Preparing For Your Retirement

[SuperChimp]

Hi all,

We live in interesting economic times and I was just curious as to your plans for retirement, if you have any. Fortunately I have a job and can hopefully start investing now to make things easier in the future, but I am one of the lucky few I feel.

Retirement is a long way off for me, and I only see that time receding further but I am interested in your expectations and plans if you do not mind sharing them.

Edited January 14, 2013 by 98% Chimp

[Monkey]

i'm 32 years old.

I'm paying into a pension at the moment, and i hope in a few years time i hope to invest money in to long term things. i dont know what as i have not done my research.

but for now i'm paying into a pension, i'm treating like a locked savings account.

[VeryMeanReversion]

All earnings in the 40% income tax band are dumped into a pension using salary sacrifice so I save both mine and the employer NI contibutions. Effective marginal tax rate was over 50% when including NI and over 60% when considering loss of child benefit. Pension charges are 0.6% p.a. Funds are currently a mix of Japan equities, cash, RPI-linked UK gilts.

Paying into pension if income is in the lower tax band isn't worth it, may as well use ISAs.

I have an outbuilding that would cost £40K to convert into a dwelling that could be rented out for ~£8k p.a. Will use the pension lump sum to pay for that, a much better return than an annuity.

[rantnrave]

Property is my pension...

...in the sense that I have a wad of savings that will within the next couple of years enable me to buy the kind of family home I want (three-bed semi, off-road parking, garage and garden you can kick a ball round) with cash just as I turn 40.

That leaves 20 years to put aside money for my retirement, so I can hopefully finish working at 60. The wife is a bit older than me, so leaving things until I'm 67 wont leave us much time to still be healthy and enjoy life. Actually, the wife is looking after the little one, so at the moment the savings are in her name and thus tax-free.

I am contributing through a pension scheme at work and have done for a while. I have little expectation that these will deliver anything like enough money to retire comfortably from though. I opt for savings accounts, even in this low-rate environment because I can see where the money is and I can choose to move it round if I wish. I know there are higher returns to be had out there, but I am definitely a low-risk kind of guy.

[Squeeky]

I am also 32, and currently paying into a pension.

At the moment all my contributions are matched by my employer, so I think it is working out okay, or at least it is liberating money from my employer that I wouldn't otherwise get. If it wasn't for the employer contributions I wouldn't be putting money into a pension at the moment as the performance over the last 10 years or so hasn't exactly been fantastic.

I have a horrible feeling that money purchase pensions are going to be the endowment policy equivalent for my generation. My plan at the moment is to keep the pension going and keep saving - primarily in cash . I am looking to buy a house within the next 5 years or so. - If the current rental gets clawed back by the landlord (which I suspect they might as they are accidental landlords) I need to be able to either buy or rent in the right area (close to children's school), depending on what is available at the time. I don't know when or if it will happen, so I can't afford to have money tied up in shares etc.. as I potentially can't afford for it to ride out any dips etc.

I will probably stop the pension contributions if I get a mortgage as that will be the priority debt. When that is all paid off I will look at my financial position again. If things stay as they are, I'll probably start work on my jewellery collection and get some interesting paintings to put on the walls....

[Democorruptcy]

Property is my pension...

...in the sense that I have a wad of savings that will within the next couple of years enable me to buy the kind of family home I want (three-bed semi, off-road parking, garage and garden you can kick a ball round) with cash just as I turn 40.

That leaves 20 years to put aside money for my retirement, so I can hopefully finish working at 60. The wife is a bit older than me, so leaving things until I'm 67 wont leave us much time to still be healthy and enjoy life. Actually, the wife is looking after the little one, so at the moment the savings are in her name and thus tax-free.

I am contributing through a pension scheme at work and have done for a while. I have little expectation that these will deliver anything like enough money to retire comfortably from though. I opt for savings accounts, even in this low-rate environment because I can see where the money is and I can choose to move it round if I wish. I know there are higher returns to be had out there, but I am definitely a low-risk kind of guy.

It's an interesting new idea that keeping money in the bank is low risk.

[Squeeky]

It's an interesting new idea that keeping money in the bank is low risk.

Risk is all relative.

[shindigger]

46. Self employed.

House mortgage free.

Stash of ******.

Got some cash in ISAs NI Certs etc.

No stock market expsosure whatsoever, other than about 19k in a pension with Aegon.

I've not paid in to it for a decade, nor do i plan to restart.

