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[Deleted User]

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Marcon

[DELETED USER] said:

I am 41 and have around 10k in a private pension. How much do I need to be saving each month to have a decent standard of living in retirement?

I realise it's hard to say exactly, but ballpark... For example what kind of income is likely to be reasonable in 2048 when I retire?

I don't own a house but an trying to get one.

Are you earning minimum wage or a bumper six-figure salary? How can anyone guess what you would regard as a decent standard of living without knowing what you earn now? There does tend to be a bit of a link...

IvanOpinion

A very rule of thumb amount is take a percentage that is half your age when you start saving.  So given you only have £10K I would be suggesting about 20% of your current pay.

Croeso69

IvanOpinion said:

A very rule of thumb amount is take a percentage that is half your age when you start saving.  So given you only have £10K I would be suggesting about 20% of your current pay.

And if you want to retire 5 years before state pension age - possibly double that.

bownyboy

How much do you NEED to live on and how much would you LIKE to live on each year?
Once you have those two figures (try looking back over the last few years of living expenses) then you have something to work with. 

[Deleted User]

How would I go about assessing how much I need to live on?

It seems that pension products like annuities are getting worse over time. Property just keeps getting more expensive. Some pension calculators suggest I'd want an income for £30k/year but will that be any good with inflation by 2048?

I am in the top tax bracket earnings wise. Wife doesn't work. Trying to buy a house but it's not easy, so might be renting into retirement. At the moment everything has to go into saving for a deposit if I want to own property, and the mortgage will be quite expensive.

IvanOpinion, thanks, 20% has been suggested by others. 20% of before-tax income, which would be like paying a second mortgage. Retiring early would be nice but seems like an unattainable dream.

kuratowski

[DELETED USER] said:

How would I go about assessing how much I need to live on?

Start from what you spend now (you will really benefit, in so many ways, from doing a detailed budget and tracking your spending) and strip off any expenses that don't apply in retirement - e.g. commuting costs, clothes for work, and hopefully the mortgage has been and gone by the time you retire as well.

Yes, it can seem daunting.  On the positive side, you have thought to ask the question at age 41 not 61, so you still have a lot of time to build up your pot.  Maybe going from nothing to 20% is too much of a leap; you could start with a smaller more affordable amount and then gradually ramp it up (e.g. if you get a pay rise make sure to allocate some).

JohnWinder

I haven't used this one, but it might give you some assistance: The Variable Savings Rate spreadsheet.

https://www.bogleheads.org/forum/viewtopic.php?t=264059

[Deleted User]

Is the poor economy likely to have any effect? They are saying 4% loss due to brexit and we will have the pandemic on top, doubtless higher taxes. How does a poor economy effect saving for a pension, or doesn't it?

bownyboy

[DELETED USER] said:

How would I go about assessing how much I need to live on?

I created a simple google sheet with categories such as home, utilities, Food & Dining, Entertainment, Car, Holidays, Health, Clothing, Gifts. 
Then I spent time going back through bank accounts to see what our average spend was in each category. 
If you use something like Money Dashboard or Moneyhub it can help with some automation of categories, but the first time you do it, it will take some time. 
You can then gradually tweak it over time and also start to think about essentials vs nice to haves which will give you a range.

Albermarle

[DELETED USER] said:

Is the poor economy likely to have any effect? They are saying 4% loss due to brexit and we will have the pandemic on top, doubtless higher taxes. How does a poor economy effect saving for a pension, or doesn't it?

Saving for a pension is a long term project , so current situation is not that relevant . One thing is absolutely certain though, if you do not increase your contributions then you will have a poor pension.
As you are a higher rate taxpayer , the tax relief with a pension is very generous . So generous that one day it will get stopped .
If 20% before tax is too high for you , then how about 20% after tax . With the tax relief this will effectively only cost you 12 % pre tax .
One caveat is that you need to pay enough higher rate tax to claim it back. Earning say £51K , means you can only claim tax relief on £1K