How much do you think you’ll need to save up to retire on?

coyrls

Money_Advice_Service wrote: »

50-60% of your current income is usually considered a good benchmark to aim for. This assumes you have paid off your mortgage and the majority of any outstanding debts though. (MAS Andrew - DipPFS)

But that doesn't answer the question of how much you'd need to "save" to provide a pension of 50-60% of your current income.


There is a huge thread here: https://forums.moneysavingexpert.com/discussion/2146737your+number concering what income is needed in retirement and what you need to "save" to achieve that income.

stehouk

Quick question can i pay monthly into an isa from my sipp cash funds on HL as there is a link to do it ?

I ask because i was trying to invest monthly from my sipp in a vanguard fund but there isn't a link for monthly investments

chucknorris

Money_Advice_Service wrote: »

How close are you to that goal? Do you wish you started earlier?

Not really, we've got much more than we need, there is a good argument for us actually starting later and enjoying ourselves more when we were younger, but certainly not the other way.

crv1963

To retire safely and with no worries we'd like the equivalent of 2k pm after tax, this is our number. We'll use a mix of DB (me), DC (Mrs CRV and I) and probably draw down my DC pot to zero by the time SP kicks in. To keep Mrs CRV in a safe place financially we'll aim to have a DC pot of 300k drawing down at 3% pa, that 9k + 8.5K SP + 9k survivors pension should meet her needs.

We're on target with my DB pension to meet 16k pa hopefully a bit more if I work for another 3 years, we'll probably need me to work 5 years if we're to meet the target of her having a 300k pot- we've reached 100k so far in it.

I think that the auto-enrollment is disingenuous for the majority as it has many believing they are saving adequately when they nearly all are undersaving, all it will do is reduce the majority from being able to claim benefits to top up basic SP.

When you look at the numbers who post on sites like this you get a glimpse at how few actually do think about the future and pensions. We certainly are in a very small minority.

pinknsparkly

As it stands today, our savings rate will allow us to retire mortgage free at 55 (in 22 years) with a shade over £400,000 in the bank (in today's money). This is money saved on top of SSP (via NI contributions) and employer pensions, and ignores the cost of bringing up kids. I am assuming that the pensions will not increase from their current value - obviously this is very much a worst case scenario as we will continue paying into them (and paying NI) until we retire. This amount of money will give us an annual income of a little over £15k/annum (again, in today's money). If we have children, I expect this date to be pushed back due to reduced savings rate. but this would also reduce the savings pot required as the time between our early retirement and drawing our pensions will be decreased. I will be reviewing the figures on an annual basis and tweaking as we go. I actually expect our pensions to provide almost all, if not more, of the £15k/annum which will drastically reduce the required size of our savings pot as it will only need to last until state retirement age, not beyond!

bugslet

GunJack wrote: »

Couldn't you sell the business on as a going concern and make a few extra quid from it??

TL;DR :No. That would have been a great option.

Long Version. It's unusual for a haulage company of our size to have a contract at all, but we do have one. However, and that would be a very long story, we couldn't agree terms, so I told them I was finishing. Our contract actually expired in March and we've been running without one since.

As im 55 next year, I thought earlier that end of 2019 would be a good finishing point, as it is, it will be April.

nrsql

About 20 years ago I estimated about £1 million for a single person, but that was assuming early retirement and a long time living off the capital.

Now I'm coming up to retirement finally - I tried retiring a number of time but enjoy work so kept going back. It means I'm fairly comfortable.
I find I'm spread between things that have capital growth and things that provide income. Didn't start pensions until I was over 50 as I considered them too risky.

Now I value things by how long I think I can afford to live. At the moment it is to 105.55 years old.
But who knows what will happen. Some things are inflation proofed (ish) but that's yet to be tested and it assumes downsizing. At some point (shortly) private health care will become too expensive and I suspect decent care homes will increase in cost so it's all really a gamble. I also don't know what I will want to do to fill in my time.
Pointless trying to put a number on it.

And no, I don't wish I'd started earlier. I wish I'd not paid anything off my first mortgage and just let inflation take care of it, I could have made better use of the money. £28k seemed a lot at the time.

Marine_life

Money_Advice_Service wrote: »

50-60% of your current income is usually considered a good benchmark to aim for. This assumes you have paid off your mortgage and the majority of any outstanding debts though. (MAS Andrew - DipPFS)

You can't just throw random figures around like that without some logic.

I suggest you read this:

http://earlyretirefree.com/how-much-do-i-need-for-retirement-and-will-it-last/

Chap really knows what he's talking about ;-)

bostonerimus

The amount needed to retire will vary with each person according to their spending, lifespan and the ways they use their pension pot to generate income. You can come up with some average life expectancy, average income, estimate of inflation, but even then someone who buys an annuity will probably need more than someone with a 60/40 portfolio to generate the same income.

Everyone should have a good idea of how much they spend each year as that is the starting point for any planning, only then can they work out how much they need to save to generate sufficient retirement income. One rule of thumb would take your annual spending and then subtract any income sources like state or DB pensions to give you a net figure. Then if you are in drawdown with a 60/40 portfolio your pension pot will need to be at least 25x that net figure to have a 95% chance of providing enough inflation linked income for a 30 year retirement.

To directly answer the question my pension pot number is pretty simple, it's zero as I have a DB pension and rental income that cover my spending with a bit left over.

MallyGirl

I am aiming for something near £2m between us as a couple across DC pensions and ISAs. No DB pensions for either of us. That is at 60. This gives us what I think we need plus what we want to be able to enjoy some travel and leisure time.