92. Mapping your journey to retirement

Join us as we tackle the burning question on everyone's mind: How much do you need to retire? From dissecting pension plans to outlining alternative income sources, they dive deep into the world of retirement planning. Get ready to have your mind blown as they reveal surprising insights and strategies for ensuring a comfortable and fulfilling retirement. So grab your favorite beverage, kick back, and tune in to the Women & Money Cafe for some money-savvy wisdom with a side of humor. You don't want to miss this episode!

🎧 Episode 34 – When do you want to retire – wrong question
🔗 Retirement Living Standards
🔗 Fidelity Retirement Guidelines
🔗 PensionWorks How much do you need to retire
🔗 MoneyHelper
🔗 A Man is Not a Financial Plan - Julie's blog

YOUR HOST

Julie Flynn is an experienced independent financial adviser and financial coach. Justice and equality drive Julie. Which is why she’s spent years studying and researching how stress affects our financial decision making.

Julie is best known for her work with women who have lost their partner and coaching financial services business who want to implement fair and transparent charges.
Ebb & Flow Financial Coaching | Bree Wealth & Tax | Instagram

CO-HOSTS
Emily Pool is a Financial Planner and Will Writer. She is passionate about empowering people to invest their wealth (pensions and savings) sustainably and in line with their personal values.
Michelle Lambell  started her career in financial services as a Stockbroker in 1999 undertaking both advisory and discretionary investment management. Today she is a Chartered Financial Planner, specialising in retirement planning advice, pensions and investments and a Certified Financial Coach.
Sara Walker is a financial planner and financial coach with 33 years’ experience in financial services. She wants all women to feel financially confident and uses her professional and life experiences to support and educate women over 40 so they in turn feel able to support and be role models for the younger women in their lives.
Jennifer O'Neil is a mortgage and protection specialist and director of Athena Mortgages. Having been in the industry since 2014 Jennifer decided to set up a company in 2020 that suited her core values as a broker – integrity, service, honesty and continuous improvement.
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Transcript

Julie [00:00:02]:

welcome back to this episode of the women of Money Cafe. Now if you've been listening to us for a while, you may remember that last year, Michelle and I did an episode 34, which said, how much do you want to retire and when do you want to retire is the wrong question? And that's a cracking episode, and you should go back and listen to it. However, year on, it did occur as we never actually told you how to figure out how much you need to retire. Because it is kind of important. Except 30 4 is critical. You need to listen to that first. But we thought we'd follow-up with this 1 and put some numbers and some ideas to you how to work out what you actually need to be able to retire. So with me today is my partner in crime Michelle.

Michelle [00:01:08]:

Hello?

Julie [00:01:09]:

Alright. I'm the partner in Crane Sarah. Hello. Hello. Alright. Thank you, ladies, for joining me on the sofa today for this episode. So who this going how to go about figuring out what you need to retire on. It's a tricky one, isn't it, Michelle?

Michelle [00:01:27]:

It's a really tricky one because, generally, we you know, when we do it, we're going to be asking people who may be in their twenties, thirties, forties, What do you want to retire on? What incomes do you want? And now look at you and go, I have absolutely no idea. That's years away. And then we have to go back and explain. Well, in order to work out what we need to do now, we need to have sort of an end point in mind. I think that is a very big mind set shift at anybody because it just seems using years away, and why would I even think about it? but it is so important to know have an idea now so that you can do the planning later.

Julie [00:02:09]:

Alright. And this is Sarah then like Michelle was saying, sometimes it could seem like such a far off distant remote event. What's the point of thinking about it? today. We got anything any sort of nuggets of wisdom to help motivate listeners.

Sara [00:02:27]:

Well, this was something that was told to me many years ago. And if you think about how old you are now, And if you have got an idea of when you'd like to retire, even if you just take it to your state pension age, which might be 68 is, And think how many pay days have we got left? So, you know, if you get paid monthly times that by 12, number of years until you want to retire. So how many pay days have you got left? And how many pay days have they got to pay for? So if you retire at 68 and you survive, 20 years to your 88, you've got 20 times 12, pay days. Have you got 20 times 12 or more, pay days to save for those pay days.

Julie [00:03:13]:

Okay. That's -- -- annoying a bit. That's quite sobering,

Sara [00:03:17]:

really, hasn't it? -- sobering. Yes. but it does help me think, okay. I should be doing something.

