Pension Fund Size Age 30

mikeyboy1980

Hi,

I am trying to establish what a reasonable size of accrued pension fund would be for a 30 year old male.

The reason I am asking, is a) to compare my actual situation to something b) I want to ensure that I am putting enough away

Would rather correct any issue at my age rather than forget about it until I am 50...

many thanks

DavidLaGuardia

An answer to this question is only going to make you feel smug or depressed for five minutes. It is a pointless excercicise.

The questions you should be answered include:

What kind of income would you like in retirment?
How much do you need to add to your existing pot toahcieve this?
What are the effect of inlfation likely to be?

This are all things tht might change over time with regular reviews are markets , funds and earnings change as well as your own expectations but this is the point you should start at, not by making a pointless comparrison of fund size with people your age.

Always look forward with financial planning also remembering what cannot be recoverd is a "sunk cost" and what has not beee done is a "past opportiunity". Neither have any bering on your control over future cash flow.

EdInvestor

First get a forecast for your likely returns from the two state pensions.They form the basis for your retirement planning, all else is on top.

https://www.thepensionservice.gov.uk

dunstonh

I am trying to establish what a reasonable size of accrued pension fund would be for a 30 year old male.

A rough yardstick is £35k by age 35. So, at 30 you should be looking at high 20s roughly. Although it really depends on how much you want in retirement and what scale of monthly contribution you are making or intend to make.

bendix

EdInvestor wrote: »

First get a forecast for your likely returns from the two state pensions.They form the basis for your retirement planning, all else is on top.

https://www.thepensionservice.gov.uk

Could you remind us again how to get a forecast for likely returns from the two state pensions Edinvestor.

I think some of us might have missed the last 2000 times you've posted it.

Aegis

dunstonh wrote: »

A rough yardstick is £35k by age 35. So, at 30 you should be looking at high 20s roughly. Although it really depends on how much you want in retirement and what scale of monthly contribution you are making or intend to make.

I always get worried when I see that sort of statistic, but then I remember that I didn't start work until later than most and am soon going to be making 18% contributions from my salary into my pension...

As you say, it depends on the amount in the pot, the expected returns, the monthly contributions, the employer matching policy, etc.

dunstonh

I always get worried when I see that sort of statistic, but then I remember that I didn't start work until later than most and am soon going to be making 18% contributions from my salary into my pension...

Its the problem with any yardstick, rough guide style figure. Too many assumptions need to be put in place.

A professional occupation may start low and later in life due to extra studying and experience required. So, they would typically have a smaller pot in the earlier years but be paying in more in later years than the average.

Where the 35k by 35 works well is to prompt those that have put it off or are making small contributions realise that they are not doing enough.

jamesd

Aegis wrote: »

I always get worried when I see that sort of statistic, but then I remember that I didn't start work until later than most and am soon going to be making 18% contributions from my salary into my pension...

It also depends on income, commitment and lifestyle. For a few years now I've been saving and investing more than 60%, probably more than 70%, of my net income. At that sort of level and with reasonable investment performance and modest income target you can start preparing for possible undesired retirement at 55 when you're 45 and make it.

When you're doing it in the economic cycle also matters. Last year I put around 80% of my gross eligible salary into my work pension because the markets have been depressed, making it a good time to invest. Full ISA allowance used as well. This year it's more like 25% and investing outside the pension (at quite high volatility risk) is to build up property deposit funds to try to buy near the bottom of that market. If you get the economic cycle timing right for adding money and right for moving into cash or low volatility you can make a really big difference. Hopefully I'm not doing too badly with these big picture parts of the investing task, though inexperience has definitely hurt a bit in some areas.

This does mean I'm currently living way below the spending budget I could have, but since it's buying long term security of income it seems like a good investment to me. I'm only 2-3 years away from being able to live as I do now with no job until I can retire on the same living standard, though without decent safety margin at the start of that range. My own plan is in part not to increase spending much until I can sustain that long term from the savings and investments, so I live within my long term means. Can't do that until I first meat the minimum target in a couple of years, of course.

In your case using the full ISA allowance every year would probably buy you a lot of security and financial flexibility if you deliberately delay increasing your spending to the short term level your income could provide.