How much do you need for comfortable existence in retirement.

Martynt74 · 16 Sep 2021 at 16:09

dave28 said:
Nobody i know has half a million spare in a pot at retirement age and own their home outright. Who has that, a brain surgeon maybe or a lawyer.
Certainly not anyone with a regular job, not a cats chance in hell

I'm not so sure, i'm 35 now and have around £35k in my pension as i've been paying in more or less the minimum since i was 19 along with fairly low contributions from my employer.

I pay in around £5k a year which is the minimum 8% contribution with the government topup. Assuming a fairly modest 5% growth each year. That puts my estimated pot at £470k in 30 years time, assuming no increase in salary or contributions just through the compounding of returns.

I wouldn't say i'm a brain surgeon or a lawyer and i certainly haven't made a conscious effort to pile money into my pension to get as much as i can in there. I'd say 500k was very achievable for a slightly above average earner.

Belly · 16 Sep 2021 at 16:21

Martynt74 said:
Assuming a fairly modest 5% growth each year.

In today's climate of low interest rates I'd consider 5% growth to be immodest!

Martynt74 · 16 Sep 2021 at 16:25

Belly said:
In today's climate of low interest rates I'd consider 5% growth to be immodest!

Over 30 years though it’s probably a reasonable assumption.

Some years there’ll be negative growth and other years there maybe 10% growth.

adam cool dude · 16 Sep 2021 at 16:28

dave28 said:
Nobody i know has half a million spare in a pot at retirement age and own their home outright. Who has that, a brain surgeon maybe or a lawyer.
Certainly not anyone with a regular job, not a cats chance in hell

I am above average wage but not by much and our household income is about average. Our mortgage will be done by 44 which in today's world I think is good going. If we put that 16 year mortgage money away till 60 that will be close to 150k plus parents house and work pensions it will not be far off 500k to retire with.

We do enjoy our lives and have two children but live within our means.

We also have the option to free up capital and downsize when we get older and the children have flown the nest.

Obviously we do not live in the South as I would more than likely be paying off our house till 60 otherwise.

Reality|Bites · 16 Sep 2021 at 16:57

Suppose it depends if you see yourself living to retirement age?

ivrytwr3 · 16 Sep 2021 at 17:15

DXP55 said:
I can assure you that £1500 is not enough even with the state pension. .

So about £27.5k per year is not enough? Get away with you! That would be very comfortable for some people.

randomshenans · 16 Sep 2021 at 17:30

Martynt74 said:
I'm not so sure, i'm 35 now and have around £35k in my pension as i've been paying in more or less the minimum since i was 19 along with fairly low contributions from my employer.

I pay in around £5k a year which is the minimum 8% contribution with the government topup. Assuming a fairly modest 5% growth each year. That puts my estimated pot at £470k in 30 years time, assuming no increase in salary or contributions just through the compounding of returns.

I wouldn't say i'm a brain surgeon or a lawyer and i certainly haven't made a conscious effort to pile money into my pension to get as much as i can in there. I'd say 500k was very achievable for a slightly above average earner.

I'm the same age and sexiness. I hadn't done anything pension wise until I moved here at 27. The good thing about here is that you are forced by Swiss law to have a pension and pay in. So I have since 27. I pay 7.55% which is my max allowed, plus 8% employer contribution. Should I stay here until retirement, I'll be sorted to be fair. I think I'd have about 1m GBP pension pot by 65. I'm most definitely not a doctor mind

My step dad managed his very well and his advice was always that you should aim for 400k GBP pot for retirement. As he earned more and as he got closer to retirement he offset some of his salary to his pension per tax etc. to boost his final pot. He took his lump sum on retiring and paid off his parts of the mortgage and now has an OK salary of 25-30k from it with no mortgage. So I think if you can live off that, and get to that point then it's a pretty good aim! He wasn't a doctor or lawyer at all. Just managed his pension pot well.

randomshenans · 16 Sep 2021 at 17:31

ivrytwr3 said:
So about £27.5k per year is not enough? Get away with you! That would be very comfortable for some people.

I think that question is impossible to answer, as it completely depends on assets / lifestyle and where you live.

ivrytwr3 · 16 Sep 2021 at 17:39

Of course it depends, but to scoff at £27.5 per year is ridiculous. A lot of people will be nowhere near that:

Retired single people spent:
£13,000 a year for an essential lifestyle
£19,000 a year for a comfortable lifestyle
£31,000 a year for a luxury lifestyle

Retired couples spent:
£18,000 a year for an essential lifestyle
£26,000 a year for a comfortable lifestyle
£41,000 a year for a luxury lifestyle

Martynt74 · 16 Sep 2021 at 17:43

randomshenans said:
I'm the same age and sexiness. I hadn't done anything pension wise until I moved here at 27. The good thing about here is that you are forced by Swiss law to have a pension and pay in. So I have since 27. I pay 7.55% which is my max allowed, plus 8% employer contribution. Should I stay here until retirement, I'll be sorted to be fair. I think I'd have about 1m GBP pension pot by 65. I'm most definitely not a doctor mind

My step dad managed his very well and his advice was always that you should aim for 400k GBP pot for retirement. As he earned more and as he got closer to retirement he offset some of his salary to his pension per tax etc. to boost his final pot. He took his lump sum on retiring and paid off his parts of the mortgage and now has an OK salary of 25-30k from it with no mortgage. So I think if you can live off that, and get to that point then it's a pretty good aim! He wasn't a doctor or lawyer at all. Just managed his pension pot well.

