People in their 30's - future financial plans?

justme111

adonis10 wrote: »

I find myself at 34 on 32k which is obviously quite depressing. .

please please keep some perspective
there ALWAYS will be more successful people than one if by success you understand income wealth. it is so sad that you class your income as depressing. please do not forget that the vast majority of earth population either has lived or is living in conditions unthinkable to you - they are no less desrving than you are , they just been born jn a different era and place. please appreciate what you have and don't class it as "depressing" because someone else got more. You are not any less valuable than economic is.

bugslet

adonis10 wrote: »

Firstly, incredible position to be in. I am incredibly envious, but it is what is is.



Totally agree, but the part about increasing the income is really rather difficult at this stage of life. Been through an accountancy qualification and I find myself at 34 on 32k which is obviously quite depressing. Short of retraining (and taking a big pay cut for 5 years) I don't see where significant increases in income will come from so I guess I need to go down the frugality route.

It's curious how much perception plays a part. 32k is above average, albeit not a lot and you are certainly savvy with your money as you are waaay ahead of a lot of individuals on the same money that have been more spendy.

At 34, I was probably earning around 15k so that was mid - late 90s. It wasn't until my mid40s - late 2000s - that I earned distinctly more. But I felt comfortably off, probably because I live in a poor area and some of my friends are financially worse off than me. Some are better off, though not by a huge amount.

So I wonder if the area you live in and the people you are friends with, make you feel richer or poorer. Not that I recommend going to live on a council estate and hobnob with only minimum wage earners:p.

Edit - cross posted with justme - we both think the same!

andrewf75

adonis10 wrote: »

I find myself at 34 on 32k which is obviously quite depressing

I find it depressing that someone earning well above the average wage and still young enough to change careers is depressed!
As the above post, we live in a country with huge differences between rich and poor so everything is relative, but being money savvy on an ordinary income is worth a lot. I know plenty of people earning more who just spend it all and have nothing.

JoeCrystal

adonis10 wrote: »

Makes sense. So the e'er contribution method works the same, for example the Local Authority pays in x% as an e'er contribution and that, in addition to her contributions, goes towards paying for the 24k per year in retirement?

Not exactly. LGPS Fund is a funded pension scheme (one of the largest in the world with £217 billion in asset) and at overall funding level of 85% of the liabilities, it is quite healthy and the only public sector pension scheme that I do not complain about (along with the military). The rest however...

Your partner on other hand is paying toward the pensioners instead. All the contributions that these public sector are paid directly to the pensioners. If there is a shortfall, then the Treasury (aka the taxpayers) fund the rest. According to the TPS account for 16/17, the income for it was £6.3 billion (both employee's and employer's contributions), and TPS paid out £7.8 billion as pension (if I am reading its annual report correctly?).

adonis10

andrewf75 wrote: »

I find it depressing that someone earning well above the average wage and still young enough to change careers is depressed!

Maybe young enough to but another 5-6 years of starting on circa 20k and moving up doesn't really reconcile with my current financial commitments and aspirations. I started accountancy late (in the sense of when I qualified) so understand the impact it has to start a 'career' job late and am already playing catch up so unsure I can afford to do it again.

bugslet wrote: »

It's curious how much perception plays a part. 32k is above average, albeit not a lot and you are certainly savvy with your money as you are waaay ahead of a lot of individuals on the same money that have been more spendy.

So I wonder if the area you live in and the people you are friends with, make you feel richer or poorer. Not that I recommend going to live on a council estate and hobnob with only minimum wage earners:p.

Most earn more, so I guess peer envy plays a part. Live in quite an expensive area so I guess this increases my perception that 32k is not a lot.

andrewf75

I'm surprised there aren't more opportunities for a qualified accountant to earn more. I'm on a similar salary to you in my 40s but with no real career type work qualifications and one of the things I'd looked at to re-train into was accountancy!

PensionPost

Regular poster but using a new account as I don't want my finances linked to my main account.


Me - 33 - Accountant, on £80k + bonus which in the last few years have been £30k-£50k range, with 10% ee pension contributions


Wife - 28 - Accountant, on £75k + bonus which in the last few years have been £8k-£10k with 11% ee pension contributions.


I put 16% into pension for a total 26%, wife puts 9% to make hers 20%


After a long while studying, doing more qualifications, we are now in the jobs that will let us plan for our eventual retirement.


Current position.


House recently bought for £700k with a £250k mortgage (£450k equity)
£140k combined pension posts (only started hammering cash into these in the last few years)
Investments of £100k, split between S&S ISA and cash ISA (which is our safety net of 24 months expenditure, excessive I know, but it would also cover a car if one went pop).


Plan,
I max out pension contributions to keep me under £100k, wife increases contributions to match pay rises, we save/invest the rest in S&S ISA's to bridge the gap between retirement and pension access date.


All done as soon as possible as you never know when the pension drawbridge will be pulled up.


Planning to retire at 55 but will be disappointed if I haven't gone sooner.


We both earn really really well, but we also live like we did when we were on half the money, which means we save like crazy, we drive sensible cars, holidays are our main weakness, but we could be a lot worse, 3 holidays a year, but not crazy extravagant.


I was brought up poor, and had getting value for money drilled into me, and I haven't changed.

JoeCrystal

adonis10 wrote: »

Totally agree, but the part about increasing the income is really rather difficult at this stage of life. Been through an accountancy qualification and I find myself at 34 on 32k which is obviously quite depressing.

Don't think like that! You have done well to get to that point. According to provisional 2016 ASHE table, the median annual gross income (without bonus or overtime) for all employee jobs is £23,099. The 70th percentile is £32,244. So an employee on that income is already better than two third of the employees in the country. (To be in top 90%, an employee would be earning £50,220 at least)

ex-pat_scot

andrewf75 wrote: »

I'm surprised there aren't more opportunities for a qualified accountant to earn more. I'm on a similar salary to you in my 40s but with no real career type work qualifications and one of the things I'd looked at to re-train into was accountancy!

There are many many flavours of accountants and of accounting roles.
I have found that your choice of industry, whether you work in practice, your flexibility and willingness to move around all pay a big element in your marketability.
Location is the biggest differentiator. I have worked for many years in the regions and there's quite a ceiling for both salary and seniority of roles, whereas in London there's a huge uplift and potential for advancement.


There's no right answer, but I have found that staff willing to travel, work away from home, and willing to move regularly, are those who progress and have the best packages.


I moved from a regional FS business to a London consultancy, and more than doubled my package, but have to travel a lot and stay away from home 4 days a week.

Farel01

I'm 32, OH 37. We've only really been saving since I took over our finances 4 years ago, before that we were on lower paid jobs, always overspending on holidays etc. and my OH just doesn't have a head for it. So the current position now is:

Salary: 40K + 10% bonus
OH Salary: 80K + 30% bonus this year

- about 75k in combined pensions. I pay 20% in (10% by employer), OH pays 10% in (5% by employer)
- 48k in S&S ISA
- 85k in 1 year savings account (to pay off CGT and house)
- 5k in P2P
-150K in equity (90k mortgage on a 240k house (will pay off with above savings next year)

So all in all not unhappy Could be better if we'd been smarter, but have also had a massively good time so **** it :cool:

We don't have children and not sure whether that's in the cards for us, but I think we'd be ok. I'm planning to retire 6 years early at the same time as my OH, that's what the S&S ISA is for. I could put that in my pension or a lisa as well, but if anything happens and we need to take it out before 55 we still have that flexibility.