Julie [00:03:23]:

Yeah. I think so what we're going to do over the next 30 minutes or so listeners is We're going to give you some general rules of thumb. And some of these you might have heard before, and we're going to give you some stats that might be helpful. And then we're going to talk you through some ideas on how you can start to work out this number for your personal situation because We can give you averages, but you're listening to our podcast, which clearly shows that you are not average, okay, in a good way. So we'll talk you through some of the things that we do and, hopefully, that they will help you. So when we talk about Poole of thumbs and average is I think there's some tracking research out there. And I know, Michelle, you've got some examples that you share with your clients on a regular basis, don't you?

Michelle [00:04:08]:

Yeah. So, obviously, when I've asked that question and they sit and look at me blank and clean grade, I have absolutely no idea how much I need. 1, we discuss what their current living is like, what their standard living is like, how much that cost. But I think even then, it's quite hard to visualize what you might need. So there is a retirement living standard, and it's all based. It's redone every year, I think. So it gives you an idea of what you might look like. So if you wanted to have a minimum income in retirement, for a simple person, you'd be looking at £12,800 a year. so that it says it covers all your needs with some leftover for fun. And, obviously, the assumptions that are used are fair are quite They're not generous. It is covering your basic needs. Then you've got a moderate one, which is more financial security and gives you a little bit more flexibility. So, obviously, there's a little bit more on food. There's a little bit more on holidays. And that's 23,300. that you need a year for a single person. Now if you want a more comfortable one, which I have to say is what most people would actually want to go for. gives you more financial freedom, more luxuries, more on food, so it almost triples what you spend on food. among Poole. And gives you more holidays, gives you more clothing, gives you more per birthday present you by the Poole. So there's loads of factors that go into this. But for a comfortable retirement for a single person, you're looking at £37,300 a year. that we would need. And I think the other things to kind of bear in mind is when you talk to clients, they very much underestimate how many years you'll be retired for. That's actually a very big chunk of lives. It can be, like, 30, 40 years in many cases. So that's also something factoring.

Julie [00:06:01]:

Alright. That's they're really interesting. That goes to those. I will put a link to the retirement living's index, is that? climate living standards. Standards in the shoulders for everybody should go and click on and have a look. So thanks for that, Michelle. Sarah, is there anything you'd like to throw in there?

Michelle [00:06:20]:

Oh,

Sara [00:06:27]:

It's worth having a look, but I think I think it's as we said, it's you've got to take it back to yourself. You'll know the kind of person you are, what life thrown at you and what that what how that's made you feel. And you can start off thinking your charm. It's going to look like this, need look like this, and then something will change. So we'll cover that, but you need to be able to be able to adapt to change. I think you've covered that in episode of 34, how people react in different situations. But If you just have a basic rule of thumb and don't get too stuck on it, then it just means that if you've got something to focus on and say, well, okay. If I really just want a better live and survive and live in a in a basic way, then at least you've got something to aim for. And it's don't get too stressed out about it, but just use them as things as guides and things to aim for and motivate you. at this stage.

Julie [00:07:29]:

No. I think that's a really good point. And then along with what Michelle was saying, like, when we sit down with clients and they've told had they figured out what they want. They've told us what they want. We've got a way and calculated what they need to do to make that happen. And then they see that number, and they're like, holy cow. home, I'm going to do that. Alright. Poole, very few people have everything in place that they need at the start. It's about starting somewhere and building on it. If you've got it all in place already, then fantastic. But if you haven't, don't be disheartened. Most of us don't. It's about doing a little bit at a time. Yeah. So along with the research, Michelle's got another good organization at as Fidelity, do really good research on this stuff as well. One of the things that they've said is that if you want a basic late to start in retirement. You're going to need to have about four times your salary saved when you hit 68. and then they'll throw the state pension on top of that. If you want an average lifestyle, age sixty eight, you have to have seven times your salary saved. And if you want luxury, then it's going to eleven times that you need to have saved. So they are some of the general rules of thumb. Now I know that when I said about research for this episode, like everybody, I just went and typed it into Google. You can go and do it too. 1 of the websites that have brought up was the money helper website, and it does then link through to is it pension works. Like and that's, you know, the question is how much do I need. And it gave you some input information. I clicked on the link and it takes you through, and I'm like, oh, bloody hell. It wants me to do a budget. But no. No. Don't be disheartened by my bloody hell butt because I think this is a really good starting point. And it's how I do it with all my clients trying to figure out what do you want in retirement. Well, let's have a look at your lifestyle right now. Would you spend your money on right now? Alright? When you're not working the way you're working right now, what are you likely to spend more on? What are you likely to spend less on? And how's that going change and what you're going to be doing with your time. And that starts to help you get an idea of what your future budget spending plan would look like. Does that make sense?

