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Anyone else not have a pension?

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    #31
    Originally posted by milanbenes View Post
    I'm 43, back in 2010 I started wondering about retirement, and this is my suggestion for you all

    . before you "just start" doing some kind of pension savings, the first thing you need to do, is,...

    you need to know what size pot you need to retire on

    how to calculate what size pot you need to retire on ?

    crudely speaking, and this is what I did in 2010, just take a sheet of paper, or an excel, and consider, at today's values, what will it cost you per month in any given year to live the kind of life you want to live when you retire, so I did it like this... per month

    Gas Heating bill

    Electricity bill

    Food bill

    Clothes and footwear

    Winter holiday

    Summer holiday

    Weekends away

    Fun/Going Out

    Petrol/Diesel

    Running a car (mot consumables brakes servicing etc)

    Owning a car, discounting the cost of a car over 5 years (you need to estimate what kind of wheels you want to be running around in)

    Council Tax

    etc etc


    So on an Excel or sheet of A4, list all of these items on the left,

    make a column for months and estimate what each costs per month

    then make a column for year and at the bottom write the total of all of these for the year

    then, and this is the useful bit, analytics, make a column % of yearly total and for each item
    list in it's row in the percentage of yearly total column what this item's percentage of the yearly
    total is

    you'll then be able to see, from the yearly total, what the % of each item is, and then you can see
    the essentials like heating and food, which don't have much room for manouvre, and the less essentials
    like the car, and you can play with the numbers, what if I had a cheap car compared to an expensive one etc

    once you have played with the numbers and come with a lifestyle standard of living you will be happy to have in your
    retirement, then you will know from this sheet of A4, how much $$$ you need per year to live on, let's say for sake of argument in today's money it's 20k gbp per year

    Once you know how much you need per live on per year, then you can estimate based upon your ancestor's life expectancy, to what age generally people in your family live to, in my family it's into the 90's

    so, you know what you need to live on, you know to what age you need to fund that, and now the magic part, when do you want to retire ?

    Let's say you want to retire at 55 (where retirement means choosing how you use your time) then you back calculate from 90 to 55, this means for 35 years you need to support yourself at 20k gbp per year, which means...

    and this is the magic part, how much do you need to retire ?

    you need, 20k gbp * 35 years = 700,000GBP

    and now you see your retirement goal, you need a pot of 700,000GBP or you need to build an income mechanism which will bring you 20k gbp per year

    of course you need to keep up with inflation

    these are the basics that we should all be doing or have done.

    I've done it, I know the numbers.


    On a personal note, at 43, having grown up in the UK with friend's fathers seeing their company pensions stolen, having lived through the .com crash, and the financial crash, especially the latter, where we can see that the greatest superstars in the square mile "didn't see it coming", and where during the crash, people saw their investments halve and funds were locked down and people couldn't remove their money...

    then speaking only for myself, I would rather lose my money myself than somebody do it for me

    In my opinion, history has proven over the generations, in the long run, property, land, houses, apartments is the best underlying foundation of a pension plan and basically, whatever your total wealth, put the highest percentage into the safest investments and the lowest percentage into the riskiest investments

    Good luck

    Milan.
    Well I will be laughing at you and your fancy preparation when I get my robot body in 20 years time. No need for heating, light, house, car and who needs holidays when you just have to charge up from the nearest Tesla Robot Pump.

    Comment


      #32
      Originally posted by milanbenes View Post
      I'm 43, back in 2010 I started wondering about retirement, and this is my suggestion for you all

      . before you "just start" doing some kind of pension savings, the first thing you need to do, is,...

      you need to know what size pot you need to retire on

      how to calculate what size pot you need to retire on ?

      crudely speaking, and this is what I did in 2010, just take a sheet of paper, or an excel, and consider, at today's values, what will it cost you per month in any given year to live the kind of life you want to live when you retire, so I did it like this... per month

      Gas Heating bill

      Electricity bill

      Food bill

      Clothes and footwear

      Winter holiday

      Summer holiday

      Weekends away

      Fun/Going Out

      Petrol/Diesel

      Running a car (mot consumables brakes servicing etc)

      Owning a car, discounting the cost of a car over 5 years (you need to estimate what kind of wheels you want to be running around in)

      Council Tax

      etc etc


      So on an Excel or sheet of A4, list all of these items on the left,

      make a column for months and estimate what each costs per month

      then make a column for year and at the bottom write the total of all of these for the year

      then, and this is the useful bit, analytics, make a column % of yearly total and for each item
      list in it's row in the percentage of yearly total column what this item's percentage of the yearly
      total is

      you'll then be able to see, from the yearly total, what the % of each item is, and then you can see
      the essentials like heating and food, which don't have much room for manouvre, and the less essentials
      like the car, and you can play with the numbers, what if I had a cheap car compared to an expensive one etc

      once you have played with the numbers and come with a lifestyle standard of living you will be happy to have in your
      retirement, then you will know from this sheet of A4, how much $$$ you need per year to live on, let's say for sake of argument in today's money it's 20k gbp per year

      Once you know how much you need per live on per year, then you can estimate based upon your ancestor's life expectancy, to what age generally people in your family live to, in my family it's into the 90's

      so, you know what you need to live on, you know to what age you need to fund that, and now the magic part, when do you want to retire ?

