Planning for Retirement

[DanTheMan]

I'm 30 now and I already regret not starting proper pension contributions as soon as I could.

I have around 5 years contributions to an employee pension with my previous employer and I'm currently in the civil service pension scheme which will hopefully still be decent when it comes to retirement.

I really need to pay into a SIPP too but I'm worried about being at the mercy of legislation that shifts the goalposts. Case in point being the recent news about the age increase from 55 to 57 to access it. I do pay into a stocks and shares ISA which in turn goes into a decent global index fund, I just can't bring myself to put it into a SIPP.

The big one for us is to be mortgage free ASAP. I'll be disappointed if the mortgage isn't paid off by the time I'm 45 and there's no chance I'm letting it go beyond 50.

 

[fobose]

@fobose - I was with my last company for almost 10 years, I hated it! Been with my current company for nearly 2 years, not much better, but i'm trying to get through college and who knows, maybe i'll get into something I enjoy!

This is my fear and why I have not moved! I went back to college when I was 30 as I felt I needed to do something. I did mech engineering BTEC stupidly. I only did it as my brother suggested it (his background). I managed a double distinction somehow but a waste of £5500 as it's not something I really want to get in to. I am glad I have it in a way as I now have 2 A level equivalents. Hopefully your study choice is a bit better than mine!

The big one for us is to be mortgage free ASAP. I'll be disappointed if the mortgage isn't paid off by the time I'm 45 and there's no chance I'm letting it go beyond 50.

This hits close to my heart. I was almost mortgage free (10k) until I moved near Cambridge! I am now stuck at my current job with a huge mortgage

 

[MatsyLR]

You are assuming they are not going to shift the goal posts again in 30 odd years.
No doubt that the retirement age is going to go up and up over the years.

 

[Jester*]

Plan for the future, but don't base your life around gunning for retirement.

My father did, and enjoyed 1 year of semi retirement before becoming terminally ill and dying at 61.

Life is too short.

 

[chorse]

Indeed. Don’t wait until 60 to retire. If you are lucky enough to have the income to expense ratio.

* obviously doesn’t apply if you are in the Rolling Stones.

 

[Hedge]

Hi there

Private pension is a must if just for tax reasons and quality of life and early retirement.

I have Nest which most of us will have and also a private pension which I then transfer into another setup by my financial advisor which I pay in a large monthly figure and sometimes I make one of larger payments but never put more than 40k per year into it so I am getting maximum government contributions and can then also get some tax back at end of financial year.

Any good financial advisor can advice you well or you can research and learn more.

I will take mine and draw down on at the earliest retirement age possible which I think is now 58.

Your situation is so relatable...

Well... To the top 1%

The rest of us normal folk are doomed lol.

Edit : but nah, on a serious note it's important we all prepare but dont let it be detrimental to your current situation. We only live once and stressing over our future could be regrettable if we end up with csncer in our 50s anyway.

 

[toshj]

I maxed out my private pension contribution the year I set it up a few years back. Had been contributing a monthly amount up until the pandemic but reduced this as our personal monthly costs soared.

As well as improving and paying off the mortgage, I'd like to have one or two holiday lets that we could both use and rent out as necessary.

If I'm careful and consistent with work - and revenues stay the same - I'm confident of being retired a little earlier than I'd initially expected, but will have to get my head down and throw myself into work for the next few years. I'd initially planned to keep all my profit in the company and then shut down/sell further down the line due to the previous tax breaks, but that doesn't seem to be an option anymore.

 

[Azza]

Oh wow didn't know you could even do that. Yea I have 3.

How old are they? You might want to consider putting the money into your own ISA (if you don't already max out contributions for yourself) or an ISA in their name, if you trust them doing something sensible when they get to 18 and can access it.

 

[Gibbo]

Your situation is so relatable...

Well... To the top 1%

The rest of us normal folk are doomed lol.

