Retirement income
Discussion
All rather depressing. Luckily I'm on a final salary scheme.
Out of interest how do those income drawdown funds? I was thinking of drawing down on savings to boost my monthly pension but current savings rates are s
t. Annuity puts me off as I could snuff it early and not get it all back.
Out of interest how do those income drawdown funds? I was thinking of drawing down on savings to boost my monthly pension but current savings rates are s
t. Annuity puts me off as I could snuff it early and not get it all back.Nah, its all just more moaning for the moaners.
Even just £100 per month saved over 40 years at a low estimate of 5% growth should give you a retirement pot of £200k to draw down from.
We just need to teach financial discipline to kids in school, rather than teaching them they cant get on in life due to tuition fees and that they need to ignore the 'now' culture, and plan long term.
I could have done with that ,and am only really getting my act together at 35. Luckily, i have always paid into a pension.
Even just £100 per month saved over 40 years at a low estimate of 5% growth should give you a retirement pot of £200k to draw down from.
We just need to teach financial discipline to kids in school, rather than teaching them they cant get on in life due to tuition fees and that they need to ignore the 'now' culture, and plan long term.
I could have done with that ,and am only really getting my act together at 35. Luckily, i have always paid into a pension.
PositronicRay said:
Once your mortgage is out of the way you can stash the surplus in your pot. Although rates have been low, that's been my strategy a great feeling once the mortgage is gone.
I reckon day to day, running the house 2 cheapish cars, 3 or 4 holidays a year £25-30k
And that is what you have worked your whole life for ... ??? to scrimp and save on £25k?! I reckon day to day, running the house 2 cheapish cars, 3 or 4 holidays a year £25-30k
Not for me, sell up, take the biggest tax free lump sum and off I go, plan is to contract 6 months (55-65) and live away 6 months experiencing the world, ensure the daft cars are paid off and enjoy myself until its all gone.
No point having 30-40k a year coming in post 75, my partners grandparents are 85ish now, haven't been able to travel for the past 7-10 years due to ill health and too tiring, three of mine have passed away (67 / 73 / 86) and one is going strong at circa 84 but starting to slow down.
Trexthedinosaur said:
No point having 30-40k a year coming in post 75, my partners grandparents are 85ish now, haven't been able to travel for the past 7-10 years due to ill health and too tiring, three of mine have passed away (67 / 73 / 86) and one is going strong at circa 84 but starting to slow down.
My father-in-law was 90 a couple of months ago and he has several holidays a year.You could easily have 30 pretty active years if you semi-retire at 55.
covmutley said:
Nah, its all just more moaning for the moaners.
Even just £100 per month saved over 40 years at a low estimate of 5% growth should give you a retirement pot of £200k to draw down from.
We just need to teach financial discipline to kids in school, rather than teaching them they cant get on in life due to tuition fees and that they need to ignore the 'now' culture, and plan long term.
I could have done with that ,and am only really getting my act together at 35. Luckily, i have always paid into a pension.
Expect 200k in 40 years time is unlikely to last much more than 5 minutes, especially if the current trend of supplementing baby boomers' generous pensions via by to lets continues and they are never able to afford to purchase their own homes. Even just £100 per month saved over 40 years at a low estimate of 5% growth should give you a retirement pot of £200k to draw down from.
We just need to teach financial discipline to kids in school, rather than teaching them they cant get on in life due to tuition fees and that they need to ignore the 'now' culture, and plan long term.
I could have done with that ,and am only really getting my act together at 35. Luckily, i have always paid into a pension.
Well inflation has average about 4% IIRC over the last 50 years or something.... also not sure on the maths I think it would be closer to 150k.
That said the point is valid in that you should do something even if its small monthly savings or small SIPP. Too many of my friends (we are late 30s) have no pension and no savings to speak of. They do however live nice lifestyles so its a trade off for them, work till they drop but live well or live a bit more frugally and retire well. A number are also expecting large inheritance which gives them little motivation also. I suspect the generation before us are even more likely to go with the now rather than later option.
I think younger people have a different attitude to work too as many work flexi time and get long career breaks etc. So they actually get to enjoy their younger years a bit more where as my parents generation were down th' pit etc etc.
That said the point is valid in that you should do something even if its small monthly savings or small SIPP. Too many of my friends (we are late 30s) have no pension and no savings to speak of. They do however live nice lifestyles so its a trade off for them, work till they drop but live well or live a bit more frugally and retire well. A number are also expecting large inheritance which gives them little motivation also. I suspect the generation before us are even more likely to go with the now rather than later option.
