What monthly dosh will I get from £500000 pension pot?

[britboy4321]

For the sake of simplicitly I am going to not bother with 'inflation' for this thread. So I'm just going to use 'todays money'.


If I retire with a total pension pot of £500,000 -- after tax approximately about how much money should I expect per month to live off ..? When I actually die, I want my missus to enjoy 50% of whatever I get until she cops it ... I want to retire at 55 -- and finally I want the payments 'inflation linked' so they don't devalue as time moves on ..??

Anyone got a very rough guestimate? At the moment I don't know whether I'll be getting £300 a month or £3000!

 

[britboy4321]

Cool thanks -- OK -- I can live with that (translation -- I HAVE TO live with that!)

 

[britboy4321]

I don't think I'll get any state pension as I don't pay NI contributions (it's a long twisted story involving dividends and no salary!)

It's terrible really. £500,000 saved up? Have £1K a month ....

My pension contributions have to be EXTRODINARILY HIGH just to get to 500K (because I started at age 35! Me moron ...)

 

[britboy4321]

£1270

http://www.moneymadeclear.fsa.gov.uk/tools/pension_calculator.html

Thanks. Is that figure before or after tax please?

 

[britboy4321]

£500k in a property would net £2.5-3k a month in rental depending on the area (obviously minus taxes and other ongoing costs of managing such a thing..).

Thats a good poinit actually. But I don't think I'd be allowed to buy a property with it .. I think you have to buy an annuity / something with more of a guarantee of income as one of the rules (??).

Basically if I understand correctly the government does not want you to have any chance of going down the bingo and wasting your pension fund then begging them for support .. if you bought a house with your £500,000 -- you could sell it 2 weeks later and chuck the money up the wall ...

The government basically do not let you get your sticky hands on your pension pot personally -- only in some way let you choose to make it so it will give you a regular income while you get old and rusty -- so they definately don't have to bother. Anyone, is this not right?


Might be wrong though ..

 

[britboy4321]

Yea when I was in my 20s retirement seemed so ridiculously far away I never thought about a pension.

At 35 when I got shown the maths (namely how many years I'd added to my working life) -- to say it was gutting was an understatement.

The funny thing is loads of people told me to start thinking of a pension when I was in my 20s -- but I thought I was being cool or cocky when I answered 'Naah - I need a decent motor - I'm gonna die young anyway'.

Anyway I'm paying the price now -- big style .. with putting in double what I'd have had to -- just to try and catch up ..

It's all the compound interest I've missed out on that really hurts. 15 years compound interest of 7% annual, on just a £100 pension contribution at age 20, -- I would have had £257 in my pot at 35 -- and remember the £100 contribution is tax free! I only would have had to pay £78 out of my back pocket.




Every £78 turned into £257 for free (and that's just the first 15 years of investment - the final figure when I retire for my £78 I put in would be £2000!!!! Honestly! in the bag for giving up £100 aged 20 ..! (retiring at 65)) -- but nope -- I'd proudly tell everyone I'd rather spend the money on beers
It's all in the maths -- just start the thing early honestly -- take my word for it!

 

[britboy4321]

NI is 10% I think.

I personally wouldn't pay it if you don't have to .. state pension is going to be worth £1.70 and a bag of chips (per month!) by the time you're old enough to claim ..

 

[britboy4321]

To get a pension pot worth 1,000,000 (2K per month to me when I retire at 55) -- at my age -- I'd have to increase my contributions to ..

Wait for it ...

£4120 PER MONTH!!!!

And yes, you did read it right! £4120 per month -- out of my back pocket -- thanks very much

 

[britboy4321]

Kicked my pension off at 18 years old, 22 now. Only a measley £160 a month going in there but its better than nothing right?

I wish a lot I'd done the same.

You'll get to aged 35-40 -- and all your mates will start saying 'oh no oh no oh no' as they realise they're due an old age of total poverty, cutting the heating off during winter because they can't afford it etc ... unless they put in thousands and thousands to try and catch up with people like you ...

I know -- because I am one of those people ..

 

[britboy4321]

I really need to think about a pension. I'm not far off 24 but haven't really thought much about it; I plan to have saved enough money by the time I've retired to live comfortably, but it's a gamble of course. I'm doing ok so far anyway.

I don't like the ideas of pensions, in that I want all my money in my account now rather than be spoon fed it back by the Government :/.

The government knows people don't like or want to think about pensions .. so they make it very VERY financially sensible to have one.

Basically it's TAX FREE. It's (as a rule) better than the best savings account you could ever hope for with regards to the pure wodja you end up with - as long as you don't want the money out until you are 55..


You may not believe this -- but if you don't deal with it in your 20s, in the 30s it becomes so much more painful when your IFA is showing you charts of where you would stand if you were bothered to think about it 10 years ago - then asking you for MASSIVE HIGHER CONTRIBUTIONS to try and match your retirement expectations (and I only want 20K a year for me and the missus when I retire and the IFA is saying 'can you possibly stretch to £1800 a month contributions so at least we've got a hope of reaching what you want? !!!!


The sad thing is, I wouldn't have even missed that £180 a month .. I just chucked it up the wall

 

[britboy4321]

Gaiden you are sorted mate ....


And if you work past 55 -- you are even better off.

Basically in the game of life you're off to the mansion, whilst I'm in the grotty old person's home! Then again -- as a royal marine you deserve every penny mate ..

 

[britboy4321]

So how much does / should everyone put in their pensions monthly?

Started at 35

Put in almost £1800 a month (which is so tough it hurts -- and doing it the rest of my working life).

This will get me and the missus (in todays money) about £1300 a month to share when I retire (inflation linked).


Puts it into perspective eh? Get saving kids ... or live your final years like a jippo!