Edit : but nah, on a serious note it's important we all prepare but dont let it be detrimental to your current situation. We only live once and stressing over our future could be regrettable if we end up with csncer in our 50s anyway.

I was lucky that when I was 16 my parents set one up for me with Britannia as it was known back then, think it started with as little as a couple of quid a week and as I got older, working I kept paying into it and Britannia got consumed by Phoenix Life and couple of years ago I created a new private pension with a provider called Embark and transferred that into this one and then dedicated £500 a month to it which becomes £625 due to £125 government contribution and then I top it up with one off payments as and when.

Ive kept my Nest one going as well which also gets an 8% contribution and yes I totally agree with your sentiment never let your life in the head and now suffer which I don’t and if for whatever reason I can at any moment stop contribution monthly and one off payments if I wish.

 

[deusexlumina]

Currently 29. Don't have any reasonable contributions, been working now for about 3 years (Phd + degree etc before that).

Tbh, I don't plan on contributing any time soon either.

I have a home, and now that I have enough disposable income to save money, I'm putting it into the mortgage to get it paid off ASAP.

Am i mad? Just seems like that is the most reasonable use of my money for now.

 

[Mr Badger]

Currently 29. Don't have any reasonable contributions, been working now for about 3 years (Phd + degree etc before that).

Tbh, I don't plan on contributing any time soon either.

I have a home, and now that I have enough disposable income to save money, I'm putting it into the mortgage to get it paid off ASAP.

Am i mad? Just seems like that is the most reasonable use of my money for now.

Only 21 years to go until you fall into the cliche of reaching 50 and panicking about not having prioritised making adequate pension provision. Sleepless nights await...

 

[martin363]

I got lucky with a pension in the 90's. 8 years ago the pension company made me an offer to buy me out (for 18.5 times what I paid in between 1994 and 2004) which basically maxed out my pension allowance (when extrapolated to retirement age) and my IFA told me to stop paying more into any pension otherwise come retirement I would be paying a lot of tax with the current GOV pension limits.

Since then I have been putting 4 figure sums into managed funds most months, which have not done too badly, and have also done reasonably well on a couple of properties. Fortunately we are entirely debt free. Our savings should cover myself and my wife until we will take our pension at a planned 67. Planning to stop work next year at 48 and live a little.

It has all been luck though, and my luck on the pension fund made a huge difference to what we can choose to do now.

I totally agree with the sentiments expressed here by others. Invest anything you can when you are young, it makes an enormous difference when you are older. Anything.

 

[Freefaller]

Funny you should post about this as this is something I'm exploring at the moment. I've had a few jobs over the last 20+ years and pensions were only mandated later in my career.

I've had a handful of pensions under my belt including a lovely 'old' final salary pension (unfortunately I was only there for 4 years and wasn't on a particularly large salary). I'm speaking to some financial gurus about whether or not I need to invest more/less, or if I should consolidate some pensions into a certain scheme etc..

I've always opted for maximum contributions to personal/private/company pensions but that means I now have around 4 different pots and need to explore. Sometimes it's not worth combining them however, depending on the schemes that you've been signed up for. I think if I add up my pensions in total at the moment they don't really add up to a tremendous amount per year including state pension, but I'm doing some work to find out exactly what that means and what the forecast is likely to be.

Ideally I'd like to aim for retirement around 60ish (younger if possible). But that may be a pipe dream.

 

[placeholder]

Im 41 and have worked for my local authority for 15 years now and have been paying into their pension as well as a small private pension too which is hardly worth talking about. I have two young kids so money isn't exactly plentiful right now so have done no more than that. On the plus side I live in a 4 bedroom detached house with a bit of ground attached that only has a small mortgage on it and also have other property. We have a flat with a mortgage on it that is permanently rented out and washing its own face so that will be an asset. I also have the family home that my elderly parents owned but is now in my name, I have paid for a lot of work to it over the years and when the time comes and they are no longer around (not for a while hopefully!) it will be converted into two flats and rented out. By the time retirement comes along we should have plenty of options. My wife also works in the local authority and pays into the pension too.

