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I see various adds suggesting 6 and 7 figure pension pots, but a life lived in the real world(ish - some may argue differently), kids, a mortgage and a number of job / pension changes have left pension contributions lower down the priority list...
Is there any sort of rule of thumb guide?
you must have read your recent letter .... 🙁
Rule of thumb is 25x your desired income is the pot size needed
Is there any sort of rule of thumb guide?
Put in as much as you can, then a bit more, a little bit more and finally a lot more. Then you'll find it wasn't enough.
Soooo, live it up then chuck yourself on the mercy of the state. Or get well insured and do a Reggie Perrin.
[url= http://www.moneysavingexpert.com/savings/discount-pensions#howmuchshould ]Martin Lewis to the thread[/url]
Is there any sort of rule of thumb guide?
Well that depends on when you want to retire, your partners pension and what other income you may have when you retire.
I'm retiring at 55, you may be happy working until you're 75 🙂
This pension product you speak of...
I think the generation who had it good in the 50's, enjoyed the 60's and partied through the 70's might have just shut the door on that concept, whilst currently enjoying their large final salary pots.
Welcome to the 21st century where you work until you die.
If you're young enough and able to, buy a property and rent it out. Let the tenants pay off the mortgage before you retire.
Yes 25 to 30 times yr required income in retirement. That and a well diversified portfolio, afraid to say that in 20 years time the state pension for anyone with any private income I doubt will exist. It has all the characteri pensionstics of a ponzi scheme.
For me it's property, dB pensions, private investments and what's left of the state pension.
Ahh well - good to know the brown sticky stuff is as brown, sticky and smelly as I thought it probably was 🙁
you must have read your recent letter ....
nope - I asked everyone if they'd had letters and were they worth reading? Response was fairly unanimous 🙁
25x your desired income is the pot size needed
🙁
Yes 25 to 30 times yr required income in retirement.
Based on what - an annuity or drawdown?
But agreed that I wouldn't be retiring at 55 if I was relying on my pension as my only income.
Based on what - an annuity or drawdown
That's likely based on an annuity, although you'll probably "need" the same for a drawdown too.
Ahh and the other kicker is - if you did have any equity before dementia/long term age related disability kicks in then, unless you have a one-way ticket to Dignitas, you can wave bye bye to it (not that you'll possibly know or care)
Just looked at that joke of a Martin Lewis thread - how many average people in this country with kids and a mortgage can even conceive of saving the amounts he talks about ❗
Just because saving the "recommended" amount is difficult/impractical doesn't make the "recommendation" wrong.
how many average people in this country with kids and a mortgage can even conceive of saving the amounts he talks about
And how many of them will smoke, drink, have Sky tv, Iphones, new car etc.
Prioritising where you spend your cash is fundamental. Very few will have the will to do it.
Annuities are currently 100k per 3k so that's 33 x yr income, ftse is yielding c4% and residential property c 4% for new money.
So quick calc the average UK salary is c 27k so at 4% that's c 700k.
Quite frightening really when you look at the debt figures
Pension pot vs income is a moveable target (annuity rates) at the moment these are a casualty of the low interest rate environment - so yes 25 income target
There are more ways to save than just pension and you should factor in the classic downsize / moving to a cheaper area or even country.
As a final jibe at the "final salary brigade" just look at Corbyn, as an MP for 30 years he has a pension worth £1.6m !! Those of us too young for that can't realistically get anywhere near that as penal tax rates cut in at £1.2m even if you cN afford to put that sort of money away
There are more ways to save than just pension and you should factor in the classic downsize / moving to a cheaper area or even country
Shhhh that's my plan,
it was aimed at a decent area of France for any aging MTB'er
until you blinkinflippin' Brexiters potentially put a large spanner in that plan 😆
it's alright Jamba your name is waaaay down the list after my mother, my sisters, my brother in law and quite a few others
Just looked at that joke of a Martin Lewis thread - how many average people in this country with kids and a mortgage can even conceive of saving the amounts he talks about
Right. Yeah. I think that's the point. It's not a "joke". Retirement is going to be tough for those who have not thought and saved well ahead.
Scary numbers but don't forget wth no mortgage or kids to pay for (probably!) or commuting expenses you don't need quite the income you might have got used to. I think most would find 15-20k very comfortable under those conditions,
It's a shame bikes don't increase in value as they age. I'd be laughing if the did...
I never used to pay much heed to pensions but always ticked the box and had an employers pension since I was 20 - by doing that I now have around £40k in the pot, apparently that's not much 🙁
I'm now in my late 30's and had a chat with a pension advisor. It bought home a few realities and now I am trying to find ways to stick more into it.
It's unlikely I will retire before I am 65 or be able to take saga cruises when I do. But by making a plan now I'll hopefully own the roof over my head and have something to live, rather than exists on when I do...
@DaRC I look forward to a suitably gentle ride and a bottle of something one day. No one is going to stand in your way. I am sure of it
Find out what your employer will match and put that in, then put extra cash somewhere else (property, share ISAs etc). You can guarantee that future governments will make a raid on private pensions within the next thirty years and you don't want to invest a lot and discover that (a) the minimum age for retirement increases faster than you age or (b) that taking it is incredibly punitive in tax.
The other - and frankly easier option - is to seek a public sector job with a defined benefit pension scheme. Like being an MP.
As a final jibe at the "final salary brigade" just look at Corbyn, as an MP for 30 years he has a pension worth £1.6m !! Those of us too young for that can't realistically get anywhere near that as penal tax rates cut in at £1.2m even if you cN afford to put that sort of money away
How odd, that you single out one Labour MP; when the same rules apply to all MPs and the PM gets an even better deal...
NB You're also out of date on the £1.2m figure (it was £1.25m), it's now down to £1m for 2016-2017 tax year unless you stopped contributing before this tax year started.
Another point is that with the new £20k per annum ISA limit (from next year), each year you can put away £40k pension and £20k in an ISA, so you can have a £1.5m (or more) pension fund and not be hit the maximum lifetime allowance. Just keep the pension part below £1m.