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  1. - Top - End - #1
    Ogre in the Playground
    Join Date
    Feb 2010
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    Sad place

    Default Saving money for retirement?

    Hello, everyone. How do save money for retirement, are you planning for retirement and what are your thoughts on the topic?

    I will tell about my plans, but first, a word of warning. I explained the following in an investment-related Facebook group and I had to delete my post in 20 minutes, because I was receiving so many difficult questions and plenty of ridicule. Please: take it easy, ok?

    I'm planning to buy two apartments and pay off their mortgage before I retire. I already have one mortgage-free apartment. I'm planning to earn steady rent income through those apartments. Furthermore, I'm planning to save 100 euros (113 dollars) each month for 20 years, then retire when I'm 68 (I can do it!) and spend 200 euros from my savings each month for 10 years. I am pretty sure I'll be dead before I'm 79, because I'm a big man, so death before I'm 80 should be very likely. If I'm still alive when I'm 79, I will sell one of my apartments and use that money to go a nursing home, because I'm sure that I won't manage by myself any more.

    What made the Facebook investment amateurs crazy about my plans was the 200-euros-per-month plan. They said that the money will lose a lot of its value over 20 years. For instance, the first 200 euros will have the value of 100 euros after 20 years have passed. I understand that this is not ideal, but investing money will also involve risks and, most importantly, will require a lot of effort and will eventually get me stressed out; I won't even live to see my 68th birthday if I have to worry about stock markets for 20 years. I think that people that want me to invest in stocks instead of saving money are just projecting their own fantasies on me.
    Last edited by Jon_Dahl; 2019-07-13 at 02:02 AM.

  2. - Top - End - #2
    Titan in the Playground
     
    BlackDragon

    Join Date
    Feb 2007
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    Manchester, UK
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    Default Re: Saving money for retirement?

    I've been paying into a personal pension scheme for nearly 30 years, although the payments I've been making for the past few years have been less than I would have liked due to shortened financial circumstances. I plan to increase that now I've paid off the mortgage on the house, though.

  3. - Top - End - #3
    Ogre in the Playground
     
    PaladinGuy

    Join Date
    Mar 2012
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    UK
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    Default Re: Saving money for retirement?

    Quote Originally Posted by Jon_Dahl View Post
    Furthermore, I'm planning to save 100 euros (113 dollars) each month for 20 years, then retire when I'm 68 (I can do it!) and spend 200 euros from my savings each month for 10 years.
    There's a hole in this - but it is one in your favour! You need to add in the interest you get on the savings, which should give you a lot more to draw on. (I know interest rates are low right now, but you should still be able to get some interest, and even low rates add up over 20 years.)

    You state that investing the money will be stressful and have a lot of risks - it should be possible to find a low-risk investment (which also lowers the return) without being stressful - your banks probably offer a serice, but for something like this I would find one of the big pension providers and ask them about a personal pension (what a lot of UK employers now do is basically this).

    For these sorts of decisions one definitely needs professional advice (which we cannt give on these forums), if you don't have large funds then the government paid for advice is probably sufficient, but you really do need to seek out what advice you can get.
    (That's not to say your plans are bad, I have no idea as I don't know your circumstances, but I do know that professional advice can make a huge difference. That said, you seem to have had the same first principle of saving that I do - pay/offset the mortgage and other debts first.)

    Good luck!

    As for me I currently have 3 company pension schemes, unfortunately all money purchase not final salary (I was too young to qualify), plus a personal scheme from when I was a contracter, then I also have a reasonable amount of savings invested with the same firm that handles the personal pension scheme.

  4. - Top - End - #4
    Ogre in the Playground
    Join Date
    Feb 2010
    Location
    Sad place

    Default Re: Saving money for retirement?

    I will receive national pension when I retire, but I didn't mention that in the OP, because there is nothing I can do about it, so there is no reason to think about it.

  5. - Top - End - #5
    Barbarian in the Playground
     
    PaladinGuy

    Join Date
    Sep 2016

    Default Re: Saving money for retirement?

    In theory some of (the next generations) taxes go into paying my pension. But that is a long time away and things could change.
    In addition there's a new tax to subsidise the stock exchange (which seems to be based on unrealistic expectations).
    I'm not entirely hopeful of either of these...

    I'm starting doing something similar to the second part, keeping the flexibility to use in a way that benefits me now/cover emergencies.

    The Stock Market is set up for those for whom 3 seconds is ridiculously long term. A facebook investors group is going to be biased to those who want to play that game (and want others to play that game).
    There are ways to get some of the benefit with a lot less risk/work (here we have "Stocks ISA" bank account and medium term bonds). I'd definitely save in a place where it does something. Also there isn't any need to have all your eggs in one basket, so you could also put a little in a few stocks and hope one is the next apple but if it all goes tits up it's only 1 year you lose (worst case you put off retiring for a month), and various other high risk/high gain long term strategies.
    The apartment game to some extent though is the equivalent of that, though. At that point the 200/month, if it loses a bit but is where you want it...that might well be worth more to you.

  6. - Top - End - #6
    Surgebinder in the Playground Moderator
     
    Douglas's Avatar

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    Default Re: Saving money for retirement?

    The Mod Radiant: Financial planning and other professional advice is an Inappropriate Topic here. Please take it elsewhere, and consider consulting a professional.
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