Hopefully that will be good enough but you never know what the future holds. Im not in a fantastically well paying job and its hard to strike a balance between planning for the future and taking care of the present. Ideally I would like another property at some point but my age may mean thats not possible. Property seems a sensible option if you live in the right place that doesn't have too many peaks and troughs price wise and a decent rental market.

 

[bainbridge]

I'm 44 and have apart from about 10 years private pension I have nothing else in the pot and will be paying for a mortgage until 65. This is due to a very carefree lifestyle. If I reach old age and am skint so be it.

 

[Freefaller]

Oh wow didn't know you could even do that. Yea I have 3.

I've set up an account for both of mine, that will transfer 50% of it to pension when they turn 18 and the the rest will be savings. I didn't want them to have access to all their money at 18 just because I know what I was like (not suggesting they will be the same) but I'd rather they have a secure future. 18 years of pension savings will hopefully get them in a more comfortable position and can spread their wings a little more than I did, though I did have a great time in my teens and 20s.

 

[Freefaller]

Hopefully that will be good enough but you never know what the future holds. Im not in a fantastically well paying job and its hard to strike a balance between planning for the future and taking care of the present. Ideally I would like another property at some point but my age may mean thats not possible. Property seems a sensible option if you live in the right place that doesn't have too many peaks and troughs price wise and a decent rental market.

You've nailed my thoughts. I want to enjoy my life, give my kids great experiences (travel etc...), and not live on a shoestring... but I also want to save for the future, but it's hard to look past the here and now.

 

[placeholder]

You've nailed my thoughts. I want to enjoy my life, give my kids great experiences (travel etc...), and not live on a shoestring... but I also want to save for the future, but it's hard to look past the here and now.

Im an only child and my parents told me from young age "You will get the house but don't expect anything else because we don't have it. However you will have good memories from the holidays we went on and the things we did cos we spent money". They were hard working people in ordinary jobs and they were right. Id far rather have the childhood memories of good times with them than a frugal childhood and inheriting money once they are gone! That is in the back of my mind with my own kids now so I'll just do what I can to clear the mortgages and any extras will go towards giving them the best childhood I can.

 

[Fusion]

I'm 34 too. Been paying into a pension since 25. Bought my first property at 31. Got quite a reasonable amount in savings/stocks. Would be nice to pay the mortgage off by 50, that's a nice round number.

I find it quite hard balancing the future and present though. I'm pretty good at prioritising the future by being frugal, but then you miss out in the here and now by foregoing holidays, that car upgrade, the property in a better area. etc. The only debt I have is the mortgage (not huge) and student loan (plan 1, so interest rate is a paltry 1.1%, and debatable whether worth paying off even though I have the money to do so).

Only child, so will get my folks' property (hopefully a long way off, as someone else has commented on).

 

[Luckystrike123]

I'm a 37 year old graduate and I'm really worried about my pension pot and savings. I have ~12 years of a civil service pension but I didn't earn much during this period.

I've landed a good graduate job but it'll be years before I start earning serious money. The work pension seems weak at 9% (5 + 4) and my wife has quit her well paid teaching job and is now a nursery assistant. She is much happier now but her gross salary is less than a third of what it was previously.

I have an idea of how I'd like to grow my/our assets over the next few years but my wife is extremely risk averse (anything other than property or cash is terrifying) and I can see this causing arguments in the future.

Y1: Cash savings (6 months plus emergency fund)
Y2-5: Save to buy a better home
Y6+: live off my salary, split the wife's income between overpaying the mortgage, SIPP, ISA depending on what would be best at the time.

I don't have an ambition to retire early, I'm (probably unnecessarily) worried about being poor in old age or dieing young and leaving my wife and son with limited resources.