How much do you put in your pension?

[wantacontract]

I put nothing in my pension...

I have £20k pot in my HL SIPP and thats it....

I am going to live off income from my properties and also my share isa....so my

Should everything go well, I should retire by 55 (over 15 years away) with a monthly income £3k, with outgoings around £2.5k.

[DonkeyRhubarb]

1. Turn mortgage into a offset mortgage, and stick 175k into account to offset all interest.
2. Overpay offset mortgage per month to a sum you're happy with. For me, if I had a £175k mortgage, I would want it paid off by 4 or 5 years and set the monthly mortgage amount to equate to that.
3. Invest £15k share isa for yourself and your wife - just stick it in vanguard...
4. Buy two residential properties for cash. Approx £240k
5. remaining £65k saved for a rainy day.

Personally, I'd just pay off the mortgage rather than offsetting but, apart from that, I like it.

It's heavy on residential property but I favour hard/tangible assets in these strange times.

[WordIsBond]

Personally, I'd just pay off the mortgage rather than offsetting but, apart from that, I like it.

The only real advantage to the offset approach is if you may want to access some of the funds in the interim. The offset gives you added flexibility. In this case, since the mortgage amount is considerably smaller than the available lump sum, there's probably no need to keep that flexibility.

That also gives space for the desire for more aggressive investing. You can pay off the mortgage (that's very safe) with about 1/3 of the funds and do something much more aggressive / risky with the rest to try to get a higher return. If you view it as putting 175K in gilts and 325K in equities, that's not overly risky. View the mortgage redemption as a bond investment, in effect, and balance it with the rest of the investment.

[DonkeyRhubarb]

Before investing a £300k lump sum in shares, even in a broad index tracker like Vanguard, ask yourself if you could stomach a 50% drawdown. (initial investment falling to £150k)

Although this is a rare event, it has happened several times in the past eg. 2000-2003 and 2008-2009.

As an alternative, you could invest the sum in several tranches, over a few years, or set up a monthly DD.

[AnotherGuy]

A bit OT, but reading lots of people here relying on property to bank when they retire.

Do you realise property prices can go up as well as go down right? like with every single investment asset out there.

In fact I would say, depending on the time scale you are on, property prices in some UK areas have more downside trend than upside in the next years.

[TheFaQQer]

Do you realise property prices can go up as well as go down right?

Don't let George Osbourne hear you speaking like that.

[unixman]

For the last couple of years I have put a large portion of company profits into the pension.

It is nothing but a long defeat in the end. Retirement security lies in owning property or working in the public sector. Article in yesterday's Torygraph (I know, I know) calclated that a nurse starting a career today will receive 45k per year after retirement, in today's money, which will be index linked and increase over time. I will receive about 7k if I keep up reasonably payments. You might feel wealthy now, but come retirement it is all tables turned.

[Fred Bloggs]

Kind of misses the point, while you are turning over £100k+ with a marginal tax rate of about 18%, the nurse grosses about a quarter to a third of that and suffers a far higher marginal tax burden. You really need to try harder than that.

[unixman]

Kind of misses the point, while you are turning over £100k+ with a marginal tax rate of about 18%, the nurse grosses about a quarter to a third of that and suffers a far higher marginal tax burden. You really need to try harder than that.

Will you be my accountant ? I much prefer your figures to the lousy ones I get from Intouch.

If you are curious, go and read the article like I did.

[Fred Bloggs]

Sure, I will read it. If you're paying a higher rate of tax than I suggest then for sure you need a better accountant! However, from next month it changes anyway, so too late.