How Much Is Enough To Retire Comfortably (updated for 2024)
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- Опубликовано: 29 июл 2024
- I did a video three years ago called ‘How much is enough to retire comfortably?’ It’s one of my most-watched videos ever, but after watching it back and reading the hundreds of comments, I reckon it’s time for an update.
So, here in the middle of 2024 - how much IS enough to retire comfortably?
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Chapters:
00:00 Welcome
00:45 What does ‘enough’ mean?
02:12 Some caveats and clarification
03:11 Arriving at a number
05:27 Two important factors
07:20 Calculating how much you have to save
09:03 Working towards your number
11:07 Resolution
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📫 Leave me a comment below - I read all of them and love hearing from you!
Your explanation is clear and practical. Nevertheless, the market can undergo manipulation in various ways. While I initially grasped trading crypto assets, my technical analysis skills were a limiting factor. This changed when I came across Flora Monticola's strategy. Day trading deserves increased attention, given its resilience to the market's unpredictable nature.
Flora Monticola's program is widely available online
Thank you for the awareness here on youtube, it shows how much you want all traders to progress as I have been thinking of selling my btc.
Reason i invest in the crypto market; to make my money work for me, to prevent inflation from eroding my savings
When your result is good and your outcome is straight to the point people will always speak for you, good to see this here.
I need to set up for retirement while earning passive income to cover daily expenses and reduce taxes, even in a higher tax bracket. I plan to invest $250K from my savings.
Diversify into different asset classes to mitigate risk. If unsure, consult a financial advisor.
Accurate asset allocation is crucial with expert guidance. At 58, I have $850K in equity, $300K cash earning 5.25% interest, $685K in a 401k, $250K in a cash account, $120K in paid-off cars, and gold and silver bars. My advisor helped realign my portfolio to my risk tolerance, and it boomed over time.
pls how can I reach this expert, I need someone to help me manage my portfolio
Amber Michelle Smith has always been on the top of my list..She is regarded as a genius in her area and well knowledgeable about financial markets. I highly recommend you look her up if you want excellent collaboration.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Diversify your holdings across several asset types to reduce risk rather than putting all of your eggs in one basket. If you don't know a lot about finances, speak with a financial expert.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
Amber Dawn Brummit is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
Success depends on the actions or steps you take to achieve it. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Financial management is a crucial topic that most tend to shy away from, and ends up haunting them in the near future.., I pray that anyone who reads this will be successful in life!!
Starting early is simply the best way of getting ahead to build wealth , investing remains a priority . I learnt from my last year's experience , I am able to build a suitable life beause I invested early ahead this time .
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Mind if I ask you to recommend this particular coach you using their service?
Credits goes to " Annette Christine Conte" one of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.
Her website appeared right away, You've saved me several hours of research, I appreciate it.
Hello, I am due for retirement in two years, I'm a senior citizen but I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $50K per year but nothing to show for it yet.
In this current unstable markets, It is advisable to diversify while retaining 70-80% in secure investments. looking at your budget, you should consider financial advisory.
@@Higuannn I think you're better off with majority investment in S&P500 and uprising equities cos they always outperform. Also speaking with an advisor can help with pointers. I've been in contact with one I reached through commentaries here, she has been really helpful.
@@hullbruce Hello, thanks for replying. I'm thinking of trying out an advisor, how can one reach a decent advisor like the one you use?
@@Jaymilnere I work with the popular Sharon Crump Cline. Who happens to be a is a hot topic among financial elitist in The US. Especially for her works during Covid. All the information you need to set up an appointment is on her web page.
@@hullbruce Thank you for this pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a calI session with her.
I’m 55 from South-Yorkshire but worked overseas all my life. I have savings of €1 million and I'm ready for retirement, only concerned about the soaring inflation. Is this enough to retire happily or do I need some sort of money management?
Glad to hear from another buckeye! comfortable retirement depends on your lifestyle...
I would get money management just in case. You’re only 55. I think the average life expectancy in the UK is 77.5 years, but many people live well into their 80s so that 1 million has to last you all of that and the unforeseen.€1m is a great start though. Good for you!
Generally speaking, a good number of people discredit the effectiveness of a certified fiduciary in planning for retirement, For over the past 10years, I’ve had a CFA consistently restructure and diversify my portfolio/expenses and I’ve made over 3m in gains.Might not be a lot but retirement doesn’t seem so farfetched anymore.
@@JIANHENGLUGI'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I've stuck with the popularly ‘’Jennifer Leigh Hickman” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
I’m 77 and still working full time. I do enjoy my work, it provides me with purpose and has secured my financial future. Most people are too eager to retire as early as possible. Even if you do retire early, best to get a part time job for the reasons cited above, as well as following many if not all of the suggestions in this video.
Accurate asset allocation is crucial. Some use hedging or defensive assets in their portfolio for market downturns. Seeking financial advice is vital. This approach has kept me financially secure for over five years, with a return on investment of nearly $1 million.
Mind if I ask you to recommend this particular coach you using their service?
