Saving for Retirement - Is employer contributions enough?

Cien

MX5huggy said:

I think you’re doing well, your taking advantage of opportunities to make your money work.

The mortgage worries me, I would be saving with a view to making that outstanding balance as small as possible come remortgage time. Best rates are for those with LTV’s under 60%. Do you pay rent for the 20% you don’t own?

The best investment you could make is probably in yourself, what do you need to do to get that next job (inside or outside the current employer). If you did a £5000 course would you then be qualified to earn £60k? Here James explains the value of this.

My reply to you seems to have vanished.
So no rent is paid on the help to buys 20%.
Basically I borrowed 20% of house value in 2019, nothing to repay for 5 years. After 5 years you have to repay the interest (no capital only interest) I cant remember the rate. 
Ideal world you'd remortgage to pay them off however as years go on already my house has risen in value. So for example today my 20% would be based on a value of 210-220k instead of the 166k back in 2019. So I repay more. However prices could crash meaning I repay less but then negative equity starts to rear it's head.

Regardless I need to defo think about the mortgage some more 🤔 hurl some money at that.

I could look at an IAD. Investment advice diploma. In short to become a wealth manager. Still unsure if that's defo the future I want but it's certainly an option. More decisions to make!

D924

It's almost funny how young our generation are having their mid life crises.

I opted out of pension contributions personally. It comes far too late in life for it to matter to me. Depends on your priorities though, I'm FIRE or bust.

ewaste

D924 said:

It's almost funny how young our generation are having their mid life crises.

I opted out of pension contributions personally. It comes far too late in life for it to matter to me. Depends on your priorities though, I'm FIRE or bust.

Tax efficiency and employer contributions? 🤦‍♂️

Younger generations need to put a lot more work and early planning into retirement but pensions are an integral part of that. It's very much build a ladder from the available wrappers e.g. I'm currently ISA, old workplace DC scheme with 55 protected age, SIPP and LISA then a smidge of DB and eventually if it exists State Pension. It's about derisking as I climb that ladder in old age. 

Cien said:

I do have income protection. 6 months full sick pay then an extra 2 years which costs around £5pm for 75% salary. I think I've covered all bases that I can do. I hope?

Ah well you've your bases well covered, again far better than the vast majority. I'd guess you work in financial services (paraplanner🤔) since you mentioned doing an IAD 😄 

Cien

D924 said:

It's almost funny how young our generation are having their mid life crises.

I opted out of pension contributions personally. It comes far too late in life for it to matter to me. Depends on your priorities though, I'm FIRE or bust.

It kinda is! 

Oh wow opted put 🙈 careful I think you'll get lynched here for that!

I'd love the extra income but hate that it's just more to be taxed or student loans. 

Cien

ewaste said:

D924 said:

It's almost funny how young our generation are having their mid life crises.

I opted out of pension contributions personally. It comes far too late in life for it to matter to me. Depends on your priorities though, I'm FIRE or bust.

Tax efficiency and employer contributions? 🤦‍♂️

Younger generations need to put a lot more work and early planning into retirement but pensions are an integral part of that. It's very much build a ladder from the available wrappers e.g. I'm currently ISA, old workplace DC scheme with 55 protected age, SIPP and LISA then a smidge of DB and eventually if it exists State Pension. It's about derisking as I climb that ladder in old age. 

Cien said:

I do have income protection. 6 months full sick pay then an extra 2 years which costs around £5pm for 75% salary. I think I've covered all bases that I can do. I hope?

Ah well you've your bases well covered, again far better than the vast majority. I'd guess you work in financial services since you mentioned doing an IAD 😄 

Thats right, but even still my knowledge of all that is basic. Hence the need to do such a course!

NoMore

D924 said:

It's almost funny how young our generation are having their mid life crises.

I opted out of pension contributions personally. It comes far too late in life for it to matter to me. Depends on your priorities though, I'm FIRE or bust.

Almost certainly the biggest financial mistake you'll make, and even if FIRE, pensions should still be utilised. Its one of (if not the best) tax wrappers, don't make the mistake that at the point of FIRE you need all the money you will ever need available to you at that point, its perfectly ok to have an income stream coming later on in life, like lets say a pension!

Albermarle

I know cash doesn't perform well long term but the thought of having to choose funds via stocks and shares makes me nervous as I wouldn't have a clue what to pick or where to start. 
You need to improve your knowledge in this area. The basics are not that complicated. Your pension is also invested, so best to have some idea about that as well. 

Retiring at 50 - Health issues aside, just be aware that this is not a realistic aim for the very large majority of people.

Secret2ndAccount

I have an oversimplification to offer you. If you pay in £320/mth for 30 years, you can expect to draw out the inflation-adjusted equivalent of £320/mth for 30 years. Hopefully it goes better than that. You might pay in for more than 30 yrs; there are tax advantages; and properly invested you achieve growth that is ahead of inflation. 
So, worst case, draw out 320/mth.  Best case, pay in longer, taxman helps, and investments work out, draw out 640/mth.
That should give you a ballpark idea of the pension out vs payments in scenarios. Remember that pension income is, to a large  extent, taxable, so withdrawal and take-home are not the same thing.

Obviously you know more about your health than I do, but be careful about under-providing for yourself. I saw this guy speaking on TV today:

He had his first heart attack in 1992, and finally a transplant 21 years ago. He's 76, healthy, and shows no imminent signs of meeting his maker.

Cien

Secret2ndAccount said:

I have an oversimplification to offer you. If you pay in £320/mth for 30 years, you can expect to draw out the inflation-adjusted equivalent of £320/mth for 30 years. Hopefully it goes better than that. You might pay in for more than 30 yrs; there are tax advantages; and properly invested you achieve growth that is ahead of inflation. 
So, worst case, draw out 320/mth.  Best case, pay in longer, taxman helps, and investments work out, draw out 640/mth.
That should give you a ballpark idea of the pension out vs payments in scenarios. Remember that pension income is, to a large  extent, taxable, so withdrawal and take-home are not the same thing.

Obviously you know more about your health than I do, but be careful about under-providing for yourself. I saw this guy speaking on TV today:

He had his first heart attack in 1992, and finally a transplant 21 years ago. He's 76, healthy, and shows no imminent signs of meeting his maker.

Thank you, this is an interesting way of looking at things!

Cien

Are there more benefits to sal sac pension contributions for those with student loan repayments? I figure if my take hone pay is lower I'm paying less tax, saving on the NI which my employer passes on to my pension and if my take home pay is lower then less to repay in student loans too?