Pensions Planning: The NUMBER

Gatser

zygurat789 wrote: »

So with no number just a fear of the future we seem to have got there.

The NUMBER is not mandatory.
If you choose not to have a target (budget) and end up happy with the outcome...fantastic.

However, the NUMBER is just a means of monitoring against a target so you are aware of deviations (good or bad)
and can react accordingly.


.

Gatser

houseboatdream wrote: »

Thats why I've set myself the "retire 10 years early" target, because I know that if I've got a goal to aim at I will be motivated to save and not buy myself things to cheer myself up at the prospect of having to work at a job I don't like very much for the next 5 - 10 years.
There are some good books on the philosophy of this - Status Anxiety by Alain de Boton which I currently re-reading and also Affluenza by Oilver James.

Absolutely!
If we estimate our NUMBER, we can aim for a level of pensions/savings
at which we are going to be happy, then we do not have to work ourselves
"to death" for some unattainable/unnecessary level.

Philosophical discussions are useful to listen to.
It's not just a money thing...it is also about health and fitness.
No point in achieving one's financial goals and being too old and unwell
to enjoys the fruits of our labours.

This is why I have quite a low NUMBER at £22k
I may cautiously revise this upwards over time

tartanterra

[QUOTE=houseboatdream;28174743
I think many people have been frightened off the subject of pensions, partly because in recent years the media have been reporting the "pensions crisis" and have convinced people that either they will never be abe to afford to retire or they will have to save up a £800k pot of money and if they do the bank or the government will "steal" it.[/QUOTE]

Too true, and it's a real shame.
Between the media and the government, pensions have lost public confidence.
Of course, a pension should only be one of several savings vehicles utilised in preparation for retirement, but a highly useful one - especially for higher rate taxpayers,; and there is likely to be a lot more higher rate taxpayers in the future as fiscal drag kicks in.

I would like to see compulsory pensions introduced. If nothing else, it may help create a savings culture; something that has been sadly lacking in the UK for several years.
It's quite clear that the government is burying it's head in the sand with reference to paying for retirement, and it's also clear that - bar people like yourselves, on these forums - most of the general public are doing the same.
I detest the amount of government interference we have to put up with these days, but I'm afraid that compulsory pensions seems the only way to avert a future crisis.

P.S. My NUMBER is £28K (with no mortgage and the kids grown up), but this number changes every time I look into the crystal ball!

Gatser

tartanterra wrote: »

I would like to see compulsory pensions introduced. If nothing else, it may help create a savings culture; something that has been sadly lacking in the UK for several years.
I detest the amount of government interference we have to put up with these days, but I'm afraid that compulsory pensions seems the only way to avert a future crisis.

P.S. My NUMBER is £28K (with no mortgage and the kids grown up), but this number changes every time I look into the crystal ball!

I agree.
Government schemes that are promoted as "the pensions solution" yet only see pathetic levels of contribution are doing nothing to boost the public's confidence. Those that are conned into thinking that everything will be fine are in for a rude awakening at retirement.
One golden rule of pensions (common sense) is that you are only going to get out what you put in (plus some growth of course)...but some folks think that paying in 4% of salary will give them a comfortable pension.

Interesting to have £28k as a comparison NUMBER thank you... do you have a breakdown to compare the different elements please?

tartanterra

Gatser wrote: »

I agree.
Government schemes that are promoted as "the pensions solution" yet only see pathetic levels of contribution are doing nothing to boost the public's confidence. Those that are conned into thinking that everything will be fine are in for a rude awakening at retirement.
One golden rule of pensions (common sense) is that you are only going to get out what you put in (plus some growth of course)...but some folks think that paying in 4% of salary will give them a comfortable pension.

Interesting to have £28k as a comparison NUMBER thank you... do you have a breakdown to compare the different elements please?

Again, very true. A balance has to be struck between saving and spending, however, low wages and a high cost of living for much of the population do conspire against this. (although rampant consumerism doesn't help - how many families really need 50 inch TV's or gigantic American fridges?:rolleyes:)

My number was very simply based on two thirds salary with a £50 - 100K cash buffer(when the kids have flown the nest).
However, as stated before, we never really know what the future holds....................................:eek:, so I'm dubious about if that is really enough!

