£300k Pension - Where and What

flap10

I’m 49, currently have £180k in my pension pot.

Paying in roughly £10-15k per year, hope to retire at 55.

Hoping to get to 300k, what sort of return could I expect, on that?

I’ve read 5% but that seems quite poor.

What in and where do people typically invest to get the best return, would like £30k per year.

Cheers,

lisyloo

I use 4% for drawdown so £300k gives you £12k per annum.
Do you have any reason to believe your longevity is impaired?
For £30k I’d be looking at a pot of £750k.

This is not the investment return but the amount I’d expect to be able to drawdown without running out of money if I live a long time.

Investment returns I use 7% and have a diversified portfolio of assets.

Personally I think you’re short by quite a lot.

Bear in mind you’ll get a state pension at 65,66 or 67.
Do you know your state pension age and what you’ll get.
It’s quite easy to do a forecast.
Obviously you won’t have that in the early years.

dunstonh

I’ve read 5% but that seems quite poor.

Why do you think 5% is poor?

What level of investment risk are you taking?

What in and where do people typically invest to get the best return, would like £30k per year.

There is no such thing as typical.

There are over 30,000 investment options on a SIPP. If you include insured funds you are getting over 50,000 options.

There are different investment strategies. Each with its pros and cons. There are different risk levels.

You wont get the best return as that would probably mean taking too much risk and being far too volatile. Not something you want when you are talking about your lifetime income.

Stubod

I don't think £30k per year from £300k is possible....wish it was. I think you would need to be well north of £750k to get even close to that annual income...(NB Most annuities are quoting an income / return of about 2% if you want spouse benefits and inflation linking)...

flap10

Another year contribution to state pension and its full.

Sadly that means one for another 17 years to pay for no extra return 🙄

Can’t believe I’m almost 50% short for what I was hoping for 🤬

lisyloo

flap10 wrote: »

Another year contribution to state pension and its full.

Sadly that means one for another 17 years to pay for no extra return 🙄

Can’t believe I’m almost 50% short for what I was hoping for 🤬

£12k is not 50% of £30k
It’s 40%

The 17 years extra is no additional return for you personally.
It will pay (for example) for non-earning engaged in child care who brought up the youngsters who’ll be paying your pension.

MarkCarnage

Paying in the middle amount in that range implies £12.5k a year making £75k in total over 6 years, taking you to just over £250k. To have 300k at the end of that 6 years only requires an annualised return of about 2.75%.

Therefore in that context, I'm not sure why you think 5% is poor. I happen to think that an annualised return net of fees and costs of 5% is likely to be realistic, even possibly optimistic over the next 5 years, and that's for equities. I think you can expect a fair bit less for bonds unless you want to take a fair bit more risk on.

You say you would like £30k a year which is 10%. I think that is extremely optimistic to put it mildly.

Albermarle

Can’t believe I’m almost 50% short for what I was hoping for

Don't want to depress you but even reaching the £300K in 6 years with an annual contribution of £12 kpa is not a given either . A prolonged dip/flat spot in the stock markets during that period is always a possibility.
Basically if you want to retire at 55 with £30K ( which is relatively quite a large amount ) then you need a very well paid job , or spent the last 30 years scrimping and saving or have a nice final salary scheme.

Sea_Shell

Numbers aside, don't let this discourage you into putting as much as you feel you can afford into your pension!!! Every little helps! Even if it's not quite what you'd hoped to hear.

As my sig says..."that pound I saved yesterday, is a pound I don't have to earn tomorrow".

Thrugelmir

flap10 wrote: »

Can’t believe I’m almost 50% short for what I was hoping for 🤬

No such thing as a free lunch. Perhaps rethink your plans.

Keith_Clunk

A general rule of thumb is £1,000 saved for every £1 per week you think you will need.