Is anyone else not bothering with pension planning?
Discussion
I'm 41, recently married, no kids at present.
Feel very lucky that I bought a little Victorian 2-up 2-down house in one of the "fancied" bits of London tube zone 6. Bought for £140K in 2003, now valued at an utterly ridiculous £350-380K.
Am happy here, mortgage nearly paid and I may have one more house move in the next 5 years depending on circumstance and if that happens we will probably move to a larger property nearby.
Returning to the original point, I don't have any provision as yet in pension terms.
Have always figured that at retirement age - lets say 65, I can sell the house here and move back to North Yorkshire (place of birth). Would only want a small property for retirement so for arguments sake lets say it would be 50% of the cost of my current house.
At today's prices, that would probably free up £150K. As an OAP, I could spend £1K/month for 10 years (very simple terms - ignoring inflation etc). That's not too bad if you don't have rent or a mortgage.
That might last till I'm 75 if I'm lucky enough to get there. In the event I last longer, I'm putting away £250/month - about £3K/year in a low-risk, FTSE-tracker account. If I keep that going from now till 65 that should hopefully generate another £75K which at a grand a month will get me to my 80's.
If I'm still going then, they can put me in a home and have the equity.
Have heard so many complaints in recent years from guys retiring, perhaps after unwise investments but for the most part following the advice of a pension planner. Some of them now have only the equivalent of half to two-thirds of what they have paid in.
Sounds nuts to me, am I the only one here or are you all paying thousands a month into future planning and laughing at me when I'm in penury in 30 years time?
Obviously I understand the benefits of long-term compound interest but at the same time think what's the point in not living in the moment. My wife and I spent 2 weeks in Vietnam in early 2016, travelling overland from Hanoi down to Hoi An via Halong Bay, Da Nang etc. Also later in the year had a fortnight in Borneo volunteering at an Orang sanctuary which was great.
I think spending our "spare" cash on travelling now while still relatively young is worthwhile - want to go trekking in Peru next year and while I hope I can still do it in my 70''s I'm not chancing it!! If I reach that age, I'll probably just want sit in my favourite chair so that £1K/month should be OK.
I'll have memories too, really good ones.
Feel very lucky that I bought a little Victorian 2-up 2-down house in one of the "fancied" bits of London tube zone 6. Bought for £140K in 2003, now valued at an utterly ridiculous £350-380K.
Am happy here, mortgage nearly paid and I may have one more house move in the next 5 years depending on circumstance and if that happens we will probably move to a larger property nearby.
Returning to the original point, I don't have any provision as yet in pension terms.
Have always figured that at retirement age - lets say 65, I can sell the house here and move back to North Yorkshire (place of birth). Would only want a small property for retirement so for arguments sake lets say it would be 50% of the cost of my current house.
At today's prices, that would probably free up £150K. As an OAP, I could spend £1K/month for 10 years (very simple terms - ignoring inflation etc). That's not too bad if you don't have rent or a mortgage.
That might last till I'm 75 if I'm lucky enough to get there. In the event I last longer, I'm putting away £250/month - about £3K/year in a low-risk, FTSE-tracker account. If I keep that going from now till 65 that should hopefully generate another £75K which at a grand a month will get me to my 80's.
If I'm still going then, they can put me in a home and have the equity.
Have heard so many complaints in recent years from guys retiring, perhaps after unwise investments but for the most part following the advice of a pension planner. Some of them now have only the equivalent of half to two-thirds of what they have paid in.
Sounds nuts to me, am I the only one here or are you all paying thousands a month into future planning and laughing at me when I'm in penury in 30 years time?
Obviously I understand the benefits of long-term compound interest but at the same time think what's the point in not living in the moment. My wife and I spent 2 weeks in Vietnam in early 2016, travelling overland from Hanoi down to Hoi An via Halong Bay, Da Nang etc. Also later in the year had a fortnight in Borneo volunteering at an Orang sanctuary which was great.
I think spending our "spare" cash on travelling now while still relatively young is worthwhile - want to go trekking in Peru next year and while I hope I can still do it in my 70''s I'm not chancing it!! If I reach that age, I'll probably just want sit in my favourite chair so that £1K/month should be OK.
I'll have memories too, really good ones.
Edited by OzzyR1 on Sunday 12th February 04:00
Don't forget you will have State Pension kicking in at age 67.
It rather depends on the quality of life you want. You have probably described a rather basic one. If you want a better one you will need more money.
I'm 55 and just started my pension planning. £40,000 x 10 in, then £40,000 x 10 out. I plan to do a lot of holiday cruising in retirement.
