Other people's facepalm financial management
Discussion
Jockman said:
"...the average pot of £29,417 held by today's 65-year-old..."
Now that's worrying.
I can see a lot of house downsizing on the horizon.
I'm certainly no expert when it comes to finance, but that amount does worry me. A workmate retired at Christmas at the age of 62, and his YEARLY pension is about £30k. No idea what the pot is to get that amount. Gotta love company pension schemes Now that's worrying.
I can see a lot of house downsizing on the horizon.
I signed up to the company pension as soon as I was able to at 19. That was 19 years ago and I've just ignored it ever since. I don't see it in my take-home pay so I just forget about it. Looking at my pay packet, this week's pension contribution was £48.23. Hopefully when I give up work I'll be able to enjoy my retirement!
I often wonder if I should be doing more with my money, but in all honesty a lot of it (investments, stocks & shares etc) completely baffles me
Vroom101 said:
I'm certainly no expert when it comes to finance, but that amount does worry me. A workmate retired at Christmas at the age of 62, and his YEARLY pension is about £30k. No idea what the pot is to get that amount. Gotta love company pension schemes
I signed up to the company pension as soon as I was able to at 19. That was 19 years ago and I've just ignored it ever since. I don't see it in my take-home pay so I just forget about it. Looking at my pay packet, this week's pension contribution was £48.23. Hopefully when I give up work I'll be able to enjoy my retirement!
I often wonder if I should be doing more with my money, but in all honesty a lot of it (investments, stocks & shares etc) completely baffles me
In the real world you would need a pot of about £500k to get £30kpa pension but that's a guesstimate! I signed up to the company pension as soon as I was able to at 19. That was 19 years ago and I've just ignored it ever since. I don't see it in my take-home pay so I just forget about it. Looking at my pay packet, this week's pension contribution was £48.23. Hopefully when I give up work I'll be able to enjoy my retirement!
I often wonder if I should be doing more with my money, but in all honesty a lot of it (investments, stocks & shares etc) completely baffles me
walm said:
Granfondo said:
In the real world you would need a pot of about £500k to get £30kpa pension but that's a guesstimate!
£660k according to the quote I just tried and I am quite fat.People in finally salary or public sector pensions are very very lucky indeed!
Ozzie Osmond said:
Simpo Two said:
The problem is that you can't predict the future. You could crunch numbers based on today's info and project forwards, and assign yourself an exact amount to spend each month so that you died at the actuarially-predicted age with £0.00p.
Aha! I've got the perfect answer! Buy an annuity! Then the money lasts exactly the same length of time that you do!No really, don't. At least, not without some very careful thought...
walm said:
Vroom101 said:
Hopefully when I give up work I'll be able to enjoy my retirement!
Perhaps it might be worth finding out rather than just hoping?bmwmike said:
I guess we could all work for the public sector.. problem solved !
I don't work in the public sector Edited by Vroom101 on Tuesday 7th June 15:44
Vroom101 said:
Well, yes, but who knows how much everything will cost when I reach retirement age (whatever that may be!)? When I do retire, I will have more service than my workmate who went on £30k a year. I do get a pension statement each year which outlines it all, but don't have it to hand. The unknown entity is the cost of living at my retirement age, but then nobody has a crystal ball.
Well I was restraining myself before but you are essentially highlighting a fairly epic financial facepalm right in front of us - so at least you have the right thread!!Everything you just described is something called "retirement planning".
It's where you PLAN for your RETIREMENT.
The name of the process itself nearly gives it away.
People who completely ignore retirement planning are demonstrating some truly brilliant facepalm financial management.
Or perhaps I am wrong and the fact that you might have to make some assumptions about inflation and the future cost of living means that burying your head in the sand and hoping for the best is clearly the best strategy.
Alternatively pay for some advice from a professional OR at the very least make a half-arsed effort to educate yourself...
http://lmgtfy.com/?q=cost+of+living+in+retirement+...
Very first link:
"Most people estimate that living reasonably comfortably in retirement requires around 60%# of the income you had while you were working."
http://www.scottishwidows.co.uk/retirement-plannin...
https://www.standardlife.co.uk/c1/guides-and-calcu...
Sheepshanks said:
Ozzie Osmond said:
Simpo Two said:
The problem is that you can't predict the future. You could crunch numbers based on today's info and project forwards, and assign yourself an exact amount to spend each month so that you died at the actuarially-predicted age with £0.00p.
Aha! I've got the perfect answer! Buy an annuity! Then the money lasts exactly the same length of time that you do!No really, don't. At least, not without some very careful thought...
walm said:
Vroom101 said:
Well, yes, but who knows how much everything will cost when I reach retirement age (whatever that may be!)? When I do retire, I will have more service than my workmate who went on £30k a year. I do get a pension statement each year which outlines it all, but don't have it to hand. The unknown entity is the cost of living at my retirement age, but then nobody has a crystal ball.
Well I was restraining myself before but you are essentially highlighting a fairly epic financial facepalm right in front of us - so at least you have the right thread!!Everything you just described is something called "retirement planning".
It's where you PLAN for your RETIREMENT.
The name of the process itself nearly gives it away.
