Retirement savings comparison; how well are you doing?

[@stevegeek]

I’m one of the few who has retired early…in my case aged 55. I don’t like to call it “lucky” because it wasn’t luck, it was 35 years of hard work and planning.

[@DianneSullivan]

“The harder I worked, the luckier I became” Warren Buffett

[@hilarygibson3150]

Same here. Retired at 54/55. I once loosely calculated hours worked over 37 years on a 40 hour week, 4 weeks holiday, excluding Bank Holidays and IIRC it was around 71,000. In that time I did 137,000. I'm 60 later this year. Living primarily off investments.

[@stevegeek]

@@DianneSullivan Great quote and so true in life! 👍

[@stevegeek]

@@hilarygibson3150 Well deserved😉👍

[@DTL0VER]

Urgh….

[@jaybo8136]

The government should raise the tax thresholds £12750 is pathetic! If this was raised our private pension would make retirement affordable

[@David-n8o]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[@julie-e3t]

Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

[@David-n8o]

@@julie-e3t However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments

[@julie-e3t]

@@David-n8o Oh please I’d love that. Thanks!

[@David-n8o]

@@julie-e3t Clementina Abate Russo is her name

[@David-n8o]

Lookup with her name on the webpage.

[@nicobass1966]

Thank you for this. You are totally right, time is the only thing you cannot buy. I'm working towards either 59 or 60 ( 18 months time ) then to stop my full time work and I've a figure that I need and have been saving hard into my workplace pension and other investments. My advise to anyone is get any spare money into your pension as the GOV adds free many and with compound interest people maybe very surprised on what your pension pot could look like. The thought of working all of your life and then in the golden years you struggle - no one wants that, again thank you

[@DianneSullivan]

Thank you for commenting and sharing your experience. Well done for saving hard into your pension and having a target amount in mind. Retiring at 59 or 60 is an amazing achievement!

[@stephengiles8526]

Great video, Did not realise being 56 and retired I was one of so few. Had a year off now and enjoying it, my friend finished at 54 so its good having a buddy, I also enjoy the extra time with my wife and kids, and not having to worry about getting time off work to pick them up from school if they are ill etc. Time definitely more important than trying to be the richest retiree.

[@rachelekemp]

So glad 15k people have watched this - there's a lot to learn and consider from this. Thanks Dianne.

[@DianneSullivan]

Thank you Rachel! This one really took off 🙂

[@ianwatkins6202]

What a fabulous video! Very very interesting! Thank you Dianne 😊

[@AimeeBatemanYouTube]

So much financial advice comes from people shouting on KZbin. I love your calm, expert take on things Dianne. This is such a great video and has helped me a lot as I plan to retire at 55 years.

[@Hawks1980]

Wow great video, thank you. It’s actually made me realise that I’m not doing too bad at all. I’m coming up to 44 and have £145000 saved in my pension. I genuinely worried that I was behind but I’m reassured that I am doing ok. My aim is to retire in around 20 years so I believe I am on track. My advice to anyone with a workplace pension is please review what it is invested in as very often the default fund is pretty poor.

[@DianneSullivan]

You really are doing well! I've made one video on the perils of the default (lifestyling). I think I need to make more...

[@AgileSnowWeasel]

I've read you need 2x salary by age 40, and 4x salary by 50 (6x by 60). However that doesn't really consider well paid but otherwise frugal people with big mortgages (as is the norm these days) that will be cleared by retirement allowing a big drop in salary needs. I have 208k saved at 46, which is 2.66x salary, but my salary is covering a house and child at the moment, well over 2k a month on their own.

[@DTL0VER]

Mate. You have £150k saved with another 25 years of retirement…. Thibk you’re doing pretty well. Don’t need to show it off on here

[@Tehui1974]

I'm from New Zealand. It's interesting to see similar trends for retirement savings are happening in the UK, the US and here in NZ. People just are not saving enough.

[@dallassukerkin6878]

As ever, these numbers are staggering. My workplace pension is at a meagre 50k after twenty five years - that's a consequence of terrible management by my company and the provider and my not paying any attention to it until far too late. In the space of five years, despite the drain of a spendthrift partner, I have managed to cobble together a portfolio of investments that equals that pension. Even so, that means I still only have 40% of what I should have to just be in the median range! It really is a terrible shame that this vitally important topic is not given more focus and exposure when we are young - I suppose it is now but when I was in my first decades it was the general assumption for working class people that the state pension would keep us going when we were retired ... and clearly it will not!

