Retirees, when did you know you'd got enough in the pot?

[Kermit power]

Afternoon all,

I've been musing over when I will have enough to retire on, and at the moment (45 this year), I haven't the faintest idea!!!!

I've got a pension from an old job and a SERPS opt out pension which between them reckon they'll pay me the princely sum of about £5k pa in today's money. On top of that, I've got my current employee pension which should be pretty healthy by the time I retire. If I stay here until I'm 65 (more of a possibility than most companies these days), then I'll have had 15% of my salary (between me and employer) going in for 28 years.

On top of that, I know I won't need as much because the mortgage and other loans will be long gone by then, plus I'll hopefully have offloaded my three little cherubs to a great extent!

Thing is, though, I simply haven't the faintest clue of exactly when I'm likely to get to the point when I can say "that's enough, I'm done", especially now that there's no longer a need to buy an annuity.

So, a question to the retirees of PH... When did you know you'd got enough to retire on, and were you accurate in that assumption? Should I be terrified of my inability to predict this 20-odd years out, or is this completely normal?

[MrBarry123]

You won't get much luck with an answer, they're all dead and/or unable to use a computer.

[Kermit power]

MrBarry123 said:

You won't get much luck with an answer, they're all dead and/or unable to use a computer.

I know there are some on here!

[Grumfutock]

I'm 75 you know. Hello? Hello? Is this thing on?

[Simpo Two]

I'd suggest you have enough when your savings can reliably generate the amount you want/need to live on. Plus a bit for contingencies.

[megaphone]

Do you really want to work full time until you're 65? Try and aim for 60 or less if you can, look at getting out of your job and taking redundancy & early retirement, by the time you hit mid 50's you'll likely have had enough! You'll then need to fund yourself using company pension, personal pension and maybe some part time work, remember the state pension does not kick in until 67 or even later for you.

[PositronicRay]

I suggest you talk to an IFA. Quite an eye opener, I had no idea until all my individual bits were pulled together. At the grand old age of 53 I could jack it all in.
I didn't really believe it but thought, if I have to I could always go back to work (as long as it didn't involve a tie of stupid hours) So I took spending easy for the couple of yrs to see how it went.

Bloody brilliant, a bit like being on the dole but with more money.

[randlemarcus]

Kermit power said:

If I stay here until I'm 65 (more of a possibility than most companies these days)

You changed employers? I thought you were Big Blue?

[Simpo Two]

PositronicRay said:

Bloody brilliant, a bit like being on the dole but with more money.

The only downside is that if you retire early, you may find all your buddies are still out slaving away 5 days out of 7, therefore unable to come out and play.

Thank god for PH eh?!

[telford_mike]

Kermit power said:

So, a question to the retirees of PH... When did you know you'd got enough to retire on, and were you accurate in that assumption? Should I be terrified of my inability to predict this 20-odd years out, or is this completely normal?

It is perhaps a bit early to be able to predict exactly when you can retire just yet, but you can put some good foundations in place by overpaying your mortgage as much as possible and saving.

It seems daunting, but if you make a good plan you can do it. I realised when I was about 52 that I could retire pretty soon if I played my cards right. The big things were:

Downsizing our family home - kids have long since left. This released capital and cut our domestic outgoings by about half, but it's hard to do.
Save save save. For 3 years we saved like crazy into ISAs. It became a hobby.
Understand what you can get from your pension - got some great advice from an IFA.

We'll have my pension + some drawdown from savings. I'm assuming that state retirement pension won't exist in any meaningful form by the time I come to collect it. Mrs t_m also has a pension but we're not drawing that - it's a safety net.

I retire at the end of this month - I'm 55.

[Kermit power]

randlemarcus said:

Kermit power said:

If I stay here until I'm 65 (more of a possibility than most companies these days)

You changed employers? I thought you were Big Blue?

Do your job well and be in a part of the business that is core to the business, and sticking around is still very much a possibility!

[Kermit power]

telford_mike said:

It is perhaps a bit early to be able to predict exactly when you can retire just yet, but you can put some good foundations in place by overpaying your mortgage as much as possible and saving.

It seems daunting, but if you make a good plan you can do it. I realised when I was about 52 that I could retire pretty soon if I played my cards right. The big things were:

Downsizing our family home - kids have long since left. This released capital and cut our domestic outgoings by about half, but it's hard to do.
Save save save. For 3 years we saved like crazy into ISAs. It became a hobby.
Understand what you can get from your pension - got some great advice from an IFA.

We'll have my pension + some drawdown from savings. I'm assuming that state retirement pension won't exist in any meaningful form by the time I come to collect it. Mrs t_m also has a pension but we're not drawing that - it's a safety net.

I retire at the end of this month - I'm 55.

I really sometimes think I was born a few years too late!

When I'm 52, my kids will be 19, 16 & 13, and I'll have 8 years left on the mortgage assuming I don't repay early, which I don't feel much incentive to do on base rate + 0.76% for the life of the mortgage, although yes, I know, that's bound to go up eventually.

On the other hand, it's my parents' generation retiring in their fifties which has fked this country up so much, so I suppose at least I won't be adding to my own kids' burden quite as much as they added to mine!