      Let's say you want to retire at 55 (where retirement means choosing how you use your time) then you back calculate from 90 to 55, this means for 35 years you need to support yourself at 20k gbp per year, which means...

      and this is the magic part, how much do you need to retire ?

      you need, 20k gbp * 35 years = 700,000GBP

      and now you see your retirement goal, you need a pot of 700,000GBP or you need to build an income mechanism which will bring you 20k gbp per year

      of course you need to keep up with inflation

      these are the basics that we should all be doing or have done.

      I've done it, I know the numbers.


      On a personal note, at 43, having grown up in the UK with friend's fathers seeing their company pensions stolen, having lived through the .com crash, and the financial crash, especially the latter, where we can see that the greatest superstars in the square mile "didn't see it coming", and where during the crash, people saw their investments halve and funds were locked down and people couldn't remove their money...

      then speaking only for myself, I would rather lose my money myself than somebody do it for me

      In my opinion, history has proven over the generations, in the long run, property, land, houses, apartments is the best underlying foundation of a pension plan and basically, whatever your total wealth, put the highest percentage into the safest investments and the lowest percentage into the riskiest investments

      Good luck

      Milan.
      Luckily for me my ancestors all died relatively early and I have a chronic condition so I don't need to save piles and piles of cash.
      "You’re just a bad memory who doesn’t know when to go away" JR

      Comment


        #33
        Originally posted by SueEllen View Post
        Luckily for me my ancestors all died relatively early and I have a chronic condition so I don't need to save piles and piles of cash.
        Some people get all the luck - try to hold out for that robot body I was talking about.

        Comment


          #34
          Originally posted by woohoo View Post
          Some people get all the luck - try to hold out for that robot body I was talking about.
          It's not really lucky when all your aunts and uncles start dying off when you are a kid.
          "You’re just a bad memory who doesn’t know when to go away" JR

          Comment


            #35
            Originally posted by SueEllen View Post
            It's not really lucky when all your aunts and uncles start dying off when you are a kid.
            Now I feel bad, apologies.

            Comment


              #36
              Originally posted by woohoo View Post
              Now I feel bad, apologies.
              I was going to add more to make you feel worse but that would be starting a pity party.

              Anyway apology accepted.
              "You’re just a bad memory who doesn’t know when to go away" JR

              Comment


                #37
                Just turned 55, work has been optional, from a financial standpoint anyway, for some time.

                Both me and Mrs PJ are old enough to have defined benefit aka final salary pensions, which we were autoenrolled into, me from my first 2 permie roles, she from 20 years in the NHS. They supply more than half our target minimum retirement joint income of > 30k pa. She already claims hers, I will start doing so when it makes sense tax-wise. I'm assuming State Pension will still be around at or near its current value of c£8K pa when I reach qualifying age, which leaves gaps of 8 and 10 years which we can bridge by taking income/drawing down our company pension defined contribution pot of c£300k. Our SIPP and ISAs currently yield 5.2% in dividends on average, so assuming that continues we can achieve the target income without drawing down the capital, just leaving inflation to worry about. In practice we'll prob drawdown some of it for holidays, seeing offspring through Uni etc.

                We've paid into a pension of some sort throughout our working lives, I see it as a nobrainer, as a permie you generally get some sort of matched contribution from your employer, as a freelance you can offset the contributions against corp tax. I started stock market investing almost as a hobby and developed a style of HYP LTBH that suits my temperament and has beaten the market every year since I started doing it with proper money. We recently answered one of those ads for Fisher Investments and a nice man came round and explained their 'wealth management' service, but they wanted 1.5% per year plus a 2.25 % 'initial deposit' fee every time you put money in. So I'm going to carry on DIY investing for a while, though I will move more towards low cost trackers as my interest wanes.

                For now, buy National Grid!
                My subconscious is annoying. It's got a mind of its own.

                Comment


                  #38
                  Originally posted by pjclarke View Post

                  We've paid into a pension of some sort throughout our working lives, I see it as a nobrainer, as a permie you generally get some sort of matched contribution from your employer,
                  That isn't generally true unfortunately which is why the government rolled out auto-enrolment. Even blue chips were deliberately cutting their matching percentages for new joiners, after they closed down their "final salary" schemes. There as SMEs often didn't have a scheme, and those who did had ones where the employer put nothing into it.

                  The reason I know is I was caught up in it and having had family and friends' who have had various jobs in the pension industry, it was drilled into me to always join an employers scheme.

                  Originally posted by pjclarke View Post
                  as a freelance you can offset the contributions against corp tax. I started stock market investing almost as a hobby and developed a style of HYP LTBH that suits my temperament and has beaten the market every year since I started doing it with proper money. We recently answered one of those ads for Fisher Investments and a nice man came round and explained their 'wealth management' service, but they wanted 1.5% per year plus a 2.25 % 'initial deposit' fee every time you put money in. So I'm going to carry on DIY investing for a while, though I will move more towards low cost trackers as my interest wanes.

                  For now, buy National Grid!
                  Thanks already have.
                  "You’re just a bad memory who doesn’t know when to go away" JR

                  Comment


                    #39
                    I've only just started paying into a pension in my mid 30s. It does make complete sense in terms of tax benefits but difficult to let go of that cash for years.. But we all know time flies and you'll be an old fart before you know it

                    One hopes the private pension age doesn't get increased nor the 25% lump sum scrapped.

                    Get it in!

                    Comment


                      #40
                      Or the pension funds don't get a hair cut.
                      Fiscal nomad it's legal.

                      Comment

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