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this podcast runs through that thought process.
meaningful money pension V ISA
EDIT - this is the video which is easier to follow as you can see the numbers side by side
Others have posted more detail above, but this is (from memory) a direct side by side comparison of the two with the hard numbers at the bottom plus other comments such as what happens to your money when you die which may or may not be relevant for you.
TLDR - Almost always best financial returns are to put it in to a pension instead is an ISA
We both retired early. Lucky enough to get substantial redundancy payments and some careful budgeting when we were younger. It's brilliant. Honestly the best thing we've ever done. Haven't been bored for a minute.
Once your mortgage us paid off it's surprising how little you need to live on. One big caveat though. It's a great peace of mind to have a bit of money tucked away that you don't need to live on but is there in the event of an unexpected large expense. Say a new boiler, big car repair or that new bike you simply can't live without (-:
If you have that great, if not it might be worth working another 12 or 18 months. If you hate your job just adopt the attitude of "well it's only a year to go and then I'm free". You might find the stuff that stresses you out doesn't seem so important. And all the time you are thinking "this is the money in the bank that means I don't have to worry about big bills for many years to come".
But overall, if you can afford to go then don't hesitate.
He said he takes home 24k.
So I’d guess a gross of about 35k, and a decent public sector pension that he joined some time ago, before they started hacking away at them.
I'm currently part time/4 days a week due to caring responsibilities for parents, but those figures are about right.
21 years in the CS, 12 years prior to that in private sector pension schemes.
Been trying to keep my head down at work till 60, but it's now at the point of increasing medication to keep me there, and that is just ****ing stupid.
I think you’ve answered your own question.
Thanks for that @bentandbroken I'll study that closely. My logic is much like one of the previous posters; being a lower rate tax payer the case for adding into the pension is less obvious. But I'm definitely keen to explore the options.
Again thanks to everyone for all the opinions and info on this, it's really useful stuff.
I think you’ve answered your own question
You are probably right. And sorry to hear you are at that stage OP. But surely the question you have answered is you can't do this job anymore. Your plan was to retire and draw your CS pension now....and take the pretty substantial pension hit....and still carry on working in a minimum wage role somewhere. Is there a middle way where you leave the CS, work somewhere more manageable but earning just enough that with some serious belt tightening you could get by to 60 before touching the pension? It'll still be less than if you hung on to 60 because of 4 years less contributions, but not by as much.
People who have retired early on small amounts: what do you do about potential big expenditures (ie your roof needs replacing – something that wouldn’t be covered by the typical “have 6 months living expenses put by” plan)?
TBH what would you do if you weren’t retired 🙂
it’s now at the point of increasing medication to keep me there
Being very cynical, could you get signed off long term sick?
People who have retired early on small amounts: what do you do about potential big expenditures (ie your roof needs replacing – something that wouldn’t be covered by the typical “have 6 months living expenses put by” plan)?
TBH what would you do if you weren’t retired
reading this and other retirement threads, it appears to me that myself, and TJ and others who have retired early without a load of cash, may have a different mindset possibly.
i for one have never wanted to live my life, thinking what if.
what if my car breaks, what if my house breaks, what if i get ill, what if i get knocked off my bike............... far too many what if's.
my mindset has always been, if i dont like something, i change it, or dont do it....... simple.
i hated work. i wanted to spend time with my grandkids whilst i was still healthy......... so i stopped working to do so.
it made me happy to do so. having a load of cash and possessions doesnt make me happy.
others may differ.
Or TBH, and without getting into politics which i promised myself i won't do any more;
- all Depts are going to have to make cutbacks and the R word may not be far away; any chance of at least hanging on for that as an option which could provide a payment and/or enable pension to be taken without being as heavily penalised for lost years of service?
I gave up my career in April and now do a part time IT job. It was making me mentally unwell and I was in danger of having to see the GP to get signed off sick with stress and anxiety. I do not know how my other half put up with me, I found me unpleasant to live with ! Age = 54
I did consider going sick but it was a public sector role and it didn't sit well going sick when the reality was that it was going to be the same when I went back. So, after a lot of soul searching and a thread on singletrack, I resigned on 2nd January 2024 and worked a 4 month notice period.
