I think I am doing okay aged 47

Workerdrone

TimSynths said:

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.

Thanks Tim,

I have to say it is handy to find someone of a similar age in a similar situation. As an earlier poster stated I think we both have a bit more than the average pension saved by mid 40's. I find pension planning quite good stress relief (I think deep down I'm just a security freak and don't like the idea of being poor in old age). I tend to keep a regular eye on my pots so I get a feel for the ebb and flow of the markets. I used to get a pleasant surprise when the annual paper statement appear but I prefer the extra graphs and analysis tools you get with the online portals. For the past few years I too found my pot grows more than my annual salary (Before anyone jumps in I am prepared that there will be good years and bad years!)

I think when you're still 15+ years from retirement and see people with million pound pots it can be quite hard to believe the power of compounding can actually get you there. There is a tendency to say "Ah yes, but that's just maths, in the real world there are dips that work against you". It would be nice to see someone who has got there share their year on year fund balances :-)

I also do my annual reviews and projections in October and I'm also early this year. The feeling seems to be the markets are due a pullback but if not, including this years contributions I hope to see 65k growth.

TimSynths

Compound interest calculators- help you dream big!

Diplodicus

Looks like you are doing ok, TimSynths!
I recommend sharesave schemes: not many unlosable bets in life but that is one. And don't rush to realise your profit at the end of term. One of my 3 year sharescheme options is now worth six figures.

Troxy

Diplodicus said:

Looks like you are doing ok, TimSynths!
I recommend sharesave schemes: not many unlosable bets in life but that is one. And don't rush to realise your profit at the end of term. One of my 3 year sharescheme options is now worth six figures.

Just be a bit careful on concentration risk, some lost 6 figures in share save in the banking crisis

Diplodicus

No they didn't, Troxy, they could only lose what they put in.

Diplodicus

But even that eventuality would depend on the shares being worth more at the end of the 3 or 5 yr sharesave scheme , then becoming worthless.

ex-pat_scot

Workerdrone said:  

It would be nice to see someone who has got there share their year on year fund balances :-)

. It would be nice to see someone who has got there share their year on year fund balances :-)

Not quite there yet.

Figures for comparison: (sorry as ever about tabulation).
Tax year end - age - pot value.

Apr-15	45	£ 262,492
Apr-16	46	£                  297,300
Apr-17	47	£                  396,128
Apr-18	48	£                  492,495
Apr-19	49	£                  563,958
Apr-20	50	£                  615,946
Apr-21	51	£                  833,840
Sep-21	52	£                  910,038

TimSynths

Diplodicus said:

Looks like you are doing ok, TimSynths!
I recommend sharesave schemes: not many unlosable bets in life but that is one. And don't rush to realise your profit at the end of term. One of my 3 year sharescheme options is now worth six figures.

I do the sharesave schemes- sadly i'm yet to win big, but I haven't lost money but I am in the banking sector and the shares are pants and have been for 12 years now. Did pay for a new boiler in 2016 though.....

I do Sharematch too- more free money, I pay £30 and then get and additional £45 of shares every month, in fact I have just cashed some in for the first time- should be hitting my account tomorrow to pay for a cheeky week in Tenerife next month.

Workerdrone

ex-pat_scot said:

Workerdrone said:  

It would be nice to see someone who has got there share their year on year fund balances :-)

. It would be nice to see someone who has got there share their year on year fund balances :-)

Not quite there yet.

Figures for comparison: (sorry as ever about tabulation).
Tax year end - age - pot value.

Apr-15	45	£ 262,492
Apr-16	46	£                  297,300
Apr-17	47	£                  396,128
Apr-18	48	£                  492,495
Apr-19	49	£                  563,958
Apr-20	50	£                  615,946
Apr-21	51	£                  833,840
Sep-21	52	£                  910,038

Wow! Thank you. I am extremely grateful. That's inspiring. An astounding set of gains in 7+ years. For balance (and for us none risk averse plebs, my gross is £36900 a year, with £14688 going into pension annually). I am assuming yours is greater (No insult intended, I just want to learn). Would you be offended if I enquired more as to your situation.  I am inspired. And of course I welcome anyone else to be as candid.

ex-pat_scot

Workerdrone said:

ex-pat_scot said:

Workerdrone said:  

It would be nice to see someone who has got there share their year on year fund balances :-)

. It would be nice to see someone who has got there share their year on year fund balances :-)

Not quite there yet.