Sonya lee Mitchell is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Is really important to acquire as much money as you can before retirement, that's why I make it a priority to invest. Right now my portfolio has good companies, however it has been stalling this year. I’ve approximately $700k stagnant in my reserve that needs growth, any suggestions to grow my portfolio will be highly appreciated.
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. that's why seeking expert advice is essential.
Very true , I diversified my $400K portfolio across multiple market with the aid of an investment advisor, I have been able to generate over $900k in net profit across high dividend yield stocks, ETF and bonds in few months.
Please can you leave the info of your investment advisor here? I’m in dire need for one.
‘’Jenienne Miniter Fagan’’ is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment
Thank you for this amazing tip. I just looked up Jenienne, wrote her explaining my financial market goals and scheduled a call
Planning for retirement can be so confusing, especially with all the new numbers for 2024. How much is really enough to retire comfortably without constantly worrying about outliving your savings?
Totally agree. It feels like the goalposts keep moving. I'm trying to figure out the right balance between saving and investing to ensure I can maintain my lifestyle.
It's a tough question. The cost of living keeps rising, and it's hard to predict future expenses. I’ve been considering various retirement calculators, but they all seem to give different answers.
I'm curious if anyone has had success working with a financial advisor to plan their retirement. It seems like having expert guidance could be crucial in getting a realistic target number.
That's a smart move. With so many variables, a good advisor could help make sense of it all. The investment adviser I use is "Kristin Amy Rose" you could just research the full names
Thanks@@LarsBergstrom-uh2eu for the recommendation - I looked up Kristin Amy Rose and she seems perfect. I'm working on setting up an appointment.
Somebody once said, You can never save enough for retirement but that doesn't mean you shouldn't try anyway. Take your health seriously now to reduce the financial burden of failing/ill health and ACTIVELY plan your retirement so you can still make money even then. Goodluck to us all.
That's very true. Besides IRA and 401k, are there other ways we can prepare ahead of time for our retirement?
Mine draws nearer by the day and I'm gradually going into panic mode
No need to panic... The simplest way is to save more and invest those savings in profitable ventures (you must either understand what you're going into or get the services of a professional so you don't end up losing your savings)… I have made a couple of thousands yearly for the past 3 years through only stocks and Etfs and if I can keep at it, I won't have much to fear even with less than 6 years to my retirement...
By professional, do you mean an FA? Did you use one? What are the steps for getting one? Like a really good one?
I could definitely use external help right now. Thanks
Yeah I did. I think you should start by looking out for those from reputable firms and good track records. You should also make sure the person is licensed. Personally, I use Marie Kelly Matwick. She's good and you could also check her out.
not true. my dad saved up a lot for retirement man
I've been thinking about retiring recently. Additionally, I placed $800K in the S&P 500 to safeguard my financial future. I need to find a strategy for investing in companies that will match my risk tolerance and financial objectives, such as Nvidia and, of course, AI stocks, but it seems like the market is now gloomy.
While the market is promising, expert guidance is essential for effective portfolio management.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $255k to $750k.
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advisor? I'll be happy to use some help.
Her name is ‘Dianne Sarah Olson’ Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before reaching her.
I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $750k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like Marisa Breton Dollard who can assist you on things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment riskwould be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Marisa has the appearance of being a great authority in her profession. I looked her up online and found her website, which I reviewed and went through to learn more about her credentials, academic background, and employment. She has a fiduciary duty to protect my best interests. I sent her an email outlining my objectives and also booked a session with her; thanks for sharing.
Just came to leave a comment to say a huge thank you to you! Because of your content I've gone from having 0 in savings and retirement to working out a budget and lifestyle adjustments to enable me to maximise pension contributions, set aside money for emergency savings and contribute to a S&S LISA regularly (even if it's not huge amounts right now). Even managed to get a few bob put away by putting the budget into action. All within a few months. Without info like yours I'd still be frittering away all my cash without thinking about my future (or rainy days) at all. Thank you so much!
Amazing! Well done for taking radical action! I’m delighted the content has been useful - more power to you, keep going! 👍🏻👊🏻👏🏻
Caution on LISA for retirement…..see my warning. It’s considered as readily accessible savings if you need unemployment benefit etc.
@@ianjames3078 thank you for the tip - this is a really good thing to know and be aware of. I'm still really new to fiscal responsibility and development, so this is one of those things I would never have considered. Thank you for sharing your experience!
I'm turning 49 this month and only got wise late last year. The eternal question of "how much is enough to save?" Has almost driven me mad. I'm putting in 30.5% of my earnings and I'm really surprised that I can still live and stuff. It's hard but I've recalibrated. No way I'm working until 67 (barring significant life events, terms and conditions apply). Thank you for helping me feel I'm neither alone nor off track
If you're putting away 30..5% of your earnings you definitely are not "off track". 👍
@@kw8757I'd be careful where I put my money. If you're into pension funds and stocks you could be hit really hard prior to retirement and not have time to recover. Don't take advice from RUclips or Internet "gurus". We are now in a very fluid political climate so be very careful how you manage or diversify your resources...
@@kw8757 Exactly.
Good move, that will repay you handsomely.
