Retirement
- Thread starter clifftaylor
- Start date
Hook
Blackbeard's former bo'sun.
Every financial planner worth a salt will introduce their clients to actuarial science - the idea of making sure your money lasts beyond a conservative expiration date. Our targets are 92 for me, and 94 for Mrs. Hook. She might get there, but my odds are long. With my continued employment through age 67, our chances of retiring with financial security are very good. Trouble is, at only 61 1/2, I am already totally burnt out. Also, the extreme stress of my IT sales job is impacting my health. So it feels like a trade-off: more money, but less health and longevity.
Good news is I’ve just said f*ck it, and started the weekend with some fine tunes and a cold beer.
martin clark
pinko bodger
Good news is I’ve just said f*ck it, and started the weekend with some fine tunes and a cold beer.
Setting-aside the general theme of pension-planning & actuarial reductions on longevity - for a quality-of-life argument that may be the best advice in-thread...
blossomchris
I feel better than James Brown
(Good news is I’ve just said f*ck it, and started the weekend with some fine tunes and a cold beer. [/QUOTE]
I know nothing, but Hook jack it in please. Life is what it is.
Bloss
[/QUOTE]I know nothing, but Hook jack it in please. Life is what it is.
Bloss
Hook
Blackbeard's former bo'sun.
(Good news is I’ve just said f*ck it, and started the weekend with some fine tunes and a cold beer.
I know nothing, but Hook jack it in please. Life is what it is.
Bloss[/QUOTE]
I hear you loud and clear Bloss. Unfortunately, was born with this stupid “work ethic” gene. Had part time jobs while in school from 16-21 (not including selling weed), and full time every day for the next 40+ years. Feel guilt at the thought of packing it in! I also feel like I need a plan for what I'll do in retirement, but haven’t figured that out yet. Doubt I’ll stay employed until 67. Also doubt that leaving the work force will be my choice. Too many younger, less expensive guys nipping at my heals. Will probably plod along for at least another 6 months till I hit 62 and become eligible for Social Security. But thanks for the advice!
blossomchris
I feel better than James Brown
I hear you loud and clear Bloss. Unfortunately, was born with this stupid “work ethic” gene. Had part time jobs while in school from 16-21 (not including selling weed), and full time every day for the next 40+ years. Feel guilt at the thought of packing it in! I also feel like I need a plan for what I'll do in retirement, but haven’t figured that out yet. Doubt I’ll stay employed until 67. Also doubt that leaving the work force will be my choice. Too many younger, less expensive guys nipping at my heals. Will probably plod along for at least another 6 months till I hit 62 and become eligible for Social Security. But thanks for the advice![/QUOTE]
Work ethic similar to mine and probably a few on here. I am not trying to compete, I was self employed for 40 odd years with little security within the building trade in the 80's, as it is now also. If you feel as bad as you say, just try something else, it is not worth the effort to keep moaning about it.
I mean this in the nicest possible way Hook.
Bloss
Mullardman
Moderately extreme...
The terrific thing about retirement is, so long as you have the wherewithall to pay your bills, etc., you get to do what you want with your time. That is the whole point.
I do think it's important to build regular exercise into your time. I do something six days a week... rotating through weights, walking and swimming mostly. Usually takes less than an hour of my day unless it's a long walk.
I have friends who are off on holiday numerous times per year, others who eat out a lot, others who do voluntary work etc. Some feel the need to structure their time, some don't.
I have a few bits of DIY I want to finish over the next few months then that's me done. I want it all done so that I don't feel guilty about leaving it while I go out doing something I'd prefer. Any further work will be farmed out to tradesmen and I'll concentrate on the garden and getting out and about.
Thing is, if, on any given day I don't feel like doing anything but binge watching something on telly, or reading/listening to music all day... I can do so.
I do think it's important to build regular exercise into your time. I do something six days a week... rotating through weights, walking and swimming mostly. Usually takes less than an hour of my day unless it's a long walk.
I have friends who are off on holiday numerous times per year, others who eat out a lot, others who do voluntary work etc. Some feel the need to structure their time, some don't.
I have a few bits of DIY I want to finish over the next few months then that's me done. I want it all done so that I don't feel guilty about leaving it while I go out doing something I'd prefer. Any further work will be farmed out to tradesmen and I'll concentrate on the garden and getting out and about.
Thing is, if, on any given day I don't feel like doing anything but binge watching something on telly, or reading/listening to music all day... I can do so.
Mullardman
Moderately extreme...
Trust me. Even a modest pension beats the crap out of being on the dole.
Retirement is not necessarily good for health unless you keep mind and body active. I can't say I have done particularly well on either count. And you can easily slip into enjoying a glass or 6 too often with no job to get to.
The best is to keep working but cut hours significantly but not many jobs allow that.
The best is to keep working but cut hours significantly but not many jobs allow that.
