This is with employer contributions, I only put in 9%. But I aim to up it sooner, I've had my share holidays and quite happy to spend my time exploring the UK now/cheap holidays when I need.
Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
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This is with employer contributions, I only put in 9%. But I aim to up it sooner, I've had my share holidays and quite happy to spend my time exploring the UK now/cheap holidays when I need.
Some months I'm saving/investing 60% or more of my income. I also get 15% contribution from my employer. Pretty aggressive FIRE for me.
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I can only talk about my circumstances, but I wouldn't be surprised if its quite common and its really a combination of both your points. I sacrifice down as much of my higher rate earnings as is feasible whilst maintaining our lifestyle. So every time I get a pay rise or unexpected lump sum, unless we need more in our pockets each month it just gets whacked into pension. If you can live without it now its really a no-brainer to take the 40% tax break.
Some real numbers to work with if that helps, my total comp is around £150k across basic, bonus and dividends. So, I could take more now and lead a more luxurious life but we really manage quite comfortably as a family of 4 on the ~£4k a month I net out from my basic salary. One foreign holiday a year plus a couple of breaks in the UK, we have no car payments or any other debt and a £700 a month mortgage which we then overpay another £350 a month. Neither of us have any expensive hobbies (tech is excluded from this
) or buy designer clobber but we spend what feels like a lot on food each month - ~£1k. Most large purchases are funded out of cash savings which occasionally need topping up but we don't put cash aside on a regular basis as I have historically carried a much higher allocation of cash than most people would advise and am accepting of the potential lost gains vs investments to know I have that to draw on when needed.It wasn't always like this, I only started contributing into a pension at all in my mid-late 20s and just put the minimum in until I was in my mid-30s so it needs some catching up. My wife has no pension at all to speak of so nor is she likely to, so mine needs to cover both our needs in the future. I have no desire to keep working past my mid/late 50s at least not in my current industry so I'm willing to make some concessions now to give myself the freedom of choice later.
Soldato
20% may be a high percentage but a low amount... my prevous place was offering me 15% themselves but 15% of **** all is still **** all...
as a wise girl said to me, "every pound saved, is 3 pounds you're giving to future you.. and future you will be please with you..."
Ah yeah I put in 8 at the moment. But my employer only puts in 5 max unfortunately
That's what I was getting at. If you're contributing 20pc just you.. Its unlikely to be low right?
If you're not earning much it's unlikely you can even contribute 20pc yourself? Because.. Life.
Soldato
Thanks for your comprehensive answer
My current pension is with Nest, I invest £850pm which includes my workplace contribution. I think I'll transfer £10k at a time every few months into the Vanguard one which I think seems sensible?L&G fund was "L&G PMC Multi-Asset Fund 3"
Soldato
not really, depends on your outgoings...
someone not paying rent or mortage for whatever reason should quite easy pay 20% into their pensions.
Got a friend who managed to buy a house on the cheap, had help from his parents and now paid it off, no kids, doesn't drive and been at the same role for over 20 years.. he's sticking in stacks into his private pension as he's got nothing else to spend it on at the moment.
I think if I went native, I could afford another 5% into my pension, I'm just so waste for especially when it comes to food. I'll eat it at some point my cupboards are like a family of four rather than single male.. lol..
Don't get me started with clothes, I have stuff that still has price tags on from 10 years ago...
Soldato
Yeah depends entirely on your outgoings and lifestyle. With the right circumstances, people can save 30%-60% of their earnings even after pension contributions.
Doesn’t even need you to eat beans on toast for every meal. Two relatively high earners (£40-60k each) with modest housing costs who don’t live beyond their means can easily save away enough to retire very early.
E.g work for 10 years saving 60% means you can maintain that lifestyle without working for 20 years. Invest it along the way in S&S ISA and you’re laughing. Then pension drawdown and whatever state pension you get later will be plenty.
Obviously add in 3 children and moving house every 5 years, new kitchens and extensions every 10 years and you’ve no chance of that but that’s the choices people have to make.
Doesn’t even need you to eat beans on toast for every meal. Two relatively high earners (£40-60k each) with modest housing costs who don’t live beyond their means can easily save away enough to retire very early.
E.g work for 10 years saving 60% means you can maintain that lifestyle without working for 20 years. Invest it along the way in S&S ISA and you’re laughing. Then pension drawdown and whatever state pension you get later will be plenty.
Obviously add in 3 children and moving house every 5 years, new kitchens and extensions every 10 years and you’ve no chance of that but that’s the choices people have to make.
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I'd say it would be highly unusual for a couple earning average or just above to be able to afford to tuck away 20pc.
I mean you'd be massively compromising somewhere. You'd need to be living very frugally. I would expect it to be people on wages above 50 at least.
Even then you're gonna have to take a big impact on life. Probably a FIRE type person.
I mean you'd be massively compromising somewhere. You'd need to be living very frugally. I would expect it to be people on wages above 50 at least.
Even then you're gonna have to take a big impact on life. Probably a FIRE type person.
I hit about 30% of base including employer contribution (9%) last year, but haven't gone overboard with lifestyle changes as my income has risen. Nicer car and holidays but not moved house and similar day to day expenditure.
I am getting tempted to move though.
I am getting tempted to move though.
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I am looking at leaving the country for retirement now. The uplift in quality of life elsewhere is becoming hard to ignore. I don't think I need to elaborate further.
I do have a few niche issues that make it a bit more complicated though.
As I have said time and again on these forums - if you are young and have skills that are in demand, get the hell out - the UK is stagnant. I would look at Switzerland or somewhere else similar.
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Agree, it's a really attractive option. The first time I visited Spain after the high inflation year or so over here, I was shocked how little prices had increased in comparison.
Portugal is my best option I think - but I am going to have to invest time in learning the language with some friends. I absolutely refuse to go anywhere without being able to integrate properly. Living in an English exclave (is that the right term?) is wrong, IMO.
If I was still ambitious I would be looking at Norway.
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We're actually on Universal Credit, 2 children, mortgage to pay, 2 cars, don't have any compromises really, still manage the 20%
So it's not just high earners.
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Soldato
The cost of living is extremely high in Switzerland… personally I’m thinking Kos, I know it’s a holiday island and I’ve been a few times. It seems the best way of doing it is to have a business but there’s no much going on apart from the holiday trade, we see what happens as it’s just a pipe dream.
Wages are high to compensate and stuff actually works in Switzerland. I have 2 friends that made the jump and they love it. Living there without working or being rich is not going to work though. Healthcare requires insurance which is an issue.
Oddly I have an acquaintance (mate’s sister) that made the jump to Kos and she says she’s never coming back. I think she has a government job now after a chain of tourist industry gigs so is stable and happy. I think she may even have citizenship now.
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You have to be absolutely mental to get married nowadays if you are in a position where you’ve accumulated significant assets and pension.
The only time it makes sense is if you have kids and your partner is in a similar financial situation.
The amount of divorces I’ve seen over the past 10 years where the dudes thought it would never happen is terrifying. Living in a bedsit in your fifties isn’t a great life. Be careful out there
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Soldato
Are we saying hookers are more cost effective? lol
Soldato
Hookers have always been more cost effective.