When to retire......

J_i_m

I think for a lot of people it's all about finding a life balance. I could for example go all out and put the maximum available into my pension to the point I have no disposable cash in the meantime and still a totally useless pension at retirement age because of economy polictics. In the meantime having poured all my money into pension I have no money for somewhere to actually live now and therefore no house at retirement.

Have I been paying into my pension? Yes, since my early twenties, for about eight years now, have I over paid? Well no.. I do need money to otherwise to live now thanks. Do I expect to retire at 55? well work ethic or not I suspect I will not be allowed to retire because polictics will have wasted my so called "gold-plated" pension.

So in the meantime I'll continue with standard contributions and work hard on buying myself a house and additional savings for my future.

Harry_Boyle

MacMickster wrote: »

I would be in favour of a completely flexible state pension age, with the size of pension adjusted to fully reflect the years of contributions, and also actuarially adjusted to reflect the period over which it is likely to be paid. Retire at 55 on maybe 40% of the pension that you would get at 68.

I can't see this working because the state pension is so low that most early retirees would descend below the poverty line and have to receive other state benefits to supplement their income - the exact thing the introduction of a flat rate state pension is trying to address.

The only way to have a comfortable retirement is to make your own provisions during your working life and view the state stipend as a bonus if you actually receive it. I've had this view all of my working life as I was convinced (and still am) that I would not receive a state pension and so I have substantial and diverse retirement savings.

marathonic

My retirement planning also assumes no state pension.

I'll probably get some angry replies over this but I think that the idea of working your entire life and only receiving a state pension when you are likely no longer able to function sufficiently at work (the state pension age is approaching 70) and for the government to provide enough for you to stay on the breadline for your remaining years, as is currently happening, is the best idea.

If you spend everything you earn during your life, you may have had a significantly better lifestyle than a peer who contributed 10% of their salary to a pension their entire lives. It only stands to sense that this person, upon retirement, should have a better lifestyle than you.

It's just common sense that you need to balance your lifestyle before and after retirement and, rather than relying on the government, this involves providing for yourself.

It's simple maths:

If you earn £450 per week and spend every penny, you'll suddenly have to re-budget on retirement to survive on the £144 state pension - a 68% drop in income.

If I earn £450 per week and contribute 10% to a private pension, my weekly spending is based on earning only £405 per week. Upon retirement, I'll get the £144 state pension and a private pension of, for example, £288 per week (I worked this out using a salary of £28,000 and a retirement age of 68, and starting at 20, in the HL calculator). My total income would be £432 - so I'd actually have an increase in income in retirement.

NOTE: People will start arguing that a 20 year old is likely still in college and not earning the above figure but that is not the point. The above point holds true regardless of your salary, it's just the figures that change.

PaulF81

Why they need to cut the state pension for boomers now. No point delaying the pain.

marathonic

PaulF81 wrote: »

Why they need to cut the state pension for boomers now. No point delaying the pain.

Cutting the pension for those would make EXCELLENT sense for the economy in the long term. However, politicians only think ahead to the next election and it'd cripple the current government if they inflicted pain on the majority voters.

PaulF81

Yep. Why chinas system is much better than ours. Most youngsters are too thick to realise what is happening right now. Some day, when they all become aware of how they have been screwed, the boomers will get their comeuppance.

BobQ

PaulF81 wrote: »

Why they need to cut the state pension for boomers now. No point delaying the pain.

I am amused that most of the comments on this discussion have focussed on pensions.

What concerns me is that the economy is stagnating (lets not worry why) so there are not lots of new jobs being created overall.

Young people are leaving school/university apparently better qualified that ever before and in the main are keen to start work. Meanwhile we have a generation in their late 50s and 60s who could retire but do not want to and others who think they cannot retire because they cannot afford it.

Your solution is to disincentivise them from retiring by cutting state pension. Fair enough but this means more will work longer. Is this good? Unless we are creating more jobs it means less opportunities for younger people to find a job.

I know your agenda is to blame the boomers for everything that is wrong in the world, but what effect does it have that people do not want to retire? Does it matter?

Thrugelmir

CLAPTON wrote: »

most 20 year olds don't expect to live past 30 (which they know is gross)

did you?

I started my first pension plan a now outdated section 226 policy at 18. A massive £10 per month before tax relief.

One of the best investments I have made.

As 47 years of compound interest will make a huge difference.

CLAPTON

Thrugelmir wrote: »

I started my first pension plan a now outdated section 226 policy at 18. A massive £10 per month before tax relief.

One of the best investments I have made.

As 47 years of compound interest will make a huge difference.

sadly 47 years of compound inflation makes a huge difference too.

PaulF81

BobQ wrote: »

I am amused that most of the comments on this discussion have focussed on pensions.

What concerns me is that the economy is stagnating (lets not worry why) so there are not lots of new jobs being created overall.

Young people are leaving school/university apparently better qualified that ever before and in the main are keen to start work. Meanwhile we have a generation in their late 50s and 60s who could retire but do not want to and others who think they cannot retire because they cannot afford it.

Your solution is to disincentivise them from retiring by cutting state pension. Fair enough but this means more will work longer. Is this good? Unless we are creating more jobs it means less opportunities for younger people to find a job.

I know your agenda is to blame the boomers for everything that is wrong in the world, but what effect does it have that people do not want to retire? Does it matter?

No, it's not to disincentivise retirement, it's to ensure government expenditure is fair for all generations and most importantly, affordable.