Average pension pot on retirement and whats your aim ?

Albermarle

MEM62 said:

bostonerimus said:

Sunnylifeover50plan said:

Ibrahim5 said:

With DC pensions you never know how much you have. The valuation changes every minute. If you look at Seashell's thread a few months ago it was all about having too much money and spending more. Now it's about inflation and energy prices and keeping warm. I can cope with the turbulence because I have over £20k in DB pension. I wouldn't like no DB pension. It was on the news that Russian share prices had dropped 90%. I am sure everyone will say that could never happen with their shares but it does show the nature of share values 

But harping on about DB pensions to those who they are not available to is a little like like trying to sell the virtue of alcohol or bacon to a Muslim or Jew.  

A DB pension certainly reduces the income generation pressure, but there are other ways to do that as well. Pay off all debt, including the mortgage, while you are working, maybe diversify your investments to include a rental property, control your spending and be open to partial annuitization if the numbers look good.

Clear debt absolutely. Ideally, you want to enter retirement debt-free.  But it still surprises me that people suggest BTL's as good investments.  The come with their own risks and are neither passive or tax-efficient.  

Probably because many people feel more comfortable with 'bricks and mortar', than with the investment/pension world. 

flipper_72

ex-pat_scot said:

flipper_72 said:

I have learned so much reading this board, and am now actively saving for my retirement from a salary of £18,361, I know I don’t earn a lot and plan to change that as soon as I can but 

“ I'm reasonably well paid (approx £140,000 pa)” puts @ex-pat_scot in the top 1% of uk earners. This is why so many like me daren’t post on their pot size and expected income in retirement and why it is so skewed.

I am indeed well aware of where my income puts me, but also a fan of self-deprecation and understatement.
I work with a peer group all of whom are on good 6 figure salaries. However I have spent many years previous to this in extended education, professional training, and in good (but not higher tax band) positions to build my CV to command this level, and am acutely aware of the precariousness of operating in this space.  I certainly started at the bottom of the salary ladder.

You note that you are reluctant to share. Conversely, I find the anonymity of the web /forum rather liberating. It's only recently that I've not been muddling through this on my own, and finding inspiration here (eg @Marine_life) for those further along the journey.

It wasn’t a dig, I was pointing out you were rather more than “reasonably well paid”. Self deprecation doesn’t come over well in written form. Whilst I wish I could earn such a high salary I know that 16 years ago when my first child was born I stopped being career driven and needed to be a mum. There is no way I could commit to the time and that is still the case. I earn half now in actual £ than I did then, so that’s probably a quarter? of what it was worth. 

As a couple (both nearly 50) we aspire to £3k per month in retirement. We both have deferred LGPS pensions of around £3kpa and are on target for full new state pension. I have a Sipp currently at £55k all in vanguard target retirement, DH has £35k in his so we have a long way to go and not many years to do it in.

ex-pat_scot

flipper_72 said:

ex-pat_scot said:

flipper_72 said:

I 

I am indeed.

It wasn’t a dig, I was pointing out you were rather more than “reasonably well paid”. Self deprecation doesn’t come over well in written form. Whilst I wish I could earn such a high salary I know that 16 years ago when my first child was born I stopped being career driven and needed to be a mum. There is no way I could commit to the time and that is still the case. I earn half now in actual £ than I did then, so that’s probably a quarter? of what it was worth. 

As a couple (both nearly 50) we aspire to £3k per month in retirement. We both have deferred LGPS pensions of around £3kpa and are on target for full new state pension. I have a Sipp currently at £55k all in vanguard target retirement, DH has £35k in his so we have a long way to go and not many years to do it in.

Spot on. Sorry about the gauche phraseology.

It's a "total sum" game for us - my wife left teaching when no.2 came along, and returned to a lower role a lot later when no.4 was at school. All of our efforts, income and expenditure are shared. I am acutely aware that Mrs XPS has been the enabler in where I am work-wise, and that the financial reward is fully "ours" not "mine". It sounds as if you might have made similar choices as a family.

On your plans, it sounds as if you have a decent amount of time. I don't know if you expect to work until you achieve the £3kpm income, or whether you have an age / time deadline. Whichever, you can control the amount you are contributing, where you are investing, minimising costs, and managing the non financial risks (health) as best you can. I've only really been focusing on this since my mid - 40s, and am also aware of how I have benefitted from the markets during that time.

QrizB

flipper_72 said:

As a couple (both nearly 50) we aspire to £3k per month in retirement. We both have deferred LGPS pensions of around £3kpa and are on target for full new state pension. I have a Sipp currently at £55k all in vanguard target retirement, DH has £35k in his so we have a long way to go and not many years to do it in.

and

ex-pat_scot said:

On your plans, it sounds as if you have a decent amount of time.

Agreed, my back-of-an-envelope suggests a gross SIPP contribution of £1000/month between you is likely to be sufficient, and that's assuming zero real growth over the next 17 years.

Thrugelmir

Albermarle said:

michaels said:

Sunnylifeover50plan said:

Ibrahim5 said:

With DC pensions you never know how much you have. The valuation changes every minute. If you look at Seashell's thread a few months ago it was all about having too much money and spending more. Now it's about inflation and energy prices and keeping warm. I can cope with the turbulence because I have over £20k in DB pension. I wouldn't like no DB pension. It was on the news that Russian share prices had dropped 90%. I am sure everyone will say that could never happen with their shares but it does show the nature of share values 

But harping on about DB pensions to those who they are not available to is a little like like trying to sell the virtue of alcohol or bacon to a Muslim or Jew.  

