Retirement fund

[NickCQ]

cavey76 said:

I work in the telecoms, i was very aware of a company called Ringcentral around 2013/14. I went ball deep on them in 2014. Sold in 2018 and thought i was Warren Buffet. I cry myself to sleep these days over what i could have won!

It's amazing how well that stock has performed given how crap the teleconferencing product is! Almost as bad as Webex, and that's saying something.

[cavey76]

NickCQ said:

cavey76 said:

I work in the telecoms, i was very aware of a company called Ringcentral around 2013/14. I went ball deep on them in 2014. Sold in 2018 and thought i was Warren Buffet. I cry myself to sleep these days over what i could have won!

It's amazing how well that stock has performed given how crap the teleconferencing product is! Almost as bad as Webex, and that's saying something.

So well that if i had had the balls to stay in i would have blown my LTA by my early 40s. I want a time machine to go back to 2018 and kick my arse.

I am not massively au fait with the product suffice to say they are true cloud and are picking up customers like Verizon, DT, BT where Cisco are dropping them so i believe they have runway ahead of them.

Lolz at your Webex comment - I erm...umm....worked for them till recently. Its not entirely bad. If you work for a a firm who has the full suite of products with an IT org that dont choke the role out of the latest updates Webex is actually not bad.

but we are getting off message here.

[NickCQ]

cavey76 said:

Lolz at your Webex comment - I erm...umm....worked for them till recently. Its not entirely bad. If you work for a a firm who has the full suite of products with an IT org that dont choke the role out of the latest updates Webex is actually not bad.

As you say, off message, but the issue with Webex is not any of the clever bits, it's the basic stuff like being able to turn off the annoying bongs, beeps and flashing taskbar icons. I assume none of that changes however much you spend with Cisco on other apps.

[supersport]

NickCQ said:

cavey76 said:

I work in the telecoms, i was very aware of a company called Ringcentral around 2013/14. I went ball deep on them in 2014. Sold in 2018 and thought i was Warren Buffet. I cry myself to sleep these days over what i could have won!

It's amazing how well that stock has performed given how crap the teleconferencing product is! Almost as bad as Webex, and that's saying something.

Nothing is as bad as Webex, it’s a pile of stinking poo.

[mikey_b]

supersport said:

Nothing is as bad as Webex, it’s a pile of stinking poo.

Obviously you've never tried Teams, particularly in a VDI environment...

[Sheepshanks]

cavey76 said:

I work in the telecoms, i was very aware of a company called Ringcentral around 2013/14. I went ball deep on them in 2014. Sold in 2018 and thought i was Warren Buffet. I cry myself to sleep these days over what i could have won!

You’d be suicidal if you still owned them - they’re down a lot this year.

I had a chunk in a chip company that made critical parts for telecoms infrastructure - they went bust.

[2 GKC]

NickCQ said:

It's amazing how well that stock has performed given how crap the teleconferencing product is! Almost as bad as Webex, and that's saying something.

Our business uses it. Never had a problem. It’s basically Zoom

[red_slr]

trickywoo said:

I know this is PH and I risk the 'anything less than £1m isn't worth worrying about' answer but if you were in the position of not being able to top up a retirement fund with a retirement date 12 to 15 years from now what would you say is a reasonable sum to have now?

Happy with a 100% equity managed style home for the money until then.

Not looking to live the high life in retirement BTW.

You are looking at this the wrong way round.

I would start to draw up a budget first.

So living costs, food, utilities, council tax, clothing, personal care, transport any health requirements etc and finally a fudge for unforeseen but not optional expenses.
This is your base line. Lets say for round numbers its £12,000 a year. (just as an example)

Then your entertainment costs. Travel. Hobbies. Coke, hookers etc.
Lets call this optional spending and say another £12,000 a year. (just as an example)

At this point you know you need £24k a year. (example)

You can use the x25 rule of thumb (or x30 if you want to be safe) and that gets you to needing a pot of £600k.

Then do retirement date minus today, lets say its 15 years.

If you work back using the 4% rule then if you start now and make zero contributions then you would need £330k today. And in 15 years that would be roughly 600k.

If you were to make contributions over that 15 years then its obviously more complicated but just for round numbers lets say 500 or 1000 a month. At 500 a month you would need to start at 260k today. At 1000 a month you would need to start at 200k today and in 15 years have c.600k.

Hopefully these examples give you a rough idea.

[Sheepshanks]

It seems such a crap system now because there's a degree of gambling with your fund and you don't have much idea how long you're going to live for.

[chip*]

Sheepshanks said:

It seems such a crap system now because there's a degree of gambling with your fund and you don't have much idea how long you're going to live for.

Just finished reading this retirement planning book 2 days ago.