I maxed out on annual and lifetime allowances particually in the last few years of work putting 50% of earnings into AVCs. It did mean skimping a bit but that ive never been extravagant. That enabled me to retirire at 56 on a better income than my previous take home. You do need to over budget as pensions dont keep pace with inflation and the cost of living has gone up perhaps 30% in the last 4 years.
The concept of retiring at 67 (let’s be honest it will be 70 by the time a lot of us in our 20’s and 30’s retire) is absolutely crushing. There is no way this is happening to me, I refuse to let the government tell me when I can stop working. 55 is my target.
Unfortunately the gvt is also controlling this by increasing the age you can access private pensions to 57 from Apr 2026. Retiring at 55 isn’t possible unless you have other forms of income besides your pension to depend on.
@@sushilvekaria164That’s exactly what I’m talking about, having enough assets in places other than a workplace pension or SIPP to bridge the 5 year gap. Although, the government is probably going to have to make withdrawing any money between 50 and 60 punishing in terms of tax to keep high earners in employment longer to pay for the aging populations state pension. I don’t think there’s any getting away from it ultimately.
@AName-pp8di this is why you need other revenue generating assets that can be drawn upon as savings rather than 'retirement'
You forget , 80 % of the population don’t live comfortably while they are working . Never mind having enough to put aside for retirement.
The videos about retirement not about cost of living
That's a very good point.
I’m not sure about that. Pretty much everyone I know ‘could’ save more into pensions but they choose not to by buying other things for ‘today’ and I don’t mean food and things they need to live on.
Most people don’t like to think about retirement and that’s the main problem. They’re never prepared for it.
I think most people if they added up their monthly costs of all the bills the need to pay and see what’s left over. That’ll make them realise what they’re choosing to spend the excess money on rather than save for retirement.
@@bremensurfing I genuinely disagree. As I saw first hand my father with everything in position for retirement . Seemed to be paying a fortune into pension towards the end (maybe not as much as he complained about 😬🤣) but unfortunately all for nothing ! As he suddenly passed which was so frustrating to see .
Shows you can’t take it with you .
@@Rosco1967 sorry to hear what happened to your dad.
I’d say you’d have a different opinion though if he lived well in retirement vs others who haven’t saved enough.
But also, that’s the one thing you can’t plan for so I still say it’s better so save as much as you can sensibly for retirement even if you don’t get to spend it all.
At least you can pass it to your children and make a huge change in their life.
But I still think the majority of people can save more than they do.
They could at least pay some kind of attention to it and make sure it’s invested properly rather than in the generic safe fund their work puts them in. That’s a free thing they can do with no excuses for.
Love this one Pete. The only thing I’d add is the thing I bang on to my daughters about all the time; the earlier you start the easier it will be. (That and “a man is not a financial plan” 😜)
But a good man is a good financial plan. It's an option women have.
@@wizzyno1566 I’d rather my daughters be financially independent of anyone (especially me 🤞)
Love it!
@@wizzyno1566A good man may be hard to find. Let’s work on the assumption that they are liabilities in general. 😊
@@wizzyno1566 That's equivalent to having a man say, "a good woman is a good financial plan. It's an option men have." Not exactly a very good option for either category.
I’m planning on retiring at 55. I’m the last month eligible to. I have a 35 years in a Final Salary DB scheme and we have now this financial year gone over to a CARE DB scheme. I pay into AVC’s, stocks & shares ISA and Premium Bonds. I make sacrifices to unable me to retire early but i still have a nice life. The reason I want to retire early is because I no longer enjoy my job and you spend a long time dead!
My father worked tirelessly to build a decent pension, lived well too . But my point was it turned out totally fruitless as he died a couple of years after retiring..
Lucky you to get a final salary pension! Good choice of job all them years ago enjoy it 👍
I retired last year aged 55…100% recommend it! Life’s too short if you don’t enjoy your job and you can afford it. I worked hard and saved hard and enjoy simple things (fortunately!).
So did I and no regrets.
Great video as usual. 41 and on track for a 55 retirement. I’ve taught my kids what compound interest is and they are 12 & 8! 😂
Compound Interest - 8th wonder of the world!
I am 55 years old and currently putting a considerable amount of my salary into my pension but I am also saving about £400-£600 per month into my ISA. My question is, is it better to put that ISA money into my pension as I then get all the tax relief on it and therefore there is more money in the pension pot to try and gain from the investment fund growth? This question has baffled me for a while. Please help 😕
Get a financial advisor man! Been with Becky Lou Gordon for over 9 years now. I have been able to retire at 59 and have over $1m in savings
I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement. I still give kudos to my Financial advisor
I would ask what easily accessible savings you already have and when you are likely to need to use them. Dreading my next MOT I spent £14000 cash on a car last year. Of course even doing that someone might be able to show that it would have been better to put the money into a pension and buy the car on finance.
@@MrDunclOr just buy an older much cheaper car. Simples.
@@daveaglasgow That is exactly what I traded in with various warning lights on. After looking around I ended up buying the same model car as I had but with 100000 less miles and a long manufacturer's approved used warranty. Anyway the car cost half what will be paid into my pension this year.