It rather depends on the quality of life you want. You have probably described a rather basic one. If you want a better one you will need more money.
I'm 55 and just started my pension planning. £40,000 x 10 in, then £40,000 x 10 out. I plan to do a lot of holiday cruising in retirement.
PurpleMoonlight said:
Don't forget you will have State Pension kicking in at age 67.
It rather depends on the quality of life you want. You have probably described a rather basic one. If you want a better one you will need more money.
I'm 55 and just started my pension planning. £40,000 x 10 in, then £40,000 x 10 out. I plan to do a lot of holiday cruising in retirement.
I discounted the state pension - who knows if it will be around in 25 years time!It rather depends on the quality of life you want. You have probably described a rather basic one. If you want a better one you will need more money.
I'm 55 and just started my pension planning. £40,000 x 10 in, then £40,000 x 10 out. I plan to do a lot of holiday cruising in retirement.
Edited my original post during your reply, I plan to do as much travelling as possible before retirement rather than waiting. Knowing my luck, I'd end up with a gammy leg and be a shoe-in for a new cast-member of Last of the Summer Wine!!
Your plan sounds good though - at 65, £400K probably buys a good few cruises. Likely you have equity elsewhere to fall back on too if the need arises so it sounds like you are sharing my view on life.
Hope you enjoy in good health.
Edited by OzzyR1 on Sunday 12th February 04:11
Good idea to do your travelling whilst your young.
Nowadays I find I can't tolerate high temperatures and prefer a maximum temp of 25 deg C which rules out most of the countries I'd like to visit unless I stay in an air-conditioned bubble.
Re pensions - good idea to have them if your employer is paying in to them, otherwise you're turning down free money.
Nowadays I find I can't tolerate high temperatures and prefer a maximum temp of 25 deg C which rules out most of the countries I'd like to visit unless I stay in an air-conditioned bubble.
Re pensions - good idea to have them if your employer is paying in to them, otherwise you're turning down free money.
OzzyR1 said:
In the event I last longer, I'm putting away £250/month - about £3K/year in a low-risk, FTSE-tracker account. If I keep that going from now till 65 that should hopefully generate another £75K which at a grand a month will get me to my 80's.
....
Obviously I understand the benefits of long-term compound interest....
If you are putting this money aside for retirement - why not put it in a SIPP and get the additional tax relief on your contributions. i.e. 20 or 40% uplift on the way in?....
Obviously I understand the benefits of long-term compound interest....
You can invest in exactly the same fund but without paying income tax on the 3K pa contribution? and this way you'll end up with a lot more than 75K.
Bob
It would be daft to turn down free money, I would certainly take any employer offering.
But the state pension rules can be changed under your feet at any time; private pensions are funded but they are inherently a large, visible, pile of cash and That One-Eyed Prick has shown us what a future Chancellor will do to them when the unfunded public sector pensions look a bit short.
Owning assets that you can sell looks like a good move. Tax free if you can wrapper them.
But the state pension rules can be changed under your feet at any time; private pensions are funded but they are inherently a large, visible, pile of cash and That One-Eyed Prick has shown us what a future Chancellor will do to them when the unfunded public sector pensions look a bit short.
Owning assets that you can sell looks like a good move. Tax free if you can wrapper them.
grumbledoak said:
But the state pension rules can be changed under your feet at any time; private pensions are funded but they are inherently a large, visible, pile of cash and That One-Eyed Prick has shown us what a future Chancellor will do to them when the unfunded public sector pensions look a bit short.
Frankly, relying upon any scheme endorsed by the government is foolish. Pensions included. If you can, you're better off with tangible, liquid, assets and businesses.
13m said:
If you can, you're better off with tangible, liquid, assets and businesses.
Unless they decide to tax those heavily as well - just look what they have done to BTL recently. I think all asset classes are at risk of Government meddling and the better plan to spread your risk across several asset classes in order to minimise the risks.Bob
fat80b said:
13m said:
If you can, you're better off with tangible, liquid, assets and businesses.
Unless they decide to tax those heavily as well - just look what they have done to BTL recently. I think all asset classes are at risk of Government meddling and the better plan to spread your risk across several asset classes in order to minimise the risks.Bob
It might also have done me a favour actually. One of my companies was about to embark on an eight-figure property development project. We won't be doing that now because the government has shown that it is reckless with business and we don't want to be exposed to further shoot from the hip tax policy.
ellroy said:
But pensions are just a tax wrapper. The assets within them are liquid, are tangible and real.
You'd be utterly mad to not hold shares etc in a pension given the tax advantages and how cheap they can be these days, assuming you've got plenty of time for the tax savings to work.
