I think I am doing okay aged 47

Workerdrone

On the point of Crypto, I view it much like playing roulette, its fine if you like the thrill but only invest what you can comfortably lose without sleepless nights. I put a couple of grand into Etherium a year ago. Its been up to 7.5k, now its hovering at 4.5k. I'm comfortable with that.

Albermarle

Workerdrone said:

On the point of Crypto, I view it much like playing roulette, its fine if you like the thrill but only invest what you can comfortably lose without sleepless nights. I put a couple of grand into Etherium a year ago. Its been up to 7.5k, now its hovering at 4.5k. I'm comfortable with that.

Like the OP , you do not mention what cash savings you have .
Some people on this forum retiring with a large DC pension are also holding up to 5 years cash . Means that if markets take a big tumble after you retire , you can live off cash until they recover . As you said not good to sell investments when prices are low.
Even a couple of years is useful + emergency cash as well. 

michaels

2nd_time_buyer said:

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.

Could you tell me where from please, annuities you will get less than half that amount, risky drawdown might get you that for a 30 year retirement but less if you want to retire in your 50s.

cattom

well you certainly are doing ok. your pension pot is considerably more than my own, and you are 13 yrs younger than I. Having said that, I have saving and investments elsewhere as I'm sure you do too. I also have premium bonds which give me the occasional winner. 

RoadToRiches

michaels said:

2nd_time_buyer said:

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.

Could you tell me where from please, annuities you will get less than half that amount, risky drawdown might get you that for a 30 year retirement but less if you want to retire in your 50s.

Very much suspect drawdown option at 3-4% on a £100K would give you the 3-4K mentioned.  Annuities at current rates are not much cop to be honest.

I'd look at drawdown, unless we start seeing hyper inflation, increased interest rates then we might get better annuity rates later on or if you are in poor health and when you look to buy one.

It's whether you believe in the 4% rule and your appetite for risk - which if you are investing in cryptos I would think is on the high side.

TimSynths

cattom said:

well you certainly are doing ok. your pension pot is considerably more than my own, and you are 13 yrs younger than I. Having said that, I have saving and investments elsewhere as I'm sure you do too. I also have premium bonds which give me the occasional winner. 

Thanks! Nothing else to declare really savings wise. I started pension saving when I was 19 and I've never regretted a day of it. Every year at this time I have a look through everything and I have a spreadsheet with it all on- its a bit messy and takes me a morning to update but I find it very interesting, even enjoyable. This year my pot has increased by more than my total annual salary, it got close in 2019 and if it carries on doing that I shall be very happy.

I suppose in a few years I may need to go see a professional IFA and have a chat, I read (and post) in these boards to try and broaden my knowledge and everyone that has commented today has been a great help. One more element I have never really considered is the option to take a lump sum (up to 25%), I wonder what most people do with it?

RoadToRiches

cattom said:

well you certainly are doing ok. your pension pot is considerably more than my own, and you are 13 yrs younger than I. Having said that, I have saving and investments elsewhere as I'm sure you do too. I also have premium bonds which give me the occasional winner. 

I got about £250 in premium bonds, and used to win a bit but not much now a days. They just sit there.  Cashed a few out over the years too.

TimSynths

Workerdrone said:

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.

Thank you! Sounds like you have a good grasp too. I don't know why people knock pensions (sad) but I think they are sexy. A £ saved today is a £ you haven't got to earn tomorrow! I first started doing my annual reviews in 2011 when the paper statements turned up - sadly all online now so not quite the same excitement. Normally I do it all in October but i'm off for two weeks and this is the first day of my holiday I thought I'd have a look- I think I will sleep easily tonight. If you see me do an update in a years time let me know how 2022 has treated you! Tim.

2nd_time_buyer

michaels said:

2nd_time_buyer said:

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.

Could you tell me where from please, annuities you will get less than half that amount, risky drawdown might get you that for a 30 year retirement but less if you want to retire in your 50s.

Yes, I was assuming drawdown. 

... and that the OP would need pension income of £18k per year up to state pension age. Then £9k once they start receiving their state pension. 

Alternatively, a fixed income annuity with no partner benefits would be around that region. The state pension could then be used to compensate for inflation.

Albermarle

One more element I have never really considered is the option to take a lump sum (up to 25%), I wonder what most people do with it?

Most people see it as a kind of retirement bonus, and  spend it on cars/holidays/family gifts/home improvements etc .

Some take it 'because it is there ' and just stick it in the bank .

However the usual advice from this forum , is only take it if you need it for something or for a specific reason.. Otherwise leave it in the pension and withdraw it in stages as part of a plan minimise income tax in retirement .

Be aware that being interested in pensions is very much a minority sport , and 'most people ' hardly have a clue about them.