I am much happier and the part time role has allowed me to decompress and get used to the idea of having more free time whilst still keeping the pennies coming in. I don't regret it for a moment, time will tell if the money runs out but that's always going to be an uncertainty, whether you go tomorrow, in a year or in 10 years. I find it easier to think in terms of not working at the moment rather than retired and never working again.
Being very cynical, could you get signed off long term sick?
I am cynically just coming to the end of a month off while they try and my dosage right. I may cynically not quite be there yet. (Mood swings are still "interesting" tbf)
all Depts are going to have to make cutbacks and the R word may not be far away
Our department is the one getting a huge investment to get more staff to close the tax gap.
i for one have never wanted to live my life, thinking what if.
That’s one point of view. Another is that I don’t want to live my life thinking “if only”. If only I’d studied more instead of bunking off with my mates I’d be in a better job. If only I’d worked a bit longer I wouldn’t be sitting in a dirty nappy full of my own shit.
Nobody is “right”.
OP,
Plenty of good advice already provided.
IMO, if you can afford to retire, then do it. i.e. provided all contingencies are in place etc.
Get out of the rat race to regain your mental health (stress related) and peace of mind.
Make sure your love ones are all in line with your plan.
Keep your life simple and you will be pleasantly surprised how well you can live, and still be happy.
I would retire in an instant if I could afford to.
DrJ can i ask , are you a real Dr ??
if so can you answer this please.
in what way does taking early retirement result in dementia ? as this what you typed seems to imply this.
If only I’d worked a bit longer I wouldn’t be sitting in a dirty nappy full of my own shit.
I'm reading it as "if I had more money I could afford a better care home' rather than 'I won't need a care home'
DrJ can i ask , are you a real Dr ??
if so can you answer this please.
in what way does taking early retirement result in dementia ? as this what you typed seems to imply this.
I am a real Dr but not a Dr of medicine.
Taking early retirement does not, as far as I’m aware, result in dementia, but it may result in not having enough money to pay someone to keep you clean later in life.
I am cynically just coming to the end of a month off while they try and my dosage right
Apologies, I didn't intend to be rude...but if I had to take meds to go to work, and was considering retirement, I would seriously consider being on long term sick for as long as possible. Then, you're continuing to contribute to your pension, but without the stress that is making you ill. You don't owe your employer anything.
Taking early retirement does not, as far as I’m aware, result in dementia, but it may result in not having enough money to pay someone to keep you clean later in life.
my mother is 85, and in a care home with demetia/alzheimers. she has not got a penny to her name. she worked until she was 70 IIRC. the ladies who work at the home, on crap wages, do a fantastic job of keeping her clean.
@ton and @drj What's probably being referred to is the twilight between part time and full time care - funded and non funded. If you're unlucky, you find yourself well enough off (usually by dint of owning a house you've worked most of your life to pay for) to qualify to pay towards (or often) for all of your non residential care needs. Needs not significant enough to require full time care, just enough to need 4 very brief visits per day. The time between visits (overnight ~12 - 14 hours) spent in your own filth should you need help and be unable to hold 'it' in. And of course, as your 'wealth' is tied up in the property you actually live in, you can't go out and retain your own, private, full time Carer as they usually want paying straight away rather than when you snuff it.
I've some direct experience of this as my Mother went through it last year to July when she died. If it were me, I think I'd be inclined to save just enough for a single ticket to Switzerland...
my mother is 85, and in a care home with demetia/alzheimers. she has not got a penny to her name. she worked until she was 70 IIRC. the ladies who work at the home, on crap wages, do a fantastic job of keeping her clean.
Then she is lucky. That is not a universal experience as @boblo says. You may want to gamble on following in her footsteps but you should respect the views of people who don’t share your risk profile. We can’t all be happy-go-lucky Jack-the-lad.
We can’t all be happy-go-lucky Jack-the-lad
No need for that.
He just has a different view to you (or attitude to risk). Doesn't make either of you right or wrong, just not sharing the same view...
Doesn’t make either of you right or wrong, just not sharing the same view…
That’s why I said
Nobody is “right”
Counter points
You don't want to be the richest person in the grave yard.
Most people make the mistake of saying " just one more year"
Hopefully by the time we are all at the stage of having to wear a nappy as a necessity the ability to choose dignity has been granted.
I actually find your post quite offensive tbh
Most people on stw are extremely privileged , educated and intelligent.
I work with people who have no money , no assets , no savings and the prospect of retirement is not going to be an option for them.
