What is a GOOD pension Pot to retire on??

jerrysimon

I wonder how many people will have anything near 2K/month to live off. Must be a very small percentage though I guess possible, if two of you also include state pensions with their additional personal pensions.


Jerry

wiggers

The first thing to look at is your annual spending. Try to reduce this by cutting out unnecessary things and using MSE's advice to reduce bills as much as possible.

Once you know roughly what your annual spending is, multiply this by 25 to get the size of pot. This assumes a 'Safe Withdrawal Rate' of 4%. I know this figure is much disputed but for many people it is a good rule of thumb.

You then need to look at what investments will get you to that size pot. I can highly recommend The Escape Artist. Take a look at the various portfolio ideas here:

https://theescapeartist.me/2015/07/28/the-simplicity-portfolio/
https://theescapeartist.me/portfolio/

Pennysmakepounds

jerrysimon wrote: »

I wonder how many people will have anything near 2K/month to live off. Must be a very small percentage though I guess possible, if two of you also include state pensions with their additional personal pensions.


Jerry

In my opinion 2K NET is possible, but only if you live within your means whilst you are working and have a long term view of life rather than a short term blinkered view.

The issue these days seems to be that young people don’t plan for their future, whilst the going is good, money is coming in they live it up LAGRE.

All too often these days the logic seems to be that the more you earn the more you NEED to spend.

There is nothing wrong with enjoying life and having a few luxuries now and again but you have to bear in mind that you will not always be earning and will still need money to live on.

The figure quoted of £880K ish is eye watering and to be honest I will NEVER achieve that figure in cash, and I’m comfortable with that because my model of BLT can achieve that figure with around half that capital n my opinion and leave a nice nest egg for the kids.

Yes its more hassle doing BTL then straight forward investments, where you just live off the interest but each to their own and to be honest I lost quite a substantial amount of money during the crash in the early 2000 and It has put me off investments so I now prefer to invest in Bricks and Montour.

somethingcorporate

You make £2k net off a £450k BTL portfolio? That is a pretty sweet return, you must have picked your properties wisely.

My number is around £3k net a month - a long way and many working years to get there.

westv

A decision rules based withdrawal route (Guyton Klinger for example) makes £2000 more achievable but the income can go down as well as up.

Pennysmakepounds

somethingcorporate wrote: »

You make £2k net off a £450k BTL portfolio? That is a pretty sweet return, you must have picked your properties wisely.

My number is around £3k net a month - a long way and many working years to get there.

I am planning on buying some cheap properties in the North of England where you can still pick up properties between 35-90K depending on location and condition.

The grand plan is to but about 7/8, with a return of around between 280/350 net each.

The 450K figure is very fluid to be honest but i know friends i went to uni with who do this for a living and nothing else tell me its achievable.

somethingcorporate

Yes, multiple houses is a super idea because spreads your risk on voids. The only issue is the admin is quite unpleasant and that was when I was managing our old flat.

I live in quite a very expensive northern city where £150k is about the minimum price for a reasonable house in an area I would want to own a rental. Possible, but finding the deposits on those isn't easy.

B2L is still a decent long term punt but the recent tax changes makes it quite unappealing at the moment to me.

Rosemary7391

Pennysmakepounds wrote: »

In my opinion 2K NET is possible, but only if you live within your means whilst you are working and have a long term view of life rather than a short term blinkered view.

The issue these days seems to be that young people don’t plan for their future, whilst the going is good, money is coming in they live it up LAGRE.

All too often these days the logic seems to be that the more you earn the more you NEED to spend.

There is nothing wrong with enjoying life and having a few luxuries now and again but you have to bear in mind that you will not always be earning and will still need money to live on.

I'm a young person (25) attempting to plan. Problem is, all of these calculators seem to assume that I'll always earn the same amount of money, which is somewhat unrealistic (I hope!). It's no good me working out I need to put in £500 a month for 50 years to get the income I think I'll want, when £500 is nearly half my current income and I'll need to also save for events like being unemployed and moving large distances (inevitable in my career). So I'll stick my paltry £50 a month in a pension for now, save what I can for my more immediate needs and see where I am in five or ten years time. It's not always wilful ignorance or profligacy, but planning for retirement now seems to be approximately as informative as a chocolate teapot is useful...

(Sorry for the rant, I just get annoyed with the generalisation. If anyone knows of some more useful calculators I'd be very grateful!)

Eric_the_half_a_bee

Rosemary7391 wrote: »

It's no good me working out I need to put in £500 a month for 50 years to get the income I think I'll want, when £500 is nearly half my current income and I'll need to also save for events like being unemployed and moving large distances (inevitable in my career). So I'll stick my paltry £50 a month in a pension for now

50% of your current income (£500) is clearly unrealistic.

So is 5% of your current income (£50).

Rosemary7391

Eric_the_half_a_bee wrote: »

50% of your current income (£500) is clearly unrealistic.

So is 5% of your current income (£50).

Yes, but any more is likely to leave me short for things I'll need in the next few years. In, say, 15-20 years time I'll likely be able to put in more than £500 a month; I'd like to be able to calculate something along the lines of £50 a month for X years, £200 for Y years... etc. That seems much more realistic. I should probably just set up a spreadsheet and play with the figures myself, but I'm not surprised younger people don't bother with it if they have to do that to get a sensible answer; or they do a calculation like mine and get a patently unrealistic answer so give up.