Saving for retirement

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  • TheSaint 9 Jan 2014 12:50:50 14,311 posts
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    So being a year or so over the big three zero I've decided that this year I really need to start seriously saving for retirement. A few years back I worked for a large company and invested in the pension scheme but haven't touched it since leaving so it's probably just sat there being eaten up by fees.

    Now I work for a small company (less than ten of us) that doesn't have any formalised pension scheme so I'm going to have to sort it out on my own.

    So what is everyone doing to plan for their future? Private pension? Paying off the mortgage as quickly as possible? Investing or playing the stock market?

    Really hard to know what the best long term option is.
  • sport 9 Jan 2014 12:53:50 12,697 posts
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    If you've got a mortgage, big credit card/loan debt etc, you'd be daft to put any extra cash in a pension.

    LB will back me up.

    Edited by sport at 12:54:05 09-01-2014
  • kalel 9 Jan 2014 12:54:12 87,064 posts
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    I think given the state of pensions and most investments, it makes sense to pay off your mortgage before you do anything else. Trying to do that is certainly as far as I've got.

    Beyond that I think long term bonds and maybe some stocks is the way to go. You can put stocks into ISAs now which is quite a clever thing to do if you can get your head round the whole thing.
  • Alastair 9 Jan 2014 12:55:20 15,607 posts
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    It's been possible to buy stocks and shares ISAs for years. Are you talking about something different?

    Not as nice as I used to be

  • elstoof 9 Jan 2014 12:55:31 7,025 posts
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    Hah, pension. Every time I get a year older the retirement age seems to move one year further away.
  • elstoof 9 Jan 2014 12:56:52 7,025 posts
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    No investment you can put money into will offer more interest than the bank is charging you for your mortgage. Pay the mortgage and then get into the ISA game.
  • Chopsen 9 Jan 2014 12:57:45 15,879 posts
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    elstoof wrote:
    Hah, pension. Every time I get a year older the retirement age seems to move one year further away.
    Exactly.

    I've got a public sector pension, so am in a relatively better position with respect to that. But they keep revising the rules and putting back the retirement age, so tbh I'm fully expecting to die on the job.
  • kalel 9 Jan 2014 12:57:48 87,064 posts
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    Alastair wrote:
    It's been possible to buy stocks and shares ISAs for years. Are you talking about something different?
    Yeah, I probably only think it's new because it's only something I recently discovered.
  • graysonavich 9 Jan 2014 12:59:28 7,320 posts
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    Pensions o_o

    The biggest thing I've saved for since hitting 30 is a Dominos pizza. Baby steps and all that.
  • TheSaint 9 Jan 2014 13:02:39 14,311 posts
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    Some good advice, thanks.

    Main problem with putting it all into the mortgage is that we'll probably want to upgrade soon and it's going to be pretty disheartening to see our sub-100k mortgage shoot up again. I think I'd feel better about that if we were in a house that would be good for the long term.
  • sherpa1984 9 Jan 2014 13:02:50 245 posts
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    Been paying into the NHS pension for about 6 years. Swines in the public complaining it was too good (Oi! It's not like there's lots of perks in the NHS- average pay, bad shifts, circumventing EU employment laws, no bonuses, frozen pay rises so we earn less every year due to inflation) mean it's not so gold-plated. I think I have to work to 67 (will be in the 70s by the time I get there) and my contribution is close to 10%.

    I better live to 100+.

    (Turned 29 in December)

    Edited by sherpa1984 at 13:05:35 09-01-2014
  • kalel 9 Jan 2014 13:03:05 87,064 posts
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    I am slightly terrified by how short-term my outlook on this stuff is. I have a savings account, but it's basically there for when expensive bits of gadgetry like my TV or Hi-fi break.
  • LeoliansBro 9 Jan 2014 13:03:49 43,824 posts
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    Hell of a time to be saving at the moment.

    LB, you really are a massive geek.

  • Alastair 9 Jan 2014 13:05:04 15,607 posts
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    kalel wrote:
    Alastair wrote:
    It's been possible to buy stocks and shares ISAs for years. Are you talking about something different?
    Yeah, I probably only think it's new because it's only something I recently discovered.
    I've been paying 100/month into one since 1996. It's currently in profit - last reporting period showed quite a jump.

    Not as nice as I used to be

  • Youthist 9 Jan 2014 13:06:55 10,011 posts
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    sherpa1984 wrote:
    Been paying into the NHS pension for about 6 years. Swines in the public complaining it was too good (Oi! It's not like there's lots of perks in the NHS- average pay, bad shifts, circumventing EU employment laws, no bonuses, frozen pay rises so we earn less every year due to inflation) mean it's not so gold-plated. I think I have to work to 67 (will be in the 70s by the time I get there) and my contribution is close to 10%.

    I better live to 100+.

    (Turned 29 in December)
    DM can help you fuck the NHS over (and us, indirectly) if you need advice.