Is it working you don’t like or just your current job? Given current salary could you find something else that may be more suitable part time maybe and take the pension to top it up?
You should check the pension estimate as 4 years additional contributions achieving over 50% uplift for retirement at 60 years seems optimistic. Ultimately you need to do the maths and only you can decide but make sure you know financial position first.
EDIT: Blimey, the OP is looking to retire at 60 so talk of care homes and soiling yourself seems a bit premature so let’s knock that off.
actually find your post quite offensive tbh
Goodness, which bit? I didn't think he had said anything contentious TBH. ( Apart from the doctorate bit obvs 🙂 )
Goodness, which bit? I didn’t think he had said anything contentious TBH. ( Apart from the doctorate bit obvs ? )
Was he addressing me, or the OP? Didn't make any sense to me .
(My username is a reference to a hip-hop artist, not an intellectual pretension :-). )
Glad I’m not the only confused one…
but it’s now at the point of increasing medication to keep me there, and that is just **** stupid.
In which case you need to go off sick NOW. No job is worth making yourself ill for and having to take medication to be able to work is just wrong ( I assume head meds?) Its not cynical, its not wrong. You job has made you ill and you need to go off sick, CS is IIRC a 6 months full pay and 6 months half pay ( and a years pension contributions)
I'll bet your GP will sign you off ( if you are honest about how you are feeling. Do not downplay it or exaggerate - just be honest about everything. To do this is not weak or a cop out or failing - its about protecting your health) and the moment you do you will feel better. There are usually two levels of early retirement on grounds of health. one is " unfit for any job" and you get you pension as if you had carried on working until 60 ie you get those extra years of contributions and no actuarial downward adjustment. The other is "unfit for this job" in which case you get your pension now without the adjustment but not the extra years contributions. In the latter case you may be offered an alternative post My bet is you would be the second case
Just to add: this is what happened to MrTJ - she was getting more and more burnt out and had been thru internal occupational health stuff including adjustments to her work and reduced hours. With just over a year until she was 60 I changed my line from " maybe you should see your GP" to " go and see your GP" she didn't think she would be signed off but the GP said " here is a 2 month sick line, come back after that for more". She never went back to work and was retired on health grounds just short of her 60th birthday.
Taking early retirement does not, as far as I’m aware, result in dementia, but it may result in not having enough money to pay someone to keep you clean later in life.
Care costs are something of an elephant in this room (IMHO).
If you have assets above about £30 - £50k (it varies between countries within the UK, but it's the ball park) you will need to pay for your care. If you can be cared for in your own home, then your home isn't included in the assets.
Nursing care costs *for a local authority* home are at least ~£55k PA. Private homes are double that or more.
Working 'an extra year' (or two... or three...) isn't going to buy most people more than about a year's care. Nobody in an 'ordinary' job is going to be able to afford a meaningful duration of care - only those with mega pensions and/or those that have been lucky on the property market.
As soon as you go into residential care, your home is included in your assets (unless you share it with a partner), and you will be required to sell it if needed to meet care costs.*
*Despite the headline noises about 'care in your own home' being a priority, local Social Services have a financial incentive to get single people to agree to be cared for in a nursing home, as they will then get funding through sale of the person's house. It was the devils own job to stop them doing this to my mum, and it was only the fact that I'd recorded phone calls and taken notes at meetings, and that I can be a stubborn f***er that stopped it - they flat out lied. (They being someone who claimed to be social services, but turned out to be some sort of agency employed by SS).
I too hope that there will be a civilised option to choose the time of my passing by the time I get there.
On the subject of care, you may not just have to think about your own. MiL retired recently with big plans then found herself looking after her own MiL. It took up a lot of time, money and mental energy and meant all retirement plans were on hold for a couple of years.
Early retirement may see you getting a better window of carefree (pun intended) lifestyle. Obviously doesn't apply to everyone and it's hard to predict the timing but another factor to consider.
...reference to a hip-hop
From nappies to a hip-op all before the age of 60 🙂
Seriously, everyone calm down; it's a point of view on an internet forum...
myself, and TJ and others who have retired early without a load of cash
That's not my understanding of TJ's position, he's got a BTL flat (plus pensions etc) from what I understand.
Taking early retirement does not, as far as I’m aware, result in dementia, but it may result in not having enough money to pay someone to keep you clean later in life.
