What is a GOOD pension Pot to retire on??

JamTomorrow

Currently 41 and hoping to become financially independent/retire in the next 10-15 years.

I've been keeping a monthly budget and tracking actual spend for the past 5 years so that provides a pretty good basis to determine what expenditure I will need when I stop formal employment.

For me and Wife I expect that figure to be £2k/month plus holidays and major purchases such as cars, house refurbs, etc. We would want the holiday spend to be at least in the £10k/year mark for the first 10 years post FI.

For this I think I am going to need a retirement pot of ~£1.5m which will be spread across SIPPs, ISAs & P2P which should help me manage the income tax in withdrawal to avoid ever going above the basic rate of income tax. Plan here is to take up to the basic rate of income tax via drawdown and then top-up out of ISAs.

Currently have funds earmarked for retirement of ~£550k and making annual contributions of ~£30k/year so think i am in reasonable shape to get there in 15 years time & maybe earlier. If I don't get to the 'number' in 15 years time I'll reassess forecast spending.

jerrysimon

Great that you have things in motion and are in great shape, 10/15 years before you retire.

For my wife and I, at 45, we were paying out about 8K a year for 5 years helping our two daughters at uni. For us mid forties up to early 50s were an expensive time.

Jerry

Pennysmakepounds

JamTomorrow wrote: »

Currently 41 and hoping to become financially independent/retire in the next 10-15 years.

Currently have funds earmarked for retirement of ~£550k and making annual contributions of ~£30k/year so think i am in reasonable shape to get there in 15 years time & maybe earlier. If I don't get to the 'number' in 15 years time I'll reassess forecast spending.

That's and impressive pot you already of over half a million at 41 and the contributions of 30K per annum are impressive you must be earning decent amount to achieve that.

The problem is that not everyone is fortunate enough to be in your position. Most will be lucky if they have a gross amount more then your contributions so planning retirement becomes difficult.

Well done.

I was actually looking over my own accounts last night and currently, if i decided to retire today at 42 i would have a 1k per month ish net, still some way off my target but fortunately i still have a few years to bring that upto my target level.

d70cw6

https://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

personally i'm conservatively aiming for £500k by 60.
(37 now with £130k pot, with £1,500 pm joint ee and er contributions going in)
That'll do me and missus.

AnotherJoe

Triumph13 wrote: »

I use £3k per month as my baseline target as a couple, because it translates nicely (in my head at least) into £1k for bills, £1k for living and £1k for having fun. I would regard each of those three budgets as having plenty of fat in them, particularly as we are currently averaging nearly 10% below that as a family of four.
The good news is that my spreadsheets tell me I should be able to go now and meet that target. The awkward bit is that the same spreadsheets tell me another 3 years work should translate into another £1k per month which is hard to turn down - so I'm still stuck working. I realise most people would regard this as a very nice problem to have, but it's frankly doing my head in a lot of the time.

I'm in the same position but where you'll be in about 2 years time. You can always regard your pension as your FU safety net if things get nasty at work.

I've also found that since I know that by this time next year I'll be gone, I dont get stressed about some of the short term decisions people make that will come back to be a problem later. When the chickens come home to roost I wont be there

jerrysimon

AnotherJoe wrote: »

I
I've also found that since I know that by this time next year I'll be gone, I dont get stressed about some of the short term decisions people make that will come back to be a problem later. When the chickens come home to roost I wont be there

Me too good point. Once you decide when you are going, things and mind sets change.

For me it will be this December 2016 or March 2017 at the latest. Not sure if there are advantages to waiting till the end of the tax year ?

Our DB pensions will provide about £1500 a month plus 60K LS. No debts no other savings and mortgage paid off. Then its a case of waiting ten years for both our full state pensions to kick in

Backup plan would be to down size our house (475K) buy smaller.

Jerry

AnotherJoe

redmalc wrote: »

I have kept approx 100K in very racy funds and will continue to monitor on a regular basis,the IFA leaves those to my judgement because he thinks i am taking to much risk,hey o life is a risk.

I suspect theres some truth in that but also an element of CYA. If an IFA tells you to go into risky funds they may be liable if it all goes Pete TOng, so its a one-way bet for you.

So better for him to say "thats too risky" and leave it up to you even if secretly they think its a reasonable risk. When I saw an IFA a year ago I commented on one of my funds as being my low risk one to balance out the scary stuff, and he said "that's the one we advise for people who want to be in a risky fund"

gadgetmind

AnotherJoe wrote: »

I dont get stressed about some of the short term decisions people make that will come back to be a problem later.

I have the opposite problem. I *really* care about my team and worry constantly about how they'll get on without me. I'm trying to make sure everything is working smoothly, but external forces (such as Brexit) are making this close to impossible.

AnotherJoe

jerrysimon wrote: »

Me too good point. Once you decide when you are going, things and mind sets change.

For me it will be this December 2016 or March 2017 at the latest. Not sure if there are advantages to waiting till the end of the tax year ?

Our DB pensions will provide about £1500 a month plus 60K LS. No debts no other savings and mortgage paid off. Then its a case of waiting ten years for both our full state pensions to kick in

Backup plan would be to down size our house (475K) buy smaller.

Jerry

My plan is until end of tax year. Keeps things very simple re tax, and as a 40% payer it really maximises my earnings in my final year. I think if you are 20% tax its less clear cut.

Have you looked at Retireasy website? It allows you to model drawdown, state pensions kicking in and the like. Not sure how those guys make money I guess eventually they will go to a paid model check it out whilst its free!

jerrysimon

gadgetmind wrote: »

I have the opposite problem. I *really* care about my team and worry constantly about how they'll get on without me. I'm trying to make sure everything is working smoothly, but external forces (such as Brexit) are making this close to impossible.

Yes my boss feels the same way and keeps telling me I cant go till he does (or pleads for me not going) he is 58. I always planned to retire at 58 anyway and now having a new grandson and changes in my type 1 diabetes, health wise, have brouhgt that forward. Staff wise I do care about them but having had some real challenges this year and being isolated and watching another colleague get diagnosed with cancer and die 6 months later at 53 my perspective has had a shift.

As you say March is neat and tidy tax wise and I am topping up a SIPP for my wife not a lot, but 11K including the tax relief which gives us a little more. She leaves at the end of August and is a non tax payer so its a shame I didn't start that earlier but better late than never.

I will give the web site a go.