Pension of £100k a year?

[dingdong]

It makes you realise how unfair public sector pensions are when you compare final salary pension schemes to the ridiculously low pensions that most people will get from their defined contribution and SIPP schemes.

[SueEllen]

It makes you realise how unfair public sector pensions are when you compare final salary pension schemes to the ridiculously low pensions that most people will get from their defined contribution and SIPP schemes.

Not all public sector pensions are great it depends on the job you do. So if you are some random admin your pension will be sh*t and you may need to continue working, there as if you are the head of an NHS trust you will be laughing all the way to the bank.

Btw I know two people in that situation.

[fidot]

... and many public sector employees have had what were initially final salary pensions converted into a career average pension, so it's not all sweetness and light.

[SussexSeagull]

Absolutely great that people build a pension to look after them in their old (or not so old!) age but I remember some of the old lifers in the Final Salary days when I worked at one of the big four banks who were going on about how good their pensions were from about their mid 40s and almost let everything else in their career be governed by it.

I know it is different for contractors but there is a balance to be had between having a comfortable retirement and not enjoying yourself when you are young.

[yasockie]

deferred-pleasure

I am definitely against excessive pensions.
Yes, you are deferring taxation but also yields and pleasure.
There's some things that you won't enjoy in your old age as much, even if you survive that long.

[Fred Bloggs]

Absolutely great that people build a pension to look after them in their old (or not so old!) age but I remember some of the old lifers in the Final Salary days when I worked at one of the big four banks who were going on about how good their pensions were from about their mid 40s and almost let everything else in their career be governed by it.

I know it is different for contractors but there is a balance to be had between having a comfortable retirement and not enjoying yourself when you are young.

But, kind of missing the point there, somewhat. It was never a mutually exclusive situation. I paid 1% of salary into my final salary pension plan. I moved to another company, got a salary increase and there I paid 2%. In some blue chip companies the final salary pension was free. So you could have a decent pension and it really had no impact on you enjoying your life.

[malvolio]

I am definitely against excessive pensions.
Yes, you are deferring taxation but also yields and pleasure.
There's some things that you won't enjoy in your old age as much, even if you survive that long.

For perspective, most people will have around 25-30 years retirement. I for one don't intend living off baked beans and wrapping up warm for all that time...

As for public sector super pensions, I know someone who worked for the NHS for 42 years, ending up running a £50m a year budget across 100 staff and has a final salary pension of £28k a year. She was in the labs though, not administration...

[TheFaQQer]

For perspective, most people will have around 25-30 years retirement. I for one don't intend living off baked beans and wrapping up warm for all that time...

As for public sector super pensions, I know someone who worked for the NHS for 42 years, ending up running a £50m a year budget across 100 staff and has a final salary pension of £28k a year. She was in the labs though, not administration...

State pension is around £16k on top of that though so she should have a pension in the range of £44k a year.

[malvolio]

State pension is around £16k on top of that though so she should have a pension in the range of £44k a year.

Her state pension is around £130 a week with 40 years full NICs paid. So she will be above national average income. But the point is the press would report her as having retired with a £1m pension pot (a £100k fund gives about £3k a year pension); that money is there somewhere to generate the pension payment but it will never get to her bank account and it's certainly not her money.

[lukemg]

Good thread. A lot of FIRE sites champion a 4% withdrawal rate, which from an investment pot should never run out of money (if future returns bear any relation to previous ones).
Current thinking is that this is too much and 3% would be more prudent but I think 4% would be fine, I am convinced you need less and less money as you get older, houses paid off, ambitions more modest.
So - 25x annual expenses to have something left to pass on.
20x if you want your last cheque to bounce....