Friday 5 June 2009

How to save a quarter of a million....

... because thats what a £10 000 a year pension will cost.

Who says?

Well if you use the rule of 25, then 25 x £10 000 is....

Yeah I saw that calculation, looked a bit flakey to me

OK, check out inflation-proofed pension quotes for this month and for a 65 year old woman £250 000 gets you...

Let me guess.

£10 000 a year.

And for a man?

For a 63 year old man - about £10 grand a year.

I can't live on £10 grand a year.

There's state pension on top of that.

True. I suppose my house will be worth a bit too.

Yes but don't forget - if you sell it and buy an annuity, you will also need to pay rent out of that £10 000.

So I can't have my house and eat it. I think I will live in it.

Fine - you will still have a quarter of a million in assets; you  won't have  much income, but you won't have rent to pay either. And do you get a pension from work?

I'm freelance

Oh

Look this has come as a bit of a shock - a quarter of a million! Nobody mentioned that to me. I have got £40k put away and I thought I was doing rather well. What's that worth?

About £5 a day. Before tax. How about your wife?

She's a deputy head teacher  - she will be retiring on £25 grand at 60 ... Hey - thats worth over half a million.

I'd stick with her then




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