How does this financial situation look long term…
Discussion
Delurking for this query
I’m 63 and we rent our home. Not worried about tenancy length. I want to retire at 67 latest but maybe 65.
Salary - approx 96k
Partner salary. 33k
Savings: 50k in each of our ISAs and we add 1200 per month between us
200k in sipp currently cash at 4% interest adding 1400 per month in contributions gross I take the extra 20% as take home pay via my tax code as increased personal allowance All stakeholders pension gets transferred to sipp as it leaks money.
30k in easy access savings for cars/kids/emergencies.
I know I’m not skint and I’m certainly not complaining but I worry about the future and if I’ll have enough money to live comfortably. I’d love to buy a house but I think that ship’s sailed. When I look at RIO or interest only I’m not eligible. If I’m lucky and healthy I could have c 350k at retirement. Or am I f@cked?
I’m not interested in providing for my nineties, past lifestyle will no doubt catch up with me at some point.
I’m 63 and we rent our home. Not worried about tenancy length. I want to retire at 67 latest but maybe 65.
Salary - approx 96k
Partner salary. 33k
Savings: 50k in each of our ISAs and we add 1200 per month between us
200k in sipp currently cash at 4% interest adding 1400 per month in contributions gross I take the extra 20% as take home pay via my tax code as increased personal allowance All stakeholders pension gets transferred to sipp as it leaks money.
30k in easy access savings for cars/kids/emergencies.
I know I’m not skint and I’m certainly not complaining but I worry about the future and if I’ll have enough money to live comfortably. I’d love to buy a house but I think that ship’s sailed. When I look at RIO or interest only I’m not eligible. If I’m lucky and healthy I could have c 350k at retirement. Or am I f@cked?
I’m not interested in providing for my nineties, past lifestyle will no doubt catch up with me at some point.
borcy said:
Do you have a company pension, does your partner?
What lifestyle do you want post retirement?
Do you have any other debts?
The company pension gets transferred to sipp. If performance improves I’ll look at investing it but for now I prefer the interest. We’re not extravagant but I’d like to travel a couple of times a year for five years or so, mainly Europe. What lifestyle do you want post retirement?
Do you have any other debts?
Debt free
Countdown said:
Apologies if this is stating the bleeding obvious but you need to work out how much money you'll need in retirement and then work back from that to see if you're screwed (or not).
No need to apologise you’re quite right, sometimes I feel optimistic, sometimes I see my savings dwindling with rent and council tax till it’s all gone. 
DonkeyApple said:
Household income in the region of £8k/month net.
The big question is just what are you spending it all on to be only putting aside a couple of grand a month to replicate your future income post employment?
Nett income is 7k monthly, we're not extravagant, no loans, both cars paid for. I use a credit card occasionally if I feel like I want some protection, but it gets paid off each month. what's left in the current account every month gets moved to the savings and around this time of year I'll be putting a lump sum into my SIPP. The big question is just what are you spending it all on to be only putting aside a couple of grand a month to replicate your future income post employment?
When we talk about the relationship between current and future income, I don't want to curtail enjoying life to the full by over providing for an uncertain future. Don't we all know people who die within a couple of years of retirement, or even sooner, and we shake our heads and mutter about how unfair it is.
Stakeholder pension is a joke, piss poor performance, shambolic admin. So that's now in the SIPP while I decide what to do - the interest is far better than the provider's performance while that rate lasts, I'm aware that rates are dropping all over.
So while I complelety get the maths of maxing out pension contributions, between a poorly performing stakeholder pension and my own ignorance of financial markets or reliable pension funds, scooping up the relief and leaving it as cash accruing interest seems a fairly sensible course of action for the moment.
Just coming back to this, thanks again for all the advice.
Life insurance is pretty well covered by death in service benefit at the moment, like someone above said, I'm worth far more dead than alive.
Re budget, still working on it but around 40k per year at today's levels plus state pension would pay the bills and keep us comfortable, bit of travel and leisure provided for. Kids would be well sorted by then, if not, well tough.
I've used the time off to work a few things out. I think a sensible short term course is to halve the ISA (which has gone down to 1 point something while new customers are being offered 4.4 via HL, criminal) before transferring the rest to a better one next week (it's maxed out this year).
