 when the state one moves to 67. You lose 4.2% a year retiring before stage pension age too, so if that goesback 3 years another 12.6% of the full lot lost.

Retire at 55 on zero pension and then lose 42% at 60, plus 15 years of contributions.

That’s not strictly true. DB schemes aren’t necessarily linked to SPA they can have their own Normal Retirement Date. I saw someone today who has a DB paying out at 60 and one at 62. He could defer taking the income and in theory get an increase to the amount paid when he decides to take it. In reality he will probably be better to pay the tax on the income and save the money. Most local authority superannuation schemes will be linked to SPA and as you point out will suffer an actuarial reduction if early retirement is taken

 

[SebastianBlue]

Actually, it probably confirms that now is the best time to start investing in a SIPP.

The stock market has taken a beating, so if you fancy buying some stocks on sale (with great tax incentives too), then now is arguably the best time in the last decade to get started.

I would absolutely advise against buying right now, unless your investment realisation horizon is 20+ years and you are certain you will not have any cashflow issues in the impending global economic decline.

If you buy right now you need to be ready for your investment to decline in value -20% to -40% over the next year and for it not to recover to initial capital levels for 5-7 years.

And this is only referring to nominal value; inflationary devaluation will also likely extend buying power losses.

 

[Kompany Car]

That’s not strictly true. DB schemes aren’t necessarily linked to SPA they can have their own Normal Retirement Date. I saw someone today who has a DB paying out at 60 and one at 62. He could defer taking the income and in theory get an increase to the amount paid when he decides to take it. In reality he will probably be better to pay the tax on the income and save the money. Most local authority superannuation schemes will be linked to SPA and as you point out will suffer an actuarial reduction if early retirement is taken

Absolutely. One of my defined benefit pensions from my days working at University, has the bizarre retirement age of 62.5yrs. I have another that is 65yrs from another company, they all vary depending on the terms when you enrolled in them.

 

[Manchester33]

I would absolutely advise against buying right now, unless your investment realisation horizon is 20+ years and you are certain you will not have any cashflow issues in the impending global economic decline.

If you buy right now you need to be ready for your investment to decline in value -20% to -40% over the next year and for it not to recover to initial capital levels for 5-7 years.

And this is only referring to nominal value; inflationary devaluation will also likely extend buying power losses.

I have to argue against this (with the obvious forewarning that the market can go down).

If we were to presume that the poster:

- has high-interest debts
- has no emergency fund and is financially unstable

Then obviously they shouldn't open a SIPP today and whack a load of money into it.

But if they

- have a good emergency fund (3-6 months spend)
- have no high-interest debts
- have no immediate financial goals (like saving for a house deposit)

Then why shouldn't they start investing now? The general rule of thumb (as far as I see it) is the best time to start investing is ASAP. Don't try and time the market because there is just as much chance that it could go up - no one knows. All the uncertainty and high inflation are factored into the current prices anyway, so I'd argue it's incredibly unlikely that the market would further drop by up to 40% within a year.

Remember, the alternative is presumably to hold cash - which is effectively losing around 13% of it's value currently?

 

[denislawsbackheel]

Surely it depends how old they are.
I’m approaching 71 and I’m spending my dosh now, not investing.

 

[SebastianBlue]

I have to argue against this (with the obvious forewarning that the market can go down).

If we were to presume that the poster:

- has high-interest debts
- has no emergency fund and is financially unstable

Then obviously they shouldn't open a SIPP today and whack a load of money into it.

But if they

- have a good emergency fund (3-6 months spend)
- have no high-interest debts
- have no immediate financial goals (like saving for a house deposit)

Then why shouldn't they start investing now? The general rule of thumb (as far as I see it) is the best time to start investing is ASAP. Don't try and time the market because there is just as much chance that it could go up - no one knows. All the uncertainty and high inflation are factored into the current prices anyway, so I'd argue it's incredibly unlikely that the market would further drop by up to 40% within a year.

Remember, the alternative is presumably to hold cash - which is effectively losing around 13% of its value currently?

I covered all of this in my post: “unless your investment realisation horizon is 20+ years and you are certain you will not have any cashflow issues in the impending global economic decline.”

But even your “good” scenario would not be sufficient for the economic downturn coming. People are underestimating the depth and breadth of market instability and dysfunction.

And “all the uncertainty and high inflation are factored into the current prices anyway” is not correct; that is a falsehood in the “everything is priced in” narrative being perpetuated by inexperienced retail traders that have become a more prominent force (both within markets and within broader culture) over the last few years.

Most have only invested/traded during a time of “stocks only go up”, instigated by the largest monetary and market intervention in human history, which is now being unwound due to functional, emergency requirements. It is a fundamental misunderstanding of market dynamics that has continually seen them “buy the dip”, as the the markets keeping dipping.

And the last thing someone that may have serious cashflow issues in the coming deep global recession would want in sustained high inflation conditions would be to have a double hit to their buying power by locking in their pound or dollar denominated savings in to equities that are losing value. If you held £50,000 in a low yield savings account, even with inflation, it would outperform an investment account continually losing value in addition to buying power. And that’s not factoring in the loss of value when a large number of people begin selling assets to cover cashflow deficits (see UK pension debacle currently taking place for an example of the spiral that ensues).

I say all of this as a person that has worked in financial data analytics for my entire career and has degrees in economics, statistics, and analytics and access to underlying credit and risk market data not available to most.

We have barely realised a bear market and calls for this being the “bottom” are pure desperation. There is a reason most seasoned, respected analysts are saying there is far more pain to come.

What is happening with GILTs, BoE intervention to prevent more asset dumping, and the volatility in global bond markets are merely early warnings of what is to come.

We are far from a “bottom” and anyone buying now needs to understand that and determine if losing 20-40% of the value of their investment from here, with a likely 5-7 year recovery to just nominal initial cap outlay (this is going to be a long recovery, nothing like 2020 for many reasons) makes sense for their financial situation given the impending global economic downturn.

My advice not to buy now is based on statistically significant data showing “most” people are not in a strong position to weather the storm that is coming and so should not be making decisions that would put them in an even worse position. Many aren’t even in a position to manage the current situation.

What people do now will have a significant impact on whether they are able to navigate what is to come. There should be an acute focus on protecting cashflow, as it matters little if you have a large investment account when you cannot meet you current financial obligations (which forces you in to an asset dump that begins a vicious wealth destruction cycle).

 

[Tommy_Catons_Perm]

You can, but I respectfully won't

Said I would be working till I die, never said I was bothered by the fact.

Not having money to sit around all day in my old age doesn't bother me, also I will be long dead before my retirement age anyway.

Thank you for the advice though

You might live to be 90. You might be too ill to work from the age of 60 and spend 30 years in miserable poverty. Nobody knows.