I have got a pension that holds equities. When we set it up I was going to be able to draw on it at 50. Now it's 55. By the time I am 55 it might be 60. What better illustration that pensions are risky all the time the government is allowed to change the rules after funds are already committed?You'd be utterly mad to not hold shares etc in a pension given the tax advantages and how cheap they can be these days, assuming you've got plenty of time for the tax savings to work.
I agree with you that pensions have their place, but my current preference is for private companies where the government is rather more limited in the way it can interfere.
In much the same boat; 38 and expect to be mortgage free in 5-10 years but have nothing beyond that. Sticking an extension on the side of the house to uplift its value seems a far smarter use of money than it sitting in some ultra low yeild scheme. My dad got diddled by the pru with his pension so who can you trust.
I know I should be doing more, but...
I know I should be doing more, but...
wibblebrain said:
I reckon you need the equivalent of at least £30k per year to live comfortably.
Is the £30k household income or per person?If it's per person, I must be something wrong
.My pension/savings income is about £20k per year and I run a Porsche, have 2 overseas holidays a year and haven't really touched my savings over the last 5 years since retiring.
uknick said:
wibblebrain said:
I reckon you need the equivalent of at least £30k per year to live comfortably.
Is the £30k household income or per person?If it's per person, I must be something wrong
.My pension/savings income is about £20k per year and I run a Porsche, have 2 overseas holidays a year and haven't really touched my savings over the last 5 years since retiring.
Household for two people and before income tax.
what planet are people on when they say you need 30k to live off per year when your mortgage is paid?. It's perfectly possible in the uk to live off £1k a month you might not have loads of lavish exotics to hand but your life wouldn't be bad. I'm doing just this now aged 35 planning on living off 18k a year working part time and enjoying life while age is on my side. Hopefully in 10 years I will drop to even less hours and live off £12k a year spending my time playing more golf.
moles said:
what planet are people on when they say you need 30k to live off per year when your mortgage is paid?. It's perfectly possible in the uk to live off £1k a month you might not have loads of lavish exotics to hand but your life wouldn't be bad. I'm doing just this now aged 35 planning on living off 18k a year working part time and enjoying life while age is on my side. Hopefully in 10 years I will drop to even less hours and live off £12k a year spending my time playing more golf.
My council tax is around £250 per monthMy electric bill is around £120 per month - this would reduce when retired and not having kids at home
My Gas bill is around £200 per month - but I accept that this is exceptional due to being on LPG
My house insurance is over £100 per month (this would change moving to a smaller house without a subsidence history)
I want a holiday or two per year. That's going to cost the equivalent of £100 - £200 per month
I need to eat - food bill is about £50 - £100 per week.
I'd like to be able to eat out occasionally - budget?
Clothes?
Budget for running a car? Including insurance, maintenance, depreciation, etc
I don't have a mortgage, but what about house maintenance and improvements over the expected time I'll spend retired (20-30 years)
That's only expenditure on us two. I have two boys who I'd expect to have a family of their own - maybe I'd like to helpl them out when necessary - take the kids to the cinema, buy them the occasional present etc
What planet are people on when they suggest you can live off £1000 per month? Same as me probably - it just depends on your circumstances.
I don't want to live like a hermit when I am retired.
OzzyR1 said:
I'm 41, recently married, no kids at present.
Feel very lucky that I bought a little Victorian 2-up 2-down house in one of the "fancied" bits of London tube zone 6. Bought for £140K in 2003, now valued at an utterly ridiculous £350-380K.
Am happy here, mortgage nearly paid and I may have one more house move in the next 5 years depending on circumstance and if that happens we will probably move to a larger property nearby.
Returning to the original point, I don't have any provision as yet in pension terms.
Have always figured that at retirement age - lets say 65, I can sell the house here and move back to North Yorkshire (place of birth). Would only want a small property for retirement so for arguments sake lets say it would be 50% of the cost of my current house.
At today's prices, that would probably free up £150K. As an OAP, I could spend £1K/month for 10 years (very simple terms - ignoring inflation etc). That's not too bad if you don't have rent or a mortgage.
That might last till I'm 75 if I'm lucky enough to get there. In the event I last longer, I'm putting away £250/month - about £3K/year in a low-risk, FTSE-tracker account. If I keep that going from now till 65 that should hopefully generate another £75K which at a grand a month will get me to my 80's.
If I'm still going then, they can put me in a home and have the equity.
Have heard so many complaints in recent years from guys retiring, perhaps after unwise investments but for the most part following the advice of a pension planner. Some of them now have only the equivalent of half to two-thirds of what they have paid in.
