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

SteveyJC

MaxiRobriguez said:

Personal opinion is that perhaps you could contribute more? You're putting 9% in but your mortgage is nearly paid off, so what are you spending the other 91% on?

If you could find a way to eek in 5-10% more, it'd go a long way to your goals, you might even realise them further.

Thanks @MaxiRobriguez  In total I'm saving (in some format) around 45% of my salary.  This goes into overpaying the mortgage, topping up emergency fund, SIPP, ISA, and then adding a small amount to my daughters JISA.   I know common thinking is not to overpay mortgage and to invest, but I think I would sleep easier knowing it is paid off!

SteveyJC

Mickey666 said:

Albermarle said:

There are many posters on this forum who have ambitions to retire at 50, or latest 55. Some/most underestimate how much money they will need, and that retiring at 50 is really only for people who are pretty wealthy or prepared to live a frugal life .
Some would say it is not even natural to retire at 50 .
60 is a much more realistic goal for most but still impossible for many .

. . . And some would say it’s not even natural to work all your life instead of enjoying it.

Most people lock into their own particular rut when they get their first job but they rarely consider the implications.  I’d say that career choice is the most important financial decision that most people ever make, yet so often they just drift into something without really understanding the implications.

Thanks, I can see that. Ive always been very career driven, and if anything Im now in a job that has a nice salary and benefits, and would put me off moving elsewhere even though I'd probably be happier somewhere else.   

crv1963

SteveyJC said:

MaxiRobriguez said:

Personal opinion is that perhaps you could contribute more? You're putting 9% in but your mortgage is nearly paid off, so what are you spending the other 91% on?

If you could find a way to eek in 5-10% more, it'd go a long way to your goals, you might even realise them further.

Thanks @MaxiRobriguez  In total I'm saving (in some format) around 45% of my salary.  This goes into overpaying the mortgage, topping up emergency fund, SIPP, ISA, and then adding a small amount to my daughters JISA.   I know common thinking is not to overpay mortgage and to invest, but I think I would sleep easier knowing it is paid off!

Doing a little (or a lot at 45% salary) of everything is to me a balanced approach. There are pros and cons to overpaying the mortgage but the peace of mind knowing you own your home outright is also valuable. A couple of thoughts- do you know what your target retirement income is? In todays money. Try reading a few of the threads especially "What's Your Number". I also think that you need an aim- what are you retiring to? What will motivate you to get up out of bed once you're not on the work treadmill?  What is your wife planning, a balanced approach for retirement may be more tax efficient. Finally, how likely are you to go from saver to spender? 30 years accumulating wealth to then start spending it, will your daughter simply gain a great inheritance?

Albermarle

and also you could argue if whether or not the state pension will even be about in 20 years time!

You can argue about it but it will still be around . It would be political suicide to get rid of it , so it will not happen.

ZeroSum

Albermarle said:

and also you could argue if whether or not the state pension will even be about in 20 years time!

You can argue about it but it will still be around . It would be political suicide to get rid of it , so it will not happen.

Some suggest it may become means tested. But think that would be counterproductive as people just would just then stop making their own provision if they'll lose out.

However at some point it may go upto 70

Anonymous101

ZeroSum said:

Albermarle said:

and also you could argue if whether or not the state pension will even be about in 20 years time!

You can argue about it but it will still be around . It would be political suicide to get rid of it , so it will not happen.

Some suggest it may become means tested. But think that would be counterproductive as people just would just then stop making their own provision if they'll lose out.

