Forum menu
@ianc that is a fun calculator. It suggested a ‘comfortable’ retirement income for 2025 was about £43,000 after tax which may seem high, or low, depending. Its inclusion of various contingency options was neat.
Which is higher than most workers earn (net)...
So "you want a £1M pot" is based on "you need £50K" income? Is that per person or joint? It seems like lazy financial planning that just conveniently comes up with round numbers. Perhaps the reason the government is so worried about the ecconomically inactive early retirees is that people learned to count for themselves and realised you don't need 4 foreign holidays a year to enjoy retirement.
There’s more than a few reports saying that parents wealth rather than earned is the defining factor in wealth for anyone under 25 in the UK now. And the inheritance figures are quite startling – for those who do have wealthy parents, the amounts and age at which they get help also matters hugely, not just a lump sum inheritance when you’re 50+…
I think this is true. Its why the current inheritance tax situation is flawed - it helps very affluent families stay very affluent and helps their children get a better start in life, whilst the poorest are trapped in a way that only incredible luck can actually help them escape.
Re student loans. I think the comparison was with graduates now vs then, rather than a current graduate vs current non-grad.
The government says median salary for a graduate is now £40k. Which means they have about £1370 less per year* to put into pensions or mortgages, than someone who graduated in the good old days.
So of course it will affect their retirement or house purchasing, although, agreed, the fact that they're a graduate at all should help their earnings in general. But they're worse off than their forebears.
*at a £40k salary, this £1,370 shortfall will last until they're about 51 if they went to uni since 2012, or 61 if they're just starting now. For those who went to uni 2006-2011, they might have it done before it's written off after 25 years. Point is, as we all keep going on about compound interest on pensions, this can put a chunky dent in their retirement fund. For MrsDoris and I, it was about 21 years in each case. And I consider myself lucky now!
I think this is true. Its why the current inheritance tax situation is flawed – it helps very affluent families stay very affluent and helps their children get a better start in life, whilst the poorest are trapped in a way that only incredible luck can actually help them escape.
Careful, you'll be upsetting the 'Farmers' again 😉
Its why the current inheritance tax situation is flawed – it helps very affluent families stay very affluent and helps their children get a better start in life, whilst the poorest are trapped in a way that only incredible luck can actually help them escape.
very much so. I am in favour of much greater inheritance taxes even tho I both stand to inherit and I have money to leave to people. Having said that no inheritance has come my way yet and I am 63. One issue is that with folk living so much longer you do not get your inheritance when you really need it but once you no longer do. Much of mine will skip a generation because of this but its still giving folk a huge advantage
the amounts and age at which they get help also matters hugely
This. As with most hugely important books that you should read, this one was recommended to me and the useful bit could be summarised in about 3 pages but it did bring into focus how people "leave" transferring wealth until either "very late" or "too late" (in the case of Mrs Surfers well off parents)
https://www.amazon.co.uk/Die-Zero-Getting-Your-Money/dp/0358099765
We have gifted sums to both of our children at the point they want to get onto the housing ladder. Not totally risk free for us gifting it now but hugely timely for them.
I semi-retired at 52, living on savings and some part time consultancy work currently, until I get my pension at 55. Yes I take a (big) reduction in the pensions taking them then instead of 67, but I also benefit from the 12 years of pension payments.
Everybody's position will be different to yours though - my pension is larger, one child just finishing school, final mortgage payment will come from lump sums, wife still working (and wanting to do so for a fair few more years yet) etc.
My advice is to do your sums, factor in when finances change (eg state pension age etc), and when you think you will spend more money (so costs of DIY/maintenance, car replacement, house moves etc). If you really want to make it work, there is usually a way!
Yes, I found it a huge mental hurdle to go from ‘saving’ and trying to build up some cash / pension, etc. to the prospect of slowly chipping away at the metaphorical pile.
I know its a very 1st world problem but we have been lucky that I can retire (Mrs Surfer retires end of next year) and the numbers stack up but for me the hardest part has been dealing with some depression and anxiety after working for 40+ years. I was lucky in my career to do rewarding jobs but there is a very real loss of identity for me. Not everyone has a mixed early retirement as I have but a note of caution, it can have some unexpected downsides in spite of what the endless stream of early retirement grifters claim on Facebook/Youtube.
Which is higher than most workers earn (net)…
it’s above the median gross for postgrads let alone net
currently annuity rates would give a joint income with 3% annual increase of £48k on £1m. Add on two state pensions and you’re in the top 10% of households. Add on the tax benefits - 25% of pension tax free and no NI to pay thsts going to move up further when you look at net incomes.
For people who have paid off mortgages, are unlikely to still have dependents and aren’t saving for pension. I’m sure it would provide for a very comfortable retirement, but I’m also sure you could be very happy on a lot less. Of course 25k of that doesn’t cut in until 67 which is a long way away if you’re thinking of retiring in early 50s
I too resigned a couple of days ago, following a reduction in hours over the past couple of years. I'll be 62 in the summer, having worked for nearly 45 years.
I will be sad to leave, my employer is outstanding and I find my work challenging and interesting, but I want to cycle, sail, travel and potter more whilst I still can.
