HOW much you need to save to RETIRE COMFORTABLY - Episode 3 Pension Income Planning
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- เผยแพร่เมื่อ 22 ส.ค. 2024
- In this third episode of a pension income planning series we look at how much money you need to save into your pension to generate enough income on top of your state pension for a moderate standard of living.
We use a pension income simulator which provides an indication of whether your drawdown approach is likely to be sustainable or whether you will run out of money - watch and all is revealed.
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Bouncing Back, retirement planning, pension drawdown uk, pension drawdown calculator, how much do i need to retire, retire with 300k, how much you need to save to retire comfortably, how much money do i need for a comfortable retirement, how much is enough to retire comfortably, how much do i need to save for retirement, how much do i need to save for a comfortable retirement, how do i know when i have enough money to retire, how much income can you generate from a £300k pension
#retirementplanning #pensionplanning #pensions
DISCLAIMER: This is NOT financial advice, it is financial education. Be sure to seek a professional financial advisor for advice tailored to your needs.
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Many folks struggling to cover basic expenses often face this challenge because they didn't save enough during their working years. The choices made in preparing for retirement have significant impacts, as seen in my own family. Different investment strategies led to different outcomes. With guidance from a financial advisor, I'm now enjoying my retirement.
Yes, I'm in my mid-50s, and a few years back, I moved my investments to my wife's wealth manager. While I haven't caught up to her long-term gains, my current earnings and the growth of my retirement fund, compared to just relying on the 401(k), are pretty satisfying.
It's a shame that many don't have this information, leading to anxiety. For me, I've made over $35k effortlessly with an advisor, consistently getting returns despite economic changes - the best part is, it doesn't demand much effort.
*@sofiakhalida8106* Can you direct me on reaching your advisor? I'm looking for a more profitable investment strategy to counter inflation and make the most of my funds.
Research and choose someone with a plan for consistent portfolio growth; "Camille Alicia Garcia" has done well with my investments, and I believe she has the qualifications and expertise to help you meet your goals.
I've proactively looked into Camille Alicia Garcia online, checked her credentials, and I am impressed with her expertise. I've contacted her to discuss my detailed financial market goals.
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $450k gains with months, I'm really just confused at this point......
Yes, a good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge/professional
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $850k with the help of my advisor from an initial $120k investment..............
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.......
There are a lot of independent advisors you might look into. But i work with Stephanie Kopp Meeks” and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Iam a pensioner had a letter this week to say I got too start paying tax on a small pension pot thanks too this government not raising the tax threshold,what a joke they our .
Imagine paying 45% marginal tax rate and not being able to get the full pension allowance because of a tax taper? 70% marginal tax rate. Ouch, that hurts. Paying 20% feels like freedom
@@davidcooks2379 try living on a state pension that does hurt
My standards of living:
Minimum I can have the heating on in the evening.
Moderate My house is warm when i want it to be.
Comfortable Greetings from sunny Barbados!
Comfortable - that sounds about perfect ye man!
Does moderate allow for food ?
@@BobBob-uv9fq nope, bread and dripping three days a week the others try not to think of food, and tea bags get re-used
@@guyr7351 I m going to kill myself when I’m 82 ,I will have used up all my pension pot ,I’m going down the no annuity way
Not sure that the ‘Minimum’ allows that, as “Luxuries” by some folk’s definition could be a coffee & cake at a cafe once a week.
What a difference a year makes. Now we have 10% inflation and it will be a while before that falls, really you need to add something in for inflation.
I retired at 55 due to health issues, with a 134k pot and 2 rentals. Took 25% to buy the 2nd rental. I take 12k drawdown and receive @13k gross rent. As my main income as defined by HMRC is the drawdown i only pay tax on the rental profit in arrears. Even with the new rules on rental income Im comfortable with income equating to a taxed salary from a 30k salary...not much less than I earned. My Royal London pot has had 19.5% growth since Aug 2020 so despite taking 41k so far its still at 116k...a bumper year maybe and some of that is from the covid nosedive but its never been as low as 5% in recent years. Forecast is I will have 30k left when state pension kicks in. I also pay into a Pru Isa which will have a similar amount at age 67...unless we spend it. Wife loves work for the NHS and doesnt want to retire, earns 35k with shifts and overtime. She has a similar drawdown pot and Isa and a BTL of 7k a year and an NHS pension when she calls time. Wel be best to get it all spent before we need care and govt takes it. Anyone who can afford it - retire and enjoy it. Like she says you cant take it with you
i want to retire at 55 with 300 grand . .
