Pension fund performance - do you monitor yours, how is it doing, do you actively change it?

[NotAGolf]

Thanks for starting this thread @danlightbulb. It's encouraged me to sort my general retirement plans.

I've consolidated all of my previous pensions (DC schemes, no fancy benefits) into one SIPP with Vanguard. I've gone for a 70/15/15 split into the following index funds VHVG (FTSE Developed World)/VFEG (FTSE Emerging Markets)/VANGMSA (Global small cap).

My current workplace pension is with The People's Pension. The list of funds are very limited, and they don't allow partial transfers, so I'll just have to suck it up until I leave the job and can transfer out into my SIPP.

I'm also paying into a S+S ISA which is 100% in VHVG.

I've not gone for any bonds. I'm 37 and quite open to a bit of risk as I've got a while for things to stabilise if things crash in the next few years, but I'll review this as I get nearer retirement.

The idea of the S+S ISA is, assuming I don't need to dip into it for any life emergencies, to allow me to retire a little earlier without having to delve into my pension early.

 

[EvilRob]

I hope to wind down at 50 (hopefully 40) to 4 days a week. Then (if world allows) 3 days etc.

I'd rather a gradual wind down and work for longer.

I know you've said you don't want to progress so not an issue for you perhaps, but in general you can't keep progressing unless you are full time and give it your all. Trade offs for sure, but if I started treading water 10 years ago the career growth thrown away would be impossible to stomach in retrospect.

 

[Bluecube]

I've not gone for any bonds. I'm 37 and quite risk averse, but I'll review this as I get nearer retirement.

You’ve not gone for bonds because you’re risk averse? Bonds, especially government bonds from stable economies, are very low of the risk scale. At 37 you still have 20 odd years to go before you can access your pension so it’ll pay to have a portion invested in high risk shots eg tech, bio pharmacy. As you get nearer the age you wish to retire, you look into gradually moving your investments in to low risk funds

 

[slinxy]

I've consolidated all of my previous pensions (DC schemes, no fancy benefits) into one SIPP with Vanguard. I've gone for a 60/15/15 split into the following index funds VHVG (FTSE Developed World)/VFEG (FTSE Emerging Markets)/VANGMSA (Global small cap).

Where's the other 10% going into?

 

[NotAGolf]

Where's the other 10% going into?

You’ve not gone for bonds because you’re risk averse? Bonds, especially government bonds from stable economies, are very low of the risk scale. At 37 you still have 20 odd years to go before you can access your pension so it’ll pay to have a portion invested in high risk shots eg tech, bio pharmacy. As you get nearer the age you wish to retire, you look into gradually moving your investments in to low risk funds

Oof, you can tell I was tired when I wrote that!
Edited the post.

 

[robj20]

Calculated my pension contributions at 20.1% of my income, that seems a decent amount to me.
My pot is currently around 2.5x my salary at age 39, I think that's good as well, few sources suggest to aim for 1.5x by 40 so I'm ahead.

 

[413x]

Calculated my pension contributions at 20.1% of my income, that seems a decent amount to me.
My pot is currently around 2.5x my salary at age 39, I think that's good as well, few sources suggest to aim for 1.5x by 40 so I'm ahead.

I'm 38 and mines at about 70k-80k. So I'm behind! Does feel that way too.

20 percent is a huge Contribution!

 

[robj20]

I'm 38 and mines at about 70k-80k. So I'm behind! Does feel that way too.

20 percent is a huge Contribution!

But what is your 70k-80k percentage wise, that's what matters really.

5% Employee contribution and tax relief included in the 20%

 

[throwaway4372]

20 percent is a huge Contribution!

I contribute 20% too, employer's percentage on top of that, which varies by employer ofc.
I think that's just what you've got to do if you want to retire at 57 rather than 68, or even earlier.
It's all circumstances though, I didn't always contribute that much, when I earnt less and had a mortgage to pay obvs priorities were different. Broadly once I started paying higher tax I started increasing my contribution to avoid it, until eventually it seemed not rly worth going any higher.
Age 38, pot 3x salary.

 

[bigmike20vt]

I know you've said you don't want to progress so not an issue for you perhaps, but in general you can't keep progressing unless you are full time and give it your all. Trade offs for sure, but if I started treading water 10 years ago the career growth thrown away would be impossible to stomach in retrospect.

it is an interesting one.... and i hope i do not cheese off a bunch of folks here, however, there has been a huge push to not disadvantage women in our workplace in their careers who chose to drop some hours to spend with their family.

what is good for the goose should also be good for the gander. (not saying it is however)

 

[413x]

I contribute 20% too, employer's percentage on top of that, which varies by employer ofc.
I think that's just what you've got to do if you want to retire at 57 rather than 68, or even earlier.
It's all circumstances though, I didn't always contribute that much, when I earnt less and had a mortgage to pay obvs priorities were different. Broadly once I started paying higher tax I started increasing my contribution to avoid it, until eventually it seemed not rly worth going any higher.
Age 38, pot 3x salary.

