Retirement planning
Discussion
Hi
Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
JungleJim said:
more info required - how old are you, what length of service, how long you been contributing, is it defined benefits or defined contributions (i assume final salary in civil service?)...etc
25 years old2 years service
2 years contribution
Not final salary, an average ? New pension scheme...
With a few assumptions made....
If its a money purchase scheme, you will reach a pension of circa £20k pa (todays terms) at about age 64 - four years before your State retirement age, which will add another £6k-ish to the total
You could retire at age 59 on circa £14k and then slum it for nine years until the State pension kicks in and bumps you up to around £20k total
If its a money purchase scheme, you will reach a pension of circa £20k pa (todays terms) at about age 64 - four years before your State retirement age, which will add another £6k-ish to the total
You could retire at age 59 on circa £14k and then slum it for nine years until the State pension kicks in and bumps you up to around £20k total
typer0612 said:
Hi
Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
Assuming you are in the main scheme (called alpha from April 2015) then you build up pension at 2.32% x your salary each year. You want £20k and are earning £30k, so you are looking for two thirds. That calculates at 28.74 years x 2.32% = 66.67. Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
But you would get more pension if and when your earnings exceed the current level for promotion (ignore inflation - it should take care of itself) - and you get less pension if you retire before your State Pension Age (don't know how old you are but assuming in your 20s as done two years, so SPA probably around 68 and about 40 years to go?) because early retirement means the annual payments are reduced such that if you have an average lifespan you will get the same amount overall as if you took the pension
So in rough terms provided you work around 30 years and started at the age of 38 you will hit it at 68! I don't thin the reduction factors for early retirement have been published yet for any of the State schemes so I do not know if it is possible to estimate what age you will actually be able to retire at
oop north said:
Assuming you are in the main scheme (called alpha from April 2015) then you build up pension at 2.32% x your salary each year. You want £20k and are earning £30k, so you are looking for two thirds. That calculates at 28.74 years x 2.32% = 66.67.
But you would get more pension if and when your earnings exceed the current level for promotion (ignore inflation - it should take care of itself) - and you get less pension if you retire before your State Pension Age (don't know how old you are but assuming in your 20s as done two years, so SPA probably around 68 and about 40 years to go?) because early retirement means the annual payments are reduced such that if you have an average lifespan you will get the same amount overall as if you took the pension
So in rough terms provided you work around 30 years and started at the age of 38 you will hit it at 68! I don't thin the reduction factors for early retirement have been published yet for any of the State schemes so I do not know if it is possible to estimate what age you will actually be able to retire at
I'm 25 now, pension started at 23 - makes more sense kinda that you have explained it... If I doubled what I put in it, would it make such a significant difference? But you would get more pension if and when your earnings exceed the current level for promotion (ignore inflation - it should take care of itself) - and you get less pension if you retire before your State Pension Age (don't know how old you are but assuming in your 20s as done two years, so SPA probably around 68 and about 40 years to go?) because early retirement means the annual payments are reduced such that if you have an average lifespan you will get the same amount overall as if you took the pension
So in rough terms provided you work around 30 years and started at the age of 38 you will hit it at 68! I don't thin the reduction factors for early retirement have been published yet for any of the State schemes so I do not know if it is possible to estimate what age you will actually be able to retire at
typer0612 said:
Hi
Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
Your plan is scuppered by the Government dictating the earliest you can receive your pension. Currently that is age 55 but it will increase to be 10 years before SPA as SPA increases.Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
So by the time you get there it will likely be 60 odd.
PurpleMoonlight said:
typer0612 said:
Hi
Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
Your plan is scuppered by the Government dictating the earliest you can receive your pension. Currently that is age 55 but it will increase to be 10 years before SPA as SPA increases.Currently I work for the Civil Service, 30k a year and I pay 126 pounds a month into my pension, they contribute 485 pound a month.
How the heck do I work out when I can retire with an income of 20k per year? It is confusing, reason I'm asking here is because the more you pay in - the more you get out of it?
So by the time you get there it will likely be 60 odd.
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