It's less about money and more about that if you get to this point is there anyone who cares AND is capable of fighting your corner (to make sure your 'ar5e' is wiped). If you've not had kids, who'll step in?
And yes, just because you've had kids it doesn't mean they will and/or can, but it's the approach used by humanity for ever.
Enough about retirement..
Who's Spartacus STM?
Well my resignation email has just gone to my boss. Three months and I'll have finished my working life!!!
If you have assets above about £30 – £50k
You might be surprised to hear, the lower limit to contribute 'something' in England is just over £14k...
That’s not my understanding of TJ’s position, he’s got a BTL flat (plus pensions etc) from what I understand.
Its where I would have been if Julie had not died. Because she died I got a lot of cash
My pension is £8500 pa plus £5000 from the rental. Julies pension would have been around £6000 We would have had around £30 000 lump sum cash between us. the flat was NOT BTL - it was her flat originally
Because she died I am much better off in cash terms and also get some small bits of widowers pension. Yes I have a similar attitude to money and retirement to Ton but the large amount of cash I got makes everything easier because I do not have to worry about what if - apart from as pointed out above its not that much if you think about care costs which I will never have. I'll be off to Switzerland
I do understand how privileged I am but we were prepared to retire on sums many of you seem to think grossly inadequate
...apart from as pointed out above its not that much if you think about care costs which I will never have. I’ll be off to Switzerland
Going in to care in old age often isn't planned. A lot are hit with a sudden illness which means they go from fine and coping to not fine and never will be again very suddenly.
The council will just take your assets though (and mine!) - I think only the very richest people can afford private care from savings and investments.
Muffinman - it was my professional world. I'm fully aware of the routes available to us. If necessary I will starve myself to death
Very gloomy topic
Going in to care in old age often isn’t planned. A lot are hit with a sudden illness which means they go from fine and coping to not fine and never will be again very suddenly.
I think it’s been mentioned on this forum before how parents, in general, never move into more suitable housing in time, when they can make an informed decision on a calm timescale. Probably my daughter will be saying the same about me 🙁 As you say, stuff happens and it can happen very quickly and at that point it’s too late to read the emergency instructions card.
Careful, and at the risk of taking this thread off to other places where thread already exists.
Switzerland won't take you just because you got a bit old and need care, and the recent progress on this topic is walking a tightrope that doesn't want to slip into that scenario, at least not yet - opponents would seize on that and the slippery slope argument with glee.
Shall we try and keep on track?
Anyway
kiloFull Member
Well my resignation email has just gone to my boss. Three months and I’ll have finished my working life!!!
Congratulations - but hopefully some thought went into it rather than just finding this thread yesterday afternoon!!
After nearly 2 decades of working in mental health, in 2022 I had enough and quit. I was 46. Takes it's toll dealing with essentially, human suffering.
I worked in a hifi shop selling high end home cinema installs. The whole kit n caboodle. Amps, speakers, wiring, lighting, seating. After 4 months of this I quit and did a few months of support work. Ended up as a support worker for some of my ex-mental health clients. Weird. Work were giving me the worst of the worst because of my experience. But obvs not getting paid very well.
I contacted one of the old senior management who said when I left, I was welcome back any time and they'd move heaven and earth to get me some work. They did. Been here now for nearly 2 years on casual long term contract. Last night I submitted an application for the nursing pool with the aim of just transitioning back from casual to permy.
A little early for me to "retire" but I'm feeling better in myself and the position I have is still stressful but manageable at the moment. Retirment plans are now 5 ish years away when the mortgage is paid off.
See how you go. Don't burn any bridges and take the break you need then re-evaluate.
You might be surprised to hear, the lower limit to contribute ‘something’ in England is just over £14k…
and I'm pretty sure the capital limit in Wales is £24k
I’m reading it as “if I had more money I could afford a better care home’ rather than ‘I won’t need a care home’
A friend who visits a lot of care homes professionally and says that expensive ones have gold taps and nice wallpaper/carpets but the amount you pay has absolutely no bearing on the quality of care.
Congratulations – but hopefully some thought went into it rather than just finding this thread yesterday afternoon!!
TBH I’ve also been sitting on the sidelines,it’s a surprisingly hard thing to make the jump.