Meanwhile a colleague spent £18000 on a new plaything motorbike then retired the next year while another colleague spent £56000 on a brand new Plug in Hybrid months before he retired !
Now that is an excellent video. Sound, considered and well presented advice. Thank you.
I have 2 work pensions I retired at 54 years old 7 years ago best thing I ever did
Good content kept simple. Thanks Pete 👌🏻
Thanks Pete. Practical and helpful as always.
Having just spent a considerable sum on an IFA (retirement financial planning), and rarely (if ever) commenting on videos - this is a great video. Very well structured and delivered. I have subscribed.
My Dad was never cheap, but frugal. He told me to start early. I started investing small amounts a year, in my early 20s. Over the years, the nest egg has grown. I am now 57 and glad I started early. I will retire in the next year or two. I call it active retirement: do things I really want. Work for fun at a golf course, for example.
Love this. Starting early is important.
How much has the compounding grown to over 30+ years? Getting payed off dividends too? Im early 20s so this is very inspiring to see. I've been investing for the last 3 years with about 30% of my salary.
@@nathangreen6286keep it going. I'm 45 and my dad also got me into investing in the late 90s. I can recall my SIPP pension, which I pay into in addition to a workplace defined benefit scheme, was only worth about £2k in 2006...fast forward to now and it's nearly 6 figures. I started off with just £40pm payment into it and gradually upped the payment at least once a year.
@@nathangreen6286, wow! That is truly impressive. When I started investing in my 401 K, I was 23 years old and the amounts I put in yearly were small compared to you! I put around 1200 $ to 2000 $ a year. As I got older, I invested more depending in the years because as you go through life, there are, of course, expenses (buying a house, having kids, playing sports etc.)
That being said, I am now 57 and have several hundred thousands $.
Cheers, Pete. Another great vid.
One person’s comfortable is not another’s. If you’re comfortable with the amount you retire with then you have enough to retire comfortably
Im 64 and a businessman. My only advice is to have a small home business using fulfillment (selling stuff online), set up before you retire. This could easily generate £1000/month vs. the extra pension pot you would need to generate an extra £1k/month... It depends on how you perceive retirement. Many people get bored and start a new hobby; why not have a hobby business that pays?
Love your channel, but this was an especially great video. Look forward to the rest of the series.
Brilliant as always, Pete. Sensitivity of assumed growth and inflation is so important, I’ve just planned mine at 2.5% inflation and 4.5% growth above inflation (100% equities), but I’m not convinced I’m going to be right! I’m 35 years away from state pension age, but it’s a hefty number if I want £78k after tax in today’s money to cover myself and my spouse from age 55. I’ve only recently added this inflation though as it was a fallacy to track progress against “today’s” figures year after year. Your content continues to keep me on track for a comfortable and hopefully early retirement. Thank you for all that you do 👍
What???? £78k after tax?? That's near enough to £100k gross. You would need £3M in today's money to generate such an income at 55 - that is one heck of a pot!
Always quality content
Thank you!
Cheers Pete, another quality update from a master of the seas of finance :)
Thank you kindly!
Thank you!
Brilliant video Pete, many thanks.
This is a great video - really helpful!
Great video
Really excellent, clear advice. Thank you! 😊
Glad it was helpful!
Hi Pete, just wanted to say thank you for your content. The balance you put in your work with the fun but still the responsible part of it still present. I follow you for the UK content and The Money Guy from the USA for all things personal finance as I think you both are the most balanced out there. Also it’s great to hear you and Roger on the pod. Keep up the great work 💪
Heyyyyy - thank you for this! Really glad the content is helpful for you: your kind words are much appreciated. 👍🏻🙏🏻👊🏻
Excellent clear advice, as usual! 👍
Thank you!
Great podcast this look forward to the book
I am 44 and currently have €2 million invested in a Vanguard global ETF alongside some individual stocks. I withdraw over 4% per annum (€100k), adjusted for inflation each year. Hopefully this will last forever, but if the market crashes I have 3 years cash available to buy the dips.
Put it into gold
Been following for years and have used Pete's info as inspiration and guidance. Still producing top quality content and will up my pension payment a further £100 due to the quick maths on the linked calculator 😅
Ugh, retirement planning is overwhelming! How much do I even need to save? I see these articles saying millions, but that feels crazy.
Yeah, it's definitely a moving target. Depends on your lifestyle. Fancy world travel or staying local?
My uncle!!Retired on a shoestring budget and travels the world frugally. Makes you think you don't need a fortune.
That's a good point. My uncle lost a lot of money in 2008. But wouldn't a financial advisor know how to avoid that?
My question too, How is the advisor beating the market by 2% every year for 25 years? Which advisor has done that?
advisors claiming consistent market outperformance, as long-term consistency is statistically rare.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
401k is a US thing, this is UK advisor
Simple, smart, effective... Great content
There was one word that sums up the approach - "uncomfortable" if you don't push yourself you will never have enough
Thanks Pete. I think taking a personal interest in tax/finance has made it all a lot less worrying for me. The unknown can be a major fear for many
I am numerically literate and have a couple of defined benefits pensions.
