Is it worth paying into a pension when you're aiming for early retirement?

Bostonerimus1

FIREwork86 said:

Hi

Thank you for all of your comments.

Sorry to not be clear - when I said "pension age", I meant the age at which I can access my full workplace pension which is currently 66. This is the age at which we'd be getting £30K based on contributions so far and continuing until 48. 

I know I can access my workplace pension earlier, but that wouldn't be the full amount.

We'd be funding the years from 48 to 66 through interest on investments and draw down.

We're after around £45K per year income which interest and draw down should give.

@Nebulous2 That's great to think about retirement as three distinct periods. Thank you, I'll give that more thought. I've been thinking of it as 48-66 and then 66+ when pensions kick-in.

I really appreciate all your thoughts on this.

Contributing to pensions and ISAs gives you flexibility and if you fill those up you can also put money into a general investment account. ISAs and GIAs give you funds you can access early to fund the gap between ER and pensions and SP being available. So do a budget and project out you income streams with a conservative rate of return. 

Hoenir

FIREwork86 said:

We're after around £45K per year income which interest and draw down should give.

Before or after tax ?  Inflation linked ? 

nadimkhana

It is really helpfpul

FIREwork86

Hoenir said:

FIREwork86 said:

We're after around £45K per year income which interest and draw down should give.

Before or after tax ?  Inflation linked ? 

Pre-tax and not inflation-linked.

lisyloo

So you need over £1 million outside of pensions.
I would recommend getting an IFA.

I pay mine 0.5% and I figure he only has to make 0.5% more than me (or lose 0.5% less than me) that me and that ignores the value of any advice he provides.
Definitely worth it/= unless you're very clued up on every aspect which take time.

Marcon

FIREwork86 said:

Hoenir said:

FIREwork86 said:

We're after around £45K per year income which interest and draw down should give.

Before or after tax ?  Inflation linked ? 

Pre-tax and not inflation-linked.

...and you are thinking of retiring at 48? Potentially you'll have 40-50 years of inflation to contend with, so presumably you already have at least £1m in assets (excluding property and your current pensions) to help you achieve your objectives? You're being very coy about your current assets, which is making it hard for people to comment with any degree of helpfulness.

Ibrahim5

If I had employed an IFA I would have retired much later because they weren't very clued up at all. Much better to do your own research.

FIREwork86

@Marcon Current situation is: We're 38/39. We have £300K in investments (S&S retirement tracker ISAs, premium bonds, fixed-term savings). We have £350K-ish house with no mortgage. We save around £80-85K per year which is unlikely to change.

lisyloo

Ibrahim5 said:

If I had employed an IFA I would have retired much later because they weren't very clued up at all. Much better to do your own research.

I disagree there's a blanket "better" for everyone.
Some people will be better off using an IFA, other not.
I was responding to the OP's situation in particular.

Cobbler_tone

I'm started to feel a little alienated on this forum.
Whilst it needs to be inclusive, the majority of 'common folk' don't earn £200k a year or save £80k a year and retiring after they leave school etc.
I much prefer the threads about people cashing pensions in and footing huge tax bills.