100k pension pot at 42

[hlu2]

I've finally checked my pension pot and age 42 it's currently 100k. Putting into random calculators, it seems ok at current money but with inflation in 25 years time, it seems tiny. And yes I should have been keeping up with this more, but I didnt start working until I was 30 (postgrad degrees and two pregnancies) so have only had 12 years of working and saving and with two kids and a house - pensions just didnt seem all that relevant until now. How much does everyone else have around this age?

You would need to up the amount to keep it on track for a reasonable pension, I think a pot of about £400k to £500k is what you need to aim for for a reasonable pension, obviously some will want more but that isn't feasible for many. Obviously the inheritance helped but you are not going to get many of them to boost it so I would up it a bit and keep up the good work with being aware of it, many aren't

In my late forties, >£400k in pension pot. Earnings have averaged around the £50k mark for most of my working life, but I always made the maximum contributions I could afford, and in particular, I have never paid 40% income tax because I put everything above that threshold into my pension, and I always made sure to maximise the employer matching contribution. It's amazing how that strategy results in a pot that grows and compounds over time, and frankly I'm astonished (and a little disgusted) by the financially illiterate in this thread who have under-provisioned for their retirement. Smacks of envy and bitterness.

How long is a piece of string? Obviously people's pensions pots will vary wildyly. Some people are on minimum wage and others are millionaires. If you want specific advice then ask a professional

Well who would have thought trying to talk about pensions and how much is a good amount to put in would be so taboo and offensive to some people. I have diddly squat now thanks to my ex but I don’t begrudge other people having healthy pots. No wonder we are so useless with our money sometimes when we treat it like a dirty subject. Some people on here to need to grow up and learn to have adult conversations without going all Veruca Salt.

@fromdownwest

I am reading the room and seeing lot's of people panicking about small pensions.

With the power of interest and time putting very small amounts in would be helpful to the next generation.

I clearly said it doesn't have to be a large amount but to get one open so the child has it there and knows it's there would be part of the child's financial literacy and as that child grows and starts to work the dregs of any money they get can go into it.

Helping to empower our children?

73k pot at 50 … no chance of paying anymore in at the moment .. I know it’s inadequate .. it is what it is

I am 45, have around £130k in my pension pot. I am finally mortgage free and the plan is to downsize or move to a cheaper area once the youngest have moved out in 3-4 years to release some additional capital and bump it up to £250k hopefully. My goal is to achieve £300k by the time I’m in my early 60’s.

Your best bet is to use pension calculators to work out what you will need. I have about the same in my pot from my current workplace (after 10 years) but in addition have some from my old workplace. I'm 45 and right now put 25% of my salary into my pension and DH around 20%. We're both good earners and have 2 DC. We didn't always put this much in but since turning 40 we've both ramped it up. It takes a substantial whack out of our earnings and we may not always be in a position to do this. A rule of thumb is that you should half your age and that's the amount you should be contributing into your pension. But I think they're a ticking time bomb in this country as pensions are very complex things and many don't contribute.

I'm 45 and have 55k so you're doing better than I am 👍 I also didn't start a pension until I was 30.

It's peanuts as single number.

You will retire at 67/68 so in 25 years time £100K now will be nothing due to inflation.

But it depends on how much that will be when you keep adding to it annually and how much your employer adds.

A family friend recently retired at 65 on a pension pot of £1.2M.
That gives £40k per month as income.

Get yourself a good financial advisor.

Per year, surely?

sorry- £40K per annum.

91K at 41. And looking for a job with a higher employer pension contribution.

While I know there are many much worse off, my projections show under where I should be. And I'd really love to retire younger than 68.

I don't understand the hate. You'd be slated if you weren't actively trying to save for retirement. It's the sensible thing to do, if you're in the position to do it.

I have no affiliation with Aviva, but they have a good range of tools for retirement planning that doesn't require any sign up to use and allows you to model what retirement could look like for you (and other interested posters).

I don't know what I had at your age as I'm a bit older now and looking to retire soon.

www.aviva.co.uk/retirement/tools/my-retirement-planner/

If the replies don't improve it maybe better to ask in the money section of this forum.

