I'm addicted to pension saving and it's leaving me short.

ussdave

If your employer matches 10% then personally I would contribute enough to maximise that.  From the sounds of it you will still have a very nice boost in take home pay even with "only" reducing your pension contributions to 10%.

More generally, I really appreciate you posting this.  It's a trap I've fallen into myself, with the negative impact on lifestyle exacerbated by the current mortgage rates and inflation.  I've also just increased my savings rate over and over without really considering what my actual end goal is.  This month I have requested a reduction in my salary sacrifice to a percentage of salary I was happy with 2-3 years ago.  The plan is to feel a bit less pinched and enjoy life...and to sit down and really look at my target retirement age and income in today's figures - as opposed to a "must save everything and retire as close to 55 as possible" approach.

Workerdrone

ussdave said:

If your employer matches 10% then personally I would contribute enough to maximise that.  From the sounds of it you will still have a very nice boost in take home pay even with "only" reducing your pension contributions to 10%.

More generally, I really appreciate you posting this.  It's a trap I've fallen into myself, with the negative impact on lifestyle exacerbated by the current mortgage rates and inflation.  I've also just increased my savings rate over and over without really considering what my actual end goal is.  This month I have requested a reduction in my salary sacrifice to a percentage of salary I was happy with 2-3 years ago.  The plan is to feel a bit less pinched and enjoy life...and to sit down and really look at my target retirement age and income in today's figures - as opposed to a "must save everything and retire as close to 55 as possible" approach.

Thanks Dave, I appreciate your candour, and yes. 6% will garner 10% from my employer. I've done exactly as you have. There was another thread today on having an arbitrary number and sticking to it no matter what. My arbitrary number was 1.18m. With a goal of buying a toy for 118k, living off 3.5% drawdown and leaving the kids in a good position. But plans have shifted and its really pretty pointless given there is no clarity or commitment to the IHT position on pensions. Why scrimp and save for my kids when IHT will see it just go on some government folly or to those who didn't save. 

Shineyhappy

We are in a similar boat apart from having a house to do up as well, but no mortgage.

We worked out what was important to us and holidays were for expensive stuff and so whilst we both make large pension payments every month, we put aside some into the travel budget and then whatever is left after the very occasional day out that isn’t a walk or free National Trust voucher goes into house savings or pensions

Is your coffee just a habit and would you be better saving that money for something more fun? You can alway go for a walk anyway before work (I do or I do a walking workout on YouTube)

I would work it what spending money you actually want and work backwards but I would make sure it was stuff that I genuinely wanted not just frittering money 

Workerdrone

Shineyhappy said:

We are in a similar boat apart from having a house to do up as well, but no mortgage.

We worked out what was important to us and holidays were for expensive stuff and so whilst we both make large pension payments every month, we put aside some into the travel budget and then whatever is left after the very occasional day out that isn’t a walk or free National Trust voucher goes into house savings or pensions

Is your coffee just a habit and would you be better saving that money for something more fun? You can alway go for a walk anyway before work (I do or I do a walking workout on YouTube)

I would work it what spending money you actually want and work backwards but I would make sure it was stuff that I genuinely wanted not just frittering money 

My coffee is probably a little more than a habit. It's human contact. I have a blimmin nice coffee machine I know how to use. In a world where most of my contact is with nice people via forums (like this one) and not so nice people via Facebook :-( Its nice to have a cheers moment and go where everybody knows your name. I regard the coffee as free but the experience of talking with the baristas as being priceless.  Its lovely to speak with young people who aren't yet jaded by life, hear of their experiences and perhaps proffer a small nugget of experience which is actually well received. 

noclaf

Op, I can't offer much advice or tips but thanks for starting this thread as it's quite insightful

I have struggled to find a balance on pension contributions and its a massive headache for me personally that I spend far too much time and mental energy mulling over. Not sure if £240k is your total pot as of now but I think you have done very well considering your wages and other commitments to reach that level at 47.  I am 42, pension is currently at circa £145k but it does feel like a monumental uphill struggle to 'move the needle' anywhere close to what I 'think' will be needed. I hope that my pot will hit £240k by 47..will see in 5 years!

 I have a toddler now and wife not currently working so have pulled back on the pension contributions after a few years of higher contributions but always contribute the minimum to receive max employer matching (my 8% is matched with 11.5% employer contribution), my biggest concern is long term job security and how easy or not easy it will be to increase earnings as well as meet all the usual financial commitments especially those for raising offspring!
Every month I seem to repeatedly be increasing and then decreasing my contributions as struggle to make my mind up as to what to contribute...is it enough ...is it overkill etc. 

I think in your case as you have been really shovelling quite diligently for a few years you could pull back slightly to help ease the situation whilst still maintaining a decent level of contributions. Best of luck whatever you do!

