Author Topic: Even high earners can't retire till 85!  (Read 3577 times)

frugledoc

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Even high earners can't retire till 85!
« on: February 15, 2016, 10:16:30 AM »
http://www.telegraph.co.uk/finance/personalfinance/pensions/12154512/Even-high-earners-will-need-to-work-to-85.html

Doesn't seem to consider that people should pay a lot more into their savings and investments.  Facepalm.

GrOW

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Re: Even high earners can't retire till 85!
« Reply #1 on: February 15, 2016, 10:28:46 AM »
This quote says it all - "It found that younger workers will have to work for longer and pay more into their pensions to stand any chance of enjoying a decent standard of living in retirement. "

Sooooooo much to facepalm about in there.

coolistdude

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Re: Even high earners can't retire till 85!
« Reply #2 on: February 15, 2016, 10:45:30 AM »
This was hard to even skim read. You can either find reasons why you can't succeed, or find ways to succeed. And if you can't succeed, change the game. The most empowering thing in life is owning that you have the ability to affect your future, and creatively taking advantage of that.

MgoSam

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Re: Even high earners can't retire till 85!
« Reply #3 on: February 15, 2016, 10:45:42 AM »
This may well be true for many people. I know quite a few people my age that make the same or less than I do, but have a much higher propensity to spend. One person that I know that likely makes around $30k's FB feed is full of concerts, status updates at coffee shops, and restaurants that she's at with friends.

frugledoc

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Re: Even high earners can't retire till 85!
« Reply #4 on: February 15, 2016, 11:08:51 AM »
This may well be true for many people. I know quite a few people my age that make the same or less than I do, but have a much higher propensity to spend. One person that I know that likely makes around $30k's FB feed is full of concerts, status updates at coffee shops, and restaurants that she's at with friends.

Anybody concerned that those that actually save for their retirement will end up paying higher taxes to fund the YOLO brigade who haven't?

mulescent

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Re: Even high earners can't retire till 85!
« Reply #5 on: February 15, 2016, 12:00:52 PM »
It's easy to cast aspersions at the (hypothetical) folks in the article.  However, I think it's worth realizing that we're in the middle of a paradigm shift away from pensions/government support and towards personal responsibility for retirement (among other things).  People who aren't vigilant tend to get screwed under such circumstances, which is exactly what is happening to many Boomers here in the US.

It would be a MUCH better article if it offered some education about how to avoid working until 85 which, as we know, isn't all that hard.  Does anyone know whether the UK has the various tax-advantaged savings accounts that we have here...

Alternatepriorities

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Re: Even high earners can't retire till 85!
« Reply #6 on: February 15, 2016, 12:01:41 PM »

Anybody concerned that those that actually save for their retirement will end up paying higher taxes to fund the YOLO brigade who haven't?

It crosses my mind from time to time. Mostly I try not to live in fear of events I can't control and remind myself that in almost every scenario I'm better off not being a consumersucka. Then I'm also reminded that the future isn't certain and it's okay to delay full FIRE to take advantage of some of the financial flexibility gained on the path to FIRE.

MgoSam

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Re: Even high earners can't retire till 85!
« Reply #7 on: February 15, 2016, 12:02:56 PM »
This may well be true for many people. I know quite a few people my age that make the same or less than I do, but have a much higher propensity to spend. One person that I know that likely makes around $30k's FB feed is full of concerts, status updates at coffee shops, and restaurants that she's at with friends.

Anybody concerned that those that actually save for their retirement will end up paying higher taxes to fund the YOLO brigade who haven't?

I try not to concern myself with things that I can't influence. Instead, I try to direct my energy towards encouraging those I know to save more. For this friend, I will casually mention FIRE and early retirement because sometimes that gets people's attention.

Scandium

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Re: Even high earners can't retire till 85!
« Reply #8 on: February 15, 2016, 12:04:00 PM »
Oh, of course

Quote
Those in highly-paid careers would also struggle, it said, as a combination of falling state benefits and lower employer contributions came together to threaten the "death of retirement".

Also mentions that it's "easier" to replace 2/3 of salary for lower paid workers than higher paid ones. So let me get this straight; the state/employer pension system will only provide a minimum income, to keep old people out of the most destitute poverty, not replace 2/3 the salary of MBA and IT workers? You mean what it was designed to do, at least in the US? Shocking! I wish people would understand that 401k is the meat of retirement, SS the safety net. Not the other way around.

And
Quote
The figures are based on workers who add the statutory minimum amount of 8pc to their pensions under auto-enrolment.

Saving more is of course barely mentioned at the end.

frugledoc

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Re: Even high earners can't retire till 85!
« Reply #9 on: February 15, 2016, 01:14:02 PM »
Does anyone know whether the UK has the various tax-advantaged savings accounts that we have here...


Probably even better than the US but the budget in March is expected to stop higher rate tax relief.

At the moment we get 40k per year tax free allowance with carry back for the previous 3 tax years.  Annoyingly there is a lifetime pension allowance of 1mil and if you go above it you get taxed 55% of the excess. 

On top of that we get 15k/year ISA allowance which is capital gains and income tax free, with no lifetime allowance.