5:58 5:58
I'm 60, no pension and can hardly pay the bills. Yet I see people smoking, drinking and milling around town who don't work and still have money for tatts and French bulldogs. Where am I going wrong?
They give tatts priority alongside cigarettes. The Frenchies are probably stolen.
Any defined benefit pensions you have are like gold, no matter how modest.
how so, they can't be left to your estate can they?
@@StoodersFam I've a modest final salary pension + state + SIPP my wife is still working part time and we've not had to dip into the SIPP yet it helps with your overall financial management.
@@StoodersFamall mine have a circa 50% spouse pension when I die plus are inflation proofed - maybe if my OH dies before me I’ll need to remarry someone far younger, so they’ll get the benefit 😜
My understanding from other pension experts on Twitter is the PLSA retirement income standards are income levels after tax. What this video shows in income before tax is deducted. So unless I have missed a step, the income from the drawdown calculator needs to be reduced by basic rate tax
The predicted income needs seem to assume that you own a property. How much income would you need if you were renting?
Does anyone even consider an annuity these days? Carefully managed drawdown has to be the better option for almost everyone.
@George Johnson This personal finance should taught at year 11 as a standard - also the fitfalls of credit cards
Life expectancy is round 80 for UK males if you retire at 65 and just divided your pot by 20 it's pretty close to the flat annuity rate
You can obviously do that yourself with drawdown and you'd expect the pot to increase as most is still invested in the early years.
While having a working knowledge of ISA's I didn't really get into full on SIPP and tax planning till I was offered redundancy a few years back and have embraced management of all savings it's not for the faint hearted that's for sure.
People worry that if there were a financial crisis would my pension be affected a real reason to look at an annuity on the flip side if that crisis was purely UK based your investments would go up as the value of the pound fell something I noticed post Brexit with my SIPP
I have an investment portfolio in investment ISA's combined with a final salary pension which I am already drawing on. My investment manager believes 5% is a reasonable figure to draw down from the ISA's which I thought was frugal until I watched this. I would like to run the investment pot down to zero but given nobody knows when they will die, it's not likely to happen.
It also depends on your investment strategy is if your drawing down over 20 years then I have 5 years worth in low risk bonds the rest is in medium term investments and a third in tech global equity funds which are considered above average risk.
Even in a very low risk strategy could see you invest years 10-20 in something with a bit more return.
That's my personnel opinion by the way and I'm in the same position as yourself, the worst crash in the markets saw a 50% drop in 2008 it picked up within 5 years check out the S&P charts the figures were back to pre 2008 levels by 2013 hence my 5 year buffer
If 325000 is the pot then divide by 20 (years) is 16250 per year + 9600 state pension = 25850
you do realise your pot stills grows (hopefully) while drawing down?
if I had 325000 in my pot, I am looking at someone else's pot lol
Exactly the way i looked at it, plus i looked at 4% in dividends via an investment trust would give me an income of £13000 pounds of income without touching the capital, and without any increase in dividend payments or capital appreciation. I actually think you could produce more than £13000 without taking too many risks via a diverse investment portfolio in trusts and funds, allowing your next of kin to inherit what is left. I am half way through this posting. Assuming you retire at 60 and live 30 years till 90 once into the late seventies many people don't go out that much therefore their needs are reduced and i would think many would not spend this much income if they had a house paid for.
Hi Helen, what has happened- are you not making any more videos? I did learn some things ffrom them. Whatever, thanks for what you did do far.
What I’m finding very odd, is that (unless I’m missing something, it is not clear whether the quoted incomes are pre and post tax. Obviously, this is a key element in determining where your projected income sits within the three levels and therefore should be immediately evident.
Pre-Tax because there's no way of telling what your tax code is or if you've taken advantage of the 25%.
Also many people have both a SIPP and will get a State pension so for example a state pension of 9k against a basic allowance of 12.5k you can take out 3.5k tax free.
Me personally I have a final salary pension a full state pension and a SIPP so anything bar the 25% lump sum I take from the SIPP is taxable at 20%
@@SlowhandGreg I agree, but this fundamental point should be made very clearly on the website and I couldn't see a reference to it. As regards tax code, the example must presume similar tax codes for all with the level of totak income of each example - otherwise they couldn't give the typical standard of living examples as actual take home pay would vary. As the examples show gross income from all sources combined, it would be by exception that tax codes would be significantly different (owing tax etc).