I am taking a large cut in my headline pay to join the CS entirely so that I can transfer some of my DC into the CS DB scheme - about 20k gross pa should do it along with state pensions to give that nice squeak free bum feeling. 

Then I will still have a DC pot that will allow me to retire whenever I want and fill the gap until SRA but I will have derisked.

Lets look at what a DC pot means - compared late last year to now, 4% rule would give me 10% less income plus rpi inflation of 7.5% would mean perhaps 15% less effectively per year forever than I might have thought likely just 6 months before.  Sure some would like to have a 25% cushion and then it is so what but I would rather not put in the extra years to build up that cushion that in 95% of scenarios would turn out to be excessive but that sounds pretty inefficient to me - after all you can only be certain you have 'won' and up your expenditure long after your ideal period for spending more.

  If I had been a more aggressive investor I would probably have doubled that figure.

Consider yourself lucky to have been in the right place at the right time. If we were born with hindsight then investing would be easy.  I view investing more as akin to going surfing. Being patient and choosing the right wave to jump on. 

bostonerimus

MEM62 said:

bostonerimus said:

Sunnylifeover50plan said:

Ibrahim5 said:

With DC pensions you never know how much you have. The valuation changes every minute. If you look at Seashell's thread a few months ago it was all about having too much money and spending more. Now it's about inflation and energy prices and keeping warm. I can cope with the turbulence because I have over £20k in DB pension. I wouldn't like no DB pension. It was on the news that Russian share prices had dropped 90%. I am sure everyone will say that could never happen with their shares but it does show the nature of share values 

But harping on about DB pensions to those who they are not available to is a little like like trying to sell the virtue of alcohol or bacon to a Muslim or Jew.  

A DB pension certainly reduces the income generation pressure, but there are other ways to do that as well. Pay off all debt, including the mortgage, while you are working, maybe diversify your investments to include a rental property, control your spending and be open to partial annuitization if the numbers look good.

Clear debt absolutely. Ideally, you want to enter retirement debt-free.  But it still surprises me that people suggest BTL's as good investments.  The come with their own risks and are neither passive or tax-efficient.  

You have to look carefully at the numbers and I'm not in the UK so taxes will be different. I would only do BTL as a long term investment with the plan being to retire without any mortgage. There is risk involved, but my BLT has provided me with good capital appreciation and I get a check every month that covers over half my living expenses. I would not advocate BLT be the first thing in a pension investment pot, definitely do workplace pensions, SIPPs, ISAs etc first, but it is a nice compliment to those sort of tax advantaged investments. My BTL flat is worth around $300k and after expenses I net $15k/year from it so that's a yield of 5%.

AlanP_2

Sunnylifeover50plan said:

Ibrahim5 said:

With DC pensions you never know how much you have. The valuation changes every minute. If you look at Seashell's thread a few months ago it was all about having too much money and spending more. Now it's about inflation and energy prices and keeping warm. I can cope with the turbulence because I have over £20k in DB pension. I wouldn't like no DB pension. It was on the news that Russian share prices had dropped 90%. I am sure everyone will say that could never happen with their shares but it does show the nature of share values 

But harping on about DB pensions to those who they are not available to is a little like like trying to sell the virtue of alcohol or bacon to a Muslim or Jew.  

Who are they not available to?

There are a few private sector DB schemes out there, but putting those aside there are very few trades / professions / skills that would make you unable to get a public sector job and the DB pension that goes with it.

Ibrahim5

bostonerimus said:

MEM62 said:

bostonerimus said:

Sunnylifeover50plan said:

Ibrahim5 said:

With DC pensions you never know how much you have. The valuation changes every minute. If you look at Seashell's thread a few months ago it was all about having too much money and spending more. Now it's about inflation and energy prices and keeping warm. I can cope with the turbulence because I have over £20k in DB pension. I wouldn't like no DB pension. It was on the news that Russian share prices had dropped 90%. I am sure everyone will say that could never happen with their shares but it does show the nature of share values 

But harping on about DB pensions to those who they are not available to is a little like like trying to sell the virtue of alcohol or bacon to a Muslim or Jew.  

A DB pension certainly reduces the income generation pressure, but there are other ways to do that as well. Pay off all debt, including the mortgage, while you are working, maybe diversify your investments to include a rental property, control your spending and be open to partial annuitization if the numbers look good.

Clear debt absolutely. Ideally, you want to enter retirement debt-free.  But it still surprises me that people suggest BTL's as good investments.  The come with their own risks and are neither passive or tax-efficient.  

I would not advocate BLT

Couldn't be recommended to a Muslim or Jew.

Lifematters

I am taking a large cut in my headline pay to join the CS entirely so that I can transfer some of my DC into the CS DB scheme.

I am seriously considering this option. Have you had a quote as to the amount of DB you could get for x amount of DC at x age?  Wondering just how generous the transfer in is. I know it gets more expensive with age.

hugheskevi

Lifematters said:

I am taking a large cut in my headline pay to join the CS entirely so that I can transfer some of my DC into the CS DB scheme.

I am seriously considering this option. Have you had a quote as to the amount of DB you could get for x amount of DC at x age?  Wondering just how generous the transfer in is. I know it gets more expensive with age.

The actuarial factors are at this link - https://www.civilservicepensionscheme.org.uk/media/yxhmcyya/cetv-factors-and-guidance-alpha.pdf