Scared/Anxious I'm not saving enough for my future.

SteveyJC

Hi All,
Im 39, homeowner, with relatively small mortgage left to pay.  My concern is that I won't have enough when I go to retire (hopefully 60ish).  Im on a reasonably good salary, with 20% being added to my pot (defined contribution) between myself and company. I also save a bit into a vanguard SIPP, ISA and top up my emergency fund a small amount (premium bonds) ever month. I also put some money into my daughters JISA.  I've ran the figures into the pension calculators and -should- be ok, but I feel like Im often anxious that Im not saving enough. 

When I look to my peers, I know they are living for the moment, and blowing the excess of what they receive each month. Maybe they have the right idea. 

Any ideas / tips?
Thank you, Stevey

JoeCrystal

20% is an extraordinary amount of contributions to put aside into the pension scheme, and you get tax relief on them. So who cares about your peers, you will have a final laugh since you are the one who planned to have a comfortable retirement. 
There is not much to say apart from keeping reviewing the pension and retirement provision once a year to see if you are on track.

AnotherJoe

 when you give no numbers and we don't know what you mean by "ok" it's difficult to comment but one rule of thumb is to put, as a % of salary, half your age Into your pension from the time you start and then you can stick with that.
eg, aged 20 when you start you can put 10% away for the rest of your working life.
Start aged 30, 15% away each year. 

Start aged 40, 20%. 

Since you already Started and are putting away 20% that puts you on a good footing.

Next step though is what is your pension being invested in. There are some dire pension default funds out there so you might do better, as a theoretical example, saving 10% into the right fund than 20% into a poor one.

so, next step is to understand what your money is being invested in and take control. 

Monevator is as good a place to start as any on the basics,  and ask here of course. 

cfw1994

JoeCrystal said:

20% is an extraordinary amount of contributions to put aside into the pension scheme, and you get tax relief on them. So who cares about your peers, you will have a final laugh since you are the one who planned to have a comfortable retirement. 
There is not much to say apart from keeping reviewing the pension and retirement provision once a year to see if you are on track.

I'd agree you are putting a decent amount away: bang on the MSE recommended 'rule of thumb' of half your age in % terms, plus you are managing other bits too.   
Certainly the ISA cash can build up and give you perhaps options to 'retire early'.   I would ask whether you have the ISA in S&S funds - cash ISAs fail to even keep up with inflation (& I know this having had some in a 5-year one - daft mistake really!)
Maybe do a bit of research into the funds your work pension and SIPP are actually invested in, to check they are performing "well enough".  With a 10year+ horizon you probably don't want to be too 'low risk' in your fund choices. 
As your daughter gets older, you may want to think about LISA funds for her, but you sound like you are doing all the right things - probably better than I was at 39, & who cares about peer groups - there are MANY people who have zero understanding of money and long term investments!

SteveyJC

Thanks for the replies.  I started late 20s, just with the basic company provision - at my lower level in the company it was 5&5, whereas now its 9%company, 11% me.  Between myself, company and my additional top up into a SIPP, it's probably £1400 a month into pensions (currently) - It obviously wasn't anything like that before.  

This may sound daft, but I'd love to retire around 60. (21 years to go).  My dad took early retirement at 60, and lived for a further 20 years.  I'm a strong believer in the fact that the stresses and strains on your body at the age and as you get older are what kills you. (personal opinion, don't shoot me down).  

I've been reading up as much as possible.  I love the JL Collins way of thinking, and have been listening to podcasts such as meaningful money.  When I was younger, I changed out of my default company pension and moved it to Invesco Propetual High Income which was doing well, but I now understand the charges will have set me back.   Probably more inclined now to move to a more Passive approach which have lower charges. 

Appreciate the time taken to reply to me. 

Thrugelmir

SteveyJC said:

 I'm a strong believer in the fact that the stresses and strains on your body at the age and as you get older are what kills you. (personal opinion, don't shoot me down).  

Compared to previous generations life today is cushy in so many ways. 

Dox

SteveyJC said:

This may sound daft, but I'd love to retire around 60. (21 years to go).  My dad took early retirement at 60, and lived for a further 20 years.  I'm a strong believer in the fact that the stresses and strains on your body at the age and as you get older are what kills you. (personal opinion, don't shoot me down).  

Why is that daft? If it's what you want and you are ensuring your retirement will be comfortably funded, go with it!

AnotherJoe

SteveyJC said:

Thanks for the replies.  I started late 20s, just with the basic company provision - at my lower level in the company it was 5&5, whereas now its 9%company, 11% me.  Between myself, company and my additional top up into a SIPP, it's probably £1400 a month into pensions (currently) - It obviously wasn't anything like that before.  

This may sound daft, but I'd love to retire around 60. (21 years to go).  My dad took early retirement at 60, and lived for a further 20 years.  I'm a strong believer in the fact that the stresses and strains on your body at the age and as you get older are what kills you. (personal opinion, don't shoot me down).  

I've been reading up as much as possible.  I love the JL Collins way of thinking, and have been listening to podcasts such as meaningful money.  When I was younger, I changed out of my default company pension and moved it to Invesco Propetual High Income which was doing well, but I now understand the charges will have set me back.   Probably more inclined now to move to a more Passive approach which have lower charges. 

Appreciate the time taken to reply to me. 

A high income fund will be performing very poorly compared to many including global equity index funds simply because they aren't aimed at growing they are aimed at providing income for people who Need the income. You don't. You need growth.  It's likely the default will have done better 

Frankly it's a terrible choice for someone with 20 + years of investing ahead of them. Shocking. But you have time to rectify that. 

SteveyJC

EEEk. Not a good move by myself.  They were accumulating units and I started in the the Woodford days.  
Looking to the future, my pension is with Standard Life, so had thought of the following two Global Equities - Any thoughts? 

SL BlackRock ACS World ex UK Equity Tracker Pension Fund

SL Vanguard FTSE Developed World ex UK Pension Fund

I know these are very similar, so might be better picking one over the other...

AnotherJoe

Pick the one with the lowest management charges. 
And as a suggestion add SL ASI global smaller companies (not the exact name but that should be close enough to find it) to complement it. 

LHW99

One thing to consider is - what are you living on now, if you deduct your mortgage, associated life insurance, work costs (clothes, commuting etc)? Check you state pension, and deduct that, and what is left gives a guide to how much income you would want at SPA. If that looks good, then the next thing would be, how could you generate that for the gap from 60 to SPA (savings, higher drawdown initially from your SIPP....).

That would give a handle on what you might need to do to achieve what you want. You'd need to be a bit flexible - maybe work to 61 rather than 60, if things didn't go as well as expected - if they went better maybe go at 59.

Also, don't forget to plan as a couple if possible - that means 2 x personal allowances where no tax is paid, rather than one. If your partner doesn't work, you can still put £2880 into a SIPP on their behalf each year, and it gets topped up by HMRC.