31 Should I be thinking about my pension?

epsilondraconis

Thanks for the link Lokolo and the ball-park figures Dunstonh of £35k by age 35. It seems that I'm doing ok - I'm sure the wife will have it all ear-marked for something anyway.

billymadbiker

£35k by 35??!!??
I am 35 next week.
To make things worse I am self-employed so very little state pension.
To make things even worse I have no private pension arrangments
To make things seem worse still, since leaving school at 16 I have only managed to save £14k and I had that earmarked for a house deposit as we have not got on the property ladder yet..
If I wanted to feel like crying I would aslo mention that the other half wants to get on with the house purchase in the next few years so we can have a couple of children..

On the upside, once I hit 60 the state will look after me, right?

billymadbiker

On that note,
reading the example of 'person a' above,
Should I be putting my money toward a pension now and saving for the house later or is actually living my life now considered more important than worring about the future?
65 seems like a long way off yet but having said that, it don't seem like I left school 20 years ago!

Derivative

http://www.fool.co.uk/10steps/step1.aspx
is a good page to look at.

Other interesting facts are that saving 25pm for your kids from age 0 to 21 beats them saving 100pm from 21 onwards.

Lokolo

billymadbiker wrote: »

On that note,
reading the example of 'person a' above,
Should I be putting my money toward a pension now and saving for the house later or is actually living my life now considered more important than worring about the future?
65 seems like a long way off yet but having said that, it don't seem like I left school 20 years ago!

TBH its upto you.

You're exactly like a lot of my friends - live today rather than live for tomorrow.

It's your choice what you do, but just be aware that you will be working for a very long time if you don't make retirement provisions - especially being self employed.

ffacoffipawb

JasX wrote: »

At 31 you've already left it somewhat late, I think the analogy often quoted is Person A starts aged 20, puts away £200 per month until age 30, then stops putting anything into their pension at all until retirement at age 65. Conversly Person B doesn't bother with a pension until age 30 then puts in £200 per month for the next 35 years until they retire age 65, guess who has the bigger pension -> Person A! (actually they are roughly equal but person A just nudges ahead -check for yourself on the calculator link).

A beats B if the average return over the 45 year period exceeds 6.593%. Which one would hope for over the long term.

If the average return is 11.445%, A gets double B's pension.

If the average return is 2.673%, A gets half B's pension.

Courtesy of Excel and the wonders of compound interest!

dunstonh

On the upside, once I hit 60 the state will look after me, right?

No. The state will not look after you at 60. Your state pension age is 68. The state will not provide any provision until age 68 for you and the current state pension proposals (which will see an increase in state pension for you as you are self employed - based on what we know so far) will see the removal of pension credits. So, in todays terms, that would be a state pension of £7280 from 68 with no benefits on top.

saverjustice

OK dunstonh

How much would a 40 year old male need to put way each month in order to obtain an annual income of £20,000 tax paid in today's terms at age 68.

Lokolo

saverjustice wrote: »

OK dunstonh

How much would a 40 year old male need to put way each month in order to obtain an annual income of £20,000 tax paid in today's terms at age 68.

http://www.h-l.co.uk/pensions/interactive-calculators/pension-calculator

Loughton_Monkey

saverjustice wrote: »

OK dunstonh

How much would a 40 year old male need to put way each month in order to obtain an annual income of £20,000 tax paid in today's terms at age 68.

And the tax rates in 28 years time will be.....????