Is your pension pot going to be large enough?

Marine_life

Conrad wrote: »

Pensions are a terrible investment. My wifes freinds sole remaining parent died shortly after retirment and the annuity provider kept the lot. At least with REAL assets you pass on your lifes work to your next of kin.

I think you are wrong. Of course everyone has one of those stories but statistically the evidence is that people are on average living longer. Also what a bout the following:

1. Most company pensions come with an employer contribution - i.e. free money.

2. Significant tax relief available especially for higher earners.

3. [A trick one this] there are lots of people who have earnings at a level at which they will simply spend everything.

Actually I think a certain level of pension saving is a responsibility most people SHOULD take to avoid them being a burden on the state and (ultimately) other tax payers.

Of course it does not mean that a pension should form the only part of retirement planning but it should at least for A part.

Batchy

I think with most pensions provsions, I dont consider the pension as the only form of income

It has to be considered with

1) Pension (of course)
2) House (no rent)
3) ISA's (tax wrapper)
4) Savings
5) Premium Bonds
6) Part time job, or voluntary work (even if no income, it stops you spending and can be enjoyable, social)
7) Good Health - Although it reduces income (annuities, it makes it more pleasurable)

You need to balance all these things, not just Pension amounts, values, performance.

ninky_2

Marine_life wrote: »

I think you are wrong. Of course everyone has one of those stories but statistically the evidence is that people are on average living longer. Also what a bout the following:

1. Most company pensions come with an employer contribution - i.e. free money.

well only because you are going to be taxed on the pension income when you draw it.

2. Significant tax relief available especially for higher earners.

again only because you will be taxed on the pension when you draw it. and who knows what level that will actually be set at on retirement.

3. [A trick one this] there are lots of people who have earnings at a level at which they will simply spend everything.

Actually I think a certain level of pension saving is a responsibility most people SHOULD take to avoid them being a burden on the state and (ultimately) other tax payers.

Of course it does not mean that a pension should form the only part of retirement planning but it should at least for A part.

as a self employed person i just don't see the benefit of pensions over other investments such as isas. the money is tied in, the annuity is a gamble and i will get taxed on the income when i finally get to spend it.

ninky_2

RenovationMan wrote: »

The question I would ask of those people who think that pensions are a 'poor investment' isto ask them 'what is better? what investment are you using that will leave the kids with an inherritance and yet will also provide you with a decent retirement income for upto 30 years?'

isas and property at the moment. not too bothered about leaving an inheritance as no kids but i don't like the inflexibility of pensions. i'd like the chance to blow lots of it if i felt i was getting too old and ill to enjoy life.

i don't think i'd want a fixed annuity as there might be some years i'd like to spend big and others where i was happy tinkering on the allotment.

Conrad

Marine_life wrote: »

I think you are wrong. Of course everyone has one of those stories but statistically the evidence is that people are on average living longer. Also what a bout the following:

1. Most company pensions come with an employer contribution - i.e. free money.

2. Significant tax relief available especially for higher earners.

3. [A trick one this] there are lots of people who have earnings at a level at which they will simply spend everything.

Actually I think a certain level of pension saving is a responsibility most people SHOULD take to avoid them being a burden on the state and (ultimately) other tax payers.

Of course it does not mean that a pension should form the only part of retirement planning but it should at least for A part.

I did the numbers over and over and concluded I need control over mine and my families destiny, so invest outside of pensions. In any event the state pension will be £151 per person per week after 2016, so for a couple it's not too bad, especialy when combined with in our case a number of property investments, stocks n shares, ISA's, inheritance and alse of business.

A great many people die after having recieved a pension annuity for just 5 or 15 years, meaning NONE of that money goes to thier kids.

Conrad

Also I am a wealth worrier and couldn't stand the thought of being reliant on an annuity provider. In the event of a great depression, some of these would go under. I prefer rowing my own boat.

mystic_trev

ninky wrote: »

that's what i don't get with pensions. it's a gamble as to how long you live.

Not if you've got it in a SIPP. I don't want some overpaid Fund manager handling my Finances, when I've been able to get better returns than them! It's also enjoyable and helps keep the 'grey matter' going. When I eventually 'take' my Pension it'll be a 'drawdown'

Conrad

RenovationMan wrote: »

The question I would ask of those people who think that pensions are a 'poor investment' isto ask them 'what is better?


'

There are many alternatives. Don't forget investing in pensions in pretty much an EXPENSIVE share buying excercise.
Go to any pension fund head office - hundreds of staff, all manner of costs all being sucked out of your fund.

I like buying shares via ultra low charge stock n shares ISA's. My kids get that money one day no matter what. I'm in control and I'm not tied a a SOLE annuity provider in retirment. In a great depression, perhaps coupled with mass natrual disaster, some of these funds would go under.

With an ISA I can convert it to cash / property etc and am not tied to an annuity provider.

We also have some property.

All in all I feel far more in control of my own destiny.

ninky_2

some of us might just want to make sure we have enough for this if the time comes.

http://www.dailymail.co.uk/news/article-1372871/The-pain-overcome-pleasure-Leading-euthanasia-campaigner-85-dies-Swiss-suicide-clinic.html

chewmylegoff

Conrad wrote: »

There are many alternatives. Don't forget investing in pensions in pretty much an EXPENSIVE share buying excercise.
Go to any pension fund head office - hundreds of staff, all manner of costs all being sucked out of your fund.

I like buying shares via ultra low charge stock n shares ISA's. My kids get that money one day no matter what. I'm in control and I'm not tied a a SOLE annuity provider in retirment. In a great depression, perhaps coupled with mass natrual disaster, some of these funds would go under.

With an ISA I can convert it to cash / property etc and am not tied to an annuity provider.

We also have some property.

All in all I feel far more in control of my own destiny.

yeah, but you don't get tax relief on contributions into an ISA and matched contributions amplify the difference.

so, as a higher rate taxpayer you get paid £100. you receive £60 and invest it in an ISA.

or you get paid £100, you invest it in your employer's pension scheme, they also pay in £100.

i can't be bothered to retype the above with 1% NIC contributions included. they don't make any material difference.

so, whilst you may like buying shares in the ISA, your pension fund is going to have to charge A LOT of expenses for the ISA to do any better. sure, your children can't get at it, but that's not a reason to chuck £140 down the drain right at the start.