Financial Planning for Retirement - where are you?

trentlad

trentlad

trentlad

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Joined
7 Feb 2010
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I thought my wife and I were doing quite well with savings and investments but she sent me an email today which apparently declares us as far behind:

By age... Aim to have saved:

30......... ½X your salary
35......... 1X your salary
40......... 2X your salary
45......... 4X your salary
50......... 6X your salary

It seems crazy expecting to double your savings every five years. Where are you guys, on track or do you have other plans?
 
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Well, I had a nice little nest egg to look forward to with me putting 11% of my pay into a pension pot but the Government has decided that my pension is too generous and as such, I am now paying 14.5% into a pension and will only receive half of what I was signed up to. Wonderful eh?
 
trentlad said:
By age... Aim to have saved:

30......... ½X your salary
35......... 1X your salary
40......... 2X your salary
45......... 4X your salary
50......... 6X your salary

It seems crazy expecting to double your savings every five years. Where are you guys, on track or do you have other plans?
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Is she including pensions in this or simply just savings/other investments?
 
eddiemcgarrigle said:
Well, I had a nice little nest egg to look forward to with me putting 11% of my pay into a pension pot but the Government has decided that my pension is too generous and as such, I am now paying 14.5% into a pension and will only receive half of what I was signed up to. Wonderful eh?
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Sounds good to me, dont see why I should have to help pay your pension
 
We're doing pretty well, we're on course to have the mortgage paid off in ten years time, and the property has gone up in value another £100k (ridiculous) since we bought it, and our tenants cover the mortgage fees and our rent in France so its currently a good situation.

Company pension is ludicrously good, we're extremely lucky and put away about £3k/month at the moment after payments for bills and into savings are made. It will change, but despite how I feel we're still young.
 
eddiemcgarrigle said:
Well, I had a nice little nest egg to look forward to with me putting 11% of my pay into a pension pot but the Government has decided that my pension is too generous and as such, I am now paying 14.5% into a pension and will only receive half of what I was signed up to. Wonderful eh?
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What you actually mean is that the ageing and increasing population means it's no longer possible to sustain these incredibley generous pensions. Your investment could go up as well as down.

Being in the public sector does not make you special. And it sure as hell should not make you immune to the market conditions that affect the rest of us.
 
Ill be dead before I retire.

eddiemcgarrigle said:
Well, I had a nice little nest egg to look forward to with me putting 11% of my pay into a pension pot but the Government has decided that my pension is too generous and as such, I am now paying 14.5% into a pension and will only receive half of what I was signed up to. Wonderful eh?
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Aww diddums. Your amazingly generous pension is now slightly less amazing. Come back when your employeer contribution is capped at 5% and the rest of us might care :p.

I get that public sector pensions need to be good to offset the limit to salary compared to the private sector, but even the new "much worse" pension schemes are leaps and bounds ahead of private sector pensions.

P.s. I had an NHS pension, I turned it into a car :p. Life's for living and all that.
 
I'm 39 in March and will probably be just short of 2x my salary by the time I'm 40 - neat goal by the way. Ill health will probably mean I'll die before I retire at 70, but at least I can leave a nice inheritance for my nieces and nephews - let's be honest, they're gonna need all the help they can get.
 
I'm on one of the last defined benefit schemes in the UK whereby I need to contribute 8% of my salary to get 1/50th of my current salary (i.e. average salary scheme). I'm 26 at the minute I hope that by the age of 30 I will have enough for approximately £6k per retirement year in income. This should then increase by around £1.2k per working year.
 
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Considering the tax you pay, it seems a stretch to say you should aim to save 4 years of salary in the 10 years between 40 and 50.

I'd be aiming to get to around 6x salary by age 60. That would see me reasonably comfortably in retirement.

Though I've got a way to go as I have currently got £0 at 32. Will be starting a pension next year, and will ramp that up with any future salary increases, as I've reached an income level now which allows a reasonable standard of living (at least, it will once my student loan finishes next year, and childcare finishes in 2.5 years)

Kemik said:
I'm 16 at the minute I hope that by the age of 30....
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You've been a member here since you were 7?!
 
eddiemcgarrigle said:
A common mistake but haters will hate anyway. The pension pot was self-sufficient until it was raided by Labour.
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And we wouldn't rely on a public pensions pot so heavily if the tories hadn't screwed up our employment market so extensively in the 80's.

Plan to retire in my 50's myself, which should be no problem, frugal living. I have no intention of working until I'm too old to enjoy retirement.
 
I'm behind schedule as a) I didn't start saving until I was 24, and b) because my current employer's pension is incredibly poor (I pay 1%, they pay 2%).

Thankfully I'm moving to a better company with a better pension scheme. I've been investing into a S+S ISA for a few years due to my shoddy pension to try and not fall too far behind. We have paid off a fair chunk of our house though and are overpaying to try and pay it off a few years earlier too, so I'm hoping I'll be able to top up my savings later in life.

The trouble I have though is knowing how much you need to save. I've seen people mention a target of 60% of you salary should be comfortable to live off when retired, but 60% of what? My salary now, my highest salary, my salary when I’m 65?! There’s calculators about too, but putting in figures on my spending today is surely going to be completely meaningless in 40 years time!
 
mpledge52 said:
I'm behind schedule as a) I didn't start saving until I was 24, and b) because my current employer's pension is incredibly poor (I pay 1%, they pay 2%).

Thankfully I'm moving to a better company with a better pension scheme. I've been investing into a S+S ISA for a few years due to my shoddy pension to try and not fall too far behind. We have paid off a fair chunk of our house though and are overpaying to try and pay it off a few years earlier too, so I'm hoping I'll be able to top up my savings later in life.

The trouble I have though is knowing how much you need to save. I've seen people mention a target of 60% of you salary should be comfortable to live off when retired, but 60% of what? My salary now, my highest salary, my salary when I’m 65?! There’s calculators about too, but putting in figures on my spending today is surely going to be completely meaningless in 40 years time!
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Don't overcomplicate things. You just need to check annuity rates (for ease, just see what you can buy per £10k);
http://www.find.co.uk/pensions/annuities_centre/annuities-calculator

Think about your living costs today, how much of those will you face in retirement (lose the mortgage, childcare, food for kids, commuting costs, for example) and come to a figure of how much you need to live on. Then look at how big your pension pot needs to be to buy an appropriate annuity.

And remember the state pension (which will only kick in at about 68), as that will boost your income.
 
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