Why would someone want to opt out from a pension scheme?

eltisley98

Silvertabby said:

eltisley98 said:

Albermarle said:

eltisley98 said:

crv1963 said:

I know several well educated and competent in their field professionals who refuse to join the NHS Pension scheme, generally when asked why I get told

1) I don't trust the Govt to pay me a pension
2) It's better in my pocket now I can't afford it
3) I don't expect to live that long my father/ grandfather died when he was 50 something
4) I'm only 20 something.....why would I put money away for forty years time?

I also know several who have previously opted out and are now in scheme, regretting having missed sometimes twenty years of contributions as arriving in their 40s and 50s focused them on the 60s and beyond!

As far as I can see, their reason 3) is not entirely unreasonable.

Apart from actually opting out of a pension, the two most common mistakes people make in their retirement planning are ;
1) Underestimating how much money they need.
2) Underestimating their likely longevity.

I agree with you. See my reply to incus432 above.

Many people, even on these boards, seem to be factoring in that they will need less money as they age, as they will be spending less on holidays etc.

Whereas we have factored in the costs of cleaners, gardeners, and all those DIY jobs that we currently do ourselves.

That is a very good point. Thanks.

I think there is opting out of pension just to get more money to spend for now, and then there is opting out of pension due to personal finance and tax considerations and to invest in other means.

Albermarle

Silvertabby said:

eltisley98 said:

Albermarle said:

eltisley98 said:

crv1963 said:

I know several well educated and competent in their field professionals who refuse to join the NHS Pension scheme, generally when asked why I get told

1) I don't trust the Govt to pay me a pension
2) It's better in my pocket now I can't afford it
3) I don't expect to live that long my father/ grandfather died when he was 50 something
4) I'm only 20 something.....why would I put money away for forty years time?

I also know several who have previously opted out and are now in scheme, regretting having missed sometimes twenty years of contributions as arriving in their 40s and 50s focused them on the 60s and beyond!

As far as I can see, their reason 3) is not entirely unreasonable.

Apart from actually opting out of a pension, the two most common mistakes people make in their retirement planning are ;
1) Underestimating how much money they need.
2) Underestimating their likely longevity.

I agree with you. See my reply to incus432 above.

Many people, even on these boards, seem to be factoring in that they will need less money as they age, as they will be spending less on holidays etc.

Whereas we have factored in the costs of cleaners, gardeners, and all those DIY jobs that we currently do ourselves.

Why stop there.
How about a cook? a driver? personal shopper 

Silvertabby

Albermarle said:

Silvertabby said:

eltisley98 said:

Albermarle said:

eltisley98 said:

crv1963 said:

I know several well educated and competent in their field professionals who refuse to join the NHS Pension scheme, generally when asked why I get told

1) I don't trust the Govt to pay me a pension
2) It's better in my pocket now I can't afford it
3) I don't expect to live that long my father/ grandfather died when he was 50 something
4) I'm only 20 something.....why would I put money away for forty years time?

I also know several who have previously opted out and are now in scheme, regretting having missed sometimes twenty years of contributions as arriving in their 40s and 50s focused them on the 60s and beyond!

As far as I can see, their reason 3) is not entirely unreasonable.

Apart from actually opting out of a pension, the two most common mistakes people make in their retirement planning are ;
1) Underestimating how much money they need.
2) Underestimating their likely longevity.

I agree with you. See my reply to incus432 above.

Many people, even on these boards, seem to be factoring in that they will need less money as they age, as they will be spending less on holidays etc.

Whereas we have factored in the costs of cleaners, gardeners, and all those DIY jobs that we currently do ourselves.

Why stop there.
How about a cook? a driver? personal shopper 

Fair point - who knows what life has in store for any of us.  If we both reach the point where we don't feel safe to drive, then we'll use taxis instead (everything we need is reasonably local).  But, thinking about it, taxis two or three times a week would probably be cheaper than keeping a car on the road!

No need for personal shoppers, unless you mean supermarket home deliveries.  Anything else will probably be available on line.

But if if comes to the point where neither of us is able to get a meal on the table.....

Roger175

Silvertabby said:

Many people, even on these boards, seem to be factoring in that they will need less money as they age, as they will be spending less on holidays etc.

Whereas we have factored in the costs of cleaners, gardeners, and all those DIY jobs that we currently do ourselves.

I think this depends on individual circumstances. My MIL who's sight is failing and can't really get out by herself or do much around the house/garden, is lucky to have both Daughters living relatively close and we (the daughters and husbands) rally round and do almost everything for her. We are lucky that we are now retired and in good health, but it means MIL doesn't actually spend much and lives comfortably within her means.

I would however say that this situation is far from normal these days with family often living a long way away and with busy lives of their own. If you don't have the benefit of that help from family then I imagine it could all get very costly. I'm not sure our kids will be in a position to help us in the same way! 

Silvertabby

Roger175 said:

Silvertabby said:

Many people, even on these boards, seem to be factoring in that they will need less money as they age, as they will be spending less on holidays etc.

Whereas we have factored in the costs of cleaners, gardeners, and all those DIY jobs that we currently do ourselves.

I think this depends on individual circumstances. My MIL who's sight is failing and can't really get out by herself or do much around the house/garden, is lucky to have both Daughters living relatively close and we (the daughters and husbands) rally round and do almost everything for her. We are lucky that we are now retired and in good health, but it means MIL doesn't actually spend much and lives comfortably within her means.

I would however say that this situation is far from normal these days with family often living a long way away and with busy lives of their own. If you don't have the benefit of that help from family then I imagine it could all get very costly. I'm not sure our kids will be in a position to help us in the same way! 

No children.  

SouthCoastBoy

The amount of money saved from not having children should more than offset any additional costs experienced in old age.

My father in law is 93 and lives in a flat on his own. His costs are minimal, a lot less than they were 10 or 20 years ago. He  has a mobility trolley for food shopping. He is not at all mobile but manages.

Roger175

SouthCoastBoy said:

The amount of money saved from not having children should more than offset any additional costs experienced in old age.

My father in law is 93 and lives in a flat on his own. His costs are minimal, a lot less than they were 10 or 20 years ago. He  has a mobility trolley for food shopping. He is not at all mobile but manages.

You make a very good point there . Having contributed heavily towards cars for two of them last year and towards weddings for two of them later this year, whilst giving the third one the equivalent money for fairness. Add in all the DIY I do for them and it would fund a few years for me in a care home! 

AlanP_2

My in laws are just in to their 90s and our retirement planning is to emulate them:

Still driving, replaced car a few months ago

8-10 weeks holiday a year minimum including at least 2 short haul European trips (having decided to give up long haul after Covid lockdown).

Theatre / Show a couple of times a month either locally or up to London.

Basically self sufficient, still have an allotment and grow most of the veg they need.

MiL banned FiL from going up ladder and painting his own eaves / window frames about 18 months ago  (thankfully!).

bjorn_toby_wilde

I’m surprised you see the fact they are still driving in their 90’s as a positive though. It would worry me.

HedgehogRulez

My father always said that not having children was the best financial decision his parents ever made.