[@DianneSullivan]

Thanks for sharing your experience. I'm sorry to hear about your workplace pension. Too many of us were left to figure this stuff out for ourselves. Where were we supposed to find basic information pre-internet?! And still most people can't afford decent financial advice. Well done on building up a decent investment portfolio for yourself.

[@XORTION]

That’s awful, prob in low risk or bonds I’m guessing?

[@AgileSnowWeasel]

Yeah, when I started pensions at work I took supposely 'high risk' managed plans, but it seems they were incredibly conservative themselves when I checked later because they weren't moving anywhere like the markets were. Got to say that a SIPP in S&P500 until 60 then a global ETF for drawdown seems the sanest, cheapest, option in the end.

[@travellingtom6091]

4 in 10 dependant on the state pension is a big assumption. People don't just use pensions to save for retirement.

[@albedo0point39]

Very interesting. I dare say what’s not in those saved statistics is the cash equivalent of DB pensions. So for many older individuals, their situation will be better than savings alone suggest.

[@DianneSullivan]

Good point!

[@AgileSnowWeasel]

Surely they report into the ONS statistics in a suitable manner?

[@calgapx1705]

Thanks Dianne, really helpful and clear video

[@DianneSullivan]

Thank you!

[@Desmond.TuTu.]

Any chance of a vid on “De-cumulation Paradox” ? Admittedly not a subject for the majority, but there appears to be very little guidance or information to help with this. Moving from a life time of accumulation to suddenly de-cumulation, it is not easy to break that mindset. The people who say it wouldn’t be an issue for them seem to be the people who never build up the big pot.

[@craftypam9992]

I "retired" at about 59 - living off a combination of savings, working 2 mornings a week, "odd-jobbing" (mostly crafty makes & repairs). I got my state pension at 66, dropped the 2 morning job, and have continued contributing to my SIPP & ISA ever since. I've done very well so far, just on the state pension, while my investments continue to (hopefully) grow. But at some point, my expenses are likely to exceed it, and I will have to draw from savings. And I have no idea how to choose what to sell, what things to consider before choosing. I've put all my learning efforts into the growing of a good reserve, I don't know how to spend it! A video with suggestions for what questions to ask would be so helpful, even if I thought it was wrong!

[@vallejoborncalihasbecomeal9022]

In the US, government jobs still have defined benefit plans. Pensions for the number of years worked and salary received. My pension from working a 30 year career in law enforcement is approximately $43,000 a year. My wife and I managed to save approximately $1.3 million dollars in cash and investments before she retired at 58 and I at 61. Our home is mortgage free and worth approximately $650,000 and we are currently debt free!

[@pip1723]

In my workplace some have opted out of the very generous defined benefit pension scheme I've tried explaining to them how good the pension is and they don't seem bothered ,incredibly short sighted or they simply can't afford it with the cost of living and soaring mortgage rates I'm not sure...

[@DianneSullivan]

It's really sad to hear that people are opting out of generous DB pensions unless they are using the extra cash to save into their own DC SIPP (unlikely).

[@AgileSnowWeasel]

Time is really important, and having time when you're 70 and your knee is screwed and you haven't got the energy to enjoy that time is going to be galling. Whilst I don't feel I can retire until I am close to retirement age (although better off than the medians you show in the video for my age) I am considering plans for 55+ that involve 4 and then 3 day weeks. I'm not chasing promotions and super-high salaries now, I'm in a coasting phase, and with luck my pension will be over 600k in today's terms by retirement, and I don't care about cars and luxuries, just beer and hiking.

[@Jeffybonbon]

I was an IFA back in 1990 whats that around 34 years ago and i spoke too a great number of bussiness owners and they would fund a pension I then spoke to a great number of folk who worked and my my advice to save into a pension fell on hard ground i look back and think about the ones who did not save and a great number now will be around 65 to 70 who i am sure will have a much smaller pension fund or no pension fund because they did not save Its human nature some will save and manage there money and others will not manage there money well I found women who would have saved but they had family and kids and they put them first and thats why pensions funds for women are lower historically Auto enrollment should have happened in 1990

[@DianneSullivan]

Thanks for sharing your experience. Another viewer made a point about the low amounts in the 75+ age group being because this age group will have had DB pensions that won't be counted in this data. True, the most obvious reason for the lower pension amounts that women have is because they are prioritising raising their children but I still feel there is a lower level of awareness among women when it comes to pensions.