Congratulations to all of you that have taken the plunge, it's like an epidemic in here 😀
I'm aiming to reduce my days to 3 maybe 4 when I hit 60 in just under 8 years time. Thankfully I enjoy my job which helps a great deal. Three years to go on the mortgage and the kids are pretty much self sufficient now.
This Fidelity blog has some handy snippets in it https://retirement.fidelity.co.uk/news-insights/workplace-investing/saving/the-100-year-life-my-plan-for-a-37-year-retirement/
@surfer ‘die with zero’ was a choice of book for a book club I take part in. I was the only one to read it as the others gave up a page or so in they judged it so execrable. I cannot recommend it. I deleted the review notes I made on it. However, I recall that it was badly written by a multi-millionaire energy trader whose advice more or less boiled down to ‘enjoy your money while you can’. As folks will gather from the title the intent is to have used or given away all your wealth by the time you die.
well, to cheer those of you without the £1m, this thread has kicked me into getting my paperwork together.
I knew it needed sorting but didn’t have the headspace and time to get to grips with it, there’s plenty of time I thought.
I find myself at 57 with a pot of c£80k. I did start one in my first job, left after 2 years but couldn’t add that to my new jobs scheme. Quite a few jobs with only 1-2 years contribution and several jobs that didn’t offer a pension.
Then kids - first born has cerebral palsy so the extra demands of looking after him and cost (eg having to adapt the house) haven’t helped.
Have actually boosted the pot in the last couple of years so hopefully a few more will help. Also expect to get a 200k + windfall in 2 years time so that’ll be added.
Can probably get c£200k if we downsize which will be a no brainier as a 4 bed property for 2 (as long as the kids leave) will be ott. That could be increased if we move out of the area.
I’m 44 and I have been focused on saving for retirement for 20 years now. Seems strange I am now at the tipping point now and I am seriously considering reducing hours but I worry this is career suicide? Too early to knock a day on the head or plod on for another 6 years to 50 then do 3 days a week. Fortunate position I know but hey YOLO and all that.
CaherFull Member
The problem now is most young people having just left Uni will be some 50k in debt so won’t have too much for either a mortgage or pension. Unless mother and father bail them out.
I think that's the wrong way of looking at student loans. Ignore the actual debt itself. Go on the dole for 40 years and it just disappears without making a single penny of payment. Look at it as a post-degree additional income tax, providing you've got a job paying a bit higher than minimum wage. And it is written off after a certain period (25 or 30 or 40 years, or when 65, depending on when it was taken). Student loans, in part, are a Government mechanism of having some national debt not included in the national debt figures.
(And to be absolutely clear, I think the whole student loan system is fundamentally appalling - we need as a nation to educate people for the good of the nation - by being highly educated usually means earning more as a result, that person pays more tax... a benefit to the nation's budget. Now, whether they are doing degrees that are worthwhile to society like medicine or engineering etc, or some mickey mouse joke of a degree... that's a different point, as there have been an increasing plethora of joke degrees out there since the early 1990s).
I am seriously considering reducing hours but I worry this is career suicide? Too early to knock a day on the head or plod on for another 6 years
I'd say that it depends on your career, and your attitude to it - civil service and some professions I work with seem more open to it. What I would say is that regardless of what the company says, you are unlikely to feel a reduced workload if you drop to 4 days a week, seems to be easier at 3 days a week. Also bear in mind you still need to do as much training, keeping up to date and read as many corporate bullshit emails as a full-timer.
Slightly off topic but.. I have a 175k pension pot, still a while off retiring yet.
IF I happen to change jobs in the not so distant future, is it better to keep my current pension pot as it is OR combine it with a new pension that the new company will offer? (obviously I would wait to see if It worked out before trenfering pensions around)
you are unlikely to feel a reduced workload if you drop to 4 days a week, seems to be easier at 3 days a week
It's certainly true that you have to be very wary / careful that droping to a 4 day week doesn't become a 20% pay cut for no gain. But... it can be possible:-
I changed employer 3 years ago. Many (ex) colleagues asked if I was dropping to a 4 day week then. I decided not, as I saw some others do that and still work all hours etc, so basically took a 20% pay cut for no benefit.
I did actually drop to a 4 day week a few months ago. So far... I'm not getting out biking or swimming as I intended - BUT - the extra day off has definitely given me more 'head space' and ability to get other things done - whether long dog walks, sort stuff in the house, etc, go see my daughter at the other end of the country, go see a man about a dog, etc. You definitely have to have a slightly hard nosed approach where Friday is a no-work day (although I do make occasional exceptions - but then get the day back in lieu). Definitely helps that my boss is clear that Friday is a no-work day for me, unless he agrees different (ie I have to agree with him if I decide to work a Friday - I manage my own time and workload) as part of my rationale was to use it to get some fitness back etc, for long term benefit. I realise many don't have such good managers. I definitely wouldn't go back to 5 days a week now.
I can defo see that 3 days a week is a psychological step to break some people's expectations that you're still full time.
s it better to keep my current pension pot as it is OR combine it
Best to get advice on this. there could be transfer fees and or new pension scheme could have worse investment options / higher management fees.
If your existing pension is a defined benefit one then (in nearly all circumstances) the advice is to leave it alone.
When I was in your situation I transferred my old (defined contribution) pension to a SIPP with low mgt fees and choose some low cost tracker investments (and a couple of higher risk ones too)