How much do we need to save for retirement?

couriervanman

MallyGirl wrote: »

pensions don't earn interest - they are generally invested. Growth might be 2.5% above inflation, but might not.

Depends if you have a pension pot or if you've saved ie other means property/shares etc

Plus as mentioned above 18k state pension at 65 if both have full contributions

enthusiasticsaver

How much to save depends on a few things.

How old are you and when do you want to retire? If you want to retire before your state pension pays out you need some savings to plug the gap.

Some people draw on their pension early, some use a SIPP or stocks and shares ISA. We took our DB pensions at 58(we had been overpaying into them) and are living off those and our tax free lump sums plus savings/investments until our monthly income is supplemented by other DB pensions and state pension.

What is your expected level of income needed for a comfortable retirement. I broke our expenses down into essential and nice to have.

What pension provision do you have at the moment? Educate yourself about these.

jonnygee2

I have no idea where to even start with pension planning. I'd love to be able to retire at 60ish but I don't think that's realistic for us!

Can anyone point me in the right direction please?

There might be 100 different calculations / projections you can make but most likely they will all end up with the same advice.

If you are employed you should save as much as you can through your company pension scheme.

1) Check what kind of pension scheme you have with your employer (or that your employer offers)
2) Start increasing contributions to the highest level you can be comfortable with

There are some more basic articles here https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement and I like this calculator which will give you a rough idea of your returns https://www.which.co.uk/money/pensions-and-retirement/pensions-retirement-calculators/pension-calculator-how-much-will-i-have-a52fk9x19gdz . Bear in mind it's all guesswork, you cannot actually predict investment growth rates, ultimately more is better than less.

jonnygee2

Bravepants wrote: »

Time to deploy my ever evolving set of beginner bullet points based upon my own experience and non-expert findings (comments/adjustments always welcome)...

Start with bullet point number 1 and then choose other bullets as appropriate, or consider them in order:



[*]Pay off any non-mortgage debt first, then

Pay off mortgage debt before putting money into a pension? This is terrible advice.

The OP didn't ask about emergency savings funds either. And they clearly have no need to start reading books about investment vehicles or investing directly in different asset classes. I think instead of copying and pasting a load of stuff it would be better just to answer the OP's situation directly.

couriervanman

What would be a good if there was a calculator for working out returns on say 300K cash at £12k a year (assuming 2 full state pensions £18k) increasing with inflation,and also adding back in 2.5% interest.I can work it out myself but it obviously takes a bit longer

Andrew31

I have one of these calculators!!:rotfl:

Stargunner

At 60, you probably need to factor in 35-40 years worth of living, and for that you would probably want a DC pot of £400k minimum if you were wanting £20k a year, considering you won't get state pension for at least 8 years after retirement.


Why does everyone need to budget to live to a 100, as only 5 % of the population live beyond 90, so the chances of both partners in a couple even living to 90 are almost non existent.
Also, as you get a lot older and your health starts to deteriorate your lifestyle changes which reduces your expenditure. You may no longer be able to go on holidays or you may have to give up your bowls or golf club membership, maybe even have to give up driving. Even when it comes to eating, older peoples appetites are much smaller so they don't spend much money on food.

Southend1

jonnygee2 wrote: »

Pay off mortgage debt before putting money into a pension? This is terrible advice.

The OP didn't ask about emergency savings funds either. And they clearly have no need to start reading books about investment vehicles or investing directly in different asset classes. I think instead of copying and pasting a load of stuff it would be better just to answer the OP's situation directly.

It says NON-MORTGAGE debt!!!

JoeCrystal

couriervanman wrote: »

What would be a good if there was a calculator for working out returns on say 300K cash at £12k a year (assuming 2 full state pensions £18k) increasing with inflation,and also adding back in 2.5% interest.I can work it out myself but it obviously takes a bit longer

Is that what Excel or OpenOffice Calc for? The joy of using the spreadsheets!

eskbanker

Stargunner wrote: »

Why does everyone need to budget to live to a 100, as only 5 % of the population live beyond 90, so the chances of both partners in a couple even living to 90 are almost non existent.

Perhaps you should advise the Office for National Statistics of the source of your assertions, as theirs are radically different? According to those more reliable figures, those who are now 60 have at least a 1 in 3 chance of reaching 90 and your 5% figure is closer to the chance of getting to 100, and for those who are younger than 60 now, their chances are even higher....

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/pastandprojecteddatafromtheperiodandcohortlifetables/1981to2068