[@mistifyme999]

Thanks Diane, really interesting video,

[@DianneSullivan]

Thank you!

[@dcphillips1991]

I'm really surprised at how low the amounts of money were in the accumulation phase, I have wondered how my pension contributions stood up, it turns out I have nearly as much as two age groups above me have. Strangely though it doesn't feel comforting, I still think what I have might not be enough with the way the worlds going.

[@AgileSnowWeasel]

People have multiple pensions from multiple jobs.

[@GregPreece]

Great video!

[@nortonr]

Final salary pensions from private companies could be helping with retiring early and bolstering pensions, but not for much longer I suspect considering the lack of availability since the late 90s

[@DianneSullivan]

Yes, true - this data doesn't include DB pensions but you're right that some people could have a preserved DB benefit to combine with their DC fund. Good point.

[@andrewrobinson2565]

Superb video and a nice soothing voice 👍👍+1.

[@andypandy9931]

This is very interesting. I have paid into a private pension for 35 tears and for the last 15 tears a company one as well. I retired last year at 66 and have have been living on my state pension, £951 a month and savings. I combined my pensions and dumped the one beginning with Pru. which as far as i could see offered very poor returns and had big fee's for them and my advisor. It would be good if you could do a video advising on good and bad Pension schemes.

[@georgebullock7923]

it must be remembered that the qualifying years are a full years payment of nc ie 52weeks payment of nc each year to qualify for pension

[@pilatesguy]

Great video! Definitely something I need to address!

[@guitarsandcheesecake1632]

Great video. I've told all my work colleagues, who are much younger than myself to start a private pension. But it looks like I've wasted my breath. It seem tax relief and compound interest is not enough of an incentive...... My savings are far less than in your video. But I still wonder how I will spend it all. As the state pension will more than pay all my bills.....take care 👍👍

[@DianneSullivan]

Well done for trying to explain the incentives to your colleagues - at least you tried - even if you change the course of action for one person (as in my video with Jack).

[@tonydonohue2727]

Given that the top 10% are disproportionately wealthy. To get a more realistic idea for an average person, the top 10% and those with no pension should be removed to give a realistic median

[@puddle_puddle]

Yes!

[@DianneSullivan]

Fair point - I was presenting the median amount as given by the ONS....I knew my clever viewers would spot this which is why I also threw in the equality data :-)

[@NathanJones-cq1dz]

I have a DB pension and a DC pension. How do I translate the annual DB benefit ammount to a pot value so I can compare where I am vs my age group?

[@XORTION]

Please take a look at what your pension is invested in. High risk is desired if you of young age. As you get older 40-50 move to safer low risk fund or high interest safe money market fund

[@DianneSullivan]

Depends...those in default lifestyling portfolios whereby the pension fund is "de-risked" as they moved closer to retirement will have suffered in the bond market recently...

[@Sam-jy5tj]

I’ve said this is a ticking time bomb and it is worse for the younger generations. People struggle to get on the property ladder now so a pension is one of the last things considered for any spare cash.

[@peterrogers3085]

I think women dont like saving money as much as men do, so on average this equates to lower averages, i think you need 1.2m household savings to retire and this is a mix of db pensions valued close to current annuity values plus your other income generating investments, that enables a sub 60 retirement and then you can spend half your yearly investment gains and reinvest your other half so your income is growing year on year.

[@Hawks1980]

Presumably a significant portion of the 43% not paying in to a pension will be 16-21 year olds at school, college and university

[@DianneSullivan]

True but sadly around 1 in 6 of over 55s have no private pension whatsoever

[@guyr7351]

One of the biggest things the government could do is scrap the £6000 pound limit where this initial Income is ignored for the deductions into your company scheme / auto enrolled scheme. I found this out when enquiring about the deduction figure in my NEST scheme not matching what I thought would be deducted. While may think it is only a few pounds the impact when compounded does build up.

[@jennyli7749]

I’m 48 and have a couple of investment properties I’m dithering about whether to start investing in my 12 year old child’s pension?

[@OMT988]

Does this take into consideration things like military pensions? also, maybe people invest, ie I have a military pension which started paying out on my exit (42) I also have 2 propertys and I plan to use those as part of my pension plan. I'll also get a state pension (what ever age that'll kick in) looking at what you've shown I think that puts me in a better place than most. I suspect a fair few these days will take a similar diverse approach rather than just depending on paying into 1 pension scheme.

