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?
  • Premier Icon jam bo
    Subscriber

    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.

    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.

    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.

    yossarian
    Member

    +1 for grantus

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

    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.

    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 🙂

    anjs
    Member

    no nice final salary pension for me.

    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. 🙂

    Premier Icon binners
    Subscriber

    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

    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.

    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 🙂

    Premier Icon Stoner
    Subscriber

    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…

    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.

    Premier Icon johnikgriff
    Subscriber

    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……

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

    Premier Icon Stoner
    Subscriber

    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

    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!!

    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.

    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.

    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.

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

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

    Dan1502
    Member

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

    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?

    Premier Icon ton
    Subscriber

    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.

    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 🙂

    Premier Icon DaRC_L
    Subscriber

    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.

    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.

    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 😉

    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.

    Premier Icon Onzadog
    Subscriber

    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.

    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.

    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

    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

    Premier Icon Kryton57
    Subscriber

    Work out your standard of living costs today, at what it might be if youo retired. Lets say thats £20,000.

    Now, retire at 67, and live until 90. Thats 23 (years) x £20k not accounting for inflation, or £460,000.

    Have a think about how much money you need to save/make between now and age 67 to get to £460k or whatever your number is…

    Scary eh 🙂

    In my case thats 28 years, or £16.5k a year.

    grantus
    Member

    This is depressing – I think I may send a letter to that boy and his wife in Largs!

    Premier Icon totalshell
    Subscriber

    coming up 50 quickly so we have our own home and a bungalow that we own mortgage free so what was there mortgages and what should be my pension contribution and bought two terraced houses on mortgages ( they should be paid off in 10 yrs) so giving me an income or a pot come 60 ish. realistically poor health we see me off before then but mrs tts should be ok esp. if she can snare some rich bloke!!

    brooess
    Member

    The government doesn’t pay for anything.
    The taxpayers do. That’s us.
    And in the case of pensions, our kids with their taxes. Who are going to have a hard enough time as it is.
    The aging population is a fact of nature. Nothing to do with the government. And we’d vote out any party that made the necessary changes to NI and taxes.
    I wouldn’t expect much in the way of benefits when I retire c2035, there won’t be the money to fund it. Only the very poorest will be fully funded.
    My plan, Work longer (we live a lot longer than when retirement ages were first decided anyway), and then semi-retire.
    And in the meantime a few less shiny bits and a little more saving…

    grantway
    Member

    Just bought a place in Spain and could now Retire by letting our house in East London.
    But we are looking at buying a couple of cheaper properties in North of England to rent, and still keep
    our London home.
    But probably later cash in homes minus London home and buy a couple of places in Spain to rent
    out has holiday and short stay lets.

    You seriously can’t rely on something that i just can’t see you being able to live on
    and may not even be there for when you do retire.

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