Getting wobbles at 45

[northernladuk]

Part time at 45, seems very young ?

If you've worked your butt off and not lived beyond your means why not relax at 45? I agree it's too young for me. I like working and need the motivation but not everyone else does. My other half is only a few years off that and she's gasping to leave teaching and semi-retire so why not. The whole point of working hard is to be able to have the choice.

[GregRickshaw]

Hi all, first time poster. I’ve been contracting as a software engineer for the last 14 years with back to back long contracts so successfully I’d say. Only in the recent few years have I started to get the bigger rates and as such only just starting to be able to afford to save and put proper money into my pension. Having stretched myself probably too far in younger life with big mortgage and kids, plus a low earning wife. My plan was always to get the mortgage done which will be in 7 years and then really ramp up pension etc until 60s (65 more than likely). But I’m getting anxious as to if this was a massive mistake, is the idea of contracting on similar rates for the next 15-20 years a sensible plan. Or should I look for a sunset permie job and reorganise finances to afford the rate drop? Must be an age things as losing my bottle a bit.

You sound as though you have lots of great experience and with back to back contracts certainly desirable, so I wouldn't expect your rates to get worse they should get better.

I think ramping up your mortgage payments was a mistake.... yes yes blah blah interest.... blah blah paid a ton more blah blah.... but you sound like you have a family home for living in and a great family (apart from those dam low earning wives)..... and so what it takes another 10 years to pay off... mortgages are meh, don't continue to kill yourself trying to get rid of it, life is for living not paying bills rapidly just for the sake of it. I see and know so many people who spend 25 years utterly miserable worrying about their mortgage payments. No one knows what is around the corner.

There is some wisdom about paying all your debts before you start saving though.

If there is a permie role which makes your day good and happy then who care about the 'drop' (see above).

[hugebrain]

taking into account the £8k government pension, you'll need over £400,000 in cash when you get to retirement to cover you.

Exactly, and that’s two years’ pay. Accounting for tax and a high-spending contractor lifestyle it could take you maybe four years to save enough to retire. So no need to stress about it.

[hobnob]

you'll need over £400,000 in cash when you get to retirement to cover you.

Exactly, and that’s two years’ pay.

£400k in 2 years = £200k per year. If the OP has 200 billable days per year, that assumes a daily rate of £1000.

Going back to your earlier comment:

Don’t pay much into your pension unless/until you fail as a contractor and have to take an inside IR35 role. Then you can drop in 120,000 in one year which will give you around double the average pension in one go.

If the OP was going to do salary sacrifice for £120k and still have enough for their existing bills (I'm guessing at least £40k gross), that's £160k in 200 days, i.e. £800/day. You're suggesting that this rate would mean the OP has "failed as a contractor".

Just to state the obvious, a lot of contractors are on significantly lower daily rates than that. I think you're well aware of that, and this is just an excuse to boast about how much you get paid, which isn't particularly helpful to anyone else.

[Whorty]

Exactly, and that’s two years’ pay. Accounting for tax and a high-spending contractor lifestyle it could take you maybe four years to save enough to retire. So no need to stress about it.

Maybe in your fantasy world that's 2 years pay, but in the real world that's significantly more fella.

Whatever the OPs rate today, it's enough to live on for him and his family, but not enough to clear his mortgage for another 7 years.

But even taking into account the 4 years, that's 100k post tax and expenses, per year to put away. So that's on top of what he picks up and burns through today ... so an extra £500 per day NET on his day rate, for the next 4 years.

I think your user name on here is more than ironic fella, and you're really not being helpful.

[northernladuk]

Exactly, and that’s two years’ pay. Accounting for tax and a high-spending contractor lifestyle it could take you maybe four years to save enough to retire. So no need to stress about it.

The previous two posters destroyed your comment so no need to do it again. I'll go with the plain old 'You're an idiot' line.

[Whorty]

The previous two posters destroyed your comment so no need to do it again. I'll go with the plain old 'You're an idiot' line.

You're too kind on him ... and that's rarely said on here in General about your posts

[hugebrain]

£400k in 2 years = £200k per year. If the OP has 200 billable days per year, that assumes a daily rate of £1000.

Going back to your earlier comment:



If the OP was going to do salary sacrifice for £120k and still have enough for their existing bills (I'm guessing at least £40k gross), that's £160k in 200 days, i.e. £800/day. You're suggesting that this rate would mean the OP has "failed as a contractor".

Just to state the obvious, a lot of contractors are on significantly lower daily rates than that. I think you're well aware of that, and this is just an excuse to boast about how much you get paid, which isn't particularly helpful to anyone else.

Failed as a contractor if he’s forced to go through an umbrella instead of his company. Doesn’t mean he’d be on a bad rate or failed in general.

There’s 250 working days in a year. So he could earn a lot more, and if he didn’t work so many days he could use some of his savings to live on while funneling more money into the pension.

I’m not boasting. I am sure there are lots of people better at coding and earning much more than me, but why is everyone on here such a Debbie Downer?

[northernladuk]

Failed as a contractor if he’s forced to go through an umbrella instead of his company. Doesn’t mean he’d be on a bad rate or failed in general.

There’s 250 working days in a year. So he could earn a lot more, and if he didn’t work so many days he could use some of his savings to live on while funneling more money into the pension.

I’m not boasting. I am sure there are lots of people better at coding and earning much more than me, but why is everyone on here such a Debbie Downer?

Can someone pass him a bigger spade so he can keep digging please?

[hugebrain]

Can someone pass him a bigger spade so he can keep digging please?

Honestly, he’s 45 and shouldn’t be worrying about his pension, especially since I’ve just demonstrated how he could fund it in around four years.

As you lot keep telling me how much cleverer you are than me you should be able to do it even quicker.

What a bunch of Negative Nellies!