Paying the most I can into a pension - daft idea?

vacheron

Cobbler_tone said:

disgruntled1234 said:

vacheron said:

So after years of steady accelleration, you now have to lift off and begin to apply the brakes, knowing that if you plan has worked perfectly, when you approach zero (or your target figure to leave for your beneficiaries) death should be imminent. In order to do this, you have to objectively and realistically decide how long you expect to live in order for your careful calculations to work optimally.  

Part of me does feel like I'd be letting my work colleagues down as I've worked for the same company for over 20 years, but I have to think about myself and family.

Despite thinking of my large corporate as a local business for over 30 years, that is one thing I WON’T be worrying about!!!!
You’d be gone in a heartbeat if they have to cut their cloth accordingly.
I think we all like to think we are more important than we are, it’s what keeps us going.

I've seen so many people leave our company (voluntarily and involuntarily) over the last 30 years. In most cases both they, and their teams / colleagues felt that the company were "stupid for letting them go" and that a hole would be left that could never be filled, causing irreparable damage the company.

The reality however was that this never happened (and I consider myself equally expendible in this regard).

When you have to make a choice between your interests and that of your company, you look after yourself and your loved ones first and foremost.  

Note: The only exception is when the company is laying off because it is already on a deathmarch to oblivion, in which case none of that matters to anybody in that desparate quest to keep the doors open for a few extra weeks!

Cobbler_tone

vacheron said:

Cobbler_tone said:

disgruntled1234 said:

vacheron said:

So after years of steady accelleration, you now have to lift off and begin to apply the brakes, knowing that if you plan has worked perfectly, when you approach zero (or your target figure to leave for your beneficiaries) death should be imminent. In order to do this, you have to objectively and realistically decide how long you expect to live in order for your careful calculations to work optimally.  

Part of me does feel like I'd be letting my work colleagues down as I've worked for the same company for over 20 years, but I have to think about myself and family.

Despite thinking of my large corporate as a local business for over 30 years, that is one thing I WON’T be worrying about!!!!
You’d be gone in a heartbeat if they have to cut their cloth accordingly.
I think we all like to think we are more important than we are, it’s what keeps us going.

I've seen so many people leave our company (voluntarily and involuntarily) over the last 30 years. In most cases both they, and their teams / colleagues felt that the company were "stupid for letting them go" and that a hole would be left that could never be filled, causing irreparable damage the company.

The reality however was that this never happened (and I consider myself equally expendible in this regard).

When you have to make a choice between your interests and that of your company, you look after yourself and your loved ones first and foremost.  

Note: The only exception is when the company is laying off because it is already on a deathmarch to oblivion, in which case none of that matters to anybody in that desparate quest to keep the doors open for a few extra weeks!

Our annual turnover is over £20b, so despite saving us the odd million here and there I reckon they’ll be OK without me. Having said that, they might disappear into the oblivion the day I clock off.  

You’re right, your health and your loved ones should be the priority for all of us.

CaptainWales

Pipthecat said:

wondering if I'm missing something and it's not a good idea?

If you have cash to save in your 40's three topics keep coming up on these forums: should I pay of my mortgage (debts), max out my pension contributions or ISA?  Which is right for you will come down to your specific circumstances but the answer might be a combination of these.

• Psychologically having no debts if very liberating even if the maths says your money could be working harder elsewhere
• Pensions wins for tax efficiency at the cost of tying away your money for another 10+ years
• ISA allows you to change your mind and access tax free money earlier.

My starting position would be to take advantage of any matching contributions into my company pension and then sit down and work out what my end goal is?  Do you have a target age and or income to retire?

I agree. For me personally, its about being able to financially secure and comfortable to retire as early as possible.  

MEM62

CaptainWales said:

I am in my 40's and currently pay most of my salary into my pension. My thinking is that it will then have the greatest amount of time to grow. I don't know anybody else who does this though and wondering if I'm missing something and it's not a good idea?

