How much money is good to have at age 30?

HarryGray

Hi all,
My question is basically where do I stand at age 30? I am hoping to retire fairly early (50s) and I work in Finance earning a decent amount of money but nothing too special by any means.
I have £95,000 across my pension/Lifetime ISA and £115,000 in my Stocks and Shares ISA. My S&S ISA will be used to by a home one day so this will soon be tied up and not used towards my 'financial freedom'. 
I'm not sure if this is a decent position to be in at age 30 as I don't talk to many people about personal finances. I feel like all I do is save and invest at the moment which is becoming tiring, so I'm hoping for some inspiration! 

eskbanker

This is one of those 'how long is a piece of string' questions, but if more than half of your assets are earmarked for your first property and most of the rest are tied up in a pension then your liquid assets aren't remarkable, albeit your overall situation is comfortable compared with many.  Not sure what your role in finance is, but worth spending some time coming up with a plan that forecasts earnings, growth, expenditure, aspirations for retirement lifestyle, etc, to see where you are, regardless of what others are doing....

dunstonh

How much money is good to have at age 30?

£787,352.96p

There is no answer as it depends on your circumstances.  Some will have little or nothing at 30. Others will have a lot.  It is what is right for you that matters.

I feel like all I do is save and invest at the moment which is becoming tiring

They are boring subjects.  It's not meant to be a source of fun.    There are better things in life to get your enjoyment from.

MaxiRobriguez

HarryGray said:

Hi all,
My question is basically where do I stand at age 30? I am hoping to retire fairly early (50s) and I work in Finance earning a decent amount of money but nothing too special by any means.
I have £95,000 across my pension/Lifetime ISA and £115,000 in my Stocks and Shares ISA. My S&S ISA will be used to by a home one day so this will soon be tied up and not used towards my 'financial freedom'. 
I'm not sure if this is a decent position to be in at age 30 as I don't talk to many people about personal finances. I feel like all I do is save and invest at the moment which is becoming tiring, so I'm hoping for some inspiration! 

There's a fair amount of articles on this sort of subject, and most suggest a 30 y/o should have 1x salary "saved" (aka, net assets) by the time they are 30. But that is only appropriate for someone who will work until normal retirement age, if you want to go early, you need to be ahead of that curve.

£95k in your pension I'd suggest is pretty healthy at 30. If you did nothing further with it and just left it invested, you'd probably be looking at a pot of £500k by the time you come to access it. For comparison I am three years your senior and have £80k in my pot.

£115k in a S+S ISA is also pretty healthy. When it comes to buying a house, if the interest rate environment is anything like it is currently then working in finance you'll probably prefer to extend the mortgage as much as you can and leave as much in the S+S ISA as you can. Push the mortgage into retirement if you want too as your pot is going to be sizable.

I think you're doing OK. Pension pot will be fine, your challenge will be bridging the gap between retirement and pension access (which will likely be 60+ by the time you get there). 

Albermarle

It looks pretty healthy .
I am always surprised though when relatively young people are already thinking about when they retire . At that age I had other things on my mind !

Sailtheworld

Multiply your annual spending by 25 - that's how much you need invested to be able to provide an income for life. If you're looking at retiring as young as your early fifties you might need more.

Currently you've got £95k in the financial freedom fund so assuming 4% is a safe withdrawal rate you could currently fund £3,800 of annual spending.

MaxiRobriguez

Sailtheworld said:

Multiply your annual spending by 25 - that's how much you need invested to be able to provide an income for life. If you're looking at retiring as young as your early fifties you might need more.

Currently you've got £95k in the financial freedom fund so assuming 4% is a safe withdrawal rate you could currently fund £3,800 of annual spending.

Too many FIRE folk are going to get burned by this. It's all based on equity markets predictably gaining 6-7% every year.

The concept is fine, but the targets need to be more conservative. x30-35 / 2-3% withdrawal.

bowlhead99

Sailtheworld said:

Currently you've got £95k in the financial freedom fund so assuming 4% is a safe withdrawal rate you could currently fund £3,800 of annual spending.

If 4% on top of inflation is an achievable investment return over the long term, the £3800 of spending would more than quadruple to £16k over the next 37 years, and when added to state pension entitlement would see you bringing in about £25k in today's terms (depending of course how the investments run and what the government does with state pension entitlements.

Of course, if you retired 15 years earlier than that, the theoretical £16k from the pension pot would only be £9k and the 4% withdrawal rate could be precarious if it might need to last half a century instead of a more traditional 20-30 years or so. I do agree with Maxi above that it would be better to be more cautious if you are looking to get off the pot early and have perhaps a half century of sequence-of-returns risk.

But if you earn a decent amount of money, the fact that your current pension won't provide for your entire early retirement is not a major issue. You will have 20+ years to make further pension contributions and if you are able to do some of them at higher rate tax relief, the combination of that (making them relatively affordable) and a decent salary in finance should see you right.

I think a lot of people would be happy if their pension was 30k by 30 if they were going to carry on working for 35 more years; so if you are already close to 100k of retirement investments that age you are definitely doing the right sort of thing to be able to quit the rat race a decade earlier.  And a majority of 30 year olds don't have £100k of home equity so again that's on the right track.

Sailtheworld

MaxiRobriguez said:

Sailtheworld said:

Multiply your annual spending by 25 - that's how much you need invested to be able to provide an income for life. If you're looking at retiring as young as your early fifties you might need more.

Currently you've got £95k in the financial freedom fund so assuming 4% is a safe withdrawal rate you could currently fund £3,800 of annual spending.

Too many FIRE folk are going to get burned by this. It's all based on equity markets predictably gaining 6-7% every year.

The concept is fine, but the targets need to be more conservative. x30-35 / 2-3% withdrawal.

I really don't think people are daft enough to set out on a decades long journey without an expectation of certain adjustments having to be made to account for life events (both good and bad). Maybe they decide they should be more conservative and retire at 52 instead of 50 - that's not being burned - it's just not being wadded as they thought they might be.

Someone at 30 could set up a retirement spreadsheet which runs for 40 years into the future. That's 40 years of uncertainty but every year it gets updated and there's now only 39 years of uncertainty and so on. Plenty of time to worry about whether 3% or 4% is a safe withdrawal rate and plenty of time to adjust accordingly.

Black_Cat2

dunstonh said:

How much money is good to have at age 30?

£787,352.96p

Lol, gonna make a note of that... 😹

rachlikeswinter

My god this thread worries the hell out of me.

I'm 33, only have about £8k in my pension(s), and around £35k in cash savings which is shortly going to be spent on a deposit for a (shared ownership) flat. That's it. Mildly concerned I'll be destitute (or still working) at 70 now