Sounds nuts to me, am I the only one here or are you all paying thousands a month into future planning and laughing at me when I'm in penury in 30 years time?
Obviously I understand the benefits of long-term compound interest but at the same time think what's the point in not living in the moment. My wife and I spent 2 weeks in Vietnam in early 2016, travelling overland from Hanoi down to Hoi An via Halong Bay, Da Nang etc. Also later in the year had a fortnight in Borneo volunteering at an Orang sanctuary which was great.
I think spending our "spare" cash on travelling now while still relatively young is worthwhile - want to go trekking in Peru next year and while I hope I can still do it in my 70''s I'm not chancing it!! If I reach that age, I'll probably just want sit in my favourite chair so that £1K/month should be OK.
I'll have memories too, really good ones.
You're basic retirement plan is set around the assumption that Yorkshire will remain fFeel very lucky that I bought a little Victorian 2-up 2-down house in one of the "fancied" bits of London tube zone 6. Bought for £140K in 2003, now valued at an utterly ridiculous £350-380K.
Am happy here, mortgage nearly paid and I may have one more house move in the next 5 years depending on circumstance and if that happens we will probably move to a larger property nearby.
Returning to the original point, I don't have any provision as yet in pension terms.
Have always figured that at retirement age - lets say 65, I can sell the house here and move back to North Yorkshire (place of birth). Would only want a small property for retirement so for arguments sake lets say it would be 50% of the cost of my current house.
At today's prices, that would probably free up £150K. As an OAP, I could spend £1K/month for 10 years (very simple terms - ignoring inflation etc). That's not too bad if you don't have rent or a mortgage.
That might last till I'm 75 if I'm lucky enough to get there. In the event I last longer, I'm putting away £250/month - about £3K/year in a low-risk, FTSE-tracker account. If I keep that going from now till 65 that should hopefully generate another £75K which at a grand a month will get me to my 80's.
If I'm still going then, they can put me in a home and have the equity.
Have heard so many complaints in recent years from guys retiring, perhaps after unwise investments but for the most part following the advice of a pension planner. Some of them now have only the equivalent of half to two-thirds of what they have paid in.
Sounds nuts to me, am I the only one here or are you all paying thousands a month into future planning and laughing at me when I'm in penury in 30 years time?
Obviously I understand the benefits of long-term compound interest but at the same time think what's the point in not living in the moment. My wife and I spent 2 weeks in Vietnam in early 2016, travelling overland from Hanoi down to Hoi An via Halong Bay, Da Nang etc. Also later in the year had a fortnight in Borneo volunteering at an Orang sanctuary which was great.
I think spending our "spare" cash on travelling now while still relatively young is worthwhile - want to go trekking in Peru next year and while I hope I can still do it in my 70''s I'm not chancing it!! If I reach that age, I'll probably just want sit in my favourite chair so that £1K/month should be OK.
I'll have memories too, really good ones.
Edited by OzzyR1 on Sunday 12th February 04:00
ked and London will remain at the top of the world. You should be fine.
On a serious note, many people plan to downsize in order to free capital to retire but it is worth looking at those who are at that point now to see how it is working out for them. It is actually far harder to do than we calculate when we are in our 40s. It isn't the simple plan we are first reckon it will be. Lots of people pensioners today had plans to downsize but haven't and are now very cash poor so it's worth fully understanding why that is ahead of setting off to do the same.
Just because you can release £150k+ in equity now and move to North Yorks does not mean you'll be able to do that in 25 years time. What was the gap 25 years ago? Probably less than £50k. I'd say that's a risky (all eggs in one basket) approach.
As another poster mentioned, if you are a higher rate tax payer then you're missing out on pension tax relief by not paying that £3k per year into a pension. Instead of £75k in that FTSE tracker at age 65 you would have £120k, 25% of which you could take tax free and the remainder would probably be basic rate tax at most. No pension planners required.
Lastly, how likely is it that you will feel the same about retirement in 15, 20 or 25 years time? Who knows what life will bring during that time to change your (and your wife's) perspective on retirement.
As another poster mentioned, if you are a higher rate tax payer then you're missing out on pension tax relief by not paying that £3k per year into a pension. Instead of £75k in that FTSE tracker at age 65 you would have £120k, 25% of which you could take tax free and the remainder would probably be basic rate tax at most. No pension planners required.
Lastly, how likely is it that you will feel the same about retirement in 15, 20 or 25 years time? Who knows what life will bring during that time to change your (and your wife's) perspective on retirement.
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