I’ve had a trivial trapped nerve and knee pain and now currentlyhuffing and puffing like 50 fags a day with flu ,over the last few months and am realising that even silly health things in my mid 50’s have stopped me from riding/walking and generally impacted on quality of life and health, let alone anything major.
Congratulations – but hopefully some thought went into it rather than just finding this thread yesterday afternoon!!
Ha, that would be a bold move, read a thread on here and completely alter the path of ones's life within 24 hours.
It was on the cards for later this year but at the end of last year my employer did something (by omission) wich resulted in a massive risk to me (scribbling out a quick will at my desk and leaving it with a colleague level of risk), this has now passed but I can't justify to myself staying here having been that badly stiffed. The joys of the civil service!
TJ won't starve himself to death, he'll have a regular supply of pasties posted to him whenever binners loses a bet!
Hmm could go the other way then - death by Greggs overdose
Aye. We live in a 'civilised' society where average life expectancy is 84 for men and 87 for women (Iirc). We then know not what to do with these old people and their health and care needs. Horrible home care with the absolute minimum of attendance often administered by people wholly unqualified and with zero in common with those they are caring for or sitting slack jawed, curled over in a wing backed chair waiting for another pureed lunch or jolly sing along. Ho hum, something to look forward to... :-/
As above, unless you're exceptionally wealthy, this is the future for a lot of us.
it’s a surprisingly hard thing to make the jump.
Yes, I found it a huge mental hurdle to go from 'saving' and trying to build up some cash / pension, etc. to the prospect of slowly chipping away at the metaphorical pile.
In essence it sounds like a good thing to do, carpe diem and all that, but PLEASE take advice from your financial advisor. They will be able to calculate within a few pound what you'll receive each year. Don't forget to include inflation too into your 'pot'; this needs careful consideration. You could find yourself much worse off even in such a short period of time as 5 years....take the emotion out of the decision and look at the funds.
to the prospect of slowly chipping away at the metaphorical pile.
It's the move from earning with some flexibility to more finite resources. Big mindset change.
The next one is 'I'm not buying xyz as I won't get my wear out of it...'. I've heard this from a number of people talking about big capital things to a pair of trousers...
Yes, I found it a huge mental hurdle to go from ‘saving’ and trying to build up some cash / pension, etc. to the prospect of slowly chipping away at the metaphorical pile.
To be positive:
this thread (and the other on the front page on a similar topic) has lightened my mood greatly. I'm very lucky.....it's reinforced that I already have enough to retire on. I don't WANT to yet - I'm lucky that i generally enjoy my job and can see that being relatively safe for another few years plus have the option to go to PT eventually, and I don't want to retire onto a minimal lifestyle (plus there are some costs still to come). I also have a house with about 10% mortgage left to pay, that is ripe for downsizing one day, etc.
I have lots of other things that do stress me - my Mum's death 14 months ago is still not resolved (hospital serious incident and coroner's inquest still to come). My son's a lot better but still a MH issue, prone to very low moods from time to time. Kids going into insecure industries, might need parental top ups if work is not forthcoming...... so one less thing to worry about has been very helpful.
One thing's clear. If you hate your job, to the point of being unwell, stop doing it. There's plenty of jobs out there, maybe not at the level or industry you want, but to be able to earn and bolster your semi-retirement.
I suspect that from now and in the future most folk will not go from full time work into retirement but go in stages ie part time or lower stress job for a few years before retirement. I could NOT have carried on in my job until I was 67 for both physical and mental reasons. Many folk will be in that position
Someone mentioned Voyant earlier. I pretended to be a financial advisor and did the 30 day free trial. Put our details in and got a surprisingly useful chart of finances from age 60 through to an imagined life expectancy of 90. Found it very useful if anyone else wants to give it a go! Just put in your salary (or both if you want to include a partner), current pensions, investments and contributions and your aim for finances in retirement. It will then plot whether you are on track for your intended aim.
The next one is ‘I’m not buying xyz as I won’t get my wear out of it…’. I’ve heard this from a number of people talking about big capital things to a pair of trousers…
My father-in-law was always really cautious about spending money (despite not needing to be). It took him over two years and much deliberating to take the leap and buy a new 40" smart TV. Two months after he got it he passed away - the TV now sits in our bedroom and the wife and me often nostalgically say 'he never did get his money's worth out of that TV'.
to the prospect of slowly chipping away at the metaphorical pile....
