What number are you aiming for - solely DC pot

Anonymous101

MrJamez said:

Do you mind me asking how old you are? Trying to get a rough estimate whether I’m on the right path at 24 years old.

Try not to worry about the value too much at moment.
If you’re looking at pension boards at 24 years of age then you’re on the right path. 

crv1963

Anonymous101 said:

MrJamez said:

Do you mind me asking how old you are? Trying to get a rough estimate whether I’m on the right path at 24 years old.

Try not to worry about the value too much at moment.
If you’re looking at pension boards at 24 years of age then you’re on the right path. 

I would add MrJamez that at 24 planning retirement now is much less costly for you than leaving it to later in life, we're playing catch up with my wifes' pension planning. Having to plough around 80% of her earnings into her pension. She did start one in her 20s and then stopped contributions ( a long story). That pot has compounded over 30 years to just over 100k. Had she carried on contributing in her 30s and 40s, now she's in her 50s we'd likely be paying much less into her pension.

Anonymous101

I’ve shared this, or something like it, many times with younger posters. Again the investment amounts or growth rates aren’t the main information. I think it illustrates the key take away that compounding is incredibly powerful and by investing whilst you’re letting time do most of the hard work.

Gary1984

Aiming to fill the LTA assuming it doesn't change significantly beyond inflation increases. I would like to retire before 57 though so need to think about bridging from say 50. Some combination of ISAs, downsizing and VCTs I expect.

On the unfair DB multiplier, they should consider increasing it to X30 and LTA to £1.5m at the same time. DB people don't lose out and DC get more equitable treatment. 

house_help

Thinking about this myself recently as ramp up pension savings. I am currently 37 with value of just over £100K in 3 DC pots from current and past employers and my SIPP. However about £35K off that has come from contributions in last 12 months, big chunk of that is one off payments into SIPP to maximise child benefit charge reduction for this tax year.

I have also increased my work place % from 7% up to 21% (+employer 7%) so ongoing total about £20K annual going into the pot. HL suggests on this starting basis I would have a £955K pot by age 67. I would like to retire well before then (!), but would like a pot somewhere near that size. So plan would be to keep at least the current % and use part any pay rises to increases where possible. Employer contribution will go up to 9% in few month as I reach a service milestone so will be additional 2% from that.

I had a look at how much I have paid in since started working and it its gone from average £700 a year for first 5 years of work, up to  £2k year, then 3K for couple years, then £4K, £6K, £6K £8K, £12K in calendar 2019 to around £38K expected this calendar year. The earlier years were all only the minimum to get the employer 100% match part. Only 2016 did I increase my contribution to get all the employer available (they match 50% on some further contributions) and from September last year started adding some additional unmatched AVCs. Had been able to make the small increases as student loan dropped off, salary increases but offset by having 2 kids! More recent been able to add the AVC & some SIPP contributions as we are now in our long term (until kids leave at least) house, before that money was going to OP mortgage to enable us to move up ladder. Suppose in the scheme of things the option to downsize in future makes putting money into housing somewhat saving for old age. We have built up about £100K of equity over the 10 yrs from normal & over-payment to mortgage and actual house price increase on sale of first home.

I think advice to my earlier self would have been to at least make use of all the available employer contribution from the start, would have roughly had extra £11K (cost me more like £7k after tax relief and free employer part) put into pot and probably easily worth double that by now.

Mbeira

Think it makes more sense to say how much you want to live on at retirement.

I'll have an enhanced annuity from my pension. My pension was started when I left the RAF, and since the kids were born (for 20 years) has been paid for by the state, through the CTC system.  (UC does NOT do this).  There's not a huge amount in there, but should bring an annuity of around £6k at 75, and I plan to claim hopefully at 67 so a bit less than this but could be enhanced, as I have a bunch of symptoms that mount up to MS so even £9k.  

The state pension can be much enhanced if you hang on for another three years to 70.  Another £1k a year more or less.  Or longer for more.  Another £9k

I already have a tax free index linked pension which is useful but does not make me rich.  £10k and rising.

I will probably be on just under £30k claiming all three in retirement each year.  No mortgage.  Three kids to bring me wine when they visit.  So not bad at all.  And yes, someone said this is a boasting thread and I suppose it is.  

The biggest bugbear is that this is 20 years hence and I have to get three kids through UNI before then.  

Mistermeaner

Thinking about how much you want a year is great but dc pot only people don’t have that luxury - best rule of thumb is 3-4% of your pot as sustainable draw down income increasing each year with inflation 

BritishInvestor

Mistermeaner said:

Thinking about how much you want a year is great but dc pot only people don’t have that luxury - best rule of thumb is 3-4% of your pot as sustainable draw down income increasing each year with inflation 

I'd be wary about relying on this "rule of thumb"

garmeg

BritishInvestor said:

Mistermeaner said:

Thinking about how much you want a year is great but dc pot only people don’t have that luxury - best rule of thumb is 3-4% of your pot as sustainable draw down income increasing each year with inflation 

I'd be wary about relying on this "rule of thumb"

3% seems a reasonable rule of thumb. What else do DC pot holders have to go on? Annuity rates make them barely worthwhile, at least before 65.

BritishInvestor

garmeg said:

BritishInvestor said:

Mistermeaner said:

Thinking about how much you want a year is great but dc pot only people don’t have that luxury - best rule of thumb is 3-4% of your pot as sustainable draw down income increasing each year with inflation 

I'd be wary about relying on this "rule of thumb"

3% seems a reasonable rule of thumb. What else do DC pot holders have to go on? Annuity rates make them barely worthwhile, at least before 65.

Reasonable on what basis?