To ask if any of you feel financially secure, and if so, what does it look like...?

[Sugarbeach]

Is it even possible? Is it a realistic hope/goal?

[Mumoftwoyoungkids]

I think we are nearly there.

We have a house that is suitable for our family needs for the next few years and although we have a small mortgage on it, our savings are larger than the mortgage. We have enough savings to live on for a year or two - even after paying off the mortgage. We both work and each individually earn enough to just about live on if we were very frugal.

The reason we don't feel 100% secure is that neither of our jobs are very stable and our pensions are not quite as good as they could be. There is nothing we can do about the jobs but we have a plan to have 5 years of big pension payments in about 3 years.

[Badvoc]

And I am one of those people wordfactory! :(

[Sugarbeach]

Hmmm....being financially secure without paid employment....most of us live pay cheque to pay cheque from one month to the next...

[UtterflyButterfly]

Agree it's definitely down to job security - which no-one really has any more. A few years ago, DH and I felt very secure financially, owning our own business which was doing really well, two properties (one owned outright), money in the bank. But the recession hit the business really hard, though we've managed to keep it going, just.

We now have one property, with a mortgage, and things are starting to pick up again, but I don't think I'll ever feel completely secure again.

[Sugarbeach]

I agree with your very simple and precise way of defining it Pagwatch....if you know you can retire tomorrow, you know you are financially secure.

[KitCat26]

No. I am not financially secure, my security relies too heavily on DH's business, and I don't like that. It feels a bit too much like all our eggs in one basket.

[C0smos]

Hmmm yes I think we are, mid thirties paid off mortgage no other loans. Enough savings in the bank to keep us going if we lost our jobs. Making decent in roads into putting money into unit trusts and other investments for retirement.

But I agree we are reliant on our income from employment to be secure, luckily we both have seniorish jobs in different industries. But both were hit badly by the recession in the UK, we live in Africa luckily so not been hit as hard. However if there was any kind of civil uprising or Mugabe style land grab here we could lose everything if we had to leave the country quickly.

[BirdyBedtime]

i do feel financiallly secure for the first time in my life at nearly 40. DH and I are both in reasonably paid public sector jobs which in terms of job security is as near as you can get to secure. We can afford to pay bills, save for holidays and treats and also have savings (thanks to small inheritance) that mean any big unexpected expenditure can be dealt with, both own our cars outright. Half way through our mortgage and house worth twice what we currently owe. It is a nice feeling.

[Iamcountingto3]

I think of us as financially secure - even though I am self employed, so job security is always a little niggle.

We have:

• paid off the mortgage
• always owned our cars outright
• enough savings to cover more than a year if we were both out of work
• and both paid into pensions from fairly young ages

Mostly though, I think of us as financially secure as I know our attitude to money will always be to save before we spend - whilst I absolutely know that bad luck can happen to anyone, I think our underlying attitude to money is cautious and therefore has protected us in less easy situations

[WilsonFrickett]

I grew up poor. I don't think there's enough money in the world for me to feel financially secure

I have my own, profitable business and I squirrel money into little savings accounts. It really upsets DH because everything we have we share (in theory) but I can't give up my security blanket money.

[WetAugust]

Own house mortgage free
Own car loan free
No loans
Few hundred grand in the bank
Inflation linked private pension paying the national average wage.

That's financial security. But it's not being rich and it doesn't particularly make you happy.
It just stops you worrying about how you will pay for things.

[mijas99]

Yes definitely. We are early 30s, 10 years since left uni. Several hundred thousand in savings. We have low rent in a large flat in a city in Northern Spain. Interest on savings will pay for private education of our two little ones. Our jobs our insecure but not too worried as we are financially stable.

We definitely do not want to blow the lot on a house of our own. They are still overpriced and add so little to your lives. Much better to have money to take a career break or eat decent food, go on holidays, have fun etc. So many people are quick to mortgage their futures, although I understand that the situation in the UK is very different as rents are so high.

Our goal is to spend the 3 month summer holidays travelling each year with the children. We both only need an internet connection to work so lets see how it goes! The challenge over the next few years is for me to start to unchain myself from the computer if possible

Those who are our age and say they are investing in pensions. Why? You are talking about 30-40 years time. There is a lot of living to be had before then

By the way, I know we are very lucky, but then we have always earnt less than our friends who work in London who now have very expensive houses and stressful careers. We took a different path

[MaidOfStars]

RussiansOnTheSpree Would be very interested to hear what you consider the principles of a good pension scheme today, compared with what might have happened 25 years ago. I have always thought my pension scheme excellent, but am now wondering what they used to be like...

[Beastofburden]

sugar, I didnt feel secure in my 30s and 40s. I do in my 50s. It feels like:

having a secure job where I earn the same as DH, and if we had to, we could live on either income;
not having any debt any more;
having a house that is big enough for our retirement and wont cost too much to run;
having a final salary pension scheme (I left private sector for University sector to get this).

But we are still saving up to help the older DC with house deposits and I still pay a shedload of childcare for my disabled DC, so it doesnt feel like having money we dont know what to do with!

I wouldnt be at all concerned if you feel insecure in your 30s and 40s, as long as you have a plan to retire debt free with a reasonable house. Your pension wont be a lot but you pay no NI and not much tax (and no pension fund deductions, doh) so if your gross income halves you wont really notice that much.