I retired a year early this past February. When I get my state pension, my income will be ROUGHLY 80% of my final salary and because I have modest savings (low £10,000s) and all of that pension income is subject to cost of living rises and suchlike, I really need not worry.
My point is that the people who REALLY need to see this and UNDERSTAND it are not in my position.
Since retiring, two reasonably close friends have "picked my brains" and what they "know" is mostly total rubbish.
All of this, most especially as pensions are now defined contributions, MUST be drummed into kids from secondary school and older.
I quite agree
@@MeaningfulMoney Even the most basic financial provisioning for later life ought to be a seperate subject at pre O level. Certainly down the qualification/salary chain, appreciation and awareness diminishes, and then disappears.
How in this sweet world, can anyone live on UK state pension alone???????
A lot of very average, ordinary people are in this position. Many are completley unaware.
I was VERY lucky - I am 65 and amongst the last of those where the state and major employers took all of the responsibility - I did not need to know.
Thanks Pete. I’m going to increase my monthly pension contributions tonight and review in October and again in the New Year.
Yes Adam! Nice work!
Also being 49, thanks for reminding me i have another 18 years to go :./ im ready to give up now
@@thisbarb I already have one at 16, no more thanks. just trying to figure out a way to finish up early and get off this rock.
@@spindly_killer_fishDignitas?
@@stuartburns8657 I was thinking more of selling the house, buying a yacht and sailing around the world 😁
@@spindly_killer_fish Ah, much more optimistic, glad to hear it!
@@stuartburns8657 Indeed, i'm not planning to give up on life, rather i'm just trying to get out of the rat race sooner rather than later.
Thanks, as always super useful. My children are all mid uni and hopefully more independent. Now I finally think we can put some serious savings down, we also plan to put my wife's nhs pension contributions up. Plan to retire/semi retire at 60 and definitely fully at 63. Im 51 and will have 35 years of DB/CARE pension by then. 🤞Good luck to those planning ahead!!
Brilliant video as always Pete - I really like your bullish comments about investing aggressively - Many of the default pension funds and ISA’s underperform, so I took control and invested in low cost Vangard funds instead, 2/3 in US equities and 1/3 Worldwide. It was the best thing I ever did.
Great content Pete. I'm using my own 2-4% rule where I increase my amount of pension investment from my salary by 2-4% each year. I'm in good position that my employer pays 10% to my pension and I currently invest 16%, giving a combined 26% currently. My plan is simple, I shouldn't notice this modest increase to much and, 'IF' I'm lucky enough to get a salary each increase year on year, I can increase this further with the aim of hitting 40% by the time I'm 58. Of course I'll have to adjust this as life events come and go (in 3 years time I'll have all 3 children possibly at University) but hopefully with come careful management, I hope to be able to retire at 62 or 63. Fingers crossed. Thanks again for the excellent content. Anthony
The "4% Rule" was a US study based on US markets. A follow-up analysis using markets outside the USA determined the safe with-drawl rate fell between 2-3%. So unless you're planning putting all your eggs in US stocks you may want to plan more conservatively.
Great video. I've recently retired and whilst financially I'm doing ok, the finances are far from the most challenging aspect to early retirement. Yes, they are a key component but far from the only one. The transition is tough once you come down from the 'honeymoon period'. The one piece of advice I have is to retire to something. Start a sustainable and fulfilling activity/hobby/past time before you retire to ease yourself into a totally different way of life. Discussing retirement with your partner is also key, what do you both expect. Too many people (and content) focuses too much on the finances and not enough on non financial challenges. That's my take.
As someone approaching early retirement my wife and I have been discussing this a lot. Fortunately we have shared hobbies that we both love - gym, hiking, skiing and cycling. As long as we are fit and well it’s all good. As the fitness fades we will need to find new activities and hobbies.
Great update on the original. 🙂
Thanks!
You mention investing aggressively which I completely agree with if you have a no. of years to go until retirement. For what it’s worth, I have always regarded my state pension as my ‘fixed interest sector’ (very old fashioned line of thought, I know) but which perhaps allows even more scope for a riskier investment strategy.
Thank you for the video.
I think that’s a great line to take, actually
That's if Liebour don't decide to means test it before you start to recieve it because then it'll be your "of no interest whatsoever sector" when they decide to give it to someone "less fortunate" than you. I sincerely hope not, but I wouldn't put anything past them.
82k views already ..awesome..........glad to see you are giving this part of retirement a revisit Pete........I also look forward to your new book on the subject....
Cheers Will, you legend!
Interesting video Pete. After stumbling across your channel while RUclips browsing, I watched it through. I'll admit it completely washed over me and I clearly need to watch it again (...and again...and again...). Nevertheless I've been paying into a public sector pension for just over 24 years, now changed to the private sector and 12 months into my pension contributions with my new employer. All these numbers on my annual benefits statement mean something, I just fail to understand what. Any simpler videos on your channel that help me understand what I'll be currently getting a month when I retire? (I'm 44).