Darth Vader
From the Dark Side
Its amazing that there are so many similarities with others on pfm and myself. I too was at the sharp end of IT working on what were known as 'mega' projects i.e. those in the billions and the sods made the job harder by holding back 4 - 6 months and then giving us the work with only 3 - 4 weeks to go! As for burn-out I went through that several times but got over it by slowing down and telling management that if I got over loaded it was their responsibility to prioritise my workload. I was planning to work to 70 but slow down to a couple of days a week and also mentor younger and less experienced peeps but the sods didn't want to know so I threw in the towel at 66 having worked full time since the age of 15 only taking a break to go to Uni and again to get my graduate teacher certificate.Every financial planner worth a salt will introduce their clients to actuarial science - the idea of making sure your money lasts beyond a conservative expiration date. Our targets are 92 for me, and 94 for Mrs. Hook. She might get there, but my odds are long. With my continued employment through age 67, our chances of retiring with financial security are very good. Trouble is, at only 61 1/2, I am already totally burnt out. Also, the extreme stress of my IT sales job is impacting my health. So it feels like a trade-off: more money, but less health and longevity.
Good news is I’ve just said f*ck it, and started the weekend with some fine tunes and a cold beer.
During the final 10 years or so I put away around a third of my income into a private pension and investments and that has really paid off as I haven't had to drop my standard of living rather the opposite as I have spare cash to enjoy my free time.
Cheers,
DV
Bob McC
Living the life of Riley
I have kept this article from 2014 from the financial press. The figures for % growth may change but the principle remains.
I made sure my kids read and understood the points being made.
When saving for 10 years pays more than saving for 40
Save from 21 to 30, then stop. You will have a bigger pension than a saver who starts at 30 and stop at 70. The miracle of compound interest, Einstein's 'eighth wonder of the world’
Which will give you a bigger pension: saving for 40 years or just 10?
Believe it or not, the answer is 10 – if those years are at the very beginning of your working life.
Someone who starts saving at the age of 21 and then stops at 30 will end up with a bigger pension pot than a saver who starts at 30 and puts money aside for the next 40 years until retiring at 70.
This astonishing outcome is entirely due to the power of compound interest – the way that investment returns themselves generate future gains. Having 10 extra years for compound interest to work its magic has the same result as all those years of extra contributions.
The conclusion emerges from figures calculated by CLSA, a research company, and assumes investment growth of 7pc a year.
The company looked at savers who each contributed £2,500 a year to a pension.
The first, who started saving at 21 and stopped at 30, would have a pension fund worth £553,000 by the age of 70. This assumes that no further contributions were made but that the fund carried on growing at 7pc a year, with these gains reinvested in the pension.
The second saver, who starts at 31 and carries on contributing until the age of 70, ends up with a fund worth £534,000, again assuming 7pc annual growth.
The total contributions of the early-bird saver come to £25,000 and grow by a factor of 22. The late starter will pay a total of £100,000 into the fund and see his or her money grow a little more than fivefold.
A third scenario is perhaps even more startling.
Some parents begin a pension or other savings plan for children as soon as they are born, sometimes to benefit from the tax relief on up to £2,880 that is available to everyone, even babies. If your parents pay £2,500 a year into a pension for only the first two years of your life – a total of just £5,000 – and the money then remains invested, growing at 7pc a year with compound interest until you are 70, a fund worth £551,000 will be the result.
Another simple illustration of the unexpected effects of compound interest is to ask how long it takes to double your money if you make compounded returns of 10pc a year. The intuitive answer is “10 years” but it actually takes just seven. In fact, to double your money in 10 years requires a compound return of only 7pc a year.
Terry Smith, the manager of the Fundsmith Equity fund, which aims to invest in businesses that use the compounding effect on their own profits, pointed out the effect of a seemingly small improvement in returns on the final value of a savings plan if compound interest were allowed to work over a long period.
He asked: “Starting with £10,000, what is the difference in final capital from 30 years of investment at 10pc a year compound versus 30 years at 12.5pc a year ? The answer, rather surprisingly, is that the extra 2.5pc of compound return would double the final sum – so £10,000 invested would become £342,000 at 12.5pc as opposed to £175,000 at 10pc.”
Albert Einstein called compound interest the “eighth wonder of the world”, adding: “He who understands it earns it; he who doesn’t pays it.”
Darius McDermott of Chelsea Financial Services, the investment shop, said: “The lesson from all these figures is that there is no amount too small to start investing and that starting early gives you a huge advantage.
“But they also show how crucial it is to stay fully invested and to keep reinvesting any interest.” He said investors who pulled their money out in 2008 when the financial crisis began would have missed out on the rally in the markets over the six years since. “If you’re investing for the long term, it is important that you hold your nerve when the market is struggling and continue investing,” Mr McDermott said.
“It’s very hard to get rich quickly but it’s quite possible to get rich if you keep reinvesting and you have time on your side.”
I made sure my kids read and understood the points being made.
When saving for 10 years pays more than saving for 40
Save from 21 to 30, then stop. You will have a bigger pension than a saver who starts at 30 and stop at 70. The miracle of compound interest, Einstein's 'eighth wonder of the world’
Which will give you a bigger pension: saving for 40 years or just 10?
