How much for retirement?

japmis

I received my pension statement today for the last tax year; my predicted pension pot at retirement (when I am 65 in 33 years time) is £12,000 per annum before tax.

I have no idea if this is good or bad. I appreciated that this is just an estimate and is based on my contributions remaining constant and my salary increasing at 2.5% a year, I'm also assuming that when I am entitled to my state pension in 2050 at the age of 68 that there won't be a state pension at all (or if there is it will be means tested and I will not qualify because my company pension pot is too large). I have a mortgage now and that will be paid off before/at retirement.

How do I know if £1,000 a month is going to be enough to live on? Do I need to start pumping more cash into my pension? :undecided

Linton

japmis wrote: »

....


How do I know if £1,000 a month is going to be enough to live on? Do I need to start pumping more cash into my pension? :undecided

A good starter is: how much are you actually living on now not including mortgage? You are used to a particular standard of living and would probably be happiest being able to keep it in retirement.

Thrugelmir

Is your salary increasing at 2.5% a year compound. Many peoples aren't.

tell_it_how_it_is

You don't know if £1,000 enough. We don't know if £1,000 is enough. Too many personal and external factors can change over the next 33 years.

Just ensure you keep paying in and taking advantage of company contributions, and consider looking at other avenues for retirement monies too (I.e. not all eggs in one basket).

Turtle

This is on my mind a lot. Like others have said, you can't know how much will be enough in 33 years, or any distant time in the future, with any certainty.

I'm 39 with a 42 year old husband and we're both paying as much as we can into pensions (mine's currenly predicting same as yours by the way), plus S&S ISA, cash savings and a house we rent out. We're aiming to retire from our main jobs at 55, then work part time or something paying less that we might enjoy. My work pension forecaster can't handle stopping paying in and deferred withdrawal so it's a bit of a stab in the dark.

Only thing I do know is that we're planning towards it and we might achieve it. If we don't plan, then we won't!

NorthernMonkey1

Do you have spare cash at the moment, and how much do you currently earn.


The tax bracket you are in, and so how much you could avoid paying by putting the money into a pension instead of an ISA will affect your decision.


If you have spare cash, then putting it into a pension instead of spending it on beer or fags will mean you have more options in 33 years time. It's probably too early to tell what those options will be, but its probably safe to say that they'll be better options with more cash in the pot.

japmis

NorthernMonkey1 wrote: »

Do you have spare cash at the moment, and how much do you currently earn.


The tax bracket you are in, and so how much you could avoid paying by putting the money into a pension instead of an ISA will affect your decision.


If you have spare cash, then putting it into a pension instead of spending it on beer or fags will mean you have more options in 33 years time. It's probably too early to tell what those options will be, but its probably safe to say that they'll be better options with more cash in the pot.

I'm in the top tax bracket and currently all my spare cash is just getting stuffed into savings accounts as I am living between countries. I am also intending to overpay my mortgage by £100 a month to shave off 7 years, once the tenants are in.

Thanks everyone for your responses; I appreciate it's a bit of a how-long-is-a-piece-of-string question

:beer:

japmis

Thrugelmir wrote: »

Is your salary increasing at 2.5% a year compound. Many peoples aren't.

I've averaged 5% a year for the last 3 years; this includes a promotion. :j

japmis

Linton wrote: »

A good starter is: how much are you actually living on now not including mortgage? You are used to a particular standard of living and would probably be happiest being able to keep it in retirement.

I guess £1k a month is a good amount given there will be no mortgage; however it doesn't leave much for holidays or if the boiler breaks.

dano17439

You said you are currently in the top tax bracket therefore you earn 150k+ a year. £1,000 a month pension will nowhere be enough to keep up the same standard of living you probably have now

My aim is for me and my wife to have combined pension pots of £1m when we retire, averaging out at 50k per year for 20 years, and we currently have an household income of 100k a year

japmis

dano17439 wrote: »

You said you are currently in the top tax bracket therefore you earn 150k+ a year. £1,000 a month pension will nowhere be enough to keep up the same standard of living you probably have now

hahahahaha that just shows how clueless I am as I thought the top tax bracket was £42k :rotfl: