If you are over 40…How big is your retirement pot?

[AnIndianWoman]

Just that really. If you’re over 40 how much have you earmarked for retirement? My pensions are approx 200k and I have another 200k in stocks and shares ISAs. Even then I won’t come close to the £50-60k a year income we will need in retirement and so can’t think of stopping working before 70.

I was thinking of investing more but not sure what size pot I should be aiming for. I’m 40.

@Margrethe when does the magic momentum kick in please

LOL I probably do sound obsessed. It is nuts for the lowest tranche of pensioners to be better off than any workers but yeah I've made my point.

@Spendonsend o don't understand lpg either.

I don't understand this part of 1/49

For every year you work, 1/49th of your salary is added to.your pension. When you retire all those fractions are added up to give the amount of your annual pension.

DP and I were looking at this the other day. I don’t know what’s in my pot but according to the predictions I get If I continue to contribute at the same rate (and hopefully it’ll go up actually as I get promotions etc) I can expect 15k a year from my workplace pension, plus the full state. He needs to figure his out, but we are aiming for 50k pa between us and to be mortgage free and downsize for a chunk of cash to also invest. I’m 40 he’s 44.

We have db pensions. As I understand it if my husband works to retirement he gets 13k a year, me about 17k a year plus state of about 10k each so that's enough surely?

Interesting to see where people are with retirement planning. I'm a 39yr old dad, married, wife is stay at home to care for kids (nursery is a rip off)/house/dogs. 2 kids, 5 and 3. We are mortgage free, which was a slog - always overpaid, never extended the term and put my only inheritance into it (grandparents).

I put away 28% of gross pay and employer 10%. With bonuses that breaks back to 60k/year now which is the max you can put in a pension. The tax relief makes it a no brainer to me. Previous two years I put the former max 40k/yr. can do 60k every year but trying while kids are young. Then we'll see where I stand.

Only really got going 2yrs ago after smashing the mortgage so my Pension (shares investments) is 155k, I also have 150k in one cash ISA I port for the best rate. Wife has nothing so it's all on me, which is a choice we made re kids.

I feel having stock and cash like this gives balance. I don't worry about the 85k max cover thing as frankly no decent bank will not be bailed out but that might be a misunderstanding on my part.

My question is what the heck do I put my pension into. I'm with Scottish widows defined contributions. Do I put it into a more risky category (I'm in the medium one)? Do I / can I tell them to put it into the S&P500 or vanguard? (No idea what that means btw). I just up my contributions when I can and struggle to learn about the actual investing bit - any info/advice/pointers would be awesome.

I have nothing. I barely earned enough to live on, never mind have extra to put away for retirement. Pensions weren’t compulsory until about 10 years ago so loads of people didn’t save anything, because they didn’t have that luxury. I started saving the minimum amount when it became compulsory, but then I was off on maternity leave and busy looking after a disabled child, so I have pretty much £0.

I suppose I might die before I’m old enough to receive a pension. Or if I’m reasonably fit I could just keep working. Alternatively I inherited a nice house which I could sell and live frugally off the proceeds. Or maybe I’ll join Only Fans (or whatever the equivalent is at that time) and sell photos of my saggy tits to perverts. There’s no point worrying about it because I don’t have access to a job which would pay enough to allow me to save, so what’s the point of worrying about something I can’t do anything about?

S&P500 is like the FTSE100 - an index covering a set chunk of a given stock market. (US for the former, London for the latter).

Vanguard is a company. They do both investments (funds of various types) and wrappers (ISAs, SIPPS etc). You can buy Vanguard finds inappropriate Vanguard wrapper; or you can get the wrapper from another company (such as Hargrieve Lansdown or Interactive investor - possibly Scottish Widows) and then buy Vanguard funds within that.

As for risk levels, that's your call. If you have a pension advisor or IFA they can help you assess what level you're comfortable with. Higher risk generally comes with higher growth on average, but also of course a higher possibility of losses.

