Getting wobbles at 45

**northernladuk** · 21 August 2022, 17:27

Originally posted by coxy View Post

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.

Don't be fooled by the bigger rates. IR35 changes have hit so even if they are bigger you've more than a good chance you are gonna get back to back inside gigs so immediately over 35% down on your previous outside gigs.. and what about bench time? You have a warchest saved?

Gotta say that's a terrible plan. Unless you are ready to downsize massively then concentrating on the morgage isn't going to help you retire. You still need a house to live in and that would leave you next to no time to save for the pension. Gambling it all on getting big rates for the next 15-20 years is a bloody awful plan. Typical plan of someone that's spunked all their money on a good lifestyle and not thought about tomorrow. Don't worry, you aren't the only one. Doesn't make it right though.

Have you factored in your health in the next 20 years? The kids wanting deposits, your wife not working or any kind of risk? Sounds like you've just been living beyond your means and not giving your retirment one iota of thought I am afraid. Time to buck up and be poorer than you've even been in the last 14 years.

**hugebrain** · 21 August 2022, 17:42

Originally posted by coxy View Post

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 are doing fine. Earning lots from contracting and lots from the negative real rates you are paying on your mortgage.

Enjoy yourself.

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.

**northernladuk** · 21 August 2022, 18:35

Originally posted by hugebrain View Post

You are doing fine. Earning lots from contracting and lots from the negative real rates you are paying on your mortgage.

Enjoy yourself.

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.

You are missing the point he's spending it all on living. He's not going to be able to drop 120,000 in a year unless he drastically reduces his outgoings.

**hugebrain** · 21 August 2022, 18:55

Originally posted by northernladuk View Post

You are missing the point he's spending it all on living. He's not going to be able to drop 120,000 in a year unless he drastically reduces his outgoings.

He says he’s getting bigger rates plus his house is nearly paid off. All he needs to do is stop putting so much in his pension now to save his allowances in case he has to join the dark side.

Also, he needs to relax and enjoy spending the money.

**northernladuk** · 21 August 2022, 19:00

Originally posted by hugebrain View Post

He says he’s getting bigger rates plus his house is nearly paid off. All he needs to do is stop putting so much in his pension now to save his allowances in case he has to join the dark side.

Also, he needs to relax and enjoy spending the money.

He is but he's likely to be inside going forward, he's got 7 years on his mortgage so he'll be 52 so waaaaay behind the curve. I very much beg to differ. He's been doing that far too long and he's got 8 years to fix it. But that's IMO.

**vetran** · 21 August 2022, 20:00

Originally posted by northernladuk View Post

He is but he's likely to be inside going forward, he's got 7 years on his mortgage so he'll be 52 so waaaaay behind the curve. I very much beg to differ. He's been doing that far too long and he's got 8 years to fix it. But that's IMO.

yeah imagine paying your mortgage off in your 30s. What happens next - oh yeah your missus wants a bigger house!

**NotAllThere** · 22 August 2022, 05:09

Originally posted by vetran View Post

yeah imagine paying your mortgage off in your 30s. What happens next - oh yeah your missus wants a bigger house!

Nah. It was already huge. (The house I mean).

**coxy** · 22 August 2022, 06:29

Originally posted by northernladuk View Post

He is but he's likely to be inside going forward, he's got 7 years on his mortgage so he'll be 52 so waaaaay behind the curve. I very much beg to differ. He's been doing that far too long and he's got 8 years to fix it. But that's IMO.

Is 52 waaay behind the curve? Thanks for you’re comments, I realise my mistakes and now working hard to address the issue. I am now building a war chest and putting decent money into pension so have made serious changes. The original question was more about longevity as a contractor into late 50s, what’s older contractors experience of getting roles when older. Surely not all subbies manage to retire at 55.

**eek** · 22 August 2022, 06:34

Originally posted by coxy

The original question was more about, is contracting as a software engineer until 60s a viable plan, or should we play safe and try and go permie?

Why continue as a software engineer?

Think about architecture, Analysis or Project Management....

Getting wobbles at 45