I contribute 8 and employer contributes 5.
My pension pot is a a out 1.3x salary

RIP

 

[413x]

I know you've said you don't want to progress so not an issue for you perhaps, but in general you can't keep progressing unless you are full time and give it your all. Trade offs for sure, but if I started treading water 10 years ago the career growth thrown away would be impossible to stomach in retrospect.

Just no interest in it really.
Its a mix of:
- not being that into the work.
- the next steps are managing
- just more into the 40pc band
- the roll would invade my out of work time (a big no no for me)

With that wombo combo the motivation is just not there.

If I could get same salary pro rata and drop to 3-4 days a week. That would motivate me.

 

[robj20]

Just no interest in it really.
Its a mix of:
- not being that into the work.
- the next steps are managing
- just more into the 40pc band
- the roll would invade my out of work time (a big no no for me)

With that wombo combo the motivation is just not there.

If I could get same salary pro rata and drop to 3-4 days a week. That would motivate me.

I've never been into career advancement either, happy where I am.

 

[slinxy]

My pension contributions are 22.8% of my salary plus I’m throwing in my yearly bonus in there, started last year doing this.

Pension pot wise, I had DB pots so it’s not a like for like compression with other people.

There was a wealth calculation, where you work out your total assets and debts, and do some maths with them along with your age and salary. Can’t remember the exact formula, I’ll have a google and edit later if I get some time.

 

[413x]

My pension contributions are 22.8% of my salary plus I’m throwing in my yearly bonus in there, started last year doing this.

Pension pot wise, I had DB pots so it’s not a like for like compression with other people.

There was a wealth calculation, where you work out your total assets and debts, and do some maths with them along with your age and salary. Can’t remember the exact formula, I’ll have a google and edit later if I get some time.

Oh yeah id be interested in that

 

[200sols]

I think that's just what you've got to do if you want to retire at 57 rather than 68, or even earlier.

Absolutely. I did see something recently were ii reckon you need £1.3million for a 'comfortable retirement' today at 55. I imagine in 20 years time this figure will be approaching £2million to retire at such an age. All these sums of course factor in you getting a state pension at 68 or whatever as well, that may well have to be means tested in the future so it cant be relied upon.

 

[slinxy]

Oh yeah id be interested in that

2 men who studied millionaires for over 20 years developed a formula that classifies Americans in 3 different categories of wealth

Are you rich? There's a simple formula you can use to find out, created by the authors of the bestselling book "The Millionaire Next Door."

www.businessinsider.com

this is the formula, your networth should be all your assest minus all your debts... e.g. house value, mortage left, savings, credit cards, loans etc.

When I did it a few months ago, I was just around 100%.

 

[throwaway4372]

There seems to be some disagreement about whether pension should be included in net wealth calculations.
That makes it confusing to know whether it has been included or not unless explicitly stated.
Maybe there's a standard answer to that which qualified finance ppl are aware of, but the average joe isn't.

Good point about paying bonuses into pension instead of to you btw.
When I was young and first got a bonus, what surprised me was the company paying the bonus never advised or offered the option to pay it into my pension instead, I only found out it was even possible when an older guy with pension on his mind mentioned it in passing.
IMO it should be regulation that when a bonus is due, the employee is given payment options so they can choose one.

 

[413x]

2 men who studied millionaires for over 20 years developed a formula that classifies Americans in 3 different categories of wealth

Are you rich? There's a simple formula you can use to find out, created by the authors of the bestselling book "The Millionaire Next Door."

www.businessinsider.com

this is the formula, your networth should be all your assest minus all your debts... e.g. house value, mortage left, savings, credit cards, loans etc.

When I did it a few months ago, I was just around 100%.

If you include pension in 100pc nearly exactly

If you don't I'm under

But my wage has grown a lot very quickly

 

[413x]

There seems to be some disagreement about whether pension should be included in net wealth calculations.
That makes it confusing to know whether it has been included or not unless explicitly stated.
Maybe there's a standard answer to that which qualified finance ppl are aware of, but the average joe isn't.

Good point about paying bonuses into pension instead of to you btw.
When I was young and first got a bonus, what surprised me was the company paying the bonus never advised or offered the option to pay it into my pension instead, I only found out it was even possible when an older guy with pension on his mind mentioned it in passing.
IMO it should be regulation that when a bonus is due, the employee is given payment options so they can choose one.

Any bonus at mine isn't able to go into my work place pension. Which is annoying as it's salary sacrifice.

Because I don't need it, as I never expect it. I'd rather have the choice as well