Pension pot- how much by when?

[bingbongbang23]

Looking for some help.

38 (F). Pay into work pension, 7%, company pay in 14%.

I logged on today to see how much is in the pot but then I have realised I don't actually know what is a good amount. How much should I realistically have saved by this age? Assuming I will retire about 60.

Thanks in advance

I want a pension pot of £600k when I retire. I’ve estimated (from using various pension calculators) this will give me £27k a year from age 65 to age 93 after taking out £150,000 tax free lump sum.

I’m planning on being mortgage free by 65 too.

At age 68 I’ll get another £11k in state pension.

I think I can live comfortably on £38k before tax plus £150k lump sum tax free for extras eg nice holidays, new car every 5 years, keep home in good state of repair

Rule of thumb is C£300k capital for c£10k a year income. Work out what income you’ll need and work from there

Work out how much yearly income you need and how much income you want.

take £10k off that number (assuming you’ll get the full state pension)

multiply the remaining numbers by 25

that gives you the numbers (need / want) you need in your pension pot by the time you are 68 (pension age)

to retire at 60, you’ll need to add 8 x your required (need / want) annual income-in-retirement to the numbers.

to work out if you’re on track, is too complicated to work out without knowing how much is in your pot and how much you’ll add annually.

Following

I find this all so confusing!

I've got about 4k in my pension pot and I'm early 30s. How do I plan better? Is there a calculator? Can I add a lump sum in myself?

Thanks, this is very useful. It's hard to know exactly how much I will need as costs as so different today (ie mortgage and nursery fees are my largest outgoings currently, both of which I will no longer have at that stage).

Assuming I want £40K, then by your maths I need 30K x 25 = £750K pot for retirement at 68.

Aside from this, would want to use stock/shares/ savings and my LISA to part fund the earlier retirement.

The projected amount in my pot will cover for this, but I am confused on how they calculate this. I only have 140k in pot tofay but it projects I will have more than 750k by time I retire... doesn't quite make sense to me based on the amount I annually put in. I am assuming it must factor in payrise and certain level of investment.

I am also confused getting my head around it.

Yes, you can do additional voluntary contributions to boost it up.

Yes, that’s right.

It sounds as though you’re on track to reach your target and that your pension provider is calculating your continued contributions and investment growth. The % going in from you and your employer is a very healthy amount IMO.

Inflation is something to consider but there’s nothing we can do to predict what it will be and all the experts can’t do that with any consistency either. Overtime, my feeling is that promotions as well as pay rises will help take care of that (and so your pension pot will be bigger to give you a bigger income aligned with that inflation).

Your existing pot will double every 7-10 years dependent on growth.

I’d want a pot of around 700k at retirement (if I didn’t have a DB pension).

There was a good thread on here the other day. For a defined contribution pension it said you did not need your whole pot at retirement. For example if you had 300k and drew down 20k the first year the remaining 280k would be invested, so your 300k would actually last you a lot longer.

I am planning to use around 2/3rds of my pension in the first 15 years until 80, figuring that if I am lucky enough to live past 80 (my mum for example died at 73), I probably will be going out and travelling a lot less than in my late 60s.

@Middleagedmom

A better strategy is to apportion a greater share in the earlier years if your retirement. In my experience, most 80+ don't spend nearly as much, as even such things as traveling become tedious.

I'm aiming for at least £600k in my DC pot. I also have a small DB scheme which at the moment is worth £8k pa. DH has a bit less than me in DC pots but together we should have at least £1m all going well in DC pots excluding state and DB pensions. Planning to repay mortgage at age 57 with the tax free lump sum (it'll be around £150k at that point). I'm 45 as is DH and hoping to retire between 62 and 65.

My DH and I both retired last year with joint pots worth 1.5 million. We are early/mid 50’s and drawing an income of 70k per year.

In you thread yesterday @Middleagedmom you say you don’t work and only receive ESA. Is that realistic to have a pension pot of £600k and no mortgage?

watching this thread. very interesting

The Aviva pension planner is very useful, can flex for different contribution rates, retirement age etc