How much should i have at 55?

de1amo

so saving 4pc in a pension plus a lot more to fund life between 55 and the 40 year pension plan ending--and also clearing the mortgage! not much demand on an average salary in an ever inflationary world!--what about health care?

Thrugelmir

mania112 wrote: »

I think we all have to assume we will continue to work until retirement.

If the situation in the UK is the same as the USA. Then the growth in jobs will not keep pace with the number available to work.

So longer term plans for saving will become a necessity rather than a luxury. Throughout ones best earning years. Whatever they are.

bigfreddiel

atush wrote: »

Well there is one thing to factor in about having a job or not long term.

If you lose it, pensions are safe and not taken into acct of you have to receive benefits for a time. But ISAs and other non pension wrapped investments ARE taken into acct. But many feel more comfortable (and will be more comfortable) living on their own savings for a time rather than benefits.

I disagree - i was more than happy to sign on and take anything i could when i was made redundant in the 90's - in fact you were an idiot not to because your stamp got paid as well

atush

I said many, not you lol. Some people actually don't like taking benefits.

bradburm

bendix wrote: »

You MUST increase your contributions annually. At the moment you put in 4.5% yourself (ignoring your employers contribution). A sound strategy is to increase it annually, so that when you are 33 you could increase it to 5% or 6%. Do the same every year. By the time you are 45, you should be contributing at least 20-25% of your income to your pension, either directly into the pension or by way of other savings.

Take this seriously!

This is sound advice. By way of example, I have 30 years until normal retirement age and I (+ employer) currently contribute 18% to my pension. I increase my contibutions following salary increases, that way I dont 'miss' the extra money.

atush

I agree with increasing annually. We tend to do ours when we get pay increases. That way you don't 'notice' it lol.

de1amo

İf the Op was in his early twenties when he commenced this pension he would be into his 60s before he could start receiving it, by ramping up to 25pc of income as saving either directly into a pension or just saving a percentage would that allow him retire at 55 and continue contributions until he hits the 40 years!

in theory increasing contributions is a good idea but pay increases are soon gobbled by inflation! something that will become more prevalent in the coming years--i remember its damaging affects from the 70s and how it impoverished even the working people.

jamesd

de1amo, right. Retirement planning isn't just how much at an age the government decides, it's how much you want to put in to retire when you want to. Usually takes some S&S ISA investing as well as pension investing so you can take a higher income before state pension age and perhaps before age 55 when you can start taking pension income.

I decided to put more than 60% of my income into savings and investments in part so I could reasonably expect to live normally even if I never worked again. Took about six years to get there, though it's harder at younger ages and lower incomes.

de1amo

60pc is some feat! have you covered all the other bases- mortgage- health care provision for old age? if i tried to save 60pc of my income my wife would become 'ex' and my daughter turn on me! and my retirement wouldnt be a joyful one!--besides my wife and daughter are a major part of my retirement strategy because of the age gap!

gadgetmind

jamesd wrote: »

I decided to put more than 60% of my income into savings and investments

I'm now doing this. Because of how tax works, 2x more goes into my pension each month than trickles into my pay packet!

Yes, it's hard, and yes, I wish I'd done it years ago!