Retirement and pensions is it worth it

bigdec

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

MallyGirl

Fundamentally, unless you are in a DB pension, then what you get out is directly related to what you put in.
If your friend has only put the bare minimum in then this is not going to generate much of an income.

hyubh

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

OK...

(If you're looking for a constructive answer, you're going to need to provide some concrete details. E.g. if 'work' is at a local council, then in no sense will what you say be true. But if 'work' is a private sector employer providing the pensions auto-enrolment minimum, then... well the responsibility for a decent retirement lies with the individual.)

hugheskevi

Has she tried to model her position using a calculator such as entitledto to see what benefits she may be eligible for, especially Housing Benefit and Council Tax Support?

Any prospect of inheritance, particularly of property?

Might bills reduce in retirement, eg, children moving out, or not needing support whilst at university?

Could she move to a less expensive area to live?

Working past State Pension age and deferring or saving State Pension whilst also continuing to build up private pension and not drawing on private pension already accrued (ie supporting oneself through work) will rapidly increase available retirement resources. This is because you are receiving earnings, also State Pension, building up more pension, and the period over which pensions have to support you is reducing.

But in general, there is the 3-way choice of save more, work longer, or be poorer in retirement (or a combination) that people face when choosing the balance between spending and saving during their working life. If you don't save much, then you face the choice of working longer or having limited resources in retirement.

Marcon

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

Your thread is titled 'Retirement and pensions is it worth it'.

Is what worth what?

What's the purpose of your post? You seem to have made a generic statement which is going to be true of a lot of people.

Bravepants

Your friend's work pension would have been "worth it" had she saved more into it. How old is she? It may not be too late. How much does she save towards her retirement each month?

swindiff

Definitely worth it if you pay in enough.  If all goes according to plan, when I retire at 60-61, I will have more income than I do now working.

NedS

The good news for your friend is that they have identified that they are not saving enough for their retirement goals, which means they can now take steps to correct that.

They need to save more for their retirement, such that their pension will allow them to retire. Now is the perfect time to start correcting that situation.

BikingBud

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

To me it is the cost of housing that will cripple many in retirement.

Advising people to save more doesn't really work when the incessant increases in housing costs, (something many people still consider to be a good thing) strips away any surplus.

We are storing up many problems and housing needs to be viewed more holistically as the transfer of wealth via property prices severely impacts lower earners in later life.

Ultimately, the taxpayer always pays!

MEM62

BikingBud said:

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

To me it is the cost of housing that will cripple many in retirement.

It is a fact but is nothing new and needs to be part of retirement planning.  If you are renting into retirement then you need a much larger pot than if you own a property against which the mortgage has been paid off.  And this does not suddenly become a fact later in life so should be considered much earlier than most people actually do. 

BikingBud said:

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

Advising people to save more doesn't really work when the incessant increases in housing costs, (something many people still consider to be a good thing) strips away any surplus.

I agree the housing market is broken.  There is nowhere near enough social housing for those that need it and governments, of all political persuasions, have failed to address it for decades.  Plenty of lip service but no action.  Although I would have to disagree that many consider incessant increases as a good thing.  I would imagine that, in fact, very few consider it a good thing. Nobody wins in a broken market. 

BikingBud said:

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

We are storing up many problems and housing needs to be viewed more holistically as the transfer of wealth via property prices severely impacts lower earners in later life.

More than storing up, they have come home to roost already.  The transfer of wealth is not the issue in my opinion.  The fact that my descendants will benefit from the value of my property is a positive thing.  It places them is a better position and that flows down the line.  The benefit to them of my work and investments does not come at a cost to anyone else.

BikingBud said:

bigdec said:

A friend of mine at work has done a rough calculation on what will happen when she reaches retirement age . Basically even with the state pension and the small amount  she would receive from her work pension she is going to have to continue working to cover her bills and pay her rent .If she did stop working then  would not have enough to survive and I think she has resigned herself to the fact she may never be able to retire.

Ultimately, the taxpayer always pays!

In many cases but not all.  There are many who are net contributors to the pot.
       

      
   

Cus

Making it less profitable to be a landlord is the right direction that governments have made.  Simplistic but as there isn't enough property it almost seems unfair to own a second one and rent it out.
Edit: you could almost see owning more than one property as profiting on the inability of others to afford property.  I know people see it as an  investment, but it is an investment that makes others poorer. It's not like buying shares in a regular company.