Subscribed to your channel too. Thanks
Once read a quote " Security is not having More, but needing LESS". I'm 56 and intend to retire (with wife) at 61. I have already worked out the BASIC cost of living for the two of us by then - albeit a retirement that is boring as hell with only leisure coming from TV, reading and music. Then I look at what a 'comfortable' retirement means for us - which I think of as the Leisure / Pleasure side + unforseen expenditure (e.g Car Bills etc) - and I've come to a figure that I KNOW we will have coming in to the household in 2029 and beyond - and that's because we have Rental Properties - we actually have very little in the way of Pensions Pots. If I ask people how much their Basic cost of living is, most have no idea at all. This is the starting point, IMO, - and it's not too difficult to calculate.
In my opinion another important thing to factor in is the performance of the markets in the first few years of retirement. If you're withdrawing from something like a stocks and shares ISA a few years in the red early on during retirement can really impact your portfolio and how long it will last, even when using the 4% rule.
Please can you come and do a talk in Milton Keynes! So many people need this information.
Myself and my partner retired a couple of years ago at the age of 58. We are very fortunate as we have indexed linked pensions of £36k and £30k and savings of around d 650k mostly invested in shares. We both love the freedom retirement brings but we do always appreciate how fortunate we are.
You're lucky I expect they are public sector pensions, the country is going broke
@@mrjohncharlesbrown Hi John, thanks for the reply. We both worked for a multinational oil company who did have a fantastic pension scheme. As I say, we do appreciate how fortunate we are.
Iv did a very similar calculation a few years ago we are both retired (2 years ago) now are 57 and 58 we have 25k in DB pensions (2k per month) we also have 130k in a SIPP plus 30k in savings we will both getting the full state pension at 67 With no mortgage we can live on 2k per month we are drawing 1.2 k out of the SIPP to give us 3k per month (this give us “experiences” money) this is well above the 4%rule but the state pension will more than replace the SIPP income We haven’t taken any inheritance into consideration as we have promised our two children any we might receive We decided to have an early retirement plan with slightly less money than work on !!! But the most important thing is to have a PLAN 👍👍👍👍
Hello Pete, Great video!!! I was wondering if i could help you edit your videos which can save your time as well as focus you only on creating more content??
I set a target of retiring by 55 when I was 40. I’ve chased pay rises, bonuses and promotions since then. Life does have a habit of getting in the way and I had a few unexpected costs. However, I’m 53 now and still can retire at 55 if I choose. It’s having the choice that empowers you. Personally I am going to do another year and use all the money earned in that final year for some luxury purchases like a sports car and maybe a camper van.
I’m retiring in September at 58. The secret is long term planning and I’ve been planning this for a long time. The younger generation need to be educated so they can do the same before it becomes too late
How many metres length does the bridge need to be when metres keep getting smaller at some unknown, but increasing rate?
Thank you for your videos.
I'd love to know what is the most tax efficient way of drawing down a pension. I realise there's not one generic answer to this as each person's circumstances are unique. Should you max the tax free lump sum and put that into an ISA for example.
Also, when we get to state pension age, is the taxable amount from a defined pension calculated and deducted automatically?
Thank you.
Thank you for a detailed vid Pete Matthew.
Even if my portfolio is 1,191,645.03 in 22 years, at the point in time i will need to have 2,283,315.10 due to inflation erosion.
Annuity + secured notes + ETF + stock + cash + social security = portfolio
I would really like to see a video on how to do financial planning for drawdown. Loads of finance RUclips covers 4%, but working out what you can draw in early active years, versus the quieter years and then finally where care costs increase means it’s a massive challenge for anyone wanting to do some DIY planning. IFA fees I have found are around 1% of the portfolio - if the 4% rule is used as a rule of thumb, the IFA costs are 25% of a retired persons income - that’s a lot… So solid DIY financial planning guidance is desperately needed
You should look at Pete's video on building a cash flow ladder. Also Vanguard Dynamic Spending Model. FI calc is also a useful free app
More excellent advice from the author of the excellent book, "Meaningful Money".
I am in the fortunate position now of having more income than I did when I was working, I was contributing 32% of may salary plus 8% employer contribution into my pension pot. So now its time to take from the pot, we both have full state pensions and I no longer pay NI so tax deductions from my pot only attract income tax, I deliberatly ensure I do not stray into the higher tax bracket. So I like you have always promoted paying into a pension to anyone that asks, best decision of my life. Lets hope I live long enough to spend most of it. I started paying into pension pots at 18 years of age and as we got more comfortable as we got older (kids left etc.) I put more into my pot, it does make a significant difference if you can do this.
Unfortunately I bet you pass away with far to much money left
@@boyasaka may be so, no one knows but lets enjoy what we have while we can, during the larger pension contributions for the last 12 years done 31 cruises, 10 USA holiday and many european jollies so still enjoyed ourselves whilst saving, live for the present, hope for a future.
Average age is around 80 years old, you'd want to plan for 90 at least. Don't want to spend your last years scrimping
You've done extremely well but most people cannot afford to put such a huge portion of their salary into their retirement fund.
@@weeeeehhhhh In your last years money will be the last of your worries, trust me.
