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    • Fatbritabroad
    • By Fatbritabroad 10th Jan 19, 8:44 PM
    • 525Posts
    • 325Thanks
    How to decide to on split between pension /other investments
    • #1
    • 10th Jan 19, 8:44 PM
    How to decide to on split between pension /other investments 10th Jan 19 at 8:44 PM
    I've always prioritised pension saving over pretty much everything else strangely, even more so since I became a hrt payer 6 years ago however I'm wondering now whether I've sacrificed too much liquidity in exchange for the tax savings. Potentially as is usual with me im probably just impatient and want to do everything at once!

    I'm 38 and want to retire early (have a loose aim for 50). Retire is probably the wrong word but I want to be at the stage where work is optional and I can live more. We're also planning to start a family this year which may put the kibosh on that plan!

    Salary is 81k and with employers contribution and the ni savings i put in a total of 19%. I'll also get a large bonus in Jan 2020 which if I put that in my pension will bring the total to around 200k maybe more. Don't really want to take too much of it as it will push me well over 100k earnings for the year.
    I have a similar amount in equity in my home and my mortgage is fixed for ten years at 2. 59% with 9 years until the fix ends. I've had relatively little money outside of these until I got an inheritance this year of around 42k.

    Ive done the fix specifically so I can now build up investments outside of my pension and have about 100k total cash and investments almost all in long term investments of various type (tracker funds a bit of p2p and Saye with work) apart from about 12k in cash which I'm building back up again at the moment as with the inheritance I was keen to get invested in one hit (typically the market corrected just after I put it in so won't be accessing that anytime soon lol)

    potentially I'm considering btl purely for a leveraged income play long term and to diversify an income stream from my job but being Cautious I will want alot more outside of pensions etc before I do this. S and s will continue to be my biggest invesment

    Basically Im wondering how you decide when to scale back the pension side of things. I could end up with almost the lta in pensions and not enough liquidity outside of it for more short term needs to bridge the gap until retirement. It just kills me to lose the tax break but equally it'd be nice to have a bigger pot to do some things before standard retirement age. Also conscious they may move the goal posts on pensions again

    Just looking for opinion real life experiences from others here. I know the usual is you aren't saving enough but I may be the other way!
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    • Thrugelmir
    • By Thrugelmir 12th Jan 19, 11:22 PM
    • 62,503 Posts
    • 55,603 Thanks
    Yes that's why i use effectively I guess 3%? (5% without any account of inflation) hisorically I understand the market has returned 5% after inflation so I'm being more Cautious. I'll be at 650k all being well by 50. Plus bonuses etc
    Originally posted by Fatbritabroad
    Historically the (UK) markets have returned around 5% above inflation with income reinvested. Only some 0.5% for capital growth only. This takes no account of trading costs or market spreads either.

    For the US markets. Over an extended period only 800 stocks out of some 25,000 were found to have bettered inflation.

    Japan speaks for itself. Though similiarities can be drawn with more recent history.

    If investing were easy. The Holy Grail would have been found years ago.
    "You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets." - Peter Lynch
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