How much to pay in?

Amme

Hi

I'm 34 & have just taken out a Pension, I'd like to know if anyone can help if I wanted to retire at 55 with a pension of £20000 a year how much would I need to pay in a month, just roughly as a guide?

Thanks

JoeCrystal

There is an pension calculator you can use to see the possible outcome.

According to this, you may need to pay in £1620 per month gross and assuming estimated annual growth of 7%.

Cheers

Joe

ukjoel

Dont forget that you could be eligble for state pension as well.

xylophone

Dont forget that you could be eligble for state pension as well.

Not at 55.

atush

I would make plans to fund that extra 5K a year out of other savings until the SP kicks in.

So, you'd be looking at 15K pension, plus 5K outside income from investments, part time work or whatever.


Whichever way you slice it, you now see why we all bang on about starting a pension earlier than you did. Plus, taking one so early. Will you really need to retire at 55? My OH is older than that (56) and is is very fit and well and would be bored out of his mind retiring now. He is changing jobs in a month though to get a better work environment.

R_P_W

bloody loads!

CLAPTON

well if you want an indexed linked pension at 55 of 20k you will probably need a pension pot in todays terms of about
20k/2.5% i.e. about 800,000 (that assumes the annunity rate for a 55 year old for an indexed linked income is about 2.5% but depends upon your assumptions (wifes pensions etc)

so as you have about 30 years to save, you need to save approximately 800,000/30 = 27,000 per annum inflation linked each year

this could be reduced a bit if you assume a greater than zero growth factor but it gives an order of magnitude calculation

System

As somebody here said recently, in very crude terms if you want to work for 40 years and retire for 20 years then you need to save half your income. Unless you can find an investment that pays a real return, to reduce that a bit.
Also you may want to enjoy your final year standard of living during retirement, not that of when you were just starting work.

dtsazza

CLAPTON wrote: »

so as you have about 30 years to save, you need to save approximately 800,000/30 = 27,000 per annum inflation linked each year

21 years in fact - so more like £38k a year savings, assuming zero real growth...

Gracchus_Babeuf

Amme wrote: »

Hi

I'm 34 & have just taken out a Pension, I'd like to know if anyone can help if I wanted to retire at 55 with a pension of £20000 a year how much would I need to pay in a month, just roughly as a guide?

Thanks

£20k at 55? Get real! :rotfl:

gadgetmind

Gracchus_Babeuf wrote: »

£20k at 55? Get real! :rotfl:

It can be done, but as we've seen, it takes an early start and a lot of work.