What should the pension pot of a couple that hit 40 should be?

Pablo7474

I’d agree, I think £250k is on target! 

QrizB

Three pages in and the OP hasn't returned. do you think we've scared them off?

sheslookinhot

1980ds said:

At 40 I’d say the following:

100k = ok
200k = reasonably good
300k = very good
400k = awesome
500k = sorted given the % interest that it will gain over next 20 years

thoughts? Obviously depends on earnings and many other factors, e.g. if someone’s earning 30k and has a 300k pot at 40 they’ve done very well.

Is that correct ? What interest will it gain ? 

I would have thought it only gains by the performance of the investments.

LV_426

QrizB said:

Three pages in and the OP hasn't returned. do you think we've scared them off?

Probably, but it's never stopped the discussion rumbling on before

pjcox2005

1980ds said:

At 40 I’d say the following:

100k = ok
200k = reasonably good
300k = very good
400k = awesome
500k = sorted given the % interest that it will gain over next 20 years

thoughts? Obviously depends on earnings and many other factors, e.g. if someone’s earning 30k and has a 300k pot at 40 they’ve done very well.

I think if this is for an individual it is well off the typical figures. 

At 40, you may well have had 18 year career having been to uni. I've had a grad job, progressing relatively quickly to higher wage although not 6 digit. If you average 10% contributions per year, then generously that's £5k per annum.

Total after 18 years would be £90,000. You'll obviously have some growth but true benefit of compounding won't have kicked in due to small investment in first 10 years. I'd say that gives £120k per person perhaps.

So that's significantly above average salary, consistently doing 10% per annum which is often not the case for many at the start of their careers with student debt and a house deposit to save.

£150k may not be early retirement but I'd badge that as very good/sensible. I think £75k would be reasonably good given vast majority of population would have less by 40 which is obviously disappointing.

slideby

I read the above numbers as being for a couple- £500k at 40 for an individual would be massive imo

Secret2ndAccount

Yeah, it's going to depend a lot on individual circumstances. From age 21-40 I went from renting a room to owning a house. I contributed to the company pension scheme, but that was all. Last ten years I've been piling money into pension and other investments hand over fist. My salary was 4 x what it was at 21. Even with compounding, what I could have saved at 30 is no match for what I could put in in 2019. I have no regrets that I spent the money back then. It allowed me to run a car, and have a holiday once a year. Turns out I have plenty for my retirement.
You do have to have some discipline at some point in your life. Put away cash when you can afford it. Otherwise you could easily hit 65 then say "Okay, now what?"