Are you worried about how to pay for your retirement vs working forever?

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Are you worried about how to pay for your retirement vs working forever?

58 posts & 46 voices | Started 9 months ago by Aus | Latest reply from ski

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Aus - Member

Following on from the 'how financially secure are you' thread, it made me worry more about old age than today. I'm relatively well paid, reasonably low mortgage & positive equity, in work (altho less than secure), few debts so overall very very fortunate.

But I do worry about retirement ... I've no pension plan but we try and save a bit. How much do you need for 'old age'; would be lovely to retire and have some enjoyment, but scary to think you might need enough for 20+ years.

We feel fine today, but not sure how one plans for retirement.

Posted 9 months ago #
jam bo - Member

I don't worry about retirement as I'm never going to get there.

The retirement age currently seems to be going up faster than I'm getting older.

Posted 9 months ago #
tadeuszkrieger - Member

no.

Posted 9 months ago #
grantus - Member

I'll make sure i've no savings and will have long-since signed my house over to my kids. That way i'll have no assets and the government can pay my keep.

Seems fair to me.

Posted 9 months ago #
b r - Member

I've no pension plan but we try and save a bit. How much do you need for 'old age'; would be lovely to retire and have some enjoyment, but scary to think you might need enough for 20+ years.

Half your age, as a percentage of your income - if aged 40, save (and invest) 20%..., and catch up all the years you haven't.

Posted 9 months ago #
yossarian - Member

+1 for grantus

I ain't paying for no nursing home, fool.

Posted 9 months ago #
TooTall - Member

Planned for it, retire in 2013 with immediate pension, lump sum and it gets index linked aged 55. I will, of course, keep working like I haven't got the pension, so will improve what I save / invest until I retire.

Posted 9 months ago #
djglover - Member

I have a target to be retired by 55. I have made adequate provision for that so far. Should be mortgage free in a few years if my move out of London comes to fruition.

Its all about living well within your means, I save over 20% of my net salary and thats on top of pension provision.

Whilst collegues and peers race around in Porsches TTs, and Audi S4's I've got a skoda

Posted 9 months ago #
anjs - Member

no nice final salary pension for me.

Posted 9 months ago #
grum - Member

Don't think I'll ever really retire as I have no pension and no likely way of getting one - but will hopefully have paid off my mortgage and not have many outgoings. When I start to get really ill/infirm then probably a trip to Dignitas or taking up Wing Suit Base Jumping.

Posted 9 months ago #
binners - Member

I spent years paying 15% of my income into a private pension. Not any more! According to my statement it will provide me, annually, with about the cost of a packet of Werthers Originals a week. For a year or two at least.

I think by the time i reach what is presently considered 'retirement age', the whole concept will be regarded as a quaint late 20th century anomaly for all but the super-rich.

So I'm ****ed if I'm handing any more hard-earned over to whoever it is at Legal & General who's made a ****ing fortune out of mine and everybody else's pension contributions thus far

Posted 9 months ago #
chrissyboy - Member

Agree with Binners. I've never worked for anyone that offered a final salary pension scheme, and anyway I've worked for loads of different companies. I used to save into a private pension until about 5 years ago, and it just seemed pointless. Current projections show that I'll be lucky to buy a whole packet of Werthers...

I'm 42 so it's probably time (or late) to do something about it, but whatever I do it won't be handing more money over to legal & general.

Posted 9 months ago #
uplink - Member

I have a pension but I suspect it's a bit like Binner's

I keep getting letters each year asking me if I want to stay opted out, in, out - shake it all about
I don't really have a clue

I'll probably sell up and go live in Spain on the proceeds, if that runs out, the kids [anyone under 30 now] can sort it

Posted 9 months ago #
Stoner - Member

one of the few things I thank my previous employer for was setting up a stakeholder pension scheme.

Run by Aviva, I can continue to use it to pay into from my own business (just sweeping surpluses into it offset against tax as and when they exist), but unlike if I were to set up a new pension fund Im only charged 1% pa on assets. Which seems OK to me for the asset management service I get.

Before reviving my pension fund I used ISAs to sweep spare into. They just sit there ticking along.

I have no idea whether I'll retire, or just find things to do for which some of them I may get paid. When the kids have buggered off, Id like to disappear with a rucksack, walking boots and bivvy bag for 6 months though...Only 17 more years to wait...