    Think of how stupid the average person is, and realise half of them are stupider than that

  • TheSaint 9 Jan 2014 13:06:58 14,311 posts
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    sport wrote:
    If you've got a mortgage, big credit card/loan debt etc, you'd be daft to put any extra cash in a pension.

    LB will back me up.
    No loans or debts aside from a couple of credit cards that will be cleared before they come out of the 0% period. Luckily mortgage and student loans (that I don't really worry about) are the only debts with interest.
  • kalel 9 Jan 2014 13:07:18 87,064 posts
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    Alastair wrote:
    kalel wrote:
    Alastair wrote:
    It's been possible to buy stocks and shares ISAs for years. Are you talking about something different?
    Yeah, I probably only think it's new because it's only something I recently discovered.
    I've been paying 100/month into one since 1996. It's currently in profit - last reporting period showed quite a jump.
    Hang on, that's not exactly what I'm talking about. That's just a certain type of ISA where you pay in money and it can go up and down, as the bank uses it to play stocks.

    I'm talking about putting shares you've bought into an ISA wrapper, so that you don't have to pay capital gains tax on them.
  • Reallysorry 9 Jan 2014 13:08:02 270 posts
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    It's one of those situations where you could save yourself thousands and be well off in retirement maybe go traveling and all that jazz but never actually make it to retirement with the increases every year to retirement age & the person who puts nothing away with the live for today attitude lives to 120. I say pay your mortgage off because even if you never save another penny after that at least you've always got a roof over your head & if you were clever enough to have at least one child it's time for them to start rebuking all those meals you put on the table from 1-18.
  • Destria 9 Jan 2014 13:08:54 2,823 posts
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    I'm putting stuff into my pension for two main reasons:
    1) Work matches it, so that I'm effectively getting it doubled
    2) To save on the tax bill, as it's salary sacrifice.

    Anything else I have left over goes onto the mortgage.
  • Alastair 9 Jan 2014 13:12:04 15,607 posts
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    kalel wrote:
    Hang on, that's not exactly what I'm talking about. That's just a certain type of ISA where you pay in money and it can go up and down, as the bank uses it to play stocks.

    I'm talking about putting shares you've bought into an ISA wrapper, so that you don't have to pay capital gains tax on them.
    Ahh, OK. So you *have* discovered something new. :)

    Not as nice as I used to be

  • LeoliansBro 9 Jan 2014 13:14:30 43,824 posts
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    'Rebuking'?

    LB, you really are a massive geek.

  • Steve_Perry 9 Jan 2014 13:15:54 3,917 posts
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    What's a mortgage?

    VIVA STEFANSEN

  • TheSaint 9 Jan 2014 13:16:13 14,311 posts
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    Seems to be a difficult balancing act between taking precautions for the future and living in the moment. Pretty depressing to think you could save like crazy and get hit by a bus at fifty and never get to enjoy it. On the flip side having a nice car and holidays in the sun is all well and good at thirty but may not feel the same living in poverty at 75.
  • LeoliansBro 9 Jan 2014 13:21:02 43,824 posts
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    It's also a balacing act between saving earlier (which allows more time for your investment to grow) and saving later (when you will have a larger income and which also dodges things like inflation). Truth at the moment is that the investment managers are broadly looking to hold the value of their funds rather than increase them, as there are very few places to invest at a useful return.

    Combined with volatile inflation (although that is down) there's a strong argument that you should enjoy your money now and save in a time of more favourable economics.

    LB, you really are a massive geek.

  • whatfruit 9 Jan 2014 13:22:25 1,441 posts
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    Dignitas is my retirement plan.
  • Whizzo 9 Jan 2014 13:22:54 43,093 posts
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    10 years paid into the Surrey County Council pension (I used to work in a college) and currently paying into the NHS pension (which has been 10 years as well now).

    While I won't be able to retire when I hit sixty, I will get my local government pension paying out and as I'll still be working that'll be nice, the lump sum as it is now is pretty decent.

    This space left intentionally blank.

  • kalel 9 Jan 2014 13:25:35 87,064 posts
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    My kid is my retirement plan. When he's a nobel prize winning international footballer playing lead violin in the Royal Philamonic, he can pay for my nursing home.
  • BillMurray 9 Jan 2014 13:26:06 7,701 posts
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    I've been in a few retirement schemes but never stayed in the jobs long enough. Like a few other people have said, they keep moving the retirement age back so I fully expect to die on the job aswell.
  • TheSaint 9 Jan 2014 13:27:53 14,311 posts
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    Another spanner in the works is that I quite fancy living abroad at some point. I guess that really messes up all your retirement plans as well.
  • ram 9 Jan 2014 13:29:00 3,476 posts
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    I've got a private pension that allows me to move my money around (for free) amongst different funds. It's a bit like playing the stock market. I can move the money on a daily basis if bothered. And track funds online.

    I'm not sure of the exact figures it's a while since I checked, but I think it grew about 8-10% in low risk funds last year which is pretty good. Can get details later if interested.
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