Michelle [00:09:47]:

Absolutely. And I think that's very much what you would start with because everyone's different. We all have different interests. We all have light. We all have different things which are important to us. Whereas life will change. You don't have to start somewhere.

Julie [00:10:03]:

Yeah. How do you approach it with your client, Sarah?

Sara [00:10:06]:

Oh, very much the same way. I start off by you know, I before I get down to the practical budget stuff, I just say what really matters, what or do you really like to be able to do once you retire during your later life? And various things will come up. And then if you just open up the conversation in a catalytic flow, then usually you get to some little nugget or dream or something that they're really, really would love to be able to do. And then we come back and say, okay. So how could we get to that then? And then we go back and look at the what are we spending our money on now? You just spend any money towards that dream now, or do we and then and then start getting down to the budgets and the secretions of today and seeing how it will change? going forward.

Julie [00:10:55]:

Right. You find as well, though, there's a there's a lot of moving parts, isn't there? in retirement, trying to figure out what you need. Because one, it's like, well, when am I going to retire? Well, let's pop a number out there and just say, 65. But my state pension doesn't kick into 68, and my final salary scheme set kicks in at 62. So you've got all this money landing at different times. and in different shapes. And then we get to 6 to whatever the heck it was that I wanted to retire at. Like, yeah. Do you know what? I think I'm going to go off and open up a surf shop now as well. So I've got income from that. And it's just it is there's no absolute about it. There's too many moving parts, and it can make it really difficult to conceptualize it. Yeah. Is that what you say, Michelle?

Michelle [00:11:39]:

Yeah. It is very much. It is very difficult to actually and I think as we all know, whenever we write a financial plan for somebody in retirement plan, it's actually out of date the next day because something may happen, something may change in their life. And that's very much something you've got to be covered with clients because otherwise, you're you can't guarantee any of this. It's all based. on assumptions and expectations of what might happen. And sometimes with clients because we have this conversation about what they want, how they want it to look, and they may not see the importance of starting to pump things early, and that can be quite damaging to any plan for retirement. So what I will sometimes do is take what they have, and I do this a lot for clients, and I'll show them what that would give them in retirement. If you just stay with what you have, this is what you'll have to live on, and they look at you and just go, but I can't live on that. that has got to be the motivation to go forward. And I think many people in our sort of generation do have unhealthy expectations because their parents are in receipt of, generally, some really good final salary pensions. Yep. We aren't. Our generation doesn't have the same level of guaranteed income that our parents may have. And a lot of them do. That generation have had a lot because the pensions. That's what they were. So they seem to think that they should have this, and you you're trying to say to them, no. It's you're not going to, but that's not a bad thing. That's not your fault. It's nothing you've done. It's just that the situation is different, and we need to work a bit harder and smarter to work out how to do that for you because we're not going to have the same as our parents. But that puts a lot of pressure on people, and I think that makes people I don't know. I think that they failed, so then they kind of want to give up. And you go, no. We can do this. You just need to get all those factors that you want in place. This is where you are now. This is what your pension you have now would give you in retirement. You want to make it more than that, that's our motivations go forward.

Julie [00:13:48]:

I think that's a really good point. I love that. about how we've got our expectations mixed up with previous generations. So as I listen to your talk there, do you know one of the things I'm thinking about? for the listeners as we're talking about trying to figure out how much you want. I'm wondering if I wasn't a financial adviser. I wasn't with a financial adviser. Would it a more realistic way to approach this, would especially in the context of how we're all going to live going forward. As if I sit down and work out, what's the absolute bare minimum I need coming in to be able to exist? And because the chances are, our generation, younger generations are going to be working a lot longer. So we're going to have other sources of income as well. So it's this is the figure. If I have that coming in at x h, that means if I'm doing a job and I hate it, I can chuck it in, and I can go and find something else to do. What do we think about that?

