Target achieved, age 44

Somebody

Well done, OP.  No doubt you'll continue to max out pensions to bring the earnings below £100k to avoid the marginal 62% tax rate.

We only felt comfortable when mortgage free, and kids graduated and in employment.   

Bostonerimus1

Tax efficiency is always nice, but you can get that going in or coming out. So I would put something into ISAs to give you enough investments you can easily access without any tax to pay if you want to retire before you can access the SIPPs. BTL can be a complex investment and right now paying down your mortgage is a far less risky way to invest in real estate. Once the mortgage is paid off it will also give you more freedom to make retirement decisions as with no mortgage you just need less income and it will probably mean that if you do move you will be able to buy your next house with cash.

As far as asset allocation goes that will depend on the rest of your finances, do you have any DB pensions, I assume you and your spouse will get SP.  You might consider a high interest saving bond ladder if you want something really safe.

daveyjp

£120k annual income 'not mega bucks'?  Its a significant amount.

Cus

Why was the target 1mn?  What's your retirement plan? and why such a difference between the SIPP and elsewhere?
Professional financial planning looks like the way to go, not sure how declaring meeting an arbitrary number and seeking internet advice makes any sense sorry.

Bostonerimus1

Cus said:

Why was the target 1mn?  What's your retirement plan? and why such a difference between the SIPP and elsewhere?
Professional financial planning looks like the way to go, not sure how declaring meeting an arbitrary number and seeking internet advice makes any sense sorry.

Yes! OP do a budget and see if your target actually meshes with you income needs and plans. You might think about early retirement and using a combination of SP, DB (if you have one), an annuity or saving bond ladders to cover your basic income needs.

Archerychick

Do you know what you want to do between now & accessing your pension? Have you worked out what life looks like for you both? If not I think you need to work that out before you can plan the what next for your income and where to put it. As others have already commented you might want to think about up weighting accessible savings between now and when you can access your pensions. 

Mistermeaner

Thanks all for input - it is useful to listen to the thoughts of others which is why I love this forum so much , it was advice from here that put me on my savings journey 15 or so years ago 

my conclusions are that having accumulated ‘enough’ (the 1mil was somewhat arbitrary but based on achieving a sustainable 4% draw down income of 40k per annum) that I need to stop obsessing over tax efficiency and accept paying higher taxes in exchange for accessibility now (albeit this hurts with the loss of child benefit etc along with high rate tax)

I’ve adjusted my pension contributions so I’m still putting in a decent 20k per annum but will have an extra £1500 post tax cash in hand each month. I’m intending to put 1000 of that in my cash isa and 500 against the mortgage 

aim now is to pay down the mortgage quicker (albeit in no rush) and build a decent accessible cash buffer to hopefully fund pre pension access years - although I have no definitive plans I would like to retire well before 57/58 or whatever the age will be when I get there 

anyone reading this I would encourage to max your pension savings from aa young as you can - sacrifice today is the key to being able to afford it. We have never had fancy new cars , lavish holidays or lots of meals out…. We enjoy Eurocamp and healthy home cooked food. Live well within both your present and future means 

Bostonerimus1

Mistermeaner said:

Thanks all for input - it is useful to listen to the thoughts of others which is why I love this forum so much , it was advice from here that put me on my savings journey 15 or so years ago 

my conclusions are that having accumulated ‘enough’ (the 1mil was somewhat arbitrary but based on achieving a sustainable 4% draw down income of 40k per annum) that I need to stop obsessing over tax efficiency and accept paying higher taxes in exchange for accessibility now (albeit this hurts with the loss of child benefit etc along with high rate tax)

I’ve adjusted my pension contributions so I’m still putting in a decent 20k per annum but will have an extra £1500 post tax cash in hand each month. I’m intending to put 1000 of that in my cash isa and 500 against the mortgage 

aim now is to pay down the mortgage quicker (albeit in no rush) and build a decent accessible cash buffer to hopefully fund pre pension access years - although I have no definitive plans I would like to retire well before 57/58 or whatever the age will be when I get there 

anyone reading this I would encourage to max your pension savings from aa young as you can - sacrifice today is the key to being able to afford it. We have never had fancy new cars , lavish holidays or lots of meals out…. We enjoy Eurocamp and healthy home cooked food. Live well within both your present and future means 

Mr. Micawber from David Copperfield was one of my earliest lessons in finance.

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

I strongly agree that putting money early into a DC pension gives you a big head start on a comfortable retirement simply because it has more years to compound. I started investing when I was 24 and I was able to retire at 52. With exponential growth it is possible for a DC pension pot's returns to eventually outstrip your spending, at which point the emphasis shifts to tax and inheritance planning.

kimwp

daveyjp said:

£120k annual income 'not mega bucks'?  Its a significant amount.

I agree. I guess the OP is looking "up" to those earning millions, but £140k combined household income is significantly in excess of enabling comfortable lives, even with four children.

In terms of next steps for OP, I'd be looking to gain time with a four day week and freedom with a mortgage free house. I've done it slightly in reverse of this - paid off my mortgage, went to five in four (so same hours but awesome three day weekend and I'll go down to four when) I've hit my magic pension number.

BlackKnightMonty

daveyjp said:

£120k annual income 'not mega bucks'?  Its a significant amount.

It isn’t.

average wages have languished for +15 years. However niche, high expertise, professional roles have continued to grow; £100k roles are quite common in London and beyond.

Well done to the OP, that’s a great achievement!