[WetAugust]

when I started work 40 years ago

many public sector pensions were contribution-free

most public sector pensions were based on 80ths of final salary

most public sector ones were inflation proof - linked to what is now the RPI

Some public sector pensions also paid a lump sum of 3 x pensionable salary on retirement.

police, fire service and armed forces had their own pension arrangements that allowed them to retire after x years of service.

Lately public sector pensions have become contributory

They are now linked to the CPI

The old pension arrangements have closed to new entrants. They will no longer be final salary but will be 'career average'. There is no lump sum.

In the private sector many of the pensions were based on 60ths of salary. There are hardly any final salary schemes left in the private sector.

[KedenTTC1Cycle3]

SugarBeach, I feel financially secure at the moment because in my household (DH & I) we are both;

• Educated & bilingual (this has made me more employable I believe).
• Health care coverage from employers. (Not a worry in the UK, but it is in the US).
• Maxing out yearly contributions to 401ks, RRSPs etc (retirement plans in US/CA)
• Funds e.g. Savings, Emergency, Future Children are healthy & contributed to regularly.
• No debt (university, credit cards or mortgage*).
• Well employed in secure jobs.
• MOST IMPORTANT, we’ve calculated that in about 10yrs (fingers crossed) if we wanted to, we should be able to live very simply, on only the returns on our investments i.e. say you have $1 million in stocks, get a return of 3% p/yr, that’s $25k per year. This is our biggest goal. Aggressively trying to pad up the investment pot now while young & childless, so we can reap the returns in our retirement.

*Mortgage was a fluke - fully expected to still be paying it. However, for the past 3yrs we’ve been expats in another country & accommodation is covered. Money we would have used to pay rent otherwise, we chose to sink into our 15yr mortgage & get it out of the way. As we are still away from home (US) we rent the house out now.

[secretscwirrels]

Yes.
Mortgage paid off 10 years ago.
Substantial savings*
No debt. DH retired on good pension, I work part time for peanuts.
I never have to think before I spend.
Holiday abroad a couple of times a year.

We don't have a huge income in MN terms and we have two teens who will be going to uni in the next few years. *Our income has fallen quite a lot because of low interest rates. We used to get a healthy chunk from investments but that has gone down in recent years.
Ironically we will be better off when I retire as I have a good public sector pension to come, probably just as the second DC leaves uni.

[wundawoman]

The problem with pensions is that the rules keep changing and we have no control over them. It depends on the government of the day. I would not rely or put extra money into pensions. Savings in the bank is also unpredictable depending on interest rates. I think owning investment property is the best idea. Rental Property in a popular area that pays a good return. There will always be demand for property. If i can own a couple of small properties with a return good enough to provide a reasonable income, I would feel financially secure and retire .

[SlowlorisIncognito]

I think my parents are financially secure up to a point (provided the banks don't all colapse tomorrow or their house burns down, or something!)

They own their house outright, they own their cars outright, my dad is lucky enough to have 2 good pensions (both from public sector jobs). My mum does work, but they are not reliant on that income. It mostly pays for them to go on multiple holidays each year, and helps improve their standard of living.

They have savings and investments (some are risky, some are not so risky) with a decent amount of capital. They have no debt at all.

I do think it is more difficult for younger people to have that level of financial security. I will never have access to the kinds of pensions my parents had access to. My dad was given a grant to go to university, I've had to get into debt (although luckily avoided 9k fees). His career has always been secure, and given him enough income to support a family if needed. They were able to take out a morgage young that didn't require a massive deposit or a punative rate of interest. They've been able to avoid any other form of debt.

I spent time working before going to university, and so I've been able to build up around 5k savings. That makes me feel a lot more financially secure than other students I know, because I can cover most major emergancies, afford to run a car, and so on. Most students I know are reliant on their parents (who may not be financially secure themselves), part time jobs that definately aren't secure, or debt. However, I know that in the real world, that having a small buffer doesn't equal financial security, and a decent period of unemployment could wipe it all out.

[UnexpectedItemInShaggingArea]

We are lucky that we can live well within our means, budget hard, are aware all the time of outgoings.

We can afford to pay into pensions, life insurance, critical illness protection etc. to give us as much financial security as possible.

But I'm not smug; big, unexpected, unimaginable life events can and do happen to rock even the most careful financial plans, anyone can can end up in a financial mess.

[Pagwatch]

I'm not smug
I had to give up work just as my career was hitting a sweet spot because of my sons disabilities.
Our determination to get financially sorted was partly driven by the awareness of he huge cost of his lifetime care.
I am aware of all the pitfalls but we are as secure as is possible (outside world war/financial meltdown)

It's not something I discuss in real life.

[wordfactory]

Do you know pag I do discuss all this in real life.

Not in a chatting to the postie kinda way, but I will always answer questions about finance. Especially from young people. And especially from young people from a background like mine.

I do think that knowledge is power and it's better that people understand how money works.

When I was at uni, I had a very rich boyfriend and one day I asked his Dad in wide eyed wonder how much their swimming pool cost to heat up! And he told me. And he explained how and why he could afford it. And how and why I could get myself into thatposition.

OMG it was a light bulb moment!

[mamaslatts]

wordfactory -share those pearls of wisdom! Our financial security is built on the house of cards of an interest only massive mortgage. We will have to downsize if we can evict the kids when they reach adulthood.

[RussiansOnTheSpree]

Maid are you in a defined benefit scheme? Is it in surplus? How much is your contribution and how much is your employers' contribution? Is it under threat from either the government or your employers?

[RussiansOnTheSpree]

beast Sorry to be a downer but the USS is definitely under threat. :(