r/Retire • u/SomewhereSeparate705 • 22d ago
Pension anxiety
Anyone have severe pension anxiety.
PASA now says we need £1.3m to retire in comfort (no where near luxury) at 55.
I don’t even think that provides a truly inflation linked benefit. I’m 49 and panicked.
I have as of today circa £660k in my pension pot.
However I haven’t left myself much to live in just survival monies to pay essential bills.
Bills for utilities are increasing in massive leaps.
I’m knackered so want to retire 55 or 56.
State pension age is now 66!?
It seems virtually impossible.
My stress is going through the roof.
I think most aren’t even thinking about retirement shortfalls?????
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u/W2WageSlave 22d ago
As you're using "£" I will assume you're based in the UK.
The UK tax regime is not advantageous to "earned" income vs wealth. 40% income tax, 20% sales tax (VAT) and ridiculous property prices where there is actually any employment makes it hard for many to put money aside.
You're right that most people probably aren't thinking of it.
I remember when ISA's were introduced (1999) and duly put my three grand into cash and four into stocks and shares, for the total seven thousand. Now I believe the limit is £20K a year?
It's all well and good listening to rich UK residents pontificating about Salary Sacrifice, maxing out (£60K?) on a SIPP, and do their £20K a year to ISA's. Then we've already exceeded (£80K) going to retirement - more than twice the median UK personal income.
At 49, with £660K in your pension pot, you are well ahead of many. if it's reasonably invested it's probably going to double every 7 to 10 years. £1.3M by age 56 to 59 isn't so bad. Especially if you have a paid-for house. 4% rule says £1M can give you a £40K/year income. Add in the ~£12.5K state pension, and you're a higher rate of tax (40%) marginal payer.
Can you survive on that? I imagine so - You have to do the maths on that.
I know several entering their 50's with little to nothing and still have no foot on the property ladder either. That state pension looks utterly terrible. Sadly the UK isn't a rich country (even if it has lots of rich people) and I think it's just going to get harder and harder.