Are you also saving for retirement?

Dithering_Dad

Yep, I have a Company/Personal Pension and/or ISA savings

kennyboy66 wrote: »

£48k gets an annuity of £4k a year !!!!

A female at 65 would be lucky to get 1/2 that if they want RPI increases.

I did a quick google on annuities and for a female aged 65 with a £48k pension pot, no guarantee and no escalation I found one paying £3800. I dare say that if one went to an IFA (as you should because this is a once in a lifetime investment) then they would be able to get better rates, even above £4k.

As you quite rightly say, if you start adding on extras such as a link to RPI, 5 yr guarantee and 75%/50%/33% spouse pension it would cost more financially and reduce the monthly income from the pension. This is another reason why putting all of your pension 'eggs' into a single pension is a bad mistake. If you and your partner have equal sized pension pots and ISA savings then they would not need to have significant spouse clauses in the pension and so would receive more from an annuity.

Pobby

Yep, I have a Company/Personal Pension and/or ISA savings

This has got me thinking about life styles. I have a very good friend who earned a mint as a hardware engineer. Unmarried, payed off his house and quit. He has lived an alternative life style on maybe £60 a week or a bit more. Sounds impossible?

His income is so low that he doesn`t pay council tax. He`s a vegetarian and buys vast amounts of food as the market closes on a Saturday evening for a few pound. He drinks a lot of wine, often berries collected in the countryside for free. He uses heating to a minimum and dresses up warmly to compensate. His income is made from other peoples cast offs. His garage is full of Dysons and the like that have been rescued from skips, repaired and then sold on. Living, as he does, in a fairly affluent area he makes money from other peoples lazy and wasteful habits.

One day he pointed at a new BMW and asked me which life style would I prefer. The BMW owner that commutes into London to earn money to pay for the fancy car and house, always on the treadmill. Or his life style. He is certainly one of the least stressed people I know.

Dithering_Dad

Yep, I have a Company/Personal Pension and/or ISA savings

Pobby wrote: »

One day he pointed at a new BMW and asked me which life style would I prefer. The BMW owner that commutes into London to earn money to pay for the fancy car and house, always on the treadmill. Or his life style. He is certainly one of the least stressed people I know.

I guess this depends on the assumption that the BMW driver hates his job or not. It could easily be the BMW driver pointing in the other direction and saying "What lifestyle would you rather have, an interesting and challenging job in an upbeat company with great work colleagues, with a loving family waiting at home or to live like a hobo, scratching around buying mouldy old turnips at the end of the day with nothing to go home to except a cold damp house".

Maybe the answer is that either could have had the other person's lifestyle yet preferred to choose their own and that both are as valid as the other. I think on reflection that I'd rather be the BMW guy.

Pobby

Yep, I have a Company/Personal Pension and/or ISA savings

On reflection I like to find the middle ground. I admit that I wouldn`t want to live such a frugal life style as my very good friend but he is a lot happier than some I know. Also I wouldn`t want to be knocking myself out with a long working day to pay for "stuff" that I, personally, am not attracted to. I am indeed fortunate to be in the middle ground. Have had stressful management jobs in the past but not any more. In the same way my wife and I need to only work part time now.

Oh and by the way, he doesn`t always come home to an empty house. He has a couple of ladies that often pay him a visit. I think his gentleness is quite attractive to some females.