Long term saving strategy

ColdIron

PledgeX2 said:

I'd be so disappointed if I made it to retirement age with a massive pension pot, but I had a dodgy hip and sore back which meant I couldn't really travel and do these things I wanted to.

How disappointed would you feel if you made it to retirement age with a dodgy hip and sore back which meant you couldn't really travel and do these things you wanted to with a tiny pension pot ?

Hopingforthesimplelife

We are in a remarkably similar position across almost all socials, ages, kids and financials, just slightly higher savings and pension etc (I say that not as competition but for context).

Our strategy is to do a bit of everything. We do a small overpayment into mortgage (also on 1.49%), save into S&S (currently have about 2 years cash out goings saved so any extra goes into S&S, not cash). 

My wife is a teacher so has DB pension and I contribute 10%/5% company, I have upped this recently. 

Pension would likely be the best purely financial use of any spare cash, but like you we value the flexibility the above approach brings. 

msallen

PledgeX2 said:

Agreed, but when you get to that age, can you really enjoy the money? I'd be so disappointed if I made it to retirement age with a massive pension pot, but I had a dodgy hip and sore back which meant I couldn't really travel and do these things I wanted to.

Don't assume that the things you will want to do at 70 are what you currently imagine they will be 30-40 years in advance.

It seems to me that you know deep down that you should be increasing your pension contributions but are looking for someone to tell you it doesn't matter.

ruperts

Worth remembering that any money kept in a S&S ISA would count against you if you wanted to claim Universal Credit. So if you were to lose your jobs you might find yourself drawing from your ISA while peers who put that money into pensions, their house or even just blew it on holidays would be getting government support.

Bravepants

ruperts said:

Worth remembering that any money kept in a S&S ISA would count against you if you wanted to claim Universal Credit. So if you were to lose your jobs you might find yourself drawing from your ISA while peers who put that money into pensions, their house or even just blew it on holidays would be getting government support.

This is what cash Emergency Funds are for.

However, some benefits are means-tested while others aren't.

For example, Job Seeker's Allowance is not means-tested if you have paid enough NI over the last few years.

patchyX2

ColdIron said:

PledgeX2 said:

I'd be so disappointed if I made it to retirement age with a massive pension pot, but I had a dodgy hip and sore back which meant I couldn't really travel and do these things I wanted to.

How disappointed would you feel if you made it to retirement age with a dodgy hip and sore back which meant you couldn't really travel and do these things you wanted to with a tiny pension pot ?

Not too disappointed if I spent the previous 10-20 years galavanting and having a good time which resulted in the dodgy hip bad back (and tiny pension pot)   I take your point though

patchyX2

msallen said:

PledgeX2 said:

Agreed, but when you get to that age, can you really enjoy the money? I'd be so disappointed if I made it to retirement age with a massive pension pot, but I had a dodgy hip and sore back which meant I couldn't really travel and do these things I wanted to.

Don't assume that the things you will want to do at 70 are what you currently imagine they will be 30-40 years in advance.

It seems to me that you know deep down that you should be increasing your pension contributions but are looking for someone to tell you it doesn't matter.

Absolutely not. I'd have no problem stopping payments into my S+S ISA today and move all my contributions into my pension instead if I thought it was the right thing to, but I don't.

I think most people would agree it's important to strike a balance between short/medium/long term saving, and I'm just trying to work out what the right balance is for me.

Thrugelmir

Investments do not grow on a linear basis. If you need money for a specific objective either save e.g replace the car or pay down debt e.g the mortgage. When market corrections occur somebody always gets their fingers burnt. 

Zorillo

I'm late 30s with three kids and made a decision in my early 30s to significantly increase my pension contributions and then also start a LISA and as a result my 'combined retirement fund' is around £130k and the LISA money is accessible if I absolutely need it in the meantime.

We also overpay the mortgage slightly as I don't have the luxury of long term job security.

I am a basic rate tax payer and sacrifice 13% of my salary, employer contributes 6% and LISA is funded as and when money is available.

I plan to increase my contribution by 1% of salary every year until I retire, whilst I can afford to do so.

And I worry I'm not doing enough

Eco_Miser

PledgeX2 said:

MaxiRobriguez said:

Don't ignore pension because the access age may change. Even if they are pushed back to 70, or 75 - that's still at least 10 and maybe a much as 25 years worth of time which you can draw from that pot.

Agreed, but when you get to that age, can you really enjoy the money? I'd be so disappointed if I made it to retirement age with a massive pension pot, but I had a dodgy hip and sore back which meant I couldn't really travel and do these things I wanted to.

I was still climbing (small) mountains at 69, and would have been at 70 if a certain virus hadn't got in the way. The hips are fine, the back was dodgy at 30. I was enjoying retirement from age 59, though I didn't get any pension until 65, and didn't claim State Pension until 66 and a bit, thanks to a nice S&S ISA.

How disappointed would you be if you never made it to retirement age?