Posted 9 months ago #
Dan1502 - Member

Old style pensions are very expensive. Some current pensions are too but there is value to be had. It's important to remember that a pension is just a long term savings 'wrapper' with various tax benefits but which also has drawbacks. Generally it's best to consider different methods of savings including pensions, ISAs etc.

It's then important to get the investment strategy right and this will be different for everyone and of course not to pay too much for it.

The problem is there's no savings culture currently and we're all constantly sat in front of a big shop window which doesn't help (internet). That combined with the closure of final salary pensions spells trouble and it's scary how much you need to save to secure a half decent lifestyle.

Relying on the State is not to be recommended as the aging population means less working to support more retiring. Pretty gloomy really.

It's also pretty hard to find a decent adviser and even more so if your earnings/wealth are not at the higher end.

Posted 9 months ago #
johnikgriff - Member

I'm in a great postion, thanks I got to retired at 40. But partly for an very unfrotunate reason that I wont go into.

I was however planning to retire in my mid 50's and was lucky enough to have had a final salary pension for a good few years. But the pension I got after it doesn't look so good.

The sign you house etc over to your children route, although seems a great idea is infact very complicated and there is lots of advise online about it, The major pit falls seem to be:-

Very complicated gift/inheritance laws when you do it. The tax office are very reluctant on giving up their slice (Bar Stewards that they are)

If you need to go into care, in the current cliamte, councils have no money so you will end up it the cheapest option they have. Not something to look forward to, somebody working in a dump on minimum wage responsible for your happiness in your final years....

Signing over to your kids, also means there spouse. So if they split they could make you sell it so they can have their bit.

I may be okay, but our kids are fecked......

Posted 9 months ago #
van cough cough - Member

there'll be a massive civil rebellion way before I retire.....

Posted 9 months ago #
Stoner - Member

Signing over to your kids, also means there spouse. So if they split they could make you sell it so they can have their bit.

better in trust

Posted 9 months ago #
thomthumb - Member

it's scary (but a long way off) for anyone in theirs 20s. Somedays i wonder whether i'll be working past my centenary.

based on the fact that when the state pension was introduced in 1909 it paid out at 70 but life expectancy was 52, i wouldn't be surprised!

hopefully all you old gits will get some kind of rot set in so i don't end up paying for you for the next 75 years!!

Posted 9 months ago #
uplink - Member

Are you worried about how to pay for your retirement vs working forever?

To directly answer the question - no

If things were so dire in old age that life was a misery, I would hope to have the wherewithal to put an end to it.

Posted 9 months ago #
Pembo - Member

Dan1502 - Member
That combined with the closure of final salary pensions spells trouble and it's scary how much you need to save to secure a half decent lifestyle.

Spot on Dan, the difference between a final salary pension scheme and a money purchase scheme is massive. Age 51, I've got a combination of both through various jobs but still can't see myself retiring before the normal retirement age. The problem is us oldies will stay in jobs for longer which will make it even more difficult for younger people to get jobs.

Posted 9 months ago #
van cough cough - Member

Mum and Dad shafted their children, and the bankers shafted everybody.

Posted 9 months ago #
oliverd1981 - Member

I'm hoping to die before I'm 70, think I might take some retirement now.

Posted 9 months ago #
Dan1502 - Member

And the Government didn't do anyone any favours by shafting final salary schemes.

Posted 9 months ago #
randomjeremy - Member

Here's a question for the STW pension experts: can you start pensions for young children? I have some young nieces and nephews who I would like to support financially and a 50 or 60 year long pension fund might be a good way to do this; is this a stupid idea? Would I be better off just paying into a savings fund / bonds?

Posted 9 months ago #
ton - Member

i have resigned myself that i will work to the day i die............and to be honest i reckon it is a good ploy.

how many people truly enjoy their old age/retirement.
how many people who pay loads into a retirement fund reap the benefits of it.

worked with a bloke who had a pension from the forces and a pension from the police, he came to work with me aged 55 and retired at 60, he died within 18 month of leaving work.

my father in law retired 2 years ago aged 65. mortgage done plenty in the pension pot, but worried to death that it will run out, he also spends 8 hrs a day on the allotment, say's he wished he could have worked on.