[gibbon]

Or you could aim to have a job that you enjoy and are in control of for as long as you want, rather than living like some kind of modern Silas Marner.

Edited by gibbon on Monday 2nd February 19:52

[Kermit power]

gibbon said:

Or you could aim to have a job that you enjoy and are in control of for as long as you want, rather than living like some kind of modern Silas Marner.

Fortunately I do rather enjoy my job at the moment, so this is more an academic exercise than anything else.

[red_slr]

Its very difficult, and each person is different.
Our situation is made easier by the fact we don't have any kids, live in a cheap part of the UK and don't really have any major outgoings.
But then its made worse by the fact we want to retire at 55.

So its very much a balancing game.

[PositronicRay]

Kermit power said:

On the other hand, it's my parents' generation retiring in their fifties which has fked this country up so much

So how does this "fk" the country up?

[Hainey]

telford_mike said:

Kermit power said:

So, a question to the retirees of PH... When did you know you'd got enough to retire on, and were you accurate in that assumption? Should I be terrified of my inability to predict this 20-odd years out, or is this completely normal?

It is perhaps a bit early to be able to predict exactly when you can retire just yet, but you can put some good foundations in place by overpaying your mortgage as much as possible and saving.

It seems daunting, but if you make a good plan you can do it. I realised when I was about 52 that I could retire pretty soon if I played my cards right. The big things were:

Downsizing our family home - kids have long since left. This released capital and cut our domestic outgoings by about half, but it's hard to do.
Save save save. For 3 years we saved like crazy into ISAs. It became a hobby.
Understand what you can get from your pension - got some great advice from an IFA.

We'll have my pension + some drawdown from savings. I'm assuming that state retirement pension won't exist in any meaningful form by the time I come to collect it. Mrs t_m also has a pension but we're not drawing that - it's a safety net.

I retire at the end of this month - I'm 55.

Well said Mike. I'm a few years behind you, but the same outlook. I'm out of this at 57 or earlier.

I'll have my military pension, my private pension and my BTL's. Some young thruster can have my job, I'll go and put my money back into the economy by spending it.

You're a long time dead after all.

[prand]

PositronicRay said:

So how does this "fk" the country up?

I was thinking this,surely these guys keep the double glazing/home improvement/boat/camper/caravan/holiday industries afloat with all their "pointless" spending?

My question is: are there some rules of thumb over what is a liveable pension, as a percentage of a person's retiring salary (which dictates what you need in your pension pot)? Say I stop work adn I'm earning earning £30k a year net, how much of that could I drop when retired, assuming no mortgage etc.

[Kermit power]

PositronicRay said:

Kermit power said:

On the other hand, it's my parents' generation retiring in their fifties which has fked this country up so much

So how does this "fk" the country up?

Primarily by not recognising that average life expectancy was rising.

State pensions and most private pensions were set up to provide a certain standard of living for an average of less than 5 years in retirement.

If retirement age had increased in line with life expectancy to keep the same period of time in retirement, if contributions had increased to reflect the increase in cost, or if payouts had decreased to take it into account, then there wouldn't have been a problem, but they didn't.

As such, a large proportion of my parents' (born '39 &'44) generation and the baby boomers retired before they could afford to, having paid in less to fund their retirement than they needed to, leaving the next generation to pick up the tab for it through increased taxation and the death of final salary pension schemes.

This was, of course, compounded by the fact that massively underpaying for their retirement meant they had proportionately more to sink into buying property, kicking off the insane increases in property price to the point we're at today. Yes, they paid higher interest rates on their mortgages, but even so the value of their properties grew even faster.

So now they're all in retirement, paying little or no tax, and leaving it to the rest of us to pick up the enormous tab for their excesses, and for the ongoing cost of their healthcare.

Before anyone in that generation starts banging on about tea chests for furniture and the like to demonstrate that they weren't spendthrifts, I'm not suggesting they were at an individual level, but my God, they were at a national level, and we can all see how difficult it is proving to put that particular genie back in the bottle.

I'm one of the lucky ones, though. So long as it's not all burnt up on nursing costs in the future, I'll get a decent inheritance towards my own retirement. The people who are really well and truly fked are those of my generation whose own parents never made it onto the property ladder.

Getting back to the reason for the original post though, I'm still none the wiser as to when all of this will conspire to let me retire. I just know it won't be anything like as young as the previous generation!

[PositronicRay]

prand said:

PositronicRay said:

So how does this "fk" the country up?

I was thinking this,surely these guys keep the double glazing/home improvement/boat/camper/caravan/holiday industries afloat with all their "pointless" spending?

My question is: are there some rules of thumb over what is a liveable pension, as a percentage of a person's retiring salary (which dictates what you need in your pension pot)? Say I stop work adn I'm earning earning £30k a year net, how much of that could I drop when retired, assuming no mortgage etc.

The industry rule of thumb used is 2/3rds net.

My income varied a lot. So for a few yrs before I retired I paid my self the same "salary" each month. I used to split out the household, savings, pension etc. This way I could work out pretty accurately what I wanted to live on.

Edited by PositronicRay on Tuesday 3rd February 12:37