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AD. When I was fresh out of school I started working for an oil tools company. They had a pension scheme and another colleague encouraged me to join it as soon as possible. At the time I thought I would be staying there for years and decided I had better invest as soon as possible. I only ended up working there for a couple of years and when I left the pension was the furthest thing from my mind. As my life was pretty much falling apart back then! However, I get an annual statement, letting me know how things are going, and giving me a predicted forecast for when I retire. Now I am thinking more about the future and want to talk to you about my future pension plans today.
I’ve been someone to bury my head in the sand in the past. I hadn’t thought much about pensions since I left my job at the oil tools company. Until recently. Now I’m almost 30, have a sizeable chunk of savings in the bank, and I’ve got a child too. I know I won’t want to work until I die, assuming that I am fortunate enough to live into my 80s or 90s! So now is the time to think a little more about our options.
Our next financial step
Firstly we want to buy our own home in the next 18-24 months. We have already got enough money to do so, and then some, however, we are waiting for the perfect opportunity. I don’t want to share too much about that yet but next year I’ll probably start blogging about what that opportunity is. Until then we are saving our money as much as possible. When we buy our home the mortgage will be smaller than our rent is currently, so we will be in a great position financially. Once we have moved we will then have the money that we were saving for our deposit to invest in paying off the remainder of our mortgage and building up our pension pots.
To see what the forecast for our pensions may look like, based on a few factors, I’ve been having an experiment with the PensionBee pension calculator. I’ve also had a check for gaps in my national insurance.
Here is what the forecast would look like according to the pension calculator if I was to invest a small amount of money each month, and move my existing pension over:
Here is what the forecast would look like according to the pension calculator if I was to invest a bigger amount of money each month, and move my existing pension over:
As you can see I have based the forecast on retiring at 69, which is my assumed state pension entitlement age. I’m confident that I will be able to retire before that. If I was to hold a plan like those PensionBee provide I could always increase my contributions to help me achieve my financial goals at an earlier age. Being able to see, at a glance, what my projections are and where things are going financially is very motivating. Now I cannot wait to get our house purchased and use some of the money we were saving for it towards our pension plans.
What I thought of the PensionBee pension calculator
It was REALLY user friendly. It takes just a few clicks and you can see your projected pension at a glance. I like that there is the option to toggle the state pension inclusion on or off. I’m hopeful that I will be able to retire before the state pension, and live frugally for the first few years. However, if I don’t want to do that I can see easily how much more money I will need to save to ensure that I’m still living the good life when I stop working.
My final thoughts on my own pension
Being self-employed means that thinking about my pension is more important than ever. We are going to press forward with our goal to buy a house and then we will begin working harder with our pension goals. My husband is employed, and his employer offer the standard workplace pension scheme. Also, we will both have national insurance contributions to cover our full pension well before we are 69, or even 60. This means we may want to take advantage of retiring earlier, safe in the knowledge that our state pension is ‘in the bag’, assuming that state pensions even exist by then! I personally don’t want to bank on the state pension being my only, or main, means of income when I retire. I want to build up a pension pot, and a property portfolio, so that I can downsize come retirement and live the good life still!
There is no guarantee that in 40 years, when I hit the state pension entitlement age, that they won’t have added a few more years on. Or scrapped it entirely. For me it is important that building up a pension pot becomes part of my family’s plan within the next couple of years. I don’t want to bury my head in the sand and be hunched over my computer come 70!
This post is in collaboration with PensionBee. All opinions within this post are my own and based on my personal calculations using the PensionBee pension calculator.
PensionBee is authorised and regulated by the Financial Conduct Authority. With pensions, your capital is at risk. The value of your pension with PensionBee can go down as well as up and you may get back less than you started with.