plonkee money an english-er's thoughts on personal finance

May 12, 2008

do you think about retirement?

Filed under: retirement — Tags: , — plonkee @ 12:00 pm

I’m in my late twenties, so it’s about 40 years until I hit state retirement age, and it’s more than 25 years until I reach the age at which I can withdraw any of my pensions. I don’t often think about what retirement might be like, or whether I’ll be able to afford it.

I do have a little spreadsheet, that tracks my pension contributions, and investment balances and gives me an inflation adjusted projection of my retirement income. (What can I say, I’m a spreadsheet geek.) It’s currently suggesting that I’ll be ok to retire when I’m 68. I’ll be rich enough to have an income that’s about what I have now, assuming that I’ll have paid off the mortgage by then.

I do put a reasonable amount away that’s earmarked specifically for retirement – currently around 11% of my gross salary. My combined investment amount this year is likely to be around 16%-17% of my gross income. This is marginally more than 2007, and I’m hoping to increase it more each year if I can.

The rule of thumb is to contribute 10% of your income, and although I’ve had a pension since I left Uni, I’m not sure when I started contributing more than 10%. But then, I don’t know if 10% is going to be a good rule of thumb for me. I’m pretty sure that you’re supposed to start with what you want retirement to look like, and then work from there, but I honestly can’t really imagine it.

I’m not anticipating taking early retirement. Compared to many of my m-network friends I have quite a conventional career/life thing going on. David @ my two dollars works for himself in various online ventures, Mrs. Micah has a patchwork career, being frugal and paidtwice are both pro-bloggers/SAHP/loads of other great suff, Patrick @ cash money life, pinyo @ moolanomy, gibble @ gather little by little, single guy money, and the doughroller are all heavily into alternative income (or have aspirations that way). I’m just well, me.

If things continue as they are for me, I’m likely to work (at a job I like) for a number of years, and then just retire when I can afford to. Pretty traditional and conventional. I absolutely don’t mind this at all, it’s just that without envisaging a kind of semi-retirement, it all seem such a very long way off. I am likely to be at least twice the age I am now when I retire, after all.

Because I’m sensible, and because I have no intention of being a poor old person, I’m dutifully putting away a good proportion of my money into retirement. Only enough that will do for retiring at 68 though. I just can’t get excited enough about retiring to work harder on it.

What do you think? Are you working towards early retirement or semi-retirement? Or are there other conventional people like me out there? Let me know in the comments.

Image by Tracy O

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