How are you planning ahead for retirement?

[ReadyPlayerGo]

Every tax year end, I review my pension pot online and scare myself!! I’ve always saved towards my pension, but the calculator showing my predicted annuity at age 65 (just over 20 years away) is no where near where I’d like it to be. Every year I’ve been putting 10% of my gross salary in and my employer also puts 10% in. I think I need to increase this.

I brought the topic up with 6 of my closest friends recently and all of them seem blissfully unaware and unconcerned about their future pensions or retirement. We’re all of a similar age, 3 have been SAHM for the past 10-15 years and don’t work or have anything saved other than state pension. Although even then, I don’t think they know they haven’t put enough NI contributions in the pot to get that full amount.

I’m planning to find an IFA to get some advice. Wondering if you’re planning for your future retirement? Or do you not worry about it?

Also, if anyone has any financial planning books that they’d recommend, I’d be grateful to hear.

I don’t tend to like to contemplate what the world will look like the 2060s.

I got worried about my pension last year when I turned 30. Where I am there are no private pension plans. So my pension get a automatically taken from my salary but it is not something employer can match or I can increase. I also started few investment/mutual funds that I save monthly. Trouble is that I'm trying to top up my general savings and house deposit so can't save towards pension too much. But it does worry me. I would like to retire earlier than in my mid to late 60's and I want to have enough to not struggle.

My pensions were affected by working part-time and staying in lower paid jobs whilst children were young. I relied on my husband’s income a lot. That's fine and we’re comfortable enough but I am now thinking more about income in early retirement.

We have set up alternative income streams.
We’ve ensured the mortgages are .paid off
We’ve had all major house jobs done to avoid unexpected bills later on.
We have money aside for the children’s weddings and grandchildren.
We have a couple of holiday places we can rent out, swop or use for cheap getaways.
We have stayed active
I have no intention of retiring ‘too early’ and spending thirty years counting pennies.

I saved like crazy and retired at 51. Best decision ever.

I wish I had listened to the advice I was given at 20 to save even a tiny regular amount for retirement right from the start of my career - I would be better off now, but all in all I will be good with the income I have.

Moneysavingexpert has an excellent section on the forums for FIRE advice. It helped me out no end and meant I could escape the daily hell that was my working life in the last couple of years.

I expect to downsize and live off any money there alongside my crap pension

If you don't pay your NI you don't get full state pension, so 'rely on benefits' is a bit of a stretch. I'd more describe it as 'getting back what you paid into the mass pension pot.'

Although the state pension is technically a benefit, that wasn't what I was thinking of. I'm no expert as I don't expect to be in that position, but I think people who don't "earn" a state pension via NI credits will get a very simiar amount via pension credit as a substitute, and possibly get housing benefit to pay their rent on top of that.

I put "earn" in quotes because I am an example of someone who will get a full state pension despite having paid bugger-all in NI over the whole of my working life. It's not necessarily true that people with state pensions have paid NI that justifies them, though perhaps many have.

Absolutely pay off the the mortgage. Repayments are a huge drain on resources.

@BlackLambAndGreyFalcoln that's really helpful advice thank you. I will look into that.

@OnlyFoolsnMothers

I expect to downsize and live off any money there alongside my crap pension

Same here.

SprungisSpringYaY - we were advised a load of things. Pay off the mortgage as early as we could... and they did out a plan for that (and found us a better mortgage than we had). Put what top ups we could into our workplace pensions, we had civil service pensions, so little we could do with them really. Keep 6 months of outgoings in an easy access account. Invest certain proportion of savings as med risk, but most low risk (we are risk averse, they found that out during their quite thorough questions, their advice changes depending on attitudes). And have "investment" fun with some... premium bonds for us ( low risk other than inflation). Products for investment have performed well.

@ReadyPlayerGo do you have to get an annuity? Annuity rates these days aren't great and it's not a common choice if you can avoid it I think. I used to work in pensions.

Consider making changes to your pension if you can and considering other types of pensions (if you can, not sure about your situation).

Flexible drawdown for example is good as you can take money out of your pension but leave some invested so it can still grow. Depending on the size of your pension maybe a small rental property would be feasible for retirement income?

Or downsizing to buy two properties, one as rental?

You still have some time so it's good you're thinking about this!

DH and I have worked hard and saved hard. We have over £900k in our combined pensions with 7 years left to the end of the mortgage term at which point we'll downsize, add the balance to whatever the pot is then and then retire. We have separate pots for university costs.

