I think I am doing okay aged 47

TimSynths

Just had a look at my pension savings. 

I'm 47 and my total pot value is £196k. I save in total £538pm, 6% from me and my employer adds 15% (21% total).

I am in three schemes.

Vanguard 100 LifeStrategy® 100% Equity Fund - Accumulation (£31.5k)

Legal and General-
L&G PMC Consensus Index 3 (£41k)
L&G PMC Multi-Asset 3 (£32k)
total £73k
This was originally an employee DB scheme worth £33k and about 5/6 years ago they offered me an additional £10k to transfer out- glad I did as they have since folded (Arcadia) and I had financial advice paid for by them.

and my current employer scheme- which is the only one I pay into, is invested across-
Mixed investment fund (£30k)
Japan Equity Fund (32k)
Emerging Markets Equity Fund (£29K)
North America Equity Fund (just £213)
total £92k

Pension growth over the last 12 months was 17.2% (excluding my contributions)

I have 7 years (no other debt) left on the mortgage @ approx £550 pm fixed for 4 more years. I add £100pm to a Vanguard S&S ISA as am mortgage "over payment" but only started a few months ago so its only £1k at the moment but its is growing by far more than the 2% interest on the mortgage. The plan is to get to a point where I am mortgage neutral then it will be my choice to clear it or stay invested.

I've got about £12k in company share schemes and finally £9k in Crypto.

My overall plan was to go into drawdown and im hoping to have enough saved to stop working before state pension age- which last time I checked would be £168 pw for me @ 67. I live on my own with no dependents, am I on the right track? I think I am?

2nd_time_buyer

Two big questions:

1) When do you want to retire? and
2) How much do you want to retire on?

 

QrizB

TimSynths said:

Just had a look at my pension savings.
I'm 47 and my total pot value is £196k. I save in total £538pm, 6% from me and my employer adds 15% (21% total).

I think you're doing OK too. Your currently grossing ~£2500/month, 30k pa, your pot is worth 6.5 years salary, and you're adding another year's salary every five years.

As 2TB asks, what's your target income and at what age?

Albermarle

Vanguard LS100 is a fund , not a scheme . Just for completeness, who is the pension provider ?

My first thought is it looked a bit like my situation a few years ago . Three pensions , all invested differently , with not a lot of logic probably involved ( possibly not that much better 20 years later ). LS 100 is 100% equity . The L&G funds are medium risk multi asset funds and the current one seems to be 90% equity and somewhat imbalanced geographically.

Also you do not mention any cash savings ?

In general though looks OK . Your employer is pretty generous contributing 15% and if you ever move jobs it is unlikely a new employer would add the same .

TimSynths

2nd_time_buyer said:

Two big questions:

1) When do you want to retire? and
2) How much do you want to retire on?

 

I enjoy my job and I work from home so I am not counting down the days, however I fully understand that no one ever on their death bed said "I wish I'd spent more time at work".

My only target realistically is to get the mortgage paid off, over the last 18 months with everything that has gone on this has become a goal. Once done it will free up some think space in my brain and I think I can then stat to think about what is next.

I can could live quite happily on £1500pm.

One mad cap dream is to move/spend a lot of time in Turkey where I have some friends and cost of living is even cheaper there.

TimSynths

Albermarle said:

Vanguard LS100 is a fund , not a scheme . Just for completeness, who is the pension provider ?

My first thought is it looked a bit like my situation a few years ago . Three pensions , all invested differently , with not a lot of logic probably involved ( possibly not that much better 20 years later ). LS 100 is 100% equity . The L&G funds are medium risk multi asset funds and the current one seems to be 90% equity and somewhat imbalanced geographically.

Also you do not mention any cash savings ?

In general though looks OK . Your employer is pretty generous contributing 15% and if you ever move jobs it is unlikely a new employer would add the same .

The Vanguard pension is actually on the vanguard platform. I transferred my first ever private pension to them @ Christmas as I was impressed with my ISA and of course had heard great things about them and their low cost approach. The pension originally started with Colonial then got bought out by Winterther life and then Aviva (might have even been another one) and last year it was the only one of my pensions that performed badly so I thought lets make a change.

I'm dead lucky with my employee scheme! I 100% know it. Fortunately I enjoy it and i've been there since 2005 with no plans to ever leave. I tell everyone I work with to make sure they pay the full 6% so they get the maximum, I think 4% gets you 11% contribution, 5% -13% and since July this year 6% will get you 15% from them- daft not too- free money!

