‘Wait till you are 35 to save’

fruityfairy

noh wrote: »

I'm saying that I would not be planning to be working at 55. I would preferably be already retired.

We can all hope

I do not currently pay into a pension as I current employer does not offer a contributed one. My former employer did and that pension as been placed on hold. Whilst trying to raise a deposit for my first house I just can not afford £100 pm at the moment to pay into one.

gadgetmind

regprentice wrote: »

i do know people who have saved up and put a full year away into their pension at that age, usually if they are expecting a big bonus or redundancy type paymen

I'm under 50, but have about three years of gross pay in pensions and similar outside of pensions. It's taken a few decades of hard saving to get to this stage.

Putting a "full year away" in one go is now very tricky for anyone earning >£50kpa due to the new annual limits and complex carry forward rules.

rictus123

Well iv just turned 20, will be clearing debt by year end, age 20. Plan is then to save(im able to pay off £1600 plus just now per month) house deposit and emergency fund until 22, gives me 18 months.

AT least £1600 x 18 = £28,800 minimum. I reckon for my half deposit + furnishing + fees il need about £20k all in max. So £8k fund.

Then once moved out so from 22 on, plan is save at least £750 a month into long term saving = £9k a year.

If i can move out and manage without this to start with then i should manage until im at least 30. That 8 years with £9k a year, assuming i get at least 3% net return and up my contributions 5% a year i will have £100k by 30. Obviously this is a very vauge plan but i dont see why it cant be done, should my income stay the same!

snowqueen555

sounds like a good plan, unless life gets in the way i.e. relationship, job loss, kids etc!

gadgetmind

snowqueen555 wrote: »

sounds like a good plan, unless life gets in the way i.e. relationship, job loss, kids etc!

Don't have kids until you're a millionaire. Simples!

Loughton_Monkey

hugheskevi wrote: »

.... And whilst it would seem posters on this page do not generally have Epstein-Zin utility functions....

I do.

I trod in some whilst out walking yesterday and it's all over my shoes.

Getting to the reality of things, my own opinion is that the key drivers here are someone's (a) earnings profile, and (b) lifestyle pattern.

Think of 2 extremes:

1. A school leaver works as a post room assistant at age 17. In 20 years he raises to the ranks of post room supervisor, and stays that way until retirement at 65.

2. A graduate starting on 'trainee' wages at 22. Salary progression is very good as he proves himself and moves up through the ranks. After 10 years, is headhunted to competitor for 20% more salary, and by age 38 is knocking on the door of 'director' level.....

Now the 'early' pension investment for case 1 will be 'very real money' and essential for a 'good' retirement.

In case 2, arguably, anything invested early on will be 'relative peanuts'. By mid 30's, this person is starting to afford a very comfortable lifestyle. And maybe gets to a 'plateau' where he doesn't want to eat better, travel further, or buy more exotic things.. in which case he might only be spending about 60% of income by age 40.

tangyfog

Well I think it pretty difficult to out earn compound interest. So I would save a little over a long period of time. i.e. ten percent of your salary. Working nicely for me. I been putting £50 a month and now have enough in my SIPP to acutally stop putting money in at 38.

The compounding of my money will do the rest. I can now use my spare cash on my ISA, Mortgage etc

The reverse of the Zin Epstien Thing. Work nice for me.:j