Is your pension pot going to be large enough?

ninky_2

IveSeenTheLight wrote: »

To answer your query though, I'm in line to far exceed that £285, via my various investments, however I'm not resting on my laurels and want to expand my investments further to cover for any other issues which may rise in life.

good for you. however is there a point do you think where people become so obsessed with increasing the size of their pension pot they forget to enjoy the life they are currently living?

i understand the need to plan for the future but the now is also important.

i'm thinking i might take a career break and go travelling for a bit - do things i won't be able to do when i'm 65.

chucknorris

ninky wrote: »

good for you. however is there a point do you think where people become so obsessed with increasing the size of their pension pot they forget to enjoy the life they are currently living?

i understand the need to plan for the future but the now is also important.

i'm thinking i might take a career break and go travelling for a bit - do things i won't be able to do when i'm 65.

I can understand what you are saying but the reason that I massively overshot was because when I was doing all the planning I invested enough to cover a couple (single at the time) but my wife has more or less matched my financial achievements, hence the excess.

Procrastinator333

IveSeenTheLight wrote: »

I'd much rather utilise the £285k in my bank account than get a pension of £11k per year.
It would be 26 years (not considering interest achieved in that period) before the pot ran dry.

As my retirement age is 67 according to the government, I'm not expecting to live beyond 93 and would rather enjoy more in my early retirement days whilst needing less further on.

To answer your query though, I'm in line to far exceed that £285, via my various investments, however I'm not resting on my laurels and want to expand my investments further to cover for any other issues which may rise in life.

The £11k is for an index linked pension at 65. It would take much less than 26 years to get to £285k. Waiting to 67 it would be more.

IveSeenTheLight

ninky wrote: »

good for you. however is there a point do you think where people become so obsessed with increasing the size of their pension pot they forget to enjoy the life they are currently living?

i understand the need to plan for the future but the now is also important.

i'm thinking i might take a career break and go travelling for a bit - do things i won't be able to do when i'm 65.

I'm not obsessed about the size of my pension pot, but I do want to ensure that my family are provided for.

There comes a time in life when you want to ensure that you've done a good job and provided good oppertunities for your children.

If that means a little sacrifice (and I don't mean being so frugile as not to enjoy life) then so be it.
There are many enjoyable things in life that don't cost a lot or indeed if anything.

I've done a lot of travelling in my time, many oppertunities through work which my family have also benefitted from.
One thing I will probably do though is a lot more travelling when I'm retired and can enjoy things at a more slower pace.

IveSeenTheLight

Procrastinator333 wrote: »

The £11k is for an index linked pension at 65. It would take much less than 26 years to get to £285k. Waiting to 67 it would be more.

I'm pretty sure that you could probably get a better return than an index linked pension.

Indeed, there are calls for it to be scrapped as it can lead to pensioner poverty in the future.

http://www.dailymail.co.uk/news/article-127364/Review-calls-index-linked-pensions-scrapped.html

http://www.timesonline.co.uk/tol/news/uk/article7063911.ece

http://blogs.telegraph.co.uk/finance/ianmcowie/100006672/how-wrong-kind-of-inflation-will-hit-index-linked-pensions/

http://www.ft.com/cms/s/2/351832f2-8045-11df-8b9e-00144feabdc0.html#axzz1IaZhkgsq

Procrastinator333

IveSeenTheLight wrote: »

I'm pretty sure that you could probably get a better return than an index linked pension.

Indeed, there are calls for it to be scrapped as it can lead to pensioner poverty in the future.

http://www.dailymail.co.uk/news/article-127364/Review-calls-index-linked-pensions-scrapped.html

http://www.timesonline.co.uk/tol/news/uk/article7063911.ece

http://blogs.telegraph.co.uk/finance/ianmcowie/100006672/how-wrong-kind-of-inflation-will-hit-index-linked-pensions/

http://www.ft.com/cms/s/2/351832f2-8045-11df-8b9e-00144feabdc0.html#axzz1IaZhkgsq

Not commenting on index linked pensions themselves. Was pointing out that you were comparing a flat 11k a year for 26 years to you 285k. The 11k originally quoted was an index linked pension. Taking a level annuity, it would be more like £17-£19k per year. So your comparison was wrong.

IveSeenTheLight

Procrastinator333 wrote: »

Not commenting on index linked pensions themselves. Was pointing out that you were comparing a flat 11k a year for 26 years to you 285k. The 11k originally quoted was an index linked pension. Taking a level annuity, it would be more like £17-£19k per year. So your comparison was wrong.

Hmmmm, I did say

IveSeenTheLight wrote:

It would be 26 years (not considering interest achieved in that period) before the pot ran dry.

Presumably if I spent the time to calculate the likely compounded interest it would mean a greater amount available per year and likely to support a similar time period as the 26 years I suggested.

I was just trying to keep it extremely simple if not rough.

Procrastinator333

IveSeenTheLight wrote: »

Hmmmm, I did say


Presumably if I spent the time to calculate the likely compounded interest it would mean a greater amount available per year and likely to support a similar time period as the 26 years I suggested.

I was just trying to keep it extremely simple if not rough.

So you are equating compound interest with index linking. Not quite comparable at the moment are they.

And presumably you are a higher rate taxpayer. So should have also reduced the corresponding non pension pot accordingly. It is just wrong to make such a simplified and poor comparison and then suggest the conclusion is sound.

On index linking itself, if you have a large stash for retirement, index linking doesn't matter. If you have a more modest pot, index linking is a form of insurance. Like all insurance you pay a premium for safety. Some need it, some want it.

IveSeenTheLight

Procrastinator333 wrote: »

So you are equating compound interest with index linking. Not quite comparable at the moment are they.

Indeed, as I said earlier, I'd probably be able to get a better return than the index linked pension.

Procrastinator333

IveSeenTheLight wrote: »

Indeed, as I said earlier, I'd probably be able to get a better return than the index linked pension.

So then you could opt for drawdown instead, therefore keeping ur pot invested and earning those higher returns.

And with your cash outside of a pension, you are starting 40% behind the pension pot.