Hundred grand in 23 years

Hello team!

I have been awful with money my whole life and up to my neck in debt until a few years ago when I had my light bulb moment and dug myself out of debt.

I am now allergic to borrowing and rent my home, which is not wise, I know.

If I want to retire in 23 years time with a lump sum, how would/could I work out how much I would need to accrue, one way or the other that would equate to a hundred grand of today's money?

I am up to about 20k at the minute, and won't lock my cash away in pensions. I pay into a ls 80 fund, punt on shares and basically just save up!
:cool::cool: lurker:cool::cool:
«1345

Comments

  • eskbanker
    eskbanker Posts: 30,401
    First Anniversary Name Dropper Photogenic First Post
    Forumite
    On what basis do you rule out pensions? They are, after all, designed to provide lump sums and/or income at retirement and the tax benefits (and employer contributions where applicable) will usually make a significant contribution to long-term fund growth over and above what you can achieve outside that wrapper....
  • Alice_Holt
    Alice_Holt Posts: 5,921
    First Anniversary Name Dropper First Post
    Forumite
    edited 18 March 2017 at 11:47AM
    These may help:

    https://www.hl.co.uk/pensions/interactive-calculators/pension-calculator/pension-calculator?theSource=PCGSN&Override=1&adg=G+SIPPENG+CAL&gclid=CjwKEAjwkq7GBRDun9iu2JjyhmsSJADHCD_H6IjT6hOVMaRcSaedX4cCjRZejjaaQmYq7EJTBalybxoCDAHw_wcB

    http://www.investopedia.com/ask/answers/04/040104.asp

    Hold any necessary emergency funds in high (!) interest accounts.
    But then I'd use a pension and get the income tax uplift. Plus an employer contribution if applicable.
    Silly not to really - just throwing away money!
    Carefully consider how to minimise costs and taxation - these eat into returns.

    This is a good resource and points you to some tools which would help your calculations:
    http://monevator.com/how-to-retirement-plan/

    Are you enrolled into a workplace pension?
    What is the forecast for your state pension?
    Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    Is the £100k all that you will have on retirement? Are you sure it's enough?
  • masonic
    masonic Posts: 23,070
    Photogenic Name Dropper First Post First Anniversary
    Forumite
    OP, how much do you think you will need to spend on your living costs in retirement? Will you already be of state pension age when you retire, and will you get the full state pension? It does rather sound like you plan to retire into semi-poverty, especially if you will still be renting.
  • JohnRo
    JohnRo Posts: 2,887
    First Anniversary Combo Breaker First Post
    Forumite
    You're aiming for a final pension pot of approx £190K then, that's if the last 23 years are any guide to the future, which they're not but it's as good a guess as any.

    According to the BoE, £100K in 1993 would be worth ~£186K in today's money with a 2.8% average annual inflation rate.

    How much a month can you afford to save into this?
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • sparkychris
    sparkychris Posts: 572 Forumite
    I rule out pensions because the idea that my money is inaccessable if a disaster should occur is really scary... My slightly less scary idea is a buy to let so that a tenant would help pay for my property over 20 years or so. Should the property be empty then I'd be paying the mortgage and just think of it as paying into my pension .. should disaster strike I could sell... Or I could retire into it and live rent free, perhaps

    The reason I don't buy my home now is because I could never afford to live in a house I'd enjoy living in but can afford the rent. The house I live in is worth about 250,000 and the rent is 650... (ish)
    I could afford a terraced home but I'd be miserable.

    I know it's not great thinking but pensions scare me to death.

    And a hundred grand wouldn't be enough but it's better than nothing!
    :cool::cool: lurker:cool::cool:
  • sparkychris
    sparkychris Posts: 572 Forumite
    masonic wrote: »
    OP, how much do you think you will need to spend on your living costs in retirement? Will you already be of state pension age when you retire, and will you get the full state pension? It does rather sound like you plan to retire into semi-poverty, especially if you will still be renting.

    Semi poverty is the best I can go for at the minute!

    Am 41, in a rented home with 20k in the bank!
    :cool::cool: lurker:cool::cool:
  • I rule out pensions because the idea that my money is inaccessable if a disaster should occur is really scary...
    You should build up an emergency fund to deal with this situation. As you have £20k that should be enough.

    For saving for retirement you need a pension or an ISA.

    Are you employed? Does your employer offer a pension scheme?

    Don't forget you should also (in theory) get the state pension at some point.
  • I have various pensions from previous employment, which should just about pay the council tax and heating, on the house we own.
    We have invested in a Buy to let, which will pay off it's mortgage just about the age of 65, so that is about £700 a month, which is probably enough to run a car and eat.
    So I am also investing in a SIPP which might be enough in the next 15 years to provide some luxury.
    If I had to worry about paying rent in my retirement I'd be bricking it.
    I did think we could always rent our house out and go and live in a caravan in my kids garden. LOL
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    Why not start by working out how much you'll need to have saved?
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards