Pensions Planning: The NUMBER

whiteflag wrote: »

Gatser now Ive picked myself off the floor can you perhaps explain where you came across So What's your number?

Youve have hit the nail on the head- knowing what your aiming for is the single most important thing>:T

It's a Prudential marketing campaign. Was run in Asia initially (has been since turn of year, perhaps even before), got pinched by another company for use in US, and has been copyrighted for use in Europe.

May not be where he found it, of course - but it's fairly widespread now.

My number based upon my current investments is NOT Enough. I have created a plan to increase my pension contirbutions by an average of 3% a year by natural wage inflation and pumping up my AVC yearly by a five spot each year. I currently pay £13pcm but this will be going up to £20 next summer, then the additional fiver annually.
The minimum aim is to have at least Two-thirdsof of my income as a pension on retirement plus various other savings/investments.

I am not banking on a state pension to suppliment this either.

houseboatdream wrote: »

I recently did a review of our finances and reckon that if I can carry on working and saving for another ten years we'll have enough to retire. Not sure I can stand it that long, so I'm aiming for a frugal five years of saving to make it even quicker - bit like those guys over on MFW and DFW. I did think of posting a "Retire 10 years early thread" but its a bit serious over here on the pensions board.......

Please do start this thread, I for one would subscribe, I feel a little intimidated by the talk on here sometimes

I haven't worked out 'the number' exactly as I know I could live easily on just over 1/2 current salary due to the amount I overpay on mortgage at the moment, plus work related costs. So, around £1,400 a month net to be safe (that's based on me being on my own, once bitten twice shy on the 'joint income' front so I will not factor OH into equation). Depending on pension performance may we well over or well under :eek: Need to get rid of mortgages to concentrate on cash savings & also revisit pension payments. Don't have a SIPP but do control what funds my co pension is in, also about to transfer 10k of other pension into a SIPP so destiny is in own hands

My time on the DFW and MFW has ingrained certain behaviour in me so I could survive better on the same income than some others do (e.g. friends mum who still shops in Waitrose & M&S and is subsequently harder up than her mil who has never had much money but makes it go much further).

I agree with those struggling to project without an end date for their spreadsheet

Gatser wrote: »

What does this refer to please?

MFW = Mortgage Free Wannabe, DFW = Debt Free Wannabe. They're two boards on MSE that attract quite a few people. The strategies there seem to consist of making your life miserable and scraping by in order to meet some financial target. In DFW the target is to get rid of debt and on the MFW the target is to get rid of a mortgage. It's been said many times before that it's the financial equivalent of crash dieting, and usually has the same outcome.

Often you people on the DFW board confessing that they have 'fallen off the wagon' (and have blown a load of cash) just as crash dieters do when they participate on a super strict diet plan that they get bored with and end up gorging themselves.

I can understand scrimping and saving and blitzing your finances for upto 1 year to get debt under control, but some of these guys are at it for 2 to 3 years with their debts and then move onto their mortgage for a further 5 years and then some of them realise that they have no retirement provision so spend a further 5 years or more blitzing that.

All the time they're doing challenges like 'living off £1 per day" or "living off £4k per year" and IMHO are spending the better part of their lives living like paupers. In the example above, it could be that someone spends a total of 12 years 'blitzing' their debts, mortgage and pension and being miserable while they could have simply done what everyone else does and split their money and do all three at the same time, giving themselves a longer period for pension investment and therefore a longer period for the pension to grow. Plus they get to spend a little on themselves while they're young enough to enjoy it.

They seem incapable of seeing that the net effect of spending 2 years exclusively paying down debt, 5 years exclusively paying down a mortgage and then 5 years exclusively paying into a pension is exactly the same as spending 12 years contributing to all three. Except that if anything goes wrong in year 6 in the second scenario, (say job loss or illness) at least they will have some pension savings that can grow while they look for work or get well.

Much better surely, to save a little, overpay a little and spend a little to achieve your financial targets?