Do you save for retirement as well?

Jenny2008

Hi, I'm new to the MFW board, but have posted on DFW. I'm currently making financial plans and once I'm debt-free, my next challenge is to be mortgage-free. I've started reading through this forum and it's really inspiring. I'm impatient to get debt-free so I can make a start!

I know that once I'm debt-free I need to make some basic savings for replacing cars, white goods and general emergencies, but what I was wondering was, do most people on here tend to save for retirement at the same time as paying off their mortgage early? Or is that something you'd do after you've paid off the mortgage?

Thanks for any advice.

Welshlassie

I have 2 pensions running, occupational and private, DH also has a private pension. I continue to pay into these throughout paying off my mortgage early. You get more benefit paying money into a pensions earlier in life that trying to play catch up later in life.

Jenny2008

Thanks Welshlassie.

Husband and I both have company pensions on the go, but contributions are pretty small due to trying to get debt-free.

I just wasn't sure what to do once we were out of debt - whether to plow everything into the mortgage or save for retirement as well.

Thanks for your help!

yogismum

I have been doing the same, occupational and private pension. The earlier you start the better as later on you need to put in a much higher proportion of your income to receive the same level of pension.

StuartGMC

I'm in a final salary scheme company pension (I hope it continues!) which means a 10% gross salary contribution. In addition to OP and offset we have some longer term ISA savings and usual cash savings. I anticipate increasing our savings to 44% of salary once MF (some are for routine things like holidays and cars, others long term) which will go to provide a savings reserve for retirement. I have an annuity from a company pension with an employer which went bust which is payable from 60 also, but it is only a few thousand a year; it may however mean I can retire one or two years early and make up a little with the savings for the actuarial reduction (4% per year early) on my present employer's scheme...

Overall, you should get a balanced portfolio and include adequate pension planning as early as possible ideally from early 20s.

Floxxie

I have nothing except tiny amounts from previous employment. I have taken financial advice on this and the best position is to do nothing at the moment. Once mortgage free I shall be using ISAs and other investments rather than any kind of pension scheme to save for retirement.

Floxxie

Floxxie

Jenny2008 wrote: »

Thanks Welshlassie.

Husband and I both have company pensions on the go, but contributions are pretty small due to trying to get debt-free.

I just wasn't sure what to do once we were out of debt - whether to plow everything into the mortgage or save for retirement as well.

Thanks for your help!

Jenny,

You need to take professional advice on this; it will depend on your age, what you are expecting for retirement, how long you have been paying in for etc. My OH was in a final salary scheme for 28 years until they suddenly closed it and transferred him to a new company. He now pays a hefty amount of his salary into a new pension which we weren't expecting him to have to do (his final salary was non-contributory).
I am always amazed by how much you need to save for retirement.

Floxxie

SmileyG_2

Jenny2008 wrote: »

Hi, I'm new to the MFW board, but have posted on DFW. I'm currently making financial plans and once I'm debt-free, my next challenge is to be mortgage-free. I've started reading through this forum and it's really inspiring. I'm impatient to get debt-free so I can make a start!

I know that once I'm debt-free I need to make some basic savings for replacing cars, white goods and general emergencies, but what I was wondering was, do most people on here tend to save for retirement at the same time as paying off their mortgage early? Or is that something you'd do after you've paid off the mortgage?

Thanks for any advice.

I have to echo StuartGMCs comments. I wish I had started a pension early, even if I was only making small contributions. I didn't start paying into a final salary scheme until I was 32. The contributions then were less than 4% of salary. I now pay 8% to secure a lesser benefit, but it's costing my company over twice that to top it up.

By all means pay into a pension, but if you are young, pay in an affordable amount and give due consideration to overpaying the mortgage.

Not much help I know, but as Floxxie says, a good IFA will help.

SmileyG

Zeddy

My H has an occupational pension that looks like it'll be quite good, so he pays in quite a bit to that.

I have a private pension, which I pay a bit in to. We also have savings, which are for us starting a family. Once I've finished maternity leave we'll see what our savings look like and consider paying a lump sum into my pension. Once we then know what our budget will be with a baby I hope to increase my contributions.

Jenny2008

Thank you everyone who has replied, your advice is much appreciated.

From general advice I've read (MSE & other finance books), it seems the most financially sensible advice is to concentrate on getting out of debt first.

And once we're debt-free we should resist the urge to go nuts with all that money :rolleyes: and sensibly split it between mortgage overpayments and retirement savings. I'm glad I asked, because I was going to chuck it all at the morgage!

Alion

I pay into a pension through my company. We can pay 3, 4 or 5% and they pay in another 4, 5 or 6% so I take advantage of their contribution and put in 5%. It's a small amount for me to pay with a big benefit. I've always paid into it and so don't miss what I've never taken home so that makes it easier.