MrsTinks

tartanterra wrote: »

how many families really need 50 inch TV's or gigantic American fridges?

ME!!! :rotfl: Well husband apparently MUST one day have the 50" TV... and I know that I definitely need a large American style fridge freezer


ok ok ok so maybe that should read WANT and not NEED But hey - I feel the NEED

Before MSE I may even have thought of buying them - now I will wait till we're debt free and save up for them

I don't have a number - because I am not debt free. I am aiming for debt free by end of this year (or £10k in savings if hubby gets a good bonus and we can pay off most of the unsecured debts) - when we have a good amount of equity in the house THEN I'll look carefully at the NUMBER

tartanterra

Gatser wrote: »

I agree.
Government schemes that are promoted as "the pensions solution" yet only see pathetic levels of contribution are doing nothing to boost the public's confidence. Those that are conned into thinking that everything will be fine are in for a rude awakening at retirement.
One golden rule of pensions (common sense) is that you are only going to get out what you put in (plus some growth of course)...but some folks think that paying in 4% of salary will give them a comfortable pension.

Interesting to have £28k as a comparison NUMBER thank you... do you have a breakdown to compare the different elements please?

MrsTine wrote: »

ME!!! :rotfl: Well husband apparently MUST one day have the 50" TV... and I know that I definitely need a large American style fridge freezer


ok ok ok so maybe that should read WANT and not NEED But hey - I feel the NEED

Before MSE I may even have thought of buying them - now I will wait till we're debt free and save up for them

I don't have a number - because I am not debt free. I am aiming for debt free by end of this year (or £10k in savings if hubby gets a good bonus and we can pay off most of the unsecured debts) - when we have a good amount of equity in the house THEN I'll look carefully at the NUMBER

Okay, I admit it!
I've got a big fridge!:D

But it is all about balance between what you spend and what you save.............And there's no simple answer for any of us, as circumstances constantly change.

IT IS good to have a target though.

Gatser

tartanterra wrote: »

My NUMBER was very simply based on two thirds salary with a £50 - 100K cash buffer(when the kids have flown the nest).
However, as stated before, we never really know what the future holds....................................:eek:, so I'm dubious about if that is really enough!

The NUMBER should really be calculated based on what you want to achieve
in retirement. This will consist of 3 elements:
* Essentials
* Desired
* Luxuries
(I did not include any Luxury element in mine though!)

If you just go for a proportion of your salary this does not necessarily
relate to your needs. (Especially if you are currently a £250k banker )

Gatser

MrsTine wrote: »

I don't have a number - because I am not debt free. I am aiming for debt free by end of this year (or £10k in savings if hubby gets a good bonus and we can pay off most of the unsecured debts) - when we have a good amount of equity in the house THEN I'll look carefully at the NUMBER

You could still have a NUMBER whilst in debt.
I appreciate you may find that a step too far at the moment....fair enough.

...but your long term planning could include clearing all debts AND
starting to work towards hitting the NUMBER.

nearlyrich

Having got caught up in th WF issue I haven't yet revealed my NUMBER!

As it goes I am a little clearer than many about how much I need to live on as I have no mortgage and my children are independant in fact one is paying me some board money. Our household bills excluding food cost around £600 per month.

I am earning very well right now and putting a lot of what I bring home into various savings plans including a pension (done as salary sacrifice) an isa, bonds including premum bonds (don't tell Martin);). My pension pot is not massive but it's growing seadily and my DH has a final salary pension that is more than adequate for a couple and it has a spouse's pension should the worst happen. This means I am not totally responsible for my own finances in retirement but I am used to having my own cash and I would struggle to ask for money for things I want, we enjoy travelling and I don't intend to sit at home twiddling our thumbs and so I keep going to get as much as possible in my various retirement pots before July 2016.

My IFA who seems a little more stable than our friend WF tells me I am in a much bettter position than a lot of my contempories;)