Figures for comparison: (sorry as ever about tabulation).
Tax year end - age - pot value.

Apr-15	45	£ 262,492
Apr-16	46	£                  297,300
Apr-17	47	£                  396,128
Apr-18	48	£                  492,495
Apr-19	49	£                  563,958
Apr-20	50	£                  615,946
Apr-21	51	£                  833,840
Sep-21	52	£                  910,038

Wow! Thank you. I am extremely grateful. That's inspiring. An astounding set of gains in 7+ years. For balance (and for us none risk averse plebs, my gross is £36900 a year, with £14688 going into pension annually). I am assuming yours is greater (No insult intended, I just want to learn). Would you be offended if I enquired more as to your situation.  I am inspired. And of course I welcome anyone else to be as candid.

Sure. Veiled behind the veneer of internet invisibility!

I have a small DB entitlement, which I value at TV (£60,000 approx) from 2003 and thereabouts.
I have a SIPP with all non-current pensions, which has not had contributions since I consolidated in 2013 or so. It's all in VWRL now, although it was initially in a range of decent single company shares.
I started contributing to current GPPP scheme in 2015 with approx £30,000 in that year then £40,000 thereafter.
The GPPP is fully invested in a global diversified tracker for both existing funds and new contributions.
My gross has hovered around £130,000 or so since then, so it's a no-brainer for me to pile into pension under sal sac, to bring adjusted gross to £100,000. (If I took the slice between £100,000 and £130,000 as monthly income, instead of pension, then I would receive under £13,000 cash. Instead I get £40,000 into my pension including er contribution and some refunded er NI).

I am aware I have greatly benefitted from QE, raging bull market, Brexit (holding overseas equities gave me a 20% boost in 2016 when sterling depreciated after the vote). I do not expect returns to continue in the same vein, but then again did not expect the returns we've had.

I have broadly converging lines on the graph. Total pot, LTA and age.
I've got a couple more years before I hit earliest access age of 55.
A lot can (and will) happen before then, both in my family and the whimsical toying of the market / investment gods.

I expect to slow or stop depending on the following events / factors:
- hitting or approaching LTA. Might be next year or in 5 years. Who knows. Current trajectory has me hitting it around age 53.5 or so, but I do not expect the market to behave rationally even in the next couple of years.
- family challenge. No idea what's going to happen with aging parents.  Recent health chaos of close family members have reminded us of the fragility of life and health, and the need to be able to drop everything (including work) when something happens.
- work. Stable. Been in same / similar role in consulting for a decade. I'm in huge demand, as is my line of business and my firm. We and our clients simply cannot get any decent candidates for the many vacancies at the moment.  I've got great creds with clients and could easily step across to them (or a competitor) with minimal hiccup, if current job disappeared. (it's always possible for highly - paid roles even if fee-earning, and I've seen plenty of good people suddenly vanish from the firm)
- continue contributing the full £40,000 AA regardless of pot value. I'm getting roughly 70% effective relief on my contributions, so even if I were to blow the LTA then I'd still be ahead.  
- even above LTA I will continue to salsac the full AA whilst employed
- I dont have much savings, which is acknowledged weakness, but I could get sufficient credit (along with contracting or other work) to tide me along to 55 and pension access.
- I still have considerable monthly commitments for my children's uni and school fees, and these soak up the monthly net income (roughly £5,250 per month), and will continue for the next few years in varying amounts depending on which children are studying at which level.
- my wife's earnings don't quite use up PA, so there's little point in diverting my contributions and instead filling her pot, even if she will pay no tax in retirement.
- I still have the thorny issue of a decent mortgage, and will possibly remortgage offset IO before I then offset with PCLS cash.

- when I get to 55 I will take stock. Survey the land, the family situation and the finances.
It is likely that I'll be able to use the pension to generate roughly £4,000 net per month, with the two state pensions coming on stream further down the line.
Whilst I haven't set a fixed "number", I rather expect that will be enough. It's hard to be too precise, as family expenditure will morph significantly over the next decade as we transition the last of the teenagers into further education and adulthood.

Summary:
- surfing the returns. Continuing in the same direction for the next few years, at the least.
- alert to risks but not unduly worried about finances
- likely to hit 55 in a strong position, and to have options at that point (but not before).