However at some point it may go upto 70

I think its inevitable that it'll be increased again.
I'm same age as you OP and I'm hoping to be FI before I'm 50 if possible. Although my numbers don't rely on the state pension an important consideration is that the access to pensions age my also increase along with state pension. There's currently a tie-in of -10 years to state pension there so you need to factor in that you may not be able to access your pension until you are 60+ depending on where you think state pension age is going.

kev2009

I often wonder the same, i'm slightly older than the OP, total contributions between myself and company are 18% so not too far off the OP's 20% but unfortunately my contribution is no where near the ops £1400 per month, however I am single, only 1 income and no dependants so i'm hoping this level of contribution will be sufficient.  I do worry if this will be sufficient for to retire on, i'm home owner also, have approx 20 years left n mortgage (if it runs the full course) but i'm hoping to get it paid off within next 10 years I've started to make yearly OP to reduce it and clear it.  I'm hoping when i clear mortgage to then start to increase contributions a bit but I'm also aware than when i get to 55, company will move my pension into a lower risk/cash type investment as i'm down to retire at 65 (this was the age when i started working) as opposed to my official state pension age which is currently 67 but due to move to 68 i believe.
State pension for me is on target for the full SP providing I continue making contributions each year.  My online portal via company has a Model which predicts what my fund would be worth when i get to 65 based on various factors like x% increase each year, fund making x% etc so its ok for a general looks but no one knows what they will be.  Based on default settings, it predicts a 10k a year income with SP on top so seems bit low to me but realise its a fair bit away to be anywhere near accurate etc.

Albermarle

but I'm also aware than when i get to 55, company will move my pension into a lower risk/cash type investment as i'm down to retire at 65

Almost certainly you can change this if you want . Your company will not normally dictate how your pension is invested. This will be a default position for people who have not actively chosen any alternative investment(s) 

Historically most DC pensions were converted to an annuity at retirement . In this case it made sense to slowly derisk down to almost all cash in the years before retirement, to avoid any nasty last minute market drops.

Nowadays most DC pensions are taken as drawdown which normally means most of it is left invested during retirement. So too much derisking can meant significantly reduced returns .

kev2009

Thanks, I my pension is a DC pension, it was originally a money purchase scheme but they moved it over to a different provider and into the DC scheme.  It still has my retirement age as 65 and I believe is geared towards buying a Annuity at the end, but does have the option of doing draw down if choose to but personally i'm more in favour of a Annuity so that I know my income is basically fixed for life with a % increase each year as opposed to being invested and if like a few months back, the markets took a knock and some still are suffering and my pension suddenly looses a substantial amount of money, i don't want to be in the position of how am i going to pay my bills etc.
Kev

kangoora

kev2009 said:

I often wonder the same, i'm slightly older than the OP, total contributions between myself and company are 18% so not too far off the OP's 20% but unfortunately my contribution is no where near the ops £1400 per month, however I am single, only 1 income and no dependants so i'm hoping this level of contribution will be sufficient.  I do worry if this will be sufficient for to retire on, i'm home owner also, have approx 20 years left n mortgage (if it runs the full course) but i'm hoping to get it paid off within next 10 years I've started to make yearly OP to reduce it and clear it.  I'm hoping when i clear mortgage to then start to increase contributions a bit but I'm also aware than when i get to 55, company will move my pension into a lower risk/cash type investment as i'm down to retire at 65 (this was the age when i started working) as opposed to my official state pension age which is currently 67 but due to move to 68 i believe.
State pension for me is on target for the full SP providing I continue making contributions each year.  My online portal via company has a Model which predicts what my fund would be worth when i get to 65 based on various factors like x% increase each year, fund making x% etc so its ok for a general looks but no one knows what they will be.  Based on default settings, it predicts a 10k a year income with SP on top so seems bit low to me but realise its a fair bit away to be anywhere near accurate etc.

Typically it's the %age that's important, moreso than the actual amount. The person you are comparing your amount to is likely to be earning in excess of £120k/year even allowing for a decent employer match (if 20% = £1,400 monthly). They are probably going to want an income in retirement of £75k+. I'm assuming you don't want quite that much
If you've been paying in 18% for a while, continue to pay that in and finish your mortgage you should, hopefully, have built up a decent enough pot that you can have a comfortable retirement - based upon YOUR salary. What you could do is work it backwards, find out your NUMBER (see The Number thread), project forwards your pension payments through a compund interest calculator and see if 3-4% of that capital amount is enough, with state pension, to align with your number.