[@davidwhiteman4649]

I think these figures are about where I would expect but suspect many aged 55+ have some DB pensions. I’m 53 and through my early career found that when I moved companies I invariably joined a DC scheme and found out I was a year or two too late to join the legacy DB schemes. Many of my peer group are in the same boat with either a tiny bit of DB pension from early in their careers, or none at all. This obviously makes these DC pot sizes so much more important as time goes on. Personally I’ve had a relatively well paid career and have ensured pay rises and bonuses go into my pension through salary sacrifice. Currently I have about £1.1 million and my wife, who took a long career break for the kids, has £200k. If we add ISA and a holiday apartment we have around £1.5 million. I think that’s probably plenty but enjoy working so plan to stop in 3 years time when I am 56. We should have between £1.8m and £2m by then. Sounds loads but it will give us a pension roughly equal to my fathers government DB pension from his mid/senior management role. I have a far far more senior and responsible job than he ever did and I think this sharply illustrates the generational pension divide.

[@99jasonhooper]

Do these figures include DB pension funds? Just discovered your channel - really good and thank you.

[@DianneSullivan]

No, just workplace pensions (DC). And thanks for discovering my channel

[@brassj67]

Men tend to work longer hours and make more money than women in general so save less for retirement. The difference can be quite small initially but over 40 years, that difference will diverge significantly. Women also pay more for products and services aimed at women.

[@roblowry9457]

Just discovered your site - great stuff and I have subscribed. Do you think 2 years is enough for the cash part of your savings to weather a downturn in the market, or should I aim for 3 or more? Diolch.

[@DianneSullivan]

I aimed to answer that question in this video kzbin.info/www/bejne/fpzYe3qggZ6kbLc :-). Diolch am danysgrifio!

[@freddiemoses467]

This will upset the feminists but I'm going to say it. Men's worth is judged on their ability to earn. The more money you earn, the hotter the women you are going to be dating. Men are built to produce and women are built to consume as they give birth and raise children. It's hardwired into men but not women. I will never forget when I said to my parents - "Why are you allowing my sister to do this silly degree which won't earn her any money". Their answer - "We have no worries for your sister as she will most likely find a husband in the similar industry and he will most likely earn more money" and they were 100% correct. She's now a stay at home mum and her husband is a millionaire account to a fashion brand.

[@hilarygibson3150]

It's hard wired into men not women. Well as someone who worked a man's job all my life, someone who worked harder than literally most people, employed my partner, retired at 54/5, started my own pension in my early 20s, never married by choice, I'm going to disagree

[@freddiemoses467]

@@hilarygibson3150 I'm talking about sexual market value. Hot women are attracted to men with money....that's not secret. If you see a fat bald guy in his 50s with a 20 year old model then we all know she's not with him because of his personality.

[@colinwithers1503]

How come my current pension annuity offer is more than half less than what I’ve seen this is confusing

[@AgileSnowWeasel]

How does your drawdown option look instead?

[@Jeffybonbon]

You have to be careful with Pension Planning and having a small pension can work against you lets say you have a person who rents a home and has an average job 17k a year if they have any private pension the system will work against them I worked out when I was an IFA if a person was renting and claiming Council tax benefit plus pension credit they would need a pension fund of around 200k to be in the same position so its wise for some not to fund a pension Not to mention if you go into care all the pension fund will fund care when a person with no pension would get everything for nothing my own view is you either need a large pension fund or nothing the system works against prudence at times

[@hilarygibson3150]

I remember 2, maybe 3? decades ago an IFA saying if you earn 20k a year, don't bother with a pension for that reason

[@Jeffybonbon]

i think the IFA was right @@hilarygibson3150

[@markjackson438]

Men are saving more than women because (1) women love to spend money, (2)women usually move jobs more.

[@AgileSnowWeasel]

Nah, both sexes are perfectly capable of spending all their money unwisely. It's probably an upbringing issue about finances that led women to spend more rather than plan ahead, hence all the jokes. I doubt it is quite the same these days. The childcare related earnings gap is a nightmare for women too, that could be a ten+ year gap in earnings (and pension contributions) for a couple of children badly timed.