I think younger people have a different attitude to work too as many work flexi time and get long career breaks etc. So they actually get to enjoy their younger years a bit more where as my parents generation were down th' pit etc etc.
Something that's rarely mentioned in chat about retirement income is the concept of investing directly into businesses esp. one's own or friends', or family's ventures etc.
However I think some of the best retiree incomes are earned from these investments especially retiring director/shareholders who continue to receive dividends from profitable ventures long after their resignation/retirement from directorial roles or other direct personal involvement.
And that's not to mention the sums the sale of such ventures or of shares in same can produce.
However I think some of the best retiree incomes are earned from these investments especially retiring director/shareholders who continue to receive dividends from profitable ventures long after their resignation/retirement from directorial roles or other direct personal involvement.
And that's not to mention the sums the sale of such ventures or of shares in same can produce.
Apart from the obvious "but you'll run out of cash", is there any real-world downside to factoring in spending some of your capital as you go in retirement?
Say I wanted £20,000 a year. That means you'd need a pot of £500,000 to live off the income at 4%. But if I retire at say 57 and decide I'm going to die at 85 (not unlikely), and/or decide that by then I don't care and/or I'm happy to be someone else's problem by then) then that's also really £500,000/28 a year too (or whatever the equivalent is as you'll make a decreasing return on the smaller cake). But still an additional £17,000 or thereabouts for the first few years. Not too bad?
Am I missing something?
Say I wanted £20,000 a year. That means you'd need a pot of £500,000 to live off the income at 4%. But if I retire at say 57 and decide I'm going to die at 85 (not unlikely), and/or decide that by then I don't care and/or I'm happy to be someone else's problem by then) then that's also really £500,000/28 a year too (or whatever the equivalent is as you'll make a decreasing return on the smaller cake). But still an additional £17,000 or thereabouts for the first few years. Not too bad?
Am I missing something?
That is kind of my plan in that I plan to front load on the first few years. We plan to spend a good chunk in the first 10 years. Then the second 10 years we will settle down and also start to draw our SIPP which will make up for the extra we took out in the first 10 years. In the third and final 10 years we will be much less mobile and that would be a case of just needing to pay bills and shuffle down to the local bingo hall twice a week so plan to have spent up by then savings down to just reserves and SIPP probably down to just the bare bones or maybe gone all together if the state pension exists / has kicked in.
If I'm honest I have no idea what I'm going to do when I retire in 30+ years.
I'm 27, have never had a pension cos I've always worked for rubbish companies who never offered them. Then when it became compulsory I was self employed. I haven't got round to sorting one out for me yet and if I'm honest I don't see the point, it's not like anyone can top it up except me/my company and as my company doesn't 'earn' enough to top it up I can't get the tax benefits each year.
I'm desperately trying to scrimp a house deposit together but it's never ending, just as I catch up, something happens like in 2015 when I had to take 9 months off work and ate into 75% of my savings just to stay off the street.
The wife works for a local school (council pension) but I'm not sure what she pays in or what they do with it. If I had a property that was all paid up and the state pension of £18,000 I'd probably be able to get by. The fact I don't have a property is the scary bit as I need to get that sorted out asap otherwise I'll be paying a mortgage right up until I'm properly old.
It's kinda scary as I'm beginning to feel old and I've got no real plan.
I'm 27, have never had a pension cos I've always worked for rubbish companies who never offered them. Then when it became compulsory I was self employed. I haven't got round to sorting one out for me yet and if I'm honest I don't see the point, it's not like anyone can top it up except me/my company and as my company doesn't 'earn' enough to top it up I can't get the tax benefits each year.
I'm desperately trying to scrimp a house deposit together but it's never ending, just as I catch up, something happens like in 2015 when I had to take 9 months off work and ate into 75% of my savings just to stay off the street.
The wife works for a local school (council pension) but I'm not sure what she pays in or what they do with it. If I had a property that was all paid up and the state pension of £18,000 I'd probably be able to get by. The fact I don't have a property is the scary bit as I need to get that sorted out asap otherwise I'll be paying a mortgage right up until I'm properly old.
It's kinda scary as I'm beginning to feel old and I've got no real plan.
Edited by ashleyman on Wednesday 5th July 23:02
Trexthedinosaur said:
And that is what you have worked your whole life for ... ??? to scrimp and save on £25k?!