Overall, a pretty decent book with excellent pointers (although Section 3 & 4 can get meaty) for those who are keen to gain an understanding to retirement financial planning.

[Prohibiting]

I’m 30, I put £400 in a month, employee contributes the bare minimum which is like £95 a month or something. Current pension pot as it stands is small as only started taking it seriously just 2 years ago.

I used a pension calculator and if I continue that for another 35 years I should have around £28k per annum with the state pension included in that.

No idea if this is good or not but living on my own it’s all I can afford to set aside right now.

[Mazinbrum]

You really need to factor in how many years before SPA you want to retire and then plan your withdrawals and tax.
Eg if you retire at 57 with 600k you can crystalise 45720 a year for 10 years giving you 11430 tax free plus 12570 taken from the taxable crystalised amount (the income tax allowance) giving you £24k tax free a year. When you get to SPA you can use the SP to pay the tax plus you'll still have some tax free left.
All in todays money and assuming the SP doesn't get canned!

[covmutley]

red_slr said:

If you were to make contributions over that 15 years then its obviously more complicated but just for round numbers lets say 500 or 1000 a month. At 500 a month you would need to start at 260k today. At 1000 a month you would need to start at 200k today and in 15 years have c.600k.

.

Whilst not relevant to the OP, for others reading, this is the most important thing to know when it comes to pensions imo!! Start early, even if only small amounts!!! I luckily got auto enrolled in my first proper job, but wish I had understood more.

Over a 40 year time frame, compound interest is an amazing thing and at 7% interest, you only need £225 a month to get to £600k.

[red_slr]

covmutley said:

Whilst not relevant to the OP, for others reading, this is the most important thing to know when it comes to pensions imo!! Start early, even if only small amounts!!! I luckily got auto enrolled in my first proper job, but wish I had understood more.

Over a 40 year time frame, compound interest is an amazing thing and at 7% interest, you only need £225 a month to get to £600k.

And if you are making payments from PAYE then that £225 is probably closer to £190 of your own money if you are 20% tax payer for example.

[Jackals]

covmutley said:

red_slr said:

If you were to make contributions over that 15 years then its obviously more complicated but just for round numbers lets say 500 or 1000 a month. At 500 a month you would need to start at 260k today. At 1000 a month you would need to start at 200k today and in 15 years have c.600k.

.

Whilst not relevant to the OP, for others reading, this is the most important thing to know when it comes to pensions imo!! Start early, even if only small amounts!!! I luckily got auto enrolled in my first proper job, but wish I had understood more.

Over a 40 year time frame, compound interest is an amazing thing and at 7% interest, you only need £225 a month to get to £600k.

True, but you need to remember £600k now, won't be worth £600k in 40 years time.

[Mazinbrum]

Jackals said:

covmutley said:

red_slr said:

If you were to make contributions over that 15 years then its obviously more complicated but just for round numbers lets say 500 or 1000 a month. At 500 a month you would need to start at 260k today. At 1000 a month you would need to start at 200k today and in 15 years have c.600k.

.

Whilst not relevant to the OP, for others reading, this is the most important thing to know when it comes to pensions imo!! Start early, even if only small amounts!!! I luckily got auto enrolled in my first proper job, but wish I had understood more.

Over a 40 year time frame, compound interest is an amazing thing and at 7% interest, you only need £225 a month to get to £600k.

True, but you need to remember £600k now, won't be worth £600k in 40 years time.

Yup, as long as inflation stays below 7% it will be worth more.

[covmutley]

Jackals said:

True, but you need to remember £600k now, won't be worth £600k in 40 years time.

And if your wage rose in line with inflation, then the amount going in the pot should also rise over time.

[NickCQ]

Mazinbrum said:

Yup, as long as inflation stays below 7% it will be worth more.

No, in the example the £600k was post growth (nominal contributions were £108k)

[BGarside]

Don't understand why people talk about 'compounding' when the pension is invested in the stock market and the underlying funds/shares can go down as well as up. Returns are not guaranteed and may not 'compound' as a fixed interest investment would.

Am I missing something??

Deduct say 2% for inflation and another 2% for management fees and to use the 4% rule you'd need a minimum market return of 8% every year just to preserve the value of the pension pot. This seems unrealistic to me and I'm thinking of drawing 2-2.5% to live on eventually which means a larger pot is required.

[NickCQ]

BGarside said:

Don't understand why people talk about 'compounding' when the pension is invested in the stock market and the underlying funds/shares can go down as well as up. Returns are not guaranteed and may not 'compound' as a fixed interest investment would.

All people mean by "compounding" is that if it goes up 10% two years on the trot you end up with 121% not 120%. Unlike a property investment where (absent rental growth) you get the same nominal rent each year.