What size pot do I need?

tony4147

I will increase my contributions to £1500 gross / month, I can easily downsize my house and pull £150K out of that if needed.
To retire at 60 would be nice, but I might be too easily bored so at the moment I don't consider it a hardship to work past 60 by a few years, for me I would like to put myself in a position of having a choice of working full time/part time or retiring.

atush

Radiantsoul wrote: »

Do you think a lot of people are paying too much into their pension?

Not as far as i can see. Most people pay in too little.

lalman

An alternative is to reduce your life style? Instead of 20k per annum have 15k... that way you pay less tax too... just a thought... particularly if you are going to have a large tax free lump sum...

kangoora

atush wrote: »

Not as far as i can see. Most people pay in too little.

I wouldn't be surprised if those that look into it, but without any great depth, are paying too much. Most pension calculators don't seem to take into account declining spending in old age - for example, my mum who is now 83 but otherwise fit and healthy.

She no longer wants to go on 'proper' holidays, has never run a car and is happy to pootle around the house, going to the WI and the local social club bowls morning, If she goes out for meals it's usually lunches when she has the pensioners special as she eats less now, has a weekly shopping bill of around £40 etc. and is actually saving circa £500 month from a total pension income of £1500/month.

I agree with Atush apart from the fact I believe that those that don't look in it are the ones likely to not be paying in enough.

atush

Here's the thing, people today are different.

I'd still want 'proper' holidays then, and have ALWAYS run a car so would then (sight permitting). I dont belong to the WI and I like eating lunch out over dinner but not the pensioners special. I'd want sushi lol.

Basically I think we need to pay in more.

tony4147

atush wrote: »

Here's the thing, people today are different.

I'd still want 'proper' holidays then, and have ALWAYS run a car so would then (sight permitting). I dont belong to the WI and I like eating lunch out over dinner but not the pensioners special. I'd want sushi lol.

Basically I think we need to pay in more.

I agree, most of my peers don't pay anything like the amount I pay, but I do see a decrease in in spend vrs increase in age.
Would be very helpful if there was a calculator that takes that into account.

TH1878

tony4147 wrote: »

I agree, most of my peers don't pay anything like the amount I pay, but I do see a decrease in in spend vrs increase in age.
Would be very helpful if there was a calculator that takes that into account.

There is. You can do a very rudimentary assessment using excel but what you're really asking for is someone to produce a cashflow forecast for you.

You'll need a competent IFA to help you out with it but for the cost of a month's premium and some investment of your time, I think it's well worth it.

tony4147

Thanks for everyones help

jamesd

Radiantsoul wrote: »

Do you think a lot of people are paying too much into their pension?

I think that most people are paying in too little but that using artificially low growth rates isn't appropriate compared to more realistic ones plus an explicit safety margin.

I also think that few consider the changes in cash flow that are needed for the part of retirement before state pension age and the typical trend to lower spending until stability is reached around age 85, at least as found in US studies of spending. For those I tend to think of it as a problem in three parts:

1. Long term for life boost to state pension, has to last until death.
2. Boost to age 85 or perhaps 80 for those of lower life expectancy.
3. Boost from retirement until state pension age.

1 and 2 are both long term enough that lifetime income is a decent approximation of the money need. 3 is usually too short term to need full life sustainability funding level.

Thrugelmir

Radiantsoul wrote: »

Do you think a lot of people are paying too much into their pension?

Basing the future on past performance offers no guarantees. One suspects that there are going to be some very disappointed people. In the main there's a lack of pension saving at a high enough contribution level. .