Do you know if I can get extra tax relief on my pension contributions as I live in Scotland and pay the higher rate of tax as I earn over the £43000 threshold. If so how do I go about it? I have filled in the form to see if I require to fill in the tax self assessment form but it says I do not need to fill it in. Yet this seems to be the only option for me. Help......
Should I transfer the maximum money allowed from my cash isa, into my company pension scheme? (Scottish Widows). Thanks.
Hi Pete, thanks for this. Just a question - Let's say if you have 25x of your annual outgoings already saved up, can you in theory retire today if you wished and the money will never run out? Of course, not accounting for the non-controllable uncertainties.
What do you think the ratio of Pension : S&S ISA : Cash should be? You touched on briefly about other income sources apart from pension - but how much?
Looking at global funds - vanguard and fidelity - i notice huge USA and technology concentration. Do you recommend these funds as your choice of global diversification or ... Would you like to do an episode on this subject? 😃 Good subject. Great video. Well delivered. Thank you
Hi Pete, is there an episode of the podcast I can go to for details on distribution reinvestment? Just wondering how to know if the fund picked is working as well as possible. I have about £8,000 in an S&P Index fund ACC. It's about £1,000 up since I started it last year. Each month I just see 'distribution Reinvestment'' of about £0.40. Is that about right for such a fund? A bit clueless on that side of it, I've been working my way through the podcasts, they're a great help and I pass on info to my daughter who has started investing age 25..thanks again.
Such a great video
Glad you think so!
Given state pension is a benefit and could in the future be means tested, do you think you should include it in pension planning? It’s likely there would be tapering to any changes. But can those in 20s and 30s realistically expect it?
In these uncertain times, it's more important than ever to have a solid understanding of how to manage your finances, invest wisely and navigate economic downturns. But my primary concern is how to grow my reserve of $240k which has been sitting duck since forever with zero to no gains, sure I'm all in on the long term game, but with my savings are lying waste to inflation and my portfolio losing gains everyday, I need a remedy.
Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it's earned through employment or investments.
I am happy to life in Austria - will get a good State pension @ 65
Does Austria have a high level of taxation to pay a good state pension?
The UK has never had a good state pension - lucky you.
@@kw8757 unfortunately yes - for the pension 22.8%, 10.25 from employee, 12.55% from company. Also the better you earn the more pension will get. And there is a max. Limit what you can get. But to maintain a „normal“ lifestyle it works pretty well.
Given the fact that time IN the market is such a crucial component, I have been trying to convince my son and daughter, That right now is the time to start a pension for the newly arrived grandchild.
If we, they, and the other grandparents just put in £5 or £10 a week (a coffee and biscuits worth) until the child reaches 18, whereupon they can let it stand or more sensibly actually Takeover contributions themselves and raise them with the rate of inflation and they would be very likely to be able to retire at 55 no problem.
So far, I’m having no luck in getting anyone else on board
Great numbers. rational logic that is applicable wherever you are by taking the "guaranteed" income, and figuring out how much is needed to close the gap.
Simple, but often sobering maths.
Many people are going to look at what will be a very large number and feel far behind. Having well over a million quid in retirement assets, plus a (hopefully paid for home) is going to be quite the stretch for many. Increased cost of living and higher taxes are almost certainly coming. It would be wise to plan accordingly, and I wouldn't be surprised if the state pension gets "means tested" by the time you're retiring.
“Simple, but often sobering maths” - couldn’t have put it better myself. Thanks for watching
Pete . 2nd question if I may
I forecast that DB pensions and state pensions rise at 3.5% Pa inflation
Is it the right thing to do to assume cost of living rises at the same rate or in your view would that start to show my figures go wildly out the later the forecast gets ?
Ps I’d be happy for you to use my situation for future examples if it would help others
😳😳😳
I’m a civil servant, on track for about 30k a year plus a nice lump sum. There is no final salary so it’s 30k a year until I die.
I wont be stopping untill i have enough to maintain my current lifestyle. Id rather work and continue to enjoy life
Well, time waits for no Man (or Women)
So tragic but sadly oh so true in many people’s lives . I retired at 60 after having worked since the age of sixteen with hopefully enough to get by. A line from a Jam song called Smithers Jones never left my thinking “ Work and work and work and work till you die because their’s plenty more fish in the sea to fry “.
@@MichaelLedwith-xs2uj appropriately preceded by :
It's time to relax
Now you've worked your arse off
But the only one smiling
Is the sun-tanned boss
@Calgacus-i9k it's a sad story, let me add to my position that I don't find work particularly inconvenient for the lifestyle it affords me. I've literally never been happier and I'm just not putting a lot of expectations for greater happiness to come from the day I decide to stop logging in.
Your current lifestyle is irrelevant, I’m 65 my lifestyle is very different to when I was 45 (thank goodness!) 20 years ago my priorities were clothes, dinner parties, horses, and holidays but now my priorities are real travel, playing saxophone, and cafe society … 2 decades changed things.