[@markjackson438]

@@AgileSnowWeasel true, but me and my sister were bought up the same and she is a spender and I am a saver/investor

[@porschecarreras992cabriole8]

What we don’t know is that for each age group how much salary they earn. Someone earning £40k at 55 may have accumulated £100k but someone earning £150k may have £350k as an example. But overall at all age groups the numbers are small for me but if you have small salary you cannot accumulate £1m savings in pension!

[@DianneSullivan]

All excellent points. We can only assume that those accumulating large pension funds in the top 10% had large salaries throughout their working lives. Money goes to money as my mother used to say...

[@sl0w_racer]

Disagree. I setup J SIPPS for both my children. I pay £50 per month each into their accounts which gets rounded up to £62.50 with the governments tax relief. I invest in high risk equities global funds which I manage and their plan is estimated to be worth £1.6m each! by the time they reach 65yrs old assuming I live until they are 65 and continue to pay £50 in each month (increasing by 2% per year). The idea a low income person cannot amass £1m is just not true.

[@porschecarreras992cabriole8]

@@sl0w_racerthere are always exceptions. You are the first person I heard that setup SIPPs to young kids and it is not common practice.

[@sl0w_racer]

@porschecarreras992cabriole8 if you paid in £150 per month increasing 2% per year from age 25 until age 65 and this includes company match and tax relief so the employee will be paying about £100 or so you will reach just over £1m if kept in high risk equities for 40yrs. So it's not really that hard to amass £1m in a pension if one does everything right even on a very low income.

[@porschecarreras992cabriole8]

@@sl0w_racer unfortunately I have been investing a lot more than 150 per month since I was 26 and due to the default lifestyling investment option this is not the case. Of course I also have two DBs from last employers. But again who wants to keep working up to 65? Anyway this is becoming 67 and eventually 68. Tell the young generation Z this☺️

[@ruddyhell7800]

But if you die before you retire you've wasted all that saving.

[@GG5150]

And that is the mentality of all the people now over 60 with no pension.

[@DianneSullivan]

True. But what if you live a long life and are stuck in a job you hate but have no choice but keep working because you didn't save for your future. It's a careful balance. And your DC pension fund can all be left tax free to your children if you have any - that's good enough reason for me.

[@terryo5672]

But you might not. Best to plan you will live to your expected life expectancy

[@AgileSnowWeasel]

With a DC pension and if you die before 75, it is fully transferrable to the beneficiaries you have supplied to your pension provider. Note - YOU HAVE TO SUPPLY THESE! Probably worth a video on beneficiary rules tbh. When I was younger a lot of people thought pensions were scams because if you died early it would be basically stolen by the pension company, and I bet this feeling (From the old days of DB pensions) still exists.

[@robertrobert5583]

But then, since you're dead, you won't be bothered.

[@andrewkingdon2000]

Let's face it, the average person who's Facebook algorithms take them to this broadcast are in the top 25 percentile and will have been saving for most of not all of their working lives. So based on that I'm not sure how being alerted to the fact that some people are going to have a subsistence retirement is nearly pointless.

[@KeatB]

£2000 is not “relatively close” to £3750 as stated, it’s not far off 50% of the amount.

[@DianneSullivan]

Thanks I take your point. My intention in that statement was say that to make up the difference between £2000 and £3750 is much easier than say between £60k and £120K.

[@Kalarandir]

I agree, and this percentage difference continues through the age groups.

[@stumac869]

Does this take into account government pensions?

[@DianneSullivan]

No this is not including public sector pensions if that's what you mean?

[@VegasMilgauss]

Women putting kids above career

[@user-fv1576]

Reason for women having lower pension saved….They tend to stay home more and take care of children . Pretty obvious really . Anyway, after a divorce it evens out 😂 trust me! Like the channel. The numbers are mostly meaningless though eg the lady with a 100k pension may have 200k in an isa and a dozen rental properties.

[@welshhibby]

Theres not a lot of stay at home mothers, both parents generally have to work in todays world. Being a stay at home mother is a privilege !

[@terryo5672]

Smart woman stay at home and look after the kids and enjoy. Once the kids are older and you are back at work, they can then divorce the husband when they choose for more than half of everything. That way you have most of the family wealth, the kids and all for the least effort. The man will probably die early and lonely after working his socks off for very little reward, if he ever reaches retirement. 😂 I know so many divorced men that work until they drop as their ex took them for everything.