Not for me, sell up, take the biggest tax free lump sum and off I go, plan is to contract 6 months (55-65) and live away 6 months experiencing the world, ensure the daft cars are paid off and enjoy myself until its all gone.
No point having 30-40k a year coming in post 75, my partners grandparents are 85ish now, haven't been able to travel for the past 7-10 years due to ill health and too tiring, three of mine have passed away (67 / 73 / 86) and one is going strong at circa 84 but starting to slow down.
Being in ur mid to late 20's , u do realise u can't equate the lifestyle of someone who is 80 now to ur own retirement in 40-50 years .Not for me, sell up, take the biggest tax free lump sum and off I go, plan is to contract 6 months (55-65) and live away 6 months experiencing the world, ensure the daft cars are paid off and enjoy myself until its all gone.
No point having 30-40k a year coming in post 75, my partners grandparents are 85ish now, haven't been able to travel for the past 7-10 years due to ill health and too tiring, three of mine have passed away (67 / 73 / 86) and one is going strong at circa 84 but starting to slow down.
Not only are people living longer but people are 'getting younger ' too (ex people that are in their 60's look better and younger and are more active than people in their 60's a generation ago ) as life expectancy increases and medical improvements 80 could become the new 50 in a few decades time. As Isaid people are getting younger and age is no longer a barrier or a limit to do anything especially if one looks after themselves ex I see lots of pensioners out running or in the gym.
Trexthedinosaur said:
And that is what you have worked your whole life for ... ??? to scrimp and save on £25k?!
Not for me, sell up, take the biggest tax free lump sum and off I go, plan is to contract 6 months (55-65) and live away 6 months experiencing the world, ensure the daft cars are paid off and enjoy myself until its all gone.
No point having 30-40k a year coming in post 75, my partners grandparents are 85ish now, haven't been able to travel for the past 7-10 years due to ill health and too tiring, three of mine have passed away (67 / 73 / 86) and one is going strong at circa 84 but starting to slow down.
Being in ur mid to late 20's , u do realise u can't equate the lifestyle of someone who is 80 now to ur own retirement in 40-50 years .Not for me, sell up, take the biggest tax free lump sum and off I go, plan is to contract 6 months (55-65) and live away 6 months experiencing the world, ensure the daft cars are paid off and enjoy myself until its all gone.
No point having 30-40k a year coming in post 75, my partners grandparents are 85ish now, haven't been able to travel for the past 7-10 years due to ill health and too tiring, three of mine have passed away (67 / 73 / 86) and one is going strong at circa 84 but starting to slow down.
Not only are people living longer but people are 'getting younger ' too (ex people that are in their 60's look better and younger and are more active than people in their 60's a generation ago ) as life expectancy increases and medical improvements 80 could become the new 50 in a few decades time. As I said people are getting younger and age is no longer a barrier or a limit to do anything especially if one looks after themselves ex I see lots of pensioners out running or in the gym.
Edited by jonny70 on Wednesday 5th July 23:57
279 said:
Expect 200k in 40 years time is unlikely to last much more than 5 minutes, especially if the current trend of supplementing baby boomers' generous pensions via by to lets continues and they are never able to afford to purchase their own homes.
Clearly you wont be living well. But taking the 5% growth forward, you could take out £10k a year without touching the £200k. If a couple both did this, plus state pension, they would probably be quite comfortable. My point was that even doing the bare minimum, over time, becomes something worth doing. But people dont. And most people should be saving a lot more than £100 month, and many funds have historically done closer to 9% growth.
ETA: Yes my maths was wrong, well , my typing,. I meant to type 6%. But even that is not overly optimistic given historical index fund performance.
Edited by covmutley on Thursday 6th July 08:45
Are people's expectations set by life expectancies of a few decades back?
There seems to be an expectation by some that you can save £50 a month for thirty years and then take back out £2,000 a month for another thirty.
It just doesn't work like that. Yes, investments tend to run a couple of percent above inflation, but even over thirty years you don't get to turn payments in of tens of pounds into a pension of hundreds or thousands.
There seems to be an expectation by some that you can save £50 a month for thirty years and then take back out £2,000 a month for another thirty.
It just doesn't work like that. Yes, investments tend to run a couple of percent above inflation, but even over thirty years you don't get to turn payments in of tens of pounds into a pension of hundreds or thousands.
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