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Saving for DC eg house deposit

3 replies

Glyco · 29/01/2023 11:38

I guess I'm looking for some validation in not considering saving a specific lump sum to give to our DC for house deposits, but instead ensuring we'll have an ok pension.

Written down like that it seems bleedingly obvious but I'm procrastinating from tax return and pondering general finances!

I think there's a reasonable expectation that for our income bracket we should be in a position to gift a lump sum (decent for normal standards, poor by MN standards...) but I can't see any give in our current incomings to set aside much more specifically for DC unless we were to lower our extra pension contributions (making up for gaps/starting later).

We are saving a bit to make up the expected student loan shortfall in living expenses (they will be getting loans for tuition), as per the Marin Lewis calculations and will hopefully be able to contribute out of income too for that.

We'll both have an element of DB pension with lump sum but to be taken at age 65, at which point youngest DC will be early 30s, is that too late for any meaningful help?

I'm also vaguely aware of the potential pitfalls of crystallizing entire DC pension to take out a tax free lump but perhaps I need to educate myself a bit more.

OP posts:
Bunnycat101 · 29/01/2023 13:14

Your pension is more important. I don’t think gifted deposits are as common as you seem to be fearing. If people are in a position to make large gifts then that is lovely but you can’t go without in retirement to do that.

validnumber · 29/01/2023 13:17

I think it's fine.
How old are dc and what are they like with money?!

Glyco · 29/01/2023 14:19

Thanks, yes it's difficult not to assume that everyone is gifting house deposits, even in my own circle I see parents helping out so much for very much grown up children.

But perhaps that's where the discrepancy lies - those that have had help themselves have extra capacity to in turn help out their DC. We've not had any cash handouts or childcare help which must make a huge difference. Don't begrudge it, just thinking this through is making me feel less guilty!

DC are secondary, one is good with money, the other terrible!

OP posts:
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