Average pension pot on retirement and whats your aim ?

Mick70

Albermarle said:

There are three types of pension: DC, Private Sector DB, Public Sector DB - they should be treated as bronze, silver and gold in that order.

Unless you had a 'non contributory ' Private sector DB pension . Yes they did exist once upon a time .

Also there is nothing intrinsically wrong with a DC pension, if enough money goes into it .

If an employer was prepared to fund a DC pension at the same level as they have to fund DB pensions , then it would be a bit more 50:50 which was best . Some would say the DC would be better due to the ability to leave it as an inheritance.

Worthy of its own thread DB v DC 😄

Albermarle

Mick70 said:

Albermarle said:

There are three types of pension: DC, Private Sector DB, Public Sector DB - they should be treated as bronze, silver and gold in that order.

Unless you had a 'non contributory ' Private sector DB pension . Yes they did exist once upon a time .

Also there is nothing intrinsically wrong with a DC pension, if enough money goes into it .

If an employer was prepared to fund a DC pension at the same level as they have to fund DB pensions , then it would be a bit more 50:50 which was best . Some would say the DC would be better due to the ability to leave it as an inheritance.

Worthy of its own thread DB v DC 😄

The consensus seems to be that having both is the sweet spot .

Ibrahim5

Mine is roughly 50:50. I think it's good. The thought of 100% DC terrifies me. I am sure someone will say "actually it isn't a problem". Well it won't be a problem when the stock market is doing well.

swindiff

michaels said:

SouthCoastBoy said:

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

So £1m pot for you and £450k (equivalent) for the DW, what age would that support retirement from for both of you?

50x is considered a reasonable estimate for the value of a DB pension now?  Mine is worth more than I thought in that case.  Thankfully it's only valued at 20X for the LTA

Albermarle

swindiff said:

michaels said:

SouthCoastBoy said:

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

So £1m pot for you and £450k (equivalent) for the DW, what age would that support retirement from for both of you?

50x is considered a reasonable estimate for the value of a DB pension now?  Mine is worth more than I thought in that case.

Measuring a DB at 50X is just an opinion, and is comparing it to the cost of a similar annuity at the present time. 
Most CETV's hover around 30x to 35X , which many consider an attractive offer and a 40X offer is seen as very good .
So if you do feel the need to value your DB somewhere around X 33 ( depending how good the conditions are) seems about right . Also just an opinion .

SouthCoastBoy

Ibrahim5 said:

Mine is roughly 50:50. I think it's good. The thought of 100% DC terrifies me. I am sure someone will say "actually it isn't a problem". Well it won't be a problem when the stock market is doing well.

It terrifies me as well, unfortunately that is the position I'm in. DW has a 9k db pension so some hedging there.

Due to my dependence on a dc pension I will be working for a while yet. Actually not sure when I will have the confidence to retire. Currently set at 60 but don't think I will have the courage to go.

DB pension expressed in DC terms? I'd go for around 30x

swindiff

To the original question, my aim is a £21k DB pension at 60 with a £140k tax free lump sum helping to bridge the gap between 60 and state pension age at 67.  The wife should have around £5k DB pension at 60 with around £60K in a SIPP.  We will both have full state pension.

Workerdrone

swindiff said:

michaels said:

SouthCoastBoy said:

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

So £1m pot for you and £450k (equivalent) for the DW, what age would that support retirement from for both of you?

50x is considered a reasonable estimate for the value of a DB pension now?  Mine is worth more than I thought in that case.  Thankfully it's only valued at 20X for the LTA

And whilst politicians pensions remain DB, that will never change

michaels

Albermarle said:

swindiff said:

michaels said:

SouthCoastBoy said:

michaels said:

I guess also important is whether we are talking about finances of an individual or a couple.  2 x £1m pots is very different to only 1....

Yes, very pertinent point. In my case I am planning for £1m pot and my wife will have a db pension of approx 9k per annum from age 60, when I will be 63

So £1m pot for you and £450k (equivalent) for the DW, what age would that support retirement from for both of you?

50x is considered a reasonable estimate for the value of a DB pension now?  Mine is worth more than I thought in that case.

Measuring a DB at 50X is just an opinion, and is comparing it to the cost of a similar annuity at the present time. 
Most CETV's hover around 30x to 35X , which many consider an attractive offer and a 40X offer is seen as very good .
So if you do feel the need to value your DB somewhere around X 33 ( depending how good the conditions are) seems about right . Also just an opinion .

Surely the best estimate of the value of anything is the market price?  Otherwise we are into the 'I know better than the market territory'

Albermarle

SouthCoastBoy said:

Ibrahim5 said:

Mine is roughly 50:50. I think it's good. The thought of 100% DC terrifies me. I am sure someone will say "actually it isn't a problem". Well it won't be a problem when the stock market is doing well.

It terrifies me as well, unfortunately that is the position I'm in. DW has a 9k db pension so some hedging there.

Due to my dependence on a dc pension I will be working for a while yet. Actually not sure when I will have the confidence to retire. Currently set at 60 but don't think I will have the courage to go.

DB pension expressed in DC terms? I'd go for around 30x

If I remember correctly from previous threads you also have around half a Million in non pension investments and cash .
So between you , you have about £1.8 M but still nervous about retiring in two years time .......

Maybe time to throw caution to the wind ?