Make hay while the sun shines.  If you can afford to and are happy with the lifestyle you can afford on what remains the it is a great idea.  It is much easier to taper off in later years than to try and catch up.    

kempiejon

CaptainWales said:My starting position would be to take advantage of any matching contributions into my company pension and then sit down and work out what my end goal is?  Do you have a target age and or income to retire?

I agree. For me personally, its about being able to financially secure and comfortable to retire as early as possible.  

When I was focused on retiring as early as possible I was younger than you Capt, so although I collected the matched contributions and usually added any bonuses to the pension my surplus money went to ISAs and a general investment account. Also without being restricted to what my pensions provider offered I could experiment with more exotic investments and got lucky. The benign treatment of dividend for basic rate and capital gains allowances made up for the smaller ISA maximum contribution.
I was made redundant at 46 and eeked out a couple of years not working before I got a part time job and a bout a year later looked again at my plans and took a smaller easier role. If it was all in personal pension/SIPP I'd have soon been in financial trouble and looking for work. 

GunJack

Cobbler_tone said:

Higher rate tax…depends how long you can sustain having no net increases.

This is a good point, and the situation I find myself in now...just upped pension conts to stay just under 40% tax, but the company have just published the pay offer so I'm going to have to up them again this fy, and each year until I pack it all in. In two and a half years my deferred CS pension kicks in and the current pension conts will have to rise again to cover the CS income...

Thankfully only got  around 4.5 years left so having no net increase for that period should be easily doable..

Cobbler_tone

GunJack said:

Cobbler_tone said:

Higher rate tax…depends how long you can sustain having no net increases.

This is a good point, and the situation I find myself in now...just upped pension conts to stay just under 40% tax, but the company have just published the pay offer so I'm going to have to up them again this fy, and each year until I pack it all in. In two and a half years my deferred CS pension kicks in and the current pension conts will have to rise again to cover the CS income...

Thankfully only got  around 4.5 years left so having no net increase for that period should be easily doable..

I’ve not had a net increase for a few years now. As I enter my last 12 months I am tempted to ramp them right up. Very easy to change them month by month and HR are good at informing you of your max % allowed in line with your wage. They’ve obviously had their wrists slapped. I could go from 47%-72% total contributions.
I appreciate the pot could drop but saving the tax now and getting 25% tax free later is pretty appealing, as opposed to a regular saver at 7.5%.

BikingBud

Hoenir said:

disgruntled1234 said:

Part of me does feel like I'd be letting my work colleagues down as I've worked for the same company for over 20 years, but I have to think about myself and family.

Everybody is expendable in the workplace. Think of yourself as a sand castle built on the beach built at low tide. 

Tomorrow somebody else will come and build a new one. 

A bucket of water, take your hand out and see what impression you have left.

Cobbler_tone

BikingBud said:

Hoenir said:

disgruntled1234 said:

Part of me does feel like I'd be letting my work colleagues down as I've worked for the same company for over 20 years, but I have to think about myself and family.

Everybody is expendable in the workplace. Think of yourself as a sand castle built on the beach built at low tide. 

Tomorrow somebody else will come and build a new one. 

A bucket of water, take your hand out and see what impression you have left.

A lot of people would make sure their middle finger was out. 

poseidon1

Not sure if I am a little unusual in holding a certain attitude to retirement income.

At retirement 10 years ago, moved down from being a solid 40% employed tax payer  broaching the point of begining to lose personal allowances, down to a comfortable 20% tax payer from various sources of retirement investment income.

However,  my objective over the years has been to grow taxable investment income sources, back to the levels of 40% earnings on the basis one can never have too much disposable income.  State pension has now firmly  tipped income  back into higher rate tax territory, with a reasonable size Sipp still to be accessed at which point will be generating  overall the same as  pre retirement employment earnings. 

Seemed to me, that since I expected  and received decent annual  pay rises whilst employed , could see no reason why the same should not occur in retirement,  but with far less effort than my previous 50/60 hour working week demanded.