Yeah but you’re rich. 15% of your salary is about 3 years worth of pension!

Surveyor · 12 Oct 2021 at 18:22

Pensions: Experts say £10,900 a year needed to retire

Retirement Living Standards

For a "comfortable" retirement a post tax income of £33,600 p.a. for one person and £49,700 p.a. for a couple. In London £36,600 and £51,300.

OldKitMan · 12 Oct 2021 at 18:34

Surveyor said:
Pensions: Experts say £10,900 a year needed to retire

Retirement Living Standards

For a "comfortable" retirement a post tax income of £33,600 p.a. for one person and £49,700 p.a. for a couple. In London £36,600 and £51,300.

comfortable? Sounds like wildly extravagant to me if my post tax income in retirement is at that level.

Joeyuk · 12 Oct 2021 at 18:45

I’m pretty much screwed at retirement. My work pension is pitiful despite paying in the max I can since I joined when I was 30. My pension statement says I will have around £160k when I hit 65 which will be £78pw. So with current state pension I will be on about £1150 a month. Problem is at 38 I still rent and that won’t be changing anytime soon. I can’t afford to buy where I live in Essex, I think if nothing has changed in 2/3 years I’m going to move to a much cheaper part of the country. Luckily as a postman my wage is the same regardless of where I work.

timmy85 · 12 Oct 2021 at 18:48

I work for a public service pension scheme.

Our biggest concerns for our members at the moment are financial advisors "advising" members it's in their best interest to transfer their benefits out of a defined benefit contribution scheme like ours. For their pension to be "freed up to draw down" then the remainder be invested. Its terrifying to see the amount of members who consider it and trust these crooks.

I'm not saying all financial advisers are after your pension pots. But in our experience, most are sniffing around for the wrong reasons.

Uther · 12 Oct 2021 at 18:51

Surveyor said:
Pensions: Experts say £10,900 a year needed to retire

Retirement Living Standards

For a "comfortable" retirement a post tax income of £33,600 p.a. for one person and £49,700 p.a. for a couple. In London £36,600 and £51,300.

I saw that earlier. Utter rubbish.

OldKitMan · 12 Oct 2021 at 19:13

Joeyuk said:
I’m pretty much screwed at retirement. My work pension is pitiful despite paying in the max I can since I joined when I was 30. My pension statement says I will have around £160k when I hit 65 which will be £78pw. So with current state pension I will be on about £1150 a month. Problem is at 38 I still rent and that won’t be changing anytime soon. I can’t afford to buy where I live in Essex, I think if nothing has changed in 2/3 years I’m going to move to a much cheaper part of the country. Luckily as a postman my wage is the same regard it where I work.

You'll have £40k lump sum as well remember, and depending on if you annuity or drawdown you could end up with a bit more per week.

Joeyuk · 12 Oct 2021 at 19:21

OldKitMan said:
You'll have £40k lump sum as well remember, and depending on if you annuity or drawdown you could end up with a bit more per week.

it’s more the worry that I won’t own a home and payed off mortgage by the time I retire. Definitely don’t see it happening here in Essex, it’s just too expensive down here. Just looked at houses in near Penrith where my sister lives and I can get a 3 bed house for what I would pay for a studio flat here.

Trifid · 12 Oct 2021 at 19:22

Surveyor said:
Pensions: Experts say £10,900 a year needed to retire

Retirement Living Standards

For a "comfortable" retirement a post tax income of £33,600 p.a. for one person and £49,700 p.a. for a couple. In London £36,600 and £51,300.

My definition of minimum and theirs seem to differ quite a bit. Pretty sure if I looked I wouldn't have spent £400 on clothes in the past year for a start (or the year before then...) Their moderate would get me a holiday most months if I was so inclined...

Kreeeee · 12 Oct 2021 at 20:45

Psiko · 12 Oct 2021 at 21:17

timmy85 said:
I work for a public service pension scheme.

Our biggest concerns for our members at the moment are financial advisors "advising" members it's in their best interest to transfer their benefits out of a defined benefit contribution scheme like ours. For their pension to be "freed up to draw down" then the remainder be invested. Its terrifying to see the amount of members who consider it and trust these crooks.

I'm not saying all financial advisers are after your pension pots. But in our experience, most are sniffing around for the wrong reasons.

I thought this was getting better now that the regulator was clamping down and most advisors were nervous to do this type of work due to the associated liability? I know previously advisors were able to charge on a contingent basis (I.e. they only get paid if you decide to transfer) in which case the incentives were terrible.

I am currently waiting for my wife’s Local authority pension transfer to complete. She only worked there for a couple of years so it wasn’t worth much and so I didn’t need to get advice. I think the transfer value was 20x the benefit and she is still 30 years away from retirement so transferring out was a no brainer. Also means I can consolidate everything in to one SIPP.