Missed out 200k, was looking forward to that one.
I am lucky to have a good final salary pension but still have a pot of £200 K to manage as well
I live in America I am a dual citizen at the moment I am nine years short of a full pension due to opt out.
So if state pension is still around when I retire I would get state pension from two countries unless they take money off you for qualifying in another country
250k pot drawing down 10k per year for 20 years and you've run out of money.???
The simulation includes the first 3 decades of the 19th century for the UK economy which was a particular awful period with the 1907 panic, first world war, spanish flu and topped off with the horrendous 1921 recession which took a decade to recover from. Some would say that would never happen again but in 2009 we came close with the almost collapse of the financial system
That calculator is very strange, might be based on some historic data but has the pot increasing in value as assuming some big growth rates. Surely most people spend less the older they get as they are less mobile etc. So most of us will be spending and holidaying a lot up to 80 then it will tail off. so you can skew your draw down accordingly PLUS there is a fixation on maintaining the value of the pot, ideal planning would be to die just as the money runs out then any estate is housing if applicable. The other option would be to sell your home and add that tot eh pension pot then live in modest accommodation and spend on yourself.
If you considered property investing you’d need only £60k. I know, because I did it.
I get the ‘Financial Advisor’ schtick. It’s what they sell. It’s inside the box. It’s a scheme for people who want to work 50 years and retire on half pay. I just think we deserve more
Very good content Well presented thanks .
Do you think with £1m pension and say 100k in cash a couple, it is possible to retire at 58yo on 50k a year, when wife will draw say 8k pension 2 year later, and full state pension kicking in at 67x2? Not sure whether I’ll have enough to retire at 58 and get my goal of 50k (no way will I draw more and pay 40% tax, I’m sick of paying 45% now)?
Don,t believe it all the GOVERNMENT expect you to live on 114 pounds and 10 pence per week for a couple if you are an ex tax payer that has been made disabled and can no longer work so these amounts of money are not achievable for people like me but THANKS for the look at what i will be missing out on as i can not get a workplace pension on disability allowance
Then get a job? The clue is in the term ‘workplace’ pension. Also if you absolutely can’t, because of your disability (disabled doesn’t equal unable to work btw 🙄) you’ll be getting universal credit and housing benefit and in addition disability living allowance, PIP, and once you become a pensioner, pension credit as well as the state pension.
Very helpful. Thank you for this mini series.
You're very welcome!
Thank you for sharing this information as most important. Can I check did your drawdown fund calculations assume income return from the moderate investment?
I'm just amazed at how much is considered a 'normal' spend even on the lower budgets? Do people really chuck so much money away?? £10 a week on taxis for example? I haven't spent that much on taxis in a year!
I don’t use them much but £10 doesn’t get me very far at all in a taxi
@@guyr7351 I found the amounts cited as 'necessary' quite astonishing. Most people must chuck their money away!!
Where do you live then up north
How much do you spend for travelling, car/bus etc though?
When you finally decide to go, I reckon you need your 25% to cover you for 4 years then what ever is left in drawdown ...so 650k for a northerner
It seems pointless building up a fund of 900k over 20years only to sustain an 11k moderate income. Surely a more dynamic withdrawal rate would be better especially in the good years and slightly less in the bad years.
Great video. Honest, to the point and easy to understand.
Thanks, glad you liked it
Thank you Helena. Good information and some excellent links, which I am now going to explore. In my experience its easier than expected to build up a decent sized pot as you effectively have 4 contributors - Yourself, taxman, employer and growth.
I like your reference to the four contributors - and so true!
Looks like Which have their categorisations correct unlike PLSA 🤨
I'm 54 and have a healthy pot of £415k and a small frozen index linked final salary pension that will pay (in today's money) £10k at age 65. So I'm probably better off than most, but my cash savings are modest and I have a mortgage that won't be paid until shortly before my 65th birthday. My wife is 51, has a modest pot of around £170k but is an only child with an 80something mum (dad already passed away) and she stands to inherit a £700k house even after the potential £86k nursing home costs as her mum has £200k in cash savings and investments. On the other hand, my parents were skint and I only ended up inheriting a third of their meagre £120k estate back in 2005, my brothers taking the rest. Any suggestions on what we should do? Our current mortgage payments amount to £740 a month, plus £2,100 a year council tax.