Also halve the savings which gives around 40k which should go under the pension allowance for this year, I'm sure there's plaenty of back fill anyway from the previous 2 years. That will bring 10k back from HMRC which might be needed for kid's plans or could go into ISA or SIPP
The transfer of my workplace pension is in progress and the money's left the scheme not turned up in the SIPP yet though. Ongoing contributions will have to go into the workplace pension. I can review that every couple of months I guess.
I think a split between a "safe" pension fund and a couple of trackers via the SIPP might be the next step?
Life insurance is pretty well covered by death in service benefit at the moment, like someone above said, I'm worth far more dead than alive.
Re budget, still working on it but around 40k per year at today's levels plus state pension would pay the bills and keep us comfortable, bit of travel and leisure provided for. Kids would be well sorted by then, if not, well tough.
I've used the time off to work a few things out. I think a sensible short term course is to halve the ISA (which has gone down to 1 point something while new customers are being offered 4.4 via HL, criminal) before transferring the rest to a better one next week (it's maxed out this year).
Also halve the savings which gives around 40k which should go under the pension allowance for this year, I'm sure there's plaenty of back fill anyway from the previous 2 years. That will bring 10k back from HMRC which might be needed for kid's plans or could go into ISA or SIPP
The transfer of my workplace pension is in progress and the money's left the scheme not turned up in the SIPP yet though. Ongoing contributions will have to go into the workplace pension. I can review that every couple of months I guess.
I think a split between a "safe" pension fund and a couple of trackers via the SIPP might be the next step?
I plan to try and max out pension over ISAs. We already save quite diligently and with a family wedding out of the way next year our only big expense would be holidays and maybe replacing one or both cars.
I know that won’t do it on its own so some sensible placing of SIPP money will be crucial I expect.
I know that won’t do it on its own so some sensible placing of SIPP money will be crucial I expect.
Ken_Code said:
Moneyquery said:
Just coming back to this, thanks again for all the advice.
Life insurance is pretty well covered by death in service benefit at the moment, like someone above said, I'm worth far more dead than alive.
Re budget, still working on it but around 40k per year at today's levels plus state pension would pay the bills and keep us comfortable, bit of travel and leisure provided for.
Well that’s not going to happen. Also, you’ve been blowing over £80,000 per year while working, how are you intending to half your outgoings once you actually want to do things instead of going to work?Life insurance is pretty well covered by death in service benefit at the moment, like someone above said, I'm worth far more dead than alive.
Re budget, still working on it but around 40k per year at today's levels plus state pension would pay the bills and keep us comfortable, bit of travel and leisure provided for.
Steve H said:
As others have commented I am at a loss as to how someone earns so much and has accumulated so little.
OP, if you can manage on £40k as you suggest and would like any chance of doing so I would suggest you start right now living at that income level and put all the rest into investments
Sorry if this sounds negative but you are asking the right question and this is the answer.
It’s only in the last few years that I’ve enjoyed this level of income. If I’d been earning like this for a decade or more I’m sure the situation would be different. I honestly don’t think we’re extravagant. We actually save far more than we spend apart from housing costs. OP, if you can manage on £40k as you suggest and would like any chance of doing so I would suggest you start right now living at that income level and put all the rest into investments
Sorry if this sounds negative but you are asking the right question and this is the answer.
xeny said:
Where are you getting £17,000 from? I make it £31,200 between pension and ISA?
OP - I'd give some serious thought to taking money out of the ISA to live on so you can pay more into the pension - essentially seek to maximise your pension contributions and minimise tax paid. Alternatively (and this is probably a better option as the ISA is presumably cash?) run down the £30,000 cash buffer, so you don't waste ISA allowance.
Yes, I’ve already dug into both pots to max out the pension allowance and plan to put in a good chunk to start next tax yearOP - I'd give some serious thought to taking money out of the ISA to live on so you can pay more into the pension - essentially seek to maximise your pension contributions and minimise tax paid. Alternatively (and this is probably a better option as the ISA is presumably cash?) run down the £30,000 cash buffer, so you don't waste ISA allowance.
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hstewie said:
hstewie said: I wouldn't automatically assume it's "bait".
Plenty of people seem to live for today and don't think about tomorrow until it's very late in the day.
I’m not trying to bait anyone. Plenty of people seem to live for today and don't think about tomorrow until it's very late in the day.
But the assumption that we piss it all up the wall is plain wrong. We save over 40k a year. It’s just that we’ve only been able to do that in the last few years.
The whole point of asking the question in the OP was to get some honest advice and it’s been a very useful set of responses.
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