@RamblingRosieLee , this graph shows how pension savings isn’t linear, but is a curve. Consider yourself “Chloe.” Just have faith and keep saving.

https://realinvestmentadvice.com/wp-content/uploads/2016/03/Retirement-Savings-JPM-031416.png

Also useful, read explanation of pension savings in your 20s.

https://www.thetimes.co.uk/money-mentor/article/pension-saving-age/

the OP read like a stealth boast about how she has more than most 😁
I don’t know any 40 year olds who have 200k in stocks and shares ISAs, on top of their pension pot!

Wife has nothing so it's all on me

Think you'll find your wife has at least 50% of whatever is in your pension pot etc.

@ErnestMilton it's true that a spouse may be entitled to a proportion of their partner's pension if they survive their partner or in the event of divorce. But most people wouldn't want to rely on a fraction of their partner's pensions; it's much more secure for individuals to have their own pension as well as the proportion they may be entitled to from their partner.

Why aren’t you putting money into a pension for your wife? This would seem to be a good plan. You’d maximise her tax allowance too.

Paying into pensions if your employer matches contributions will generally long term be better than paying off a mortgage.

Why don’t you contribute to your wife’s pension and use her ISA allowance? Have you looked into making NI voluntary payments for her so she gets the full state pension if this is possible? (I’m not sure).

As mentioned beforehand, most of us trying to grow pots didn’t overpay the mortgage when rates were low and invested but you’re rectifying that now with max contributions.

I can’t answer the where to put your pension Q as I don’t understand workplace DC schemes but £150K in cash is too much, just keep an emergency fund and whatever you need for the near future and invest the rest, otherwise your savings will be eroded by inflation. Meaningful Money (Pete Matthews) is really helpful at this explaining what funds to look at and explains risk etc.

I know, and the government knows this, which is precisely why they are trying to push people into starting other pensions by having brought in auto enrolment etc and changing the regulations to enable people to save into SIPPs easier.

state pension is ok but only on top of other workplace or private pension. State pension only would enable you to exist, i suppose.

You’ve got best part of 20 years before you can access it anyway. Even if you didn’t put another penny in it, that £200k will grow massively. Put it into a future value calculator or Excel and forecast how much it’ll be at your retirement age. You’re not likely to need as much income as you think in retirement and also, it’s not as if you take the whole lot out in one go, it’ll stay invested during retirement drawdown and what’s left will continue to grow.

have a look at Rebel Finance School. They have some handy calculators to help you work out the target pot you need. £1m is a lot of people’s “FIRE” number - 25 x £40kpa, the balance of which remains invested so doesn’t actually deplete that much.

About £56k. I'm 41. But we've only just managed to a suitable house, so...

Got a big job on to focus on it for the rest of my career but I also expect to be working til 75 if still in good health (I work in an industry where self employment is easy to continue on your own terms)

https://www.alandonegan.com/retirement-calculator.html

Christ alive! What is your household income?

"I can’t answer the where to put your pension Q as I don’t understand workplace DC schemes but £150K in cash is too much, just keep an emergency fund and whatever you need for the near future and invest the rest, otherwise your savings will be eroded by inflation" @WeAreBorg

Disagree, ISAs balance vis the invested pension. We've put the 150k total across our ISAs. My plan there is to get them to 250k by retirement. At 5% interest that's 12k/year.

I'll also take 250-300k tax free from my pension at 57 and put that in isas over time for another 12k/yr interest. It's low stress. I don't want to have to manage investments I don't understand and property rentals are hugely stressful.

All I'm interested in is whether to put my Scottish widows workplace pension into the "adventurous" category or keep it at the current medium lifestyle one.... if the risk of erosion is high I'll play it safe.

You need to speak to an IFA about investing decisions.

£500k in cash does seem a lot. And £12/25k in 20 odd years won’t be the same as £12/25k now

Zero. I don’t plan on living to retirement age.

@LittleBearPad who would be a good IFA though? Also would you just as easily make 12k/yr by putting 250k into property with the same no hassle input?
I'd look at shares if the returns we're likely and someone helped me but I've no idea how to invest really so need a lot of steering! A decent IFA would be a starter but again how do you know if they are trust worthy?