Am I saving enough?

si2winit

Hello everyone

I am looking to see if I am saving enough in my DC pension.

I'm 34 years old and contributing 200 a month and my employer is contributing 300 a month. There is currently £50k in the pot. Hoping to retire at 60 and don't know if I need to increase my contributions from 7% currently

Any help would be appreciated

Thanks

RuleTheWorld

17.5% being contributed in total? seems ok versus your age always room for more though presuming you have no high interest debt and are ok for easy access savings

bigadaj

How much do you earn and how much would you want to retire on?

Plenty of calculators on tinternet.

si2winit

Earning £37k a year. Would really like £25k but could be well out of reach at the moment

ThinkingOutLoud_2

Try this for a view.

https://www.moneyadviceservice.org.uk/en/tools/pension-calculator

atush

Do you have an emrgency easy access cash fund? Do you use your S&S isa allownce?

I would consider, if you are saving 16% of your salary as pension, to use your S&S isa allowance for further savings.

ischofie1

Just crunching some No's whilst making lots of assumptions:-
Average historical equity returns are 5% + inflation. I've ignored inflation to keep things in today's money. I've assumed you'll get pay rises of inflation + 1%. Again to keep things in today's money I've ignored inflation and increased the current 500 PM payment by 1% PA.
I've assumed 26 years of payment/growth to get you to 60.

Starting with £50K, your pot would be £538K when you're 60 in today's money.
Using a safe withdrawal rate of 4%, you could take £21.5K PA as a pension in drawdown. May be more if a state pension is due to kick in.

In reality many things are likely to change before you retire. New job/s, promotion Etc & these will change these figures.

Yes its good if you could increase your pension contribution but be aware you're locking money in for a long time.
You don't say if the pension is via salary sacrifice.
If it is, then increasing contributions becomes more benificial.

What works for me is sacrificing some of my annual salary increase to increase the pension, I.E. if you got a 3% rise you may decide to up the pension by 1% and settle for a lower rise.
Also as you approach 60, it may be your mortgage is paid off or kids left home. This is when many can really ramp up the pension although this won't have many years to benefit from compound interes.

si2winit

Brilliant, sorry for the delay in replying.

Thanks for crunching this numbers for me. The kids are 8, 9 and 11 already so likely out on their own by then ! Lol

I think I'll take your advice in sacrificing some annual percentage pay rises towards my pot, normally get around 3/4% so will up by 1/2%per year.

Again, thanks for the sound advice

martinsurrey

Rawhammer wrote: »

To benchmark i'm 37 with £156k pot contributing 21% ee with 12% er and wanting to retire at 60 with a £25k income in today's terms. I'm not convinced it will happen though.

what is you contribution % a percentage of (ie current salary)?

seems very high to not be confidant!

System

By my calculations, 21%+12%=33%

ThinkingOutLoud_2

Rawhammer wrote: »

To benchmark i'm 37 with £156k pot contributing 21% ee with 12% er and wanting to retire at 60 with a £25k income in today's terms. I'm not convinced it will happen though.

So a combined 33% sound good, but of what salary? Can't calculate anything without that...