It’s the move from earning with some flexibility to more finite resources. Big mindset change.
but you want to enjoy it. It seems quite common to be excessively cautious, and also to get freaked out by the 'cash cost' of things as you age. Prices go up with inflation - so yes, say, a pair of shoes will cost more in cash terms than when you were young.
My parents always moaned about being poor pensioners and wasted money on cheap throwaway crap after they retired. They had enough money to have lived better - more/nicer holidays. To have bought quality stuff for the house that might have been of use to someone else rather then Dunelm crap that all went in a skip. My Dad's dead and my mum now in a care home and what they did have is fast depleting on her fees. This was not sensible financial planning.
The key to happiness in life is having 'enough' and that's far less an absolute figure than a state of mind. We're back to watch collections, status symbol cars and second homes - if you feel you need all that you'll probably never have 'enough'. And I see that in peoples retirement plans as well - theres a risk/reward balance on life - how much of your life are you going to spend trying to accumulate wealth that you might never have a chance to enjoy?
Hi
Everyone's situation is different so its difficult to say go for it. I've been planning ours since 2011... Partner is hopefully handing her notice in with the NHS this month we both turn 55 in May. Using partners pension and small pensions I have along with some money we get from a rental property and drawing some cash from money we have saved - no mortgages and no children.
Enough to "run the house" - cover bills etc and we are planning on building or getting a camper van to go travelling. We both have 35 years NI contributions so if we can do this for 12 years (67) but I've allocated for 13 years (68) for out state pension.
Reasons to do - NHS job is extremely stressful, mine job OK but I have some recent issues with my eye sight (double vision) and back and more recently shoulder and neck problems. I'm paying money to the Government for nothing (NI) as you don't get anymore state pension and my taxes are being squandered by successive Governments. The environment is going down hill and I think in the next 5 to 10 years western Governments are going to have real problems. We're getting out and doing some travelling.
Its a scary thing to do and we are both nervous about it - but we simply can't keep going on like this.
lol.......only just seen this
We can’t all be happy-go-lucky Jack-the-lad.
trust me, this is so far off the mark it made me giggle.
i am just not a man driven by money.
my wife made sure we had a decent safety net prior to us both retiring.
we have a couple of ISA's each, and a nice lump in capitol when we downsize houses.
our meagre amount is the monthly income. less than half of what we were on when working. but we are managing fine.
PLEASE take advice from your financial advisor. They will be able to calculate within a few pound what you’ll receive each year
I find that extremely hard to believe.
I doubt your financial advisor can tell you when you will die, get cancer, loose the ability to enjoy life. If you think you can do it go now. If you run out of cash get a new job. Life is happening now not some vague point in the future.
I;m taking a big salary cut in March and retiring at 55.
I cant wait.
Won’t have 1 million in the pension though.
Very few will.
Won’t have 1 million in the pension though.
Is this a well known piece of financial advice that we should be aspiring towards? I have a friend who is always going on about trying to get £1M in his pension pot and works crazy hard to try and achieve that and expects to work till 66. No way I'll be working till then - I will not have £1M in pension... is there a reason that that conveniently round number seems to get plucked out as the target?
^^ many online pension planning guides, and financial advisors, will say this is the right ballpark number if you wish for a 'comfortable ' lifestyle. It's all in the detail though of one person's 'comfortable', and of course their personal situation and outgoings.
Is this a well known piece of financial advice that we should be aspiring towards? I have a friend who is always going on about trying to get £1M in his pension pot and works crazy hard to try and achieve that and expects to work till 66. No way I’ll be working till then – I will not have £1M in pension… is there a reason that that conveniently round number seems to get plucked out as the target?
I've seen it mentioned on STW a few times - supposed to return 40-50k (don't forget the state pension, though).
1million will earn 50 to 60 k interest pa for ever and you will still have the 1 million so i guess its the amount you need to buy 50 to 60k.
Oddly it is deemed very little on here or average.
Just see premium bond thread for all the spare 50k full pots, and the shares threads.
Well done to those i have to say and good luck
I have a mate who could have retired 10 years ago on way more than our combined gross pay, he still says its not enough to live on, and grumbled his wifes 16k bonus was ONLY 12k after tax, at the same time he grumbles minimum wage is too high as it affects his profit related bonus.
I guess we all look at life differently
Is this a well known piece of financial advice that we should be aspiring towards?