Posted 9 months ago #
jon1973 - Member

I'll make sure i've no savings and will have long-since signed my house over to my kids. That way i'll have no assets and the government can pay my keep.

Seems fair to me.

This is a good idea. In fact, I think I may just quit work now due to 'ill-health', have loads of kids and let you all take care of me from now on

Posted 9 months ago #
DaRC_L - Member

Expecting to work until I die - once I get too old it's time for the short term heroin habit (cheaper than a trip to Switzerland)

Paid into pensions for 15 years, 2 are worthless & the other was with the equitable so goooone. Still at least the past 10 have been on a final salary pension - it's the main reason I stay in the job.

Posted 9 months ago #
Dan1502 - Member

You can pay up to £3,600 pa (gross) into a pension for anyone. The payment would be £2,880 with the tax relief added on. You can't claim additional tax relief.

It can be a good idea but you need to think about the pros and cons. You might consider helping them towards a house purchase or education fees a higher priority or at least like there to be the option to access funds for such purposes rather than have to wait until age 55 to benefit.

Posted 9 months ago #
grantus - Member

our company accountant has a lot of Asian clients and he says not a single one of them has a pension scheme. They don't trust them.

They invest in other ways such as property.

I think this is the best idea.

Overpay your mortgage - at least you know where it's going. Then, when you pay off early - either try to invest in a smaller property for retiral or holiday type flat or put the mortgage money away into as high an interest account as you can.

Or emigrate to Eastern Europe - if you're going to be poor, might as well do it somewhere where everyone else is the same and beer is cheap

Posted 9 months ago #
Dan1502 - Member

Diversification is the best approach. Investing directly into property comes with a whole host of risks, costs and hassles and like anything else, if you get it right it can be very rewarding but if not then it can go horribly wrong.

Overpaying a mortgage can also be a good thing. I have done this to an extent and still am a bit but have toned it down as my interest rate is currently rediculously low.

And to say it again, a pension (a decent policy at least) is just a wrapper that holds investments. So the clients you speak of basically don't trust investments other than property. There are investments you can't access using pensions but I'm just trying to get accross that a pension is a means to get income tax relief up front and pay less tax on the funds whilst invested (including IHT benefits before drawn up to age 75) with the downside being the restrictions at the back end (maximum 25% tax free lump sum, taxed on income etc).

I encourage people to consider their goals and resources as a whole, develop an overall plan then think about the investment strategy and the tax wrappers and products/policies last.

The first and very important part is to consider what lifestyle you're aiming for and when then explore whether and how you might get there.

Posted 9 months ago #
Onzadog - Member

I'm just trying to work out how I can pay off my mortgage before I retire as the pension sure isn't going to cover it.

Posted 9 months ago #
djglover - Member

how many people truly enjoy their old age/retirement.
how many people who pay loads into a retirement fund reap the benefits of it.

Using only my parents as a model, they do and love it, they have a modest income from my dads pension, he retired at 57, and they basically live in their camper van for 6 months of the year traveling as they please.

That + some part time work, not sure weather it would be corporate via consultancy or working in a shop, would be what I aspire to. Deffo don't want to work full time till I die.

Posted 9 months ago #
Ro5ey - Member

"Overpay your mortgage - at least you know where it's going. Then, when you pay off early - either try to invest in a smaller property for retiral or holiday type flat or put the mortgage money away into as high an interest account as you can."

This has some merits but so has a balanced portfolio of investments which I believe pensions have a part.

I wouldn't be paying off all my mortgage (when rates are sooooo low) at the expense of putting monies into ISA or a pension. Massive tax gains involved with each, be they realised now of offset in the future

Posted 9 months ago #
Tijuana Taxi - Member

Final salary pension paid for 32 years until they changed it to a career average earnings from April 2009
Not too bad because I have been the highest engineering grade before management for the last thirty years

Lose a bit for retirng early, but fifty five is enough for me, so should get about 2/5ths salary and three times that as a lump sum

Wife gave up work to look after our daughter, but she had eleven years in an index linked final salary that pays at sixty and been paying into another pension scheme for the last five years

Never know might even get a state pension one day, but not betting on it

Posted 9 months ago #

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