Advice at 30

MEM62

lisyloo wrote: »

What assumptions did you use to get to that figure?

I used the info provided by the OP in their original post and plugged it into the retirement planner referred to in the link. You can play with some of the assumptions but that was the base result assuming no TFLS taken.

30andcounting

Mortgage is actually £133K, just checked. £509 a month but I overpay when I can.

I know I have spare money without doing a SOA, my main question in my original post was whether I was doing enough contributing 10% of my salary (inc Ers) into a pension on my earnings at 30, appreciate the opinions and will probably look to upping it another %.

General rule of thumb I can gather from peoples posts is put as much in as you can afford whilst still having what can resemble a life.

Johnnyboy11

ColdIron wrote: »

Today that is right, £11,850 personal allowance plus £34,500 basic rate band. From Saturday it will be £50,000 (£12,500 + £37,500)

Not for those with the temerity to live and work in the People's Republc of Scotland, where property is theft. From Saturday, 41% Income Tax on earnings above £43,430, ouch!

crv1963

30andcounting wrote: »

I know I have spare money without doing a SOA, my main question in my original post was whether I was doing enough contributing 10% of my salary (inc Ers) into a pension on my earnings at 30, appreciate the opinions and will probably look to upping it another %.

General rule of thumb I can gather from peoples posts is put as much in as you can afford whilst still having what can resemble a life.

That's about the sum of it.

You need to look at several things at once in deciding-

1) What income/ lifestyle do you want in retirement- taking into account hopefully children will be independent, no mortgage, no pension saving. What age will this be at?

2) Having a life now- health and certainly youth may not last forever, but you don't need to go overboard all the time, economies can be had.

3) Tax efficient savings for both of you- maybe get your income down to ensure child benefit and out of 40% bracket.

4) Look at how the retirement income will come in- LISA, DC, and SP and how you will be taxed.

I lost 40% of my pension pot in a divorce, but Mrs CRV and I are on track to retire when we are 55 and 58 respectively, with a lifestyle we want.

Set it all up and review every now and then maybe when you re-mortgage, hit 35, 40, 45 and 50. Or when you have more children?

Do not worry what others have or have not. That is their problem it is what YOU want that is the issue. Since he was 18 my youngest has put 13% into a pension, has a savings rate of about 30-35% of income but lives a life and travels, my older is saving at what he says is a rate that he is on target to retire mid 40s.

Good luck and well done for looking at it now.

Anonymous101

30andcounting wrote: »

Mortgage is actually £133K, just checked. £509 a month but I overpay when I can.

I know I have spare money without doing a SOA, my main question in my original post was whether I was doing enough contributing 10% of my salary (inc Ers) into a pension on my earnings at 30, appreciate the opinions and will probably look to upping it another %.

General rule of thumb I can gather from peoples posts is put as much in as you can afford whilst still having what can resemble a life.

Think of it as delayed gratification. You do the hard work now when due to the effects of compounding you will need to put in substantially less than if you try to backfill it later.

If as above you understand your numbers then you can get to a point sooner rather than later where you're planned number will be reached from the growth on your current investment and at that point you can scale back the pension savings and invest in post tax through a S&S ISA or similar and work on shortening your working life.

swindiff

My mortgage is £500/month. Salary is just over £40k, wife's is about £18.5k both 48 years old

I pay 33% into my pension (workplace), wife pays 21% (workplace + SIPP)

We don't live on the breadline, 2 or 3 holidays a year. But we are prepared to sacrifice a bit now to stop work in about 10 years time. If we were not overpaying now we would be working until state pension age.

30andcounting

Thanks for everyone's help and advice. I am in a fortune position (well I've worked damn hard) to be on a decent salary so want to try and maximise my position now while I can. The easy way out would be to bury my head in the sand and see what happens, but if I can really up my game in the next 10 years then hopefully by 40 I will be in a half decent position.

It's great in a forum environment that complete strangers want to share help and advice on topics like this, it's really opened my eyes. Thank you

30andcounting

Another ques sorry - is it worth finding out from Royal London what sort of funds my pension is invested in. Given I'm 30 and between 25-35 years from retirement should I be moving these funds into a higher risk category? Or is that just a stupid move...Thanks

Brodiebobs

for some comparison you requested OP..

Me and OH are mid 30's 2 kids and both earn under £35k, we only started paying pension when compulsory scheme came in. Both our employers only offer the minimum contribution.

However we have always overpaid mortgages and have our home and a rental both under 75% LTV and hope to have both paid off within 10 years. That was our retirement plan.

We had a lightbulb moment re. pensions last year and are now both paying in just about 7% and plan to increase with pay rises.

So id say your in a very fortunate position with your level of salary and employer scheme, and were both fortunate that we have age on our side and aren't realising this at 50+.:o

crv1963

30andcounting wrote: »

Another ques sorry - is it worth finding out from Royal London what sort of funds my pension is invested in. Given I'm 30 and between 25-35 years from retirement should I be moving these funds into a higher risk category? Or is that just a stupid move...Thanks

You are young so what funds you choose will be driven by your appetite for risk. Hopefully you are financially savvy enough to know that there will be big drops in fund values over the next 25-35 years? As well as growth.

You will know that the point of saving regularly is to smooth the rises and falls in the markets, so at 30 I with my risk appetite would be looking to have my money in 100% equities, review when I'm 10 years from retirement.

We're a lot older and at 51 just opened a SIPP for my wife with 60% equities 40% bonds- but we intend accessing this when she is 55 to 57 maybe a little later if there is a big market fall. But she also has about 100k in an old pension fund still growing.

That's why I suggested you set up and then review every 5 years- don't become obsessed with every rise and fall in the markets. My sons pensions are both in 100% equities.

Learn what yours are in, work out if you could stomach a 50% drop bearing in mind markets do eventually recover over time, all the while you are accumulating more funds at a lower price. DO NOT take fright and sell when it drops.

Most recommend reading some FIRE blogs, more threads on here and build some cash savings, maybe 3-6 months outgoings, have a look about for some ideas. Save a bit even £50pm into a LISA- tied up to age 60 but worth it for the tax break.

For example we intend retiring in 2-3 years- we worked out our income need and then backwards to getting it, what we need to save and when various bits of money pay out. So roughly as it is a work in progress-

Retire me 58, Mrs CRV 55-

Pension DB (me) 18-20 k pa
Pension DC (Mrs) 4k pa
Pension SIPP (Mrs) 6-8k pa in draw down keeping her under TA

Total 28- 32k less tax I'll pay

At me age 67, Mrs CRV 64-

Pension DB (me) 18-20k pa
Pension SP (me) 8.5 k pa
Pension DC (Mrs) 4k, SIPP possibly exhausted.

Total 30.5 - 32.5k pa

At me age 70, Mrs CRV 67-

Pension DB (Me) 18-20k pa
Pension SP (Me) 8.5k pa
Pension DC (Mrs) 4k pa
Pension SP (Mrs) 8.5k pa

Total 39- 41k pa.

Look at what your joint needs are and how you can keep your tax bill down as a couple- If I die first (as is likely) Mrs CRV will have approx 10k DB Survivors Pension so she will be able to maintain being retired once we retire, all be it with some drop from our joint income.

Edit- we were late to the party so to speak and didn't look at this until I was in my 50s!