It's either a loaf of bollocks, or was previously a load of bollocks
It was much spouted years ago and given the insane cost of living increase over the last six years it can't have been true then and now.
Oddly it is deemed very little on here or average
Source?
yes, there are many websites that insist for a 'comfortable' retirement you need £50k each, so best get investing! They often seem to be sponsored or run by wealth management companies, mind.
TBF I would indeed be extremely comfortable on 50k, what with it being far higher than my salary now (or ever), so I can't really argue that point. But still, they do like to over-egg it a bit.
1million will earn 50 to 60 k interest pa for ever and you will still have the 1 million so i guess its the amount you need to buy 50 to 60k.
I suppose it’s fine if your going to live forever 🙂
IMHO makes more sense in the game of life to have a lesser pension and draw more of it and have a fuller more active life, unless you have the health you can’t truly enjoy the wealth 🙂
The game of life does not reward prudent financial investors with guaranteed health and time to spend it 🙂
This is a great thread and possibly timely as I hit 55 this year, and start asking myself about packing in. We have had the unfortunate scenario where Mrs Rock and I have lost all our parents in the last 18 months so any pot has been boosted by unwelcome inheritance. But inheritance it is and we are looking to see how that changes things.
I already had an IFA assisting and we are due to see him again for revised forecasts in a couple of weeks. I expect he will ask us what the desired income is, which we are starting to think about, but it feels I’d need to know, for example, with a £250k pension pot, you could safely draw £ xxx per month. I, personally, sort of feel that would be a clearer target to start on, then see if you can adjust to that.
grumbled his wifes 16k bonus was ONLY 12k after tax
would have been worth more as a direct contribution to her pension [wink emoji]. Unless they need the cash, bonuses make a nice lump contribution. Unless your allowance is already maxed out.
it’s quite difficult to get information to say, for example, with a £250k pension lot, you could safely draw £ xxx per month
One reason being that the value of investments for DC pensions can go (way) down as well as up. While the general trend of an index is upward, there are fluctuations that can have an immediate, and devastating, effect on the value of a pension pot.
edit - you could make some projections using notional rates of interest to extrapolate the possible pot value alongside notional withdrawals. A few runs of that with various values, pick your level of appetite for risk, and then decide.
I expect he will ask us what the desired income is, which we are starting to think about, but it feels I’d need to know, for example, with a £250k pension pot, you could safely draw £ xxx per month.
some decent online calculators, I like this one :
A MILLION!
I remember when £100k was a fortune 🙂
I too watched many videos where they were talking about only taking enough so as not to impact the capital - stuff that, we're going to spend the money we've earned while we can (and then live off our various DB and State Pensions).
I did stealt edit my post after only six seconds, acknowledging that I need to ask that, rather than implying the IFA can’t provide that. I suppose the sensible starting point is how much do you need. But how much can you receive, and see if that is feasible.
Things like running two cars could probably be knocked on the head.
I'll be doing well to get to a £100k pension pot! 🙂
House is paid for though.
Won’t have 1 million in the pension though.
Very few will.
At the risk of restating the same thing, the best way to get a big pension pot isn't by putting a lot in, it's by starting early. It might be too late for some but if you have kids, or work with / manage younger staff PLEASE try to get them started on the Cpd Interest magic carpet.
If an individual was to start saving £100 a month at the age of 30 and continued until they were 60, they would have deposited £36,000 and saved, with 10% annual interest, a sum of £217,132.11.
However, if they started saving £100 a month at the age of 20, stopped when they were 30 and left the money in the account until they turned 60, they would have deposited £12,000 but accumulated £367,090.06 The ‘magic’ of compound interest, in this example, means that saving for 10 years can be more profitable than 30 years, if it starts earlier.
I did a rough calc. I've been paying in 5-6% of salary - depending on who I've been with I've had anywhere from 6-12% added by employer. A rough estimate so far therefore is that I've paid in say 6% of average salary for 34 years = 204% of average salary (6x34), but my current pot is about 5x that value - the rest is from employer contribs (about 1.5x) and the other half is cpd interest.
In theory I have another 12 years to go, if I just took my current pot and just expand that by 5% pa with no more inputs at all, it'll reach 180% ie: 9x my input.
900k for about 100k paid in, because I started at 21. And I got tax relief on it. Mad.