My son summed it up perfectly when he said " we are no longer the working class - we are the working poor"
Many working people who think they are poor , waste lots of money
Cars and coffee and buying lunches at work are big wealth killers
PCP car £400 a month easy
One coffee per day £2 x 5 x 52
= £500 a year
Lunch £5 a day x 5 x 52 = £1300 a year
I have a old car that’s paid for
I make coffee at work and take my lunch to work
I work with people who earn same as me
They have a £400 a month pcp car
Bring in a coffee every morning they picked up on way into work
And they nip over to Sainsburys every lunch time for a meal deal
So same wage as me
But they spend £500 a year on coffee £1300 a year on lunches and £4800 a year on they brand new lease car to impress people why don’t really know
£6600 blown
And they ask how I appear to always have plenty money and have many holidays abroad 🤣
Poor is a mentality that very few recover from.
And with Labour now in power, we will be the working even poorer!
@@boyasakabut rent and house prices about 10 times wages.
A few coffees isn't going to detract from the sobering reality
Really? What struck me when I moved to the UK was how much extra one had to pay for because benefits were less (and apparently tax was too). It's value for tax that matters... @@nickcastings1568
The bulk of my income in retirement will come from a DB scheme (nhs) but I’m also utilising a SIPP/LISA & stocks&shares ISA as I would like the option to finish at 55 or at least partially retire and reduce hours. Luckily I have a protected minimum pension age of 55 on one of the DB schemes - great video
I'm in a similar situation, and can actually take my DB scheme aged 50, albeit 33% reduced, on a sliding scale up to age 60. However, my SIPP will probably not be accessible until age 58
@@matt49125 if I'd have joined pre 2006 I would be able to access at 50 too, but didn't join the scheme until 2009. It's still a fair deal though - you will still receive yearly rises and as it's being paid for longer it might be worth considering partially retiring
Hey Pete, great video. I think you could focus a little more on the power of compound interest (Rule of 72 stuff). This is so powerful if people can recognise it early enough. Appreciate your audience is more likely 45 plus but if we can collectively switch our kids on they’ll have a chance. If they don’t start early with no real DB schemes any more their challenge will be harder. Thanks again
Great point, Matthew - watch this space as I will be building on this point in the coming videos
Totally agree.
The quote, "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it," is often attributed to Albert Einstein. 😊👍
really useful video, my head spins trying to work out if i’ll have enoigh to retire!
on a side note, do you think its worth overpaying a mortgage? im 49 like you and still have about 14 years left on my mortgage.. thanks in advance!
For me, enough is 60% of my reference gross salary. Simple as that. Anything less isn't going to be enough for my needs and wants.
How much to be happy? This is beyond money! It involves being grateful for good health, kind to others and the joy of love filling your heart. Stressing about money is not good and sometimes you can be happier with little really, that way you appreciate the important aspects of life, not materialistic trash.
Hi Pete. Great video and looking forward to the next ones .
I do try to forecast with inflation at 3.5% and higher for investments, but always know it’s a stretch to forecast tax threshold rates.
So I apply a 2% increase from 2028.
I’m 55 in 2 months and deeply focussing on reducing hours / income but feeding off my other incomes (savings / mil pension)
Q- can you talk about forecasting tax thresholds or, if it’s a no no , let me know !
Love your work
When planning for clients, I also assume tax band increases below the rate of inflation, figuring we’ll all pay more tax rather than less going forward
@@MeaningfulMoney of course ! And there’s no saying what the new government will do- might change it completely and have one band … cheers
You can could also do equity release from your property, I know a lot of people think this is a scam. But my wife and I do not have children, so don’t have anyone to leave a legacy too
In the right circumstances, Equity Release is absolutely the right thing…
@@MeaningfulMoney Pete, maybe you could do a video explaining Equity Release and when it might work for some people.
Better to downsize than use some equity release scheme....
@@matt49125 I don’t wont to down size I like where I live thanks.
@@matt49125 I don’t wont to down size I like where I live. Thanks.
My mum retiered on the state pension and with things like top ups no council tax and she did ok.cant say she was rich but she eat well didnt freeze and was generally happy. Ghis was mainly due to retiering debt and mortgage free, so its do able even if not desirable. You are so right you can number crunch all you like but you never know, what this government or the next or the next will do, what inflation might be or what the tax system will be. Will the state pension still be triple locked, means tested or even still exists and what the market will do is anyones guess, add that how long you will or won't live willyou be fit and healthy, able to work still if needed or paying through the nose for a care home. The only thing that is for sure is that if you make some provision for yourself, even if you only manage a small amount, the more you put in and the longer you do it you will undoubtedly be better off doing something than you will doing nothing
The most important thing approaching retirement is to be mortgage free and debt free. If that means downsizing, even downsizing massively, or relocating, then so be it. It is also not worth living in a large (mortgage free) house if you are existing on the state pension alone, large house maintenance costs will lead to debts - downsize and release the equity to create savings to help in retirement. In my opinion you should plan to downsize and relocate around five years before retirement if your work allows, lets say 60, gives you some time to find where you want to live, some time to move proceeds into pension pots and ISAs, yet it is likely after the kids have left home.
If you are an instinctive saver, prudent through your life , retirement can be very comfortable.