My employee funds I choose myself about 5 years ago after reading an article that said that more people should move away from the default funds so I looked at past 5 year performance against the default funds and took the plunge. Gulp.

2nd_time_buyer

TimSynths said:

2nd_time_buyer said:

Two big questions:

1) When do you want to retire? and
2) How much do you want to retire on?

 

I enjoy my job and I work from home so I am not counting down the days, however I fully understand that no one ever on their death bed said "I wish I'd spent more time at work".

My only target realistically is to get the mortgage paid off, over the last 18 months with everything that has gone on this has become a goal. Once done it will free up some think space in my brain and I think I can then stat to think about what is next.

I can could live quite happily on £1500pm.

One mad cap dream is to move/spend a lot of time in Turkey where I have some friends and cost of living is even cheaper there.

So it sounds like nothing is set in stone yet...

Generally you are a fair way above the (median) average pension at your age.

As a rule of thumb £100k might get you around £3-4k of annual  pension income (if retiring early).

So assuming you retire late 50s. Then a pot of £500-600k (in today's money) could be in the right (conservative) ballpark to achieve £18k per year (and more when you start receiving your state pension)

If you were prepared to run your pot down and consider equity-release/downsizing then you could get away with a lot less.

Workerdrone

I'm a long time reader of these boards but I've never posted before. I'm 45 so not a million miles off TimSynths age. I think I'm doing ok so sharing my pot as a comparison. I have two pensions schemes with a total value of £233.5k.

The first Aegon is split as follows. 40% Technology fund valued at £84.6k, the second is a high equity WP fund £30.3k with a 30k and slowly growing WP bonus maturing at age 65. The Aegon pension doesn't receive any contributions. I stopped paying into it when I left my last employer so since around 2003 the £29k I put is has benefitted from a bull run largely on the tech stocks and has a transfer value of £144.9k

My second pension with my current employer is with Standard Life worth £88.6k. I pay in £1224 a month on a salary sacrifice scheme. 10% of this is my employer contribution. This all goes into ASI UK Smaller companies which is about 22% of my fund. I have 18% in ASI Global Smaller companies and the remaining percentage circa 59% in SL Threadneedle American Select. I'm aware that a.) These are higher risk funds which I am comfortable with. b.) There is some overlap in the portfolios and c.) Riskier funds come with higher management charges.I receive decent discounts on the AMC so I pay just over 1%.

Anything can (And usually does happen), but pensions are a long term thing, my investments weathered the 2008 crash and bounced back and weathered Covid and bounced back. I fully expect there'll be something else along to upset the apple cart before I retire. I am a firm believer in the adage "You don't make a loss when your stocks go down, you make a loss when your stocks go down and you sell". With that in mind I would like to go at 60, but there is always another 8 years of working to cushion and wait for recovery if things go south just before retirement age.

Mrs Littleplumber is a band 7 nurse, so her pensions is the NHS DB scheme. Part of the idea in the riskier investment strategy is to allow her to retire around 60. We agree night shifts would be harder as you get to that age.

She will likely take the 1995 part of her pension, top it up with either a little job or bank shifts and we would pull from my fund to cover the gap until her 2015 section and then ultimately SP becomes active.

Now is the part where I may be being a bit hubristic. I am hoping for growth to take me up to the LTA by 60. I keep a close eye on it and depending on what the gov do with the current LTA limit I may be better off helping her to put money into an additional DC pension. We've set one up for her but really only put £60 a month is (Plus the governments top up).

As I approach (hopefully) LTA I will derisk the currently portfolio.

Hope that's a helpful comparison.

Thrugelmir

TimSynths said:

 am I on the right track? I think I am?

Set your own personal financial objectives and work towards them. Everything else is the lap of the Gods. As one gets older job insecurity can become a factor. Personally I ditch the crypto and reduce the mortgage balance. Gamble when you can afford to. 

Thrugelmir

Workerdrone said:

weathered Covid and bounced back. 

 "It ain't over until the fat lady sings" ............. 

Workerdrone

Thrugelmir said:

Workerdrone said:

weathered Covid and bounced back. 

 "It ain't over until the fat lady sings" ............. 

Well that's true.