Given the awful replies you are getting Op, I wouldn’t bother to even post in the money section.

Go to the MoneySavingExpert retirement section, you will get good advise there

forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning

You can also ask about ISAs in savings section

forums.moneysavingexpert.com/categories/savings-investments

Assuming that your pension is a Defined Contribution pot with your employer, then 100k doesn’t sound too bad at 42, you have at least 26yrs until the official retirement age, and it’s unlikely that you would buy an annuity, as most people now use DC pensions for drawdown. I also think that investing your inheritance was wise, but may have been better in an ISA as it gives options to use it earlier eg to help kids at uni.

I have taken early retirement and using ISA savings as well as some drawdown money. Some of my ISA savings came from my inheritance from parents, I split it between mine, DH and kids ISAs.

Maybe check what funds your pension is invested in - you have time on your side for investing in medium to high risk funds, especially if you split the contributions over a few funds, rather than a default low risk strategy.

You will retire at 67/68 so in 25 years time £100K now will be nothing due to inflation.

But presumably the pension is invested in assets that aim to provide above inflation growth over that time period.

OP,
£100k at 42 is a good start. You’re doing better than most people, which is a mixture of lots of luck and a bit of planning on your part.

I personally had £242k at age 39 in my pot when I was disabled in seconds in an RTA and have not worked a day since, nor will I ever be able to work again. The pot has had zero contributions to it since then and is currently hovering around £388k (it’s invested so has gained value with the investments). I am 49 yrs old now.

My pot is 100% from my wages, there was no inheritance or windfalls of cash. I simply started saving aggressively from my first graduate job aged 24 by putting away 25% of gross income. I never missed the income because I went from skint student doing low paid BS jobs to graduate earning a decent wage. So I still had more take home pay.

If I’d been able to keep contributing to my pot, it would likely be over £1m by now. As that was “the plan”. But I’m so glad I saved when I could as it’s probably how I’m going to fund getting back on the property ladder with a retirement home. The RTA created a financial crisis for my family and we ended up having to sell our home and are back to private renting.

However, you are fit and healthy, working and contributing. So this pot will likely grow quite a bit by retirement age (touch wood you don’t get disabled). I am assuming of course your pension pot is invested in some form? It’s not a savings account is it? If it is, consider opening and putting it in a SIPP.

I think you are in a good shape for your age.

Annuity rates have been improving lately so not the automatic rejection it might have been. It's a marathon not a sprint and economics change frequently. The only given is really that it's generally better to get money in while you are young to maximise the time it has to grow.

As a very rough rule of thumb, take the age you started a pension, half it, and put that % away a month.

So, starting at 30 suggests saving 15% would be ideal. Some of that is your employers contribution tho.

No idea what my pot is like, as I have an old DC and DB pension from old work place, a 5 year gap, and a DB pension on my current low salary (19k).

60k is good money tho. Way, way way above average earnings.

🙄

That £100k will get you about the same pension that those with no provision or savings other than state pension will get topped up with pension credit. It won't be a retirement of luxury sadly.

Similar age and similar salary. Single parent and I have contributions of £11k a year including what my employer puts in.
Remember that pot is to last all your years of retirement, not just one year. How many years of retirement do you intend to have?

👏👏👏
Brava

And sorry about your ex and your situation. Having a good pension pot is mostly down to luck imho.

To be fair, its probably around 40- 50% of those in work and majority of pensioners... you only have to look at the number of pubs shutting down or business closures.

But yes there are an awful lot of people who are not & yet we give them billions in state aid - bonkers.

It is silly to say I have £100k at 40 something after 12 years, how about you/ is this ok?
And then disclose later that £60k of it is inheritance. Why not just state that at the start?
I couldn't care less if it's a brag or not, it's just not clear to begin with.
We're retiring with work pensions and fairly small private pensions but we have savings and lots of investment including rental properties, plus we downsized. We're going to spend loads on travel for the next 15 years, otherwise we could manage on a lot less. One size doesn't fit all.