How much should i have at 55?

james3333

what would be a 'good' amount to have in my pension at age 55, if i dont have a mortgage to pay and just want to live 'comfortably'?

CLAPTON

how much do you need to living comfortably excluding mortgage now

Linton

How much do you need to live on? For any sort of retirement planning that is the most important figure. A starting point is how much per year are you spending now. Without that number you cant become to work out whether you are on track.

Take off state pension+S2P/SERPS and multiply by 30. That will give you the pot needed at retirement age (at current prices) if you want guaranteed inflation proofed income, assuming you have no other pensions.

To work out whether you are on track at 55 is then a fairly straightforward bit of spreadsheeting. But get the first step done before moving on to that.

james3333

well, ive been paying into a pension since i was 22. i pay in £120 per month and my company match it. i have £20,000 in there at the moment, but based on your projections i will need over 100k in there to have a 'reasonable' retirement, is this correct, if so how the hell do they expect anyone to have a decent pension at retirement age!!!! i thought i had been really good starting a pension as soon as i started work AND getting my companys contributions to match too

Margey

There is no way that many people have that kind of money to look forward to. The pension systems are awful, but its not to late because there are other ways to save for your pension. Through properties or gold. Plus you will have the state pension. Albeit not a lot. It seems that many people entering retirement are living on the poverty line and it is worrying.

somethingcorporate

Margey wrote: »

There is no way that many people have that kind of money to look forward to. The pension systems are awful, but its not to late because there are other ways to save for your pension. Through properties or gold. Plus you will have the state pension. Albeit not a lot. It seems that many people entering retirement are living on the poverty line and it is worrying.

How does gold provide an income? You are speculating on an asset that provides no income...not very useful for retirement.

OP, £240 a month is not much to be going in to your pension and like most things in life you get out what you put in.

How old are you?

james3333

Margey wrote: »

There is no way that many people have that kind of money to look forward to. The pension systems are awful, but its not to late because there are other ways to save for your pension. Through properties or gold. Plus you will have the state pension. Albeit not a lot. It seems that many people entering retirement are living on the poverty line and it is worrying.

i must have gotten the numbers wrong here, im paid 30k a year now. im 32 years old and i save £120 (so £240 goes in with my companies contribution) a month into my pension....does my situation seems reasonable? and any idea what i shpould be hoping to have in my pot at 55?

Linton

james3333 wrote: »

well, ive been paying into a pension since i was 22. i pay in £120 per month and my company match it. i have £20,000 in there at the moment, but based on your projections i will need over 100k in there to have a 'reasonable' retirement, is this correct, if so how the hell do they expect anyone to have a decent pension at retirement age!!!! i thought i had been really good starting a pension as soon as i started work AND getting my companys contributions to match too

£100K is much too low to have what I would consider a reasonable retirement.

BUT a quick bit of Excel tells me that neglecting inflation if you and your company continue paying what is currently paid into your pot and you get a return of 4% then after 40 years you will have a pot of nearly £300K thanks to the magic of compound interest. The assumptions are not completely realistic, but it will do for an order of magnitude figure.

So you and your company are in the right ballpark for a sensible pension. If you add your ongoing payment into sensible ISA'd share investments you are on target for a early and happy retirement.

james3333

Linton wrote: »

£100K is much too low to have what I would consider a reasonable retirement.

BUT a quick bit of Excel tells me that neglecting inflation if you and your company continue paying what is currently paid into your pot and you get a return of 4% then after 40 years you will have a pot of nearly £300K thanks to the magic of compound interest. The assumptions are not completely realistic, but it will do for an order of magnitude figure.

So you and your company are in the right ballpark for a sensible pension. If you add your ongoing payment into sensible ISA'd share investments you are on target for a early and happy retirement.

EXCELLENT, THANKS FOR THIS..... makes me feel a little better!

somethingcorporate

Depends on how much you have in your fund now. The HL pension calculator suggests if you have nothing now you will end up with something like the equivalent of £100k in your pot providing an income of £3,400 by the age of 55.

If you increase it to 65 the pot jumps to £166k with an income of £7.5k.

Have a play with the figures here: http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

There is some suggestion that the amount you should be putting in to your pension is half your age as a % (if you were starting from scratch) to get a relatively good income (circa ~66% of salary) when you retire. If you want to retire earlier this % needs to be a lot higher. You are currently contributing 9%.

Contrary to Linton's post I would say you are not putting enough in - 9% of your salary is quite small. What do your employer match up to?

Unfortunately by Linton neglecting inflation the £300k figure is a lot more flattering than it in reality it will be.

james3333

i currently have 20k in my pot. will have a play with the figures with this thing cheerS!