People who completely ignore retirement planning are demonstrating some truly brilliant facepalm financial management.
Or perhaps I am wrong and the fact that you might have to make some assumptions about inflation and the future cost of living means that burying your head in the sand and hoping for the best is clearly the best strategy.
Alternatively pay for some advice from a professional OR at the very least make a half-arsed effort to educate yourself...
). Every day is a school day, as the saying goes.Going by those links, it looks like I'll have sufficient income. I'm under no illusion that I'm lucky to be in the pension scheme I am. I wouldn't like to be one of those people who intend to live out their retirement on just a state pension.
My company offers advice for those approaching retirement, so of course I'll take that too. However I expect I'll be working for at least another twenty years before I do retire, so plenty of time to look into it further and do some more. My dad is still working at the age of 67, but that is through choice rather than necessity. I do know his pension fund took a hit when he and my mum divorced after 27 years of marriage, though. He stuffed as much as he could back into the fund after she took her cut.
When I occasionally come on this part of the forum and read about people making investments, whether it is stocks, shares, property or otherwise, that is where I feel most naive.
I'm certainly up for more education
I am not a financial advisor. However I would say the best thing to do is complete a statement of current assets. No through all of your savings, investments, house and pension and note down what they are worth now.
Then for each one start to think about if there is a growth rate (eg you might plan for 3% on the investments) and project it out
For the pension, get the last statement and see if it gives you an estimate. Be careful with the estimates as sometimes they are too optimistic (eg mine is 7% investment growth a year, I think that's optimistic). Then work out what that's projected to be
Then work out where you want to be and what you want to be able to do, and when. IE when do you want to retire, what standard of living do you want, do you want to keep the house / move abroad / downsize
Then you work out the gap between the projection and the desired target. Once you know which way that is going, you can then start to think about if you should change anything.
Shouldn't take more than half a day and could significantly pivot your entire financial future. Or you might be good - don't know until you work it out
Then for each one start to think about if there is a growth rate (eg you might plan for 3% on the investments) and project it out
For the pension, get the last statement and see if it gives you an estimate. Be careful with the estimates as sometimes they are too optimistic (eg mine is 7% investment growth a year, I think that's optimistic). Then work out what that's projected to be
Then work out where you want to be and what you want to be able to do, and when. IE when do you want to retire, what standard of living do you want, do you want to keep the house / move abroad / downsize
Then you work out the gap between the projection and the desired target. Once you know which way that is going, you can then start to think about if you should change anything.
Shouldn't take more than half a day and could significantly pivot your entire financial future. Or you might be good - don't know until you work it out
Vroom101 said:
Thank you for the education (honestly - no sarcasm implied or intended ). Every day is a school day, as the saying goes.
Going by those links, it looks like I'll have sufficient income. I'm under no illusion that I'm lucky to be in the pension scheme I am. I wouldn't like to be one of those people who intend to live out their retirement on just a state pension.
My company offers advice for those approaching retirement, so of course I'll take that too. However I expect I'll be working for at least another twenty years before I do retire, so plenty of time to look into it further and do some more. My dad is still working at the age of 67, but that is through choice rather than necessity. I do know his pension fund took a hit when he and my mum divorced after 27 years of marriage, though. He stuffed as much as he could back into the fund after she took her cut.
When I occasionally come on this part of the forum and read about people making investments, whether it is stocks, shares, property or otherwise, that is where I feel most naive.
I'm certainly up for more education
That is awesome news. Thanks for not attacking me for being rude!! ). Every day is a school day, as the saying goes.Going by those links, it looks like I'll have sufficient income. I'm under no illusion that I'm lucky to be in the pension scheme I am. I wouldn't like to be one of those people who intend to live out their retirement on just a state pension.
My company offers advice for those approaching retirement, so of course I'll take that too. However I expect I'll be working for at least another twenty years before I do retire, so plenty of time to look into it further and do some more. My dad is still working at the age of 67, but that is through choice rather than necessity. I do know his pension fund took a hit when he and my mum divorced after 27 years of marriage, though. He stuffed as much as he could back into the fund after she took her cut.
When I occasionally come on this part of the forum and read about people making investments, whether it is stocks, shares, property or otherwise, that is where I feel most naive.
I'm certainly up for more education
CarlosFandango11 said:
Yes Defined Benefit schemes would be good for those who get paid pension schemes, but cost a lot and have a lot of risk for companies that sponsor them, hence there aren't many left....
The trouble being that the few remaining ones have a collective shortfall of £300 billion. Not a problem s long as companies make profits and govts run surpluses.....hmmmmJockman said:
The trouble being that the few remaining ones have a collective shortfall of £300 billion. Not a problem s long as companies make profits and govts run surpluses.....hmmmm
The govt doesn't need to run a surplus - pension costs are a big chunk of the overall public spending each year.They don't have a "pot" as such that might fall into deficit - they just pay out of the ongoing P&L of the government.
According to this it is 20% of government spending.
(Not saying it isn't going to become a problem but they don't need a surplus to service it - at the moment.)
http://www.ukpublicspending.co.uk/
Gassing Station | Finance | Top of Page | What's New | My Stuff