Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
- Start date
Im a while away yet. When the mortgage is paid off ill be happy with 60% of the wage wheh it comes. Hopefully close to 60!
That's a bit like asking "how much do you need to earn?" It's very dependent on your individual circumstances. It's reasonably straightforward to figure out how much you need to live once you don't need to pay a mortgage or save for retirement anymore.
I'm aiming for roughly 3k a month... or what ever the equivalent is when I retire. That's more than I spend now per month, but it should help me cover those large one off costs like a car, house decor etc, as I don't tend to budget for that out of my monthly spends, but from my savings. When I have enough to cover me for that, and have enough in my ISAs to cover that amount for the years before my offical retirement age of 67, I shall retire.
The crazy thing is that most people don't know how much they spend per month, so even with the unknown factor of how long you going to live for... they don't know how much they need.
Don't take any notice of such figures, they are nonsense. I never even earned anything like £44k when I was working!
Including employers contributions I pay the equivalent of 23% into my pension pot, plus an annual lump sum of around 8k per year when it comes to bonus time.
Estimated pension if we're to choose an annuity at 60 is £51k per year. Aiming to retire at 55 which should be feasible
Estimated pension if we're to choose an annuity at 60 is £51k per year. Aiming to retire at 55 which should be feasible
Last edited:
Also - rarely with a decent fund would you ever buy an annuity - drawdown is more beneficial in a number of areas for most of the population.
obviously subject to risk profile/ other cash / savings / investments / pensions etc etc etc
Yeah, I'm a good 15-20 years off retirement yet unfortunately. Need to time it where both myself and the Mrs can retire rather than her having a too work another 10 years after me.
Based on current investments and market performance I'm expecting a drawdown value or £800k to £1.2m depending on average Vs strong market performance.
I've started to manage it myself over the last 5years and averaging 10% growth, but will start derisking in a few years time.
Perked up again:
84.5% of portfolio - Blackrock Consensus 85 (+50%)
8.5% of portfolio - Vanguard LifeStrategy 80% Equity (+31%)
7% of portfolio - WS Lindsell Train UK Equity (+51%)
Is managing it yourself anything more than sticking the whole lot in a cheap global index fund?
thanks for your replies, all interesting stuff to consider. I think I need a target otherwise I won't have the focus that keeps me investing in my pension. Having lost friends and family in recent years I want to retire early and make the most of my time while I have good health. So I need that target to help me decide when enough £ is enough.
There’s a rule of thumb that says you take your desired level of income per month and multiply it by 375 and that should be your target. That’s on the basis that if you live 25 years in retirement and get taxed at 20% on your pension income, then you need 300 months worth, grossed up by 20%, which gets you to 375. So if you want £2k a month (on top of your state pension) then you need £750k invested when you retire.
The monthly figure is the hard bit to determine, and only you know the answer to that. It also depends on whether you’re single or whether you have someone else who will also be drawing a pension.
Last edited:
So I saw lots of advice like that and it got me motivated to put money away into my workplace avc. somehow I only recently understood that I have a defined benefit pension and that my pension income is not dependent on my own investment pot. So I'm in a better place than I thought but I'm still trying to keep the saving habit going, there are company wide redundancies and its quite likely that I won't be able to contribute through that scheme anymore.
I did a household budget and I think a net income of £3k a month is a good target. Could get by on less, obviously would be happy with more. At the moment I'm doing okay with less than that after my monthly saving contributions.
I did a household budget and I think a net income of £3k a month is a good target. Could get by on less, obviously would be happy with more. At the moment I'm doing okay with less than that after my monthly saving contributions.
It's interesting that everyone seems to think they need to do this. If you are not buying an annuity then presumably your pension fund is still a long term investment that you hope will be growing for decades after you retire. So why is it accepted wisdom that you need to remove the risk before you reach retirement age?
Normally you derisk a bit before and into retirement so you are not exposed to a big market downturn at the start of retirement and are then forced to draw down on a much reduced pot. You are eliminating sequence of returns risk this way. You are most exposed to this risk just as you retire.
Many ways to do it, you don't want to remove all risk as you say.
I don;t think you need to de-risk too much too early, but it can make sense to move some growth based equity into income from bonds/REITs or even just high yeild dividend indexes that will have lowerr growth but more regular income. This provides regular, often monthly income, and as a side effect has lower risks but less grwoth.
It wouldnt make sense to do it before retirement though.
I know this is going to sound morbid, but with my health issues I will be very pleased if I see 50. My salary is such that I can't afford a pension even if I wanted to, heck, I can barely afford food and am looking at getting a 2nd and maybe a third job. I will literally work until I die and I've made my peace with that. My family are disabled so will be looked after by the state I hope, although I am trying to save to give them something. My funeral l is already taken care of and I am aiming to pass debt free.
Pretty much this.
However, for me anyway, I am aiming to have all the retirement investment I need at 6o. If the market is weak at that time, I have the time to keep on working until the market recovers. And so will just do that.