@Lookup2Wakeup Since my post one year ago my pension fund has risen to £480k. I'm one month away from my 56th birthday. Fingers firmly crossed.
Most peoples’ definition of “Skint” is not £120k.
Worth pointing out you need more than 30k to spend 30k. Tax on 30 is £3, 500 give or take. So you would need £33,500 to spend £30,000. If you don't take a lumper when you retire then you can have a larger tax break which is what I'll be doing to take more without passing some to the tax man.
In episode 3 we look at what kind of income you can expect in retirement with around £300K in your pension savings
Just to confirm all these incomes are before uk tax Is it possible to become say a Dubai Citizen and have my state pension payed off shore
In the UK u will always pay tax even when you’re dead
Always useful content, thanks Helena. Great trilogy by the way! Or will it be a quadrilogy..? 😁
Thanks as always!
Loved your video information what about if you emigrated and your pension is stuck in the uk
These are very useful videos. I’m going to binge watch the pension ones.What I’ve never understood is…If I drawdown less than the personal allowance every year do I have to pay any tax at all?
If your total taxable income is less than your personal tax allowance then you'd not have to pay income tax.
Glad you find the videos useful!
Don’t forget drawdown is just part of your income, state pension is taxable too, so you need to consider both. So roughly speaking anything over £3k of drawdown income will be taxed, if you get a full state pension
Some poor devils never get a break in life....poorly paid jobs and lots of commitments; truly I'm sorry for these folks. Then I look at my professional peers who mock me for my very modest car while they drive Jags, BMW's and Mercedes. I did discuss retirement plans and they said ''well, I'll downsize my house'' - that might raise 150K....that and their state pension will have to get them through maybe 25-30 years. I don't feel it necessary to mock their selfish and immature spending habits and I don't really care if somebody wants to judge me for having a cheap car - let them. I got a feeling I may have the last laugh.....
The state pension will means tested in the near future, I wouldn’t count on it.
Its possible but then the government would have a headache calculating tax every year as people spend it. It certainly would see people blowing their money or giving it to loved ones to a point where there is some gain at reaching a certain threshold.
How much money will you be spending when you're 80?
This, I believe is something people overlook. The 4% rule where you need X amount pot to give you Y annually for 30 years. But at 80+ you're unlikely to be going on holidays abroad, buying another car or partying etc.
Is this before tax?
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As always, thank you for watching and as always, you are so gorgeous, MARRY ME! X
Bit creepy
@@u3vs62cja ur jealous 😂
Are these figures used as retirement goals gross or net? 🤓
I read these as gross, and personally £30k a year when you have finished your mortgage i think is more than comy
Very informative Helen. Are there no decent bonds or similar lower risk investments that would generate income without the crazy risk of equities?
Invest in Bitcoin as a hedge against inflation. This required £30k for a comfortable living for a couple will only go up. Bitcoin is deflationary and can earn you 10% back (staking rewards) just for holding it.
Bitcoin is not a hedge against inflation housing is
how come we pay tax are pensions wen we payed tax on it wen was at work we are being robbed
@georgeriggs7651: But you didn't "pay tax on it when was at work". Your pension contributions are all taken BEFORE tax is applied to a wage. No tax going in, and pay tax on the way out and it's been like that for over 100 years. You only pay tax if your pension + other income exceeds the personal allowance of £12,570 per year so those on the state pension alone do not pay any income tax. You are not being robbed.
I like this ladies videos but the REALITY is the average pension pot in the UK as of April 2023 is approx £70,000 ish and nowhere near these type of websites over inflated figures of £1/2 million to £1,000,000 ! 🤣🤣🤣 It’s TOTALLY laughable and applies to about 2% of the UK population and the rest struggle on the state pension of about £170.00 pw! 😠 7th richest country in the world with one of the lowest state pensions in Europe 🤔
The FAs i have met want to charge me 1% for the pleasure of transferring my hard earned into their platform, 1-2 thousand pounds for setup fees and 1 to 1.5% per year incl fund costs for the pleasure of putting my money in tracker funds. Thanks but no thanks!
Where did you go to? Lost it all and got a job?
Your insane ! we havent spent that amount EVER
what is this a john lewis crimbo ad ? turn the twinkly lights off
I'll ask Santa for a plant to put in the background instead
Rude!