I'd be quite happy to take that as a "trivial" whatnot depending on what the threshold is when it comes to it. Might buy me a car....

I contracted out when an employee in the late 80's.

I honestly don't have a clue what the state will give me, and as such, i've regarded anything i get from them as a bonus.

I pay my class 2 and class 4. On paper, it seems a fair return for the money.

Sounds like it might be good news for someone in my position, but god kows what my actual retirement age will be.

It seems they have actually made a genuine effort to simplify matters.

Thatcher really stirred this shit up in the 80's. It was an utter mess.

Edited January 14, 2013 by shindigger

[gimble]

I expect to retire in about 30 years time, pay tax at 40%. I'm sticking the maximum into stocks and shares ISAs, nothing else, no pension. Average annual return on the ISAs over the last 10 years since I started is 7%, not great but considering most share indecies have more or less gone sideways (ok with some ups and downs) not too shabby. If there's another crisis and shares fall 50% I'll lose all those gains but in a way that's good cos I'm looking long term and am happy to buy cheap.I don't trust pensions, pension income is taxed and you have to buy an annuity with 75% of your pot like it or not. I have mates that work in pension management and they are all in the clover, VERY good salaries, amazing flashy offices in London - the money's coming from somewhere, errr from their trustees' funds I guess! Unless the government change the rules on ISAs (a possibility I admit) I will draw down the funds in the ISA on retirement and pay zero tax on this. Annuities are a rip off IMHO, at least with an ISA you know what you've got. In the ISAs I have mostly gone for cheap index trackers on UK, Europe, USA & Japan with income re-invested. Fees on managed funds eat into returns too much to justify them, unless you're very lucky and pick an "Anthony Bolton" ( a famous fund manager who turned £1000 invested in 1980 to £180,000 in 2004 or something like that) . That said I have also bought into some high yield bond funds that are doing well so far, some Eastern Europe and Paxcific Asia risky ones that are also doing well so far and JPM Natural Resources (this did stonkingly up to 2008, since then has been dire - my thinking is it's a hedge on energy prices - if oil goes up my investment goes up, if oil's down my investment is down but my bills go down too). I also plan to learn the art of home brewing as a hedge against price rises in beer.

[rit]

45 and now self employed.

I opted out of the company pension I had access to in 1989, 2 days out after I had a legal right to and have focussed on funding it ever since. Over the years I have made good use of things like salary sacrifice as the Labour party when in power made a complete mess of the rule changes(for once to my advantage). Before you could only place 17.5% of yearly earnings into a pension - the limit then went to £250,000. This is the limit that the current government has now dropped to £40,000 - still a lot higher than 17.5% for most people.

I also have savings in ISAs, NS&I tax free bonds, P2P lending and own my home.

The result is that I can retire as and when I want as long as my investments keep up with average wage growth (currently doing better than that). It will not be a champagne lifestyle, but I have my saving because I never had one of those in the first place.

[rxe]

43.

Paying 15% of salary into a money purchase scheme, along with employers 10%. Actually, I think it is less than 15% now, but still a respectable sum. It is stand alone from my employer, so is essentially a tax optimised punt in the UK stock market. Did very well 1993 - 2005, flatlined since. Still a tidy sum, and it has 20 years to run.

Debt free. House/Car/Appliances fully maintained - no unplanned looming bills that I could have avoided.

Spread of equity investments in three different currencies. 50% GBP, 30% USD, 20% EUR - tax efficient ISA/PEPs up to the annual limits. All focused on companies that make stuff or dig it out of the ground - no Facetwitter here. 3 years cash in the bank.

Rather than gold, my backstop is agricultural land - genuinely useful and gives me pleasure.

Retirement plans? Start packing it in at 55, live off dividends and renting my place in London. Become a smallholder out in the country. At current figures, that would be fine, though clearly that may change.

[Kurt Barlow]

40

Local Govt Pension worth equivalent of about £7000 pa at 63 (should the UK not go bust) plus small Private sector pension (probably worth £500 a year equivalent aged 60)

Own UK House with small mortgage <20% of value- rented out

95K shares & 80K (cash, ZOPA, Funding Circle, premium bonds, ISA's)

Currently working in Oz. 9% of gross income goes into Superannuation fund. Hope to work until 60ish (health permitting), part time work thereafter for 4-5 years.

$35K in Aus $ savings.

[SuperChimp]

Just wanted to say thanks for all your replies.

It is very interesting to see the spread of risk into different investment classes which is what I am aiming for.

Thanks.