....and coffee is my vice too on office days...a modest treat to help get through the week I would say..gotta live a little!

Workerdrone

noclaf said:

Op, I can't offer much advice or tips but thanks for starting this thread as it's quite insightful

I have struggled to find a balance on pension contributions and its a massive headache for me personally that I spend far too much time and mental energy mulling over. Not sure if £240k is your total pot as of now but I think you have done very well considering your wages and other commitments to reach that level at 47.  I am 42, pension is currently at circa £145k but it does feel like a monumental uphill struggle to 'move the needle' anywhere close to what I 'think' will be needed. I hope that my pot will hit £240k by 47..will see in 5 years!

 I have a toddler now and wife not currently working so have pulled back on the pension contributions after a few years of higher contributions but always contribute the minimum to receive max employer matching (my 8% is matched with 11.5% employer contribution), my biggest concern is long term job security and how easy or not easy it will be to increase earnings as well as meet all the usual financial commitments especially those for raising offspring!
Every month I seem to repeatedly be increasing and then decreasing my contributions as struggle to make my mind up as to what to contribute...is it enough ...is it overkill etc. 

I think in your case as you have been really shovelling quite diligently for a few years you could pull back slightly to help ease the situation whilst still maintaining a decent level of contributions. Best of luck whatever you do!

....and coffee is my vice too on office days...a modest treat to help get through the week I would say..gotta live a little!

Thank you for your candour. Yes 240k is my total pot but the Mrs has DB and a slowly growing SIPP. Its good to realise I am not alone.Just a few short years ago, I was excited to realise one of my pots was 50k. Then without adding to that it suddenly took off like a rocket to £150k without further input, its since stalled. such are the whims of the market, but when you have such a pronounced win, you tend to project. A period of slowing down causes doubt As dunstonh is fond of saying, Did you worry when the markets fell in xxx. The one thing I did back in my early 20's was to commit to a concept. Post the tech boom when noone wanted tech I just assumed tech will always be needed. that there is a cycle of replacement at most every 6 years. I didn't envisage a world where we would become luddites so, I went long on tech. Ironically AI terrifies me and I am increasingly that luddite.

theoretica

A few thoughts - I think you write that you currently arrange matters so that you and your wife have equal spending money, if your plan to increase this for both of you, or for you to have more?  How closely do you budget what you currently have?

There are alternatives to fully retiring at 60 - changing to a part time job with only nice hours, for instance.

As discussed above with the question of what would you really do with more spending money, what would you really do in retirement?  How much detailed financial planning have you done (when will the mortgage be paid off?  In retirement no NI, more time to spend money...) 

L9XSS

Very interesting reading this thread Workerdrone. I can relate to quite a lot and realised how obsessed I have become to saving for retirement to the point that my life has become somewhat insular. I’m not unhappy as such but realise I need to let go of the reigns and live a little. I’m 57 and plan to retire at 62. I view my SIPP daily which I realise is obsessive and look for ways to add money consistently to it. My salary isn’t large, circa 23k but my projected retirement income in 5 years time is nearly 42k........I really don’t think I will be able to switch from managing on £1500 a month to having this extra spending capacity. I do feel I’m missing out and question every additional spend that is not a fixed cost. its only recently I’ve felt like this. I don’t dislike my work and enjoy the free time I have out of work but I don’t do a lot in my free time and this is holding me back, apart from pouring over spreadsheets, reviewing investments, trading and buying shares, reading and researching the financials, following the business and economic news. I realise I need to reappraise the context of all the above in terms of where I’m at and some lifestyle changes.

ComicGeek

My wife has long term health issues, and won't be able to enjoy an active retirement - even at 42 now day-to-day life is dominated by them, and it affects everything. 

So while we do save for retirement I know that we need to do bucket list stuff now, rather than assume that we will be able to do them in 20-30 years time. Annual trips to Disneyworld at the moment with our young son, and putting in a swim spa in the garden for her to exercise in. 

I think your daily coffee trip is worth more than the monetary cost, and I wouldn't give that up. But if you can take in a reusable cup and get a discount each time, even better!

Workerdrone

ComicGeek said:

My wife has long term health issues, and won't be able to enjoy an active retirement - even at 42 now day-to-day life is dominated by them, and it affects everything. 

So while we do save for retirement I know that we need to do bucket list stuff now, rather than assume that we will be able to do them in 20-30 years time. Annual trips to Disneyworld at the moment with our young son, and putting in a swim spa in the garden for her to exercise in. 

I think your daily coffee trip is worth more than the monetary cost, and I wouldn't give that up. But if you can take in a reusable cup and get a discount each time, even better!

Its a little independent place that kept me sane during covid so I am loyal to them. I actually have a VIP card so I get money off+ they insist I still collect their loyalty stamps, so every so often I reach in my pocket and see I have a free one :-)