Believe it or not, the answer is 10 – if those years are at the very beginning of your working life.
Someone who starts saving at the age of 21 and then stops at 30 will end up with a bigger pension pot than a saver who starts at 30 and puts money aside for the next 40 years until retiring at 70.
This astonishing outcome is entirely due to the power of compound interest – the way that investment returns themselves generate future gains. Having 10 extra years for compound interest to work its magic has the same result as all those years of extra contributions.
The conclusion emerges from figures calculated by CLSA, a research company, and assumes investment growth of 7pc a year.
The company looked at savers who each contributed £2,500 a year to a pension.
The first, who started saving at 21 and stopped at 30, would have a pension fund worth £553,000 by the age of 70. This assumes that no further contributions were made but that the fund carried on growing at 7pc a year, with these gains reinvested in the pension.
The second saver, who starts at 31 and carries on contributing until the age of 70, ends up with a fund worth £534,000, again assuming 7pc annual growth.
The total contributions of the early-bird saver come to £25,000 and grow by a factor of 22. The late starter will pay a total of £100,000 into the fund and see his or her money grow a little more than fivefold.
A third scenario is perhaps even more startling.
Some parents begin a pension or other savings plan for children as soon as they are born, sometimes to benefit from the tax relief on up to £2,880 that is available to everyone, even babies. If your parents pay £2,500 a year into a pension for only the first two years of your life – a total of just £5,000 – and the money then remains invested, growing at 7pc a year with compound interest until you are 70, a fund worth £551,000 will be the result.
Another simple illustration of the unexpected effects of compound interest is to ask how long it takes to double your money if you make compounded returns of 10pc a year. The intuitive answer is “10 years” but it actually takes just seven. In fact, to double your money in 10 years requires a compound return of only 7pc a year.
Terry Smith, the manager of the Fundsmith Equity fund, which aims to invest in businesses that use the compounding effect on their own profits, pointed out the effect of a seemingly small improvement in returns on the final value of a savings plan if compound interest were allowed to work over a long period.
He asked: “Starting with £10,000, what is the difference in final capital from 30 years of investment at 10pc a year compound versus 30 years at 12.5pc a year ? The answer, rather surprisingly, is that the extra 2.5pc of compound return would double the final sum – so £10,000 invested would become £342,000 at 12.5pc as opposed to £175,000 at 10pc.”
Albert Einstein called compound interest the “eighth wonder of the world”, adding: “He who understands it earns it; he who doesn’t pays it.”
Darius McDermott of Chelsea Financial Services, the investment shop, said: “The lesson from all these figures is that there is no amount too small to start investing and that starting early gives you a huge advantage.
“But they also show how crucial it is to stay fully invested and to keep reinvesting any interest.” He said investors who pulled their money out in 2008 when the financial crisis began would have missed out on the rally in the markets over the six years since. “If you’re investing for the long term, it is important that you hold your nerve when the market is struggling and continue investing,” Mr McDermott said.
“It’s very hard to get rich quickly but it’s quite possible to get rich if you keep reinvesting and you have time on your side.”
Mullardman
Moderately extreme...
Yebbut.... Inflation
Mullardman
Moderately extreme...
I was enjoying too many 'glasses' before retirement, though not in order to face work. I'm now enjoying rather fewer, minus the stress and frustration of a job which was being turned into a box ticking travesty of what I trained and studied for.
I don't think retirement is doing me any harm at all. It allows me much more time to do what I want and need to do to look after me.
Darth Vader
From the Dark Side
Indeed but calculations like those above don't tell the whole story and if you save with a bank you'll actually lose money. Thats just one of the sneaky way banks 'make' money. Whats missing is inflation and that eats away at your money.
Take bank interest rates. The return is less than inflation. Just check the interest that the banks pay against the rate of inflation. Today UK inflation is 2.7% and the BOE interest rate is 0.75% so your money is losing value at the rate of 1.95%. Its disappointing when someone claims that they have doubled their savings over a number of years to have it pointed out that yes the figures have doubled but its value is less today than when it was invested! So inflation also compounds but negatively.
Thats why for true growth you need to be invested in the markets. I set my strategy to realise a growth of 2.5% above inflation and thats not as easy as you may think over several decades. In one decade of my life inflation was above 10% in the UK reaching above 20% at times.
Also choosing a rate of growth of 7% over such an extended period is over enthusiastic. Just ask some people who have saved in poorly managed pension funds by famous brand names. Thats not to say compounding isn't important it is but be realistic and don't fall for marketing gimmicks after all these peeps are after your money...............
Quarterly pension fund growth
Time period
% pension fund growth
Q1 2018 -3.8%
Q4 2017 3.5%
Q3 2017 0.9%
Q2 2017 1.4%
Q1 2017 4.0%
The heaviest losses during the quarter were suffered by Commodity/Energy (minus 10.4 per cent), Global Property (minus 6.8 per cent) and UK All Companies (minus 6.1 per cent).
Source: Moneyfacts UK Personal Pension Trends Treasury Report
Cheers,
DV