I planned from my early 30s although getting divorced a few years ago threw a bit of a curve ball for a while, I am back on track.
Now with dp both early 50s. We downsized from my 5 bed and his 3 bed (all dc had their own places by this time) and we were able to buy a big 2 bed home outright, a rental property each and a tiny holiday cottage which we don't let out but will provide us with lots of cheap holidays.
We also have private and work pensions, none of them are great but they add to the pot.
Almost maximum savings in premium bonds.
I've aready received a couple of inheritances that helped with the above. Not relying on any further inheritances.
I Work one day a week and dp does three because he sssspendsmore.in another year or we should beable to retire.

This is all well and good. But arent you going to give some money to your kids for deposits on a house? I would put that before trying to accrue loads in a pension.

Do you have to buy an annuity ?

Work provided a pension seminar which was very helpful in making me realise some of the options.

Annuities rates have dropped a lot over the last few decades. They have the further disadvantage that they did with you, leaving nothing for any dependants. You can have a spouse's benefit that continues but it significantly reduces the amount you get.

The advantage is that the money does not run out in your lifetime.

The seminar recommended that anyone with a defined contribution go for a mixture of things, for example an annuity to cover basic living expenses and use any addition funds to pay for extraordinary expenses, whether those would be a broken boiler or a wonderful holiday.

Anyone with a defined benefit pension of course doesn't have these options but is probably better off anyway.
Anyone with a defined

Nope - sorry - not going to give my kids house deposits. I supported them from uni and now they are in work. If I had carried on working I would have been knocking years off my life.

I had no help with my uni whatsover, and certainly no deposit for a house. If they needed money urgently then I would of course give that to them but as grown adults I do think it's ime to let them stand on their own two feet. My DD lives here rent free and as she has nothing to spend on atm she has built up quite a good savings nest. My DS is married and currently saving for their own house deposit.

OP I had a similar concern a few years ago and have spent quite a bit of time planning. I definitely don't throw everything at the pension but I've got clear goals and a (flexible) plan of how to get there.

I'd start by getting a very clear understanding of your current position. Get your state pension forecast, track down any old pensions, make sure you understand exactly what you have in your current pension (as a PP says you don't need to get an annuity) and what the terms are.
Then I'd think about what you want in retirement - how much and when. I realise that without a crystal ball that's pretty difficult to do accurately but I find which and this helpful in getting a rough idea of what we might need.

Once you've done all that you can have a much better idea of where you are currently and then can plan to get to where you want to be. The MSE retirement board is really helpful as a starting point in thinking about that.

A few PP have suggested doing things like paying down mortgage or getting house deposits for your DC before pension. But the earlier you start on the pension the easier it will be to reach your goals because the tax relief and compound interest will get you there much quicker. I definitely don't throw everything at the pension but paying in alongside other things like tackling the mortgage (rather than waiting till I've achieved them) seems a much better strategy in my circumstances.

i work at uni.....and having seen the latest to have come out of our pensions debate, we are probably going back on strike....so thats how academics are trying to do it.

We have recently purchased an additional property to help prepare for retirement, we are still in our late 20's/early 30's, so have time for the second mortgage to be paid off and then the rental should bump up our retirement income.

I still find it baffling how so few people understand how much they will need for retirement, especially my peers, as lets be honest its unlikely we will have a state pension to look forward to when we (finally) retire.

@Scepticalch3rry surely most people your age are still struggling to get onto the property ladder let alone by a second property?

[quote loggybear]@Scepticalch3rry surely most people your age are still struggling to get onto the property ladder let alone by a second property?[/quote]
Sure some are, not sure what that's got to do with anything though

My DH and I have just retired, we have a pension pot of 1.3 million and are 52 and 55. I have 29/35 of state pension contributions and am still accumulating them as I get carer’s allowance. My DH has 35/35 contributions.

@bbbbbbbbbccccc we are planning to help out our kids with house deposits. Any equity in our second home will be split when they are older and looking to start a family. We brought the apartment with my dear mil inheritance, so we both feel it's right to go to the kids when they need it.

We are also planning my parents financial future, as they won't. And trying to see what we can do in the way of supporting our youngest, who may never be able to work. We're currently debating whether to open ISAs or SIPPs for them. Eventually we hope to start both. Our future looks quite bleak (In terms of financial help from the government) so I can only imagine what it'll be like in 60 years for my kids.

WRT funding childrens uni education or giving them money for houses, is this not out of the most people's reach? We only have one so we hope to pay his living expenses but not his fees. I am also considering asking my Mum to leave my share of her flat to ds not me and he can either sell it or get a mortgage to cover my brothers share so that would get him on the property ladder

Also as an only child he will inherit everything/anything that is left when we both die