Sara [00:14:49]:

Yep.

Julie [00:14:50]:

Yep. That sounds good. It's almost like a skinny fire number.

Sara [00:14:55]:

Yes. Yeah. What's the absolute minimum you need to just survive?

Julie [00:15:04]:

So what was that basic number you were talking about with Shell from the 1st set of research?

Michelle [00:15:10]:

The 1st set of research, so that would be 12,800 and a year for a single person. So that say covers your needs and leaves you with some funk. Now that estimates £54 a week on food. It estimates you don't have a car. Wow. You have a holiday in the UK.

Julie [00:15:32]:

£580

Michelle [00:15:33]:

a year for clothing and footwear and £20 for a birthday present. So there are outages, but it that is, as you say, the minimum.

Julie [00:15:42]:

Okay. So that was 12,800 in today's terms. Right? And the state pension In today's terms, it's 10,600. So you've nearly all of us have achieved the absolute basic lifestyle. So I'm hoping that's a bit of a motivator for people to realize that you've nearly achieved step 1. And with your existing provision, you might have actually met step 1 So you're actually building now working towards step 2. I'm hoping that's given people a bit more encouragement about this whole retirement and saving and pension thing.

Sara [00:16:17]:

Yes.

Michelle [00:16:18]:

Yes. Right. I think the state pension is quite undervalued, and I think people have perceptions because unless you noted the number, we know the number because we talk about it. They were dealing with it all the time, but there is this misconception that as actually. It's nothing. It's patent. It's not going to give me anything. Actually, when you tell them the number and £1600 a year, they sort of oh, Okay. So if I want 20,000 in a year, that's part of it already. Mhmm. From, say, age sixty eight. And, again, there's this because it's not something that's in our world every day, you have not talked to everybody. This is when we get back to education of younger Poole, They don't know. But when you do know, it's actually a really important part of any.

Julie [00:17:04]:

Yeah. So just to say again, that's 2 over 200 pound of weak people. Yeah. You've already got that in the bank. So that's a nice step up as well as then whatever existing provision you've got. So, Sarah, anything you want to throw in here?

Sara [00:17:25]:

I when I talk to clients, I always talk about time differences as in an in things you know, do they know the things they want to do? So we've touched on the fact that a lot of people are working longer. But there's so many people now, certainly most a lot of our clients really do a semi what we would call a semi retirement. So this is a working part time. But that part time income could be a little bit where it could. Sometimes it ends up being quite a lot. And or they go I think you mentioned starting to surf shop The number of people there who start their own little business. And so sometimes, the planning is actually factoring in to have a little bit of money to start that little business when they immediately retire. But then that little business starts giving them a supplement income. as they go through. A lot of people worry about how much they're going to need just to get much older. you know, back hair and all that sort of thing. So whilst we're quite fitting well, and we can choose how we want to live and how much we want spend and what we want to do with it. Within our budget, it's fine. But when you get to the point where you might need to spend money on things that have become necessity because maybe you're not so well or your partner's not so well. That's when the cost can go up. depending on your own financial circumstances and what benefits you may not be entitled to. That's the bit that's really difficult to plan for.

Julie [00:19:00]:

No. I think that's a good point. I think excuse me. So that idea, I think it's called an encore career. When you finish one job and then you like but I've always wanted to open a cake shop, so I'm going to go and do this now. Or I've always wanted to learn how to code, so I'm going to go and do that now. And these things and I think we touched on this on episode 34 as the traditionally, we've seen return. It was like a cliff edge. I work to x and then all income stops. And so I just need the pension income. And it turns out that you were going to go and open a cake shop or surf shop, a lens code, or whatever, and all of a sudden, there's more money coming in. Now if we knew there was more money coming in, going to be coming in, we could have moved that cliff edge, which wasn't really a cliff edge, further closer to a year. So it's being mindful of what you think your life might that there's a lot of guessing what life might be like for you in the future because if it is your intention, that you're going to stop completely, and you're never going to work again. That's great. But if you think there's a chance to do what I would be bored, silly, I will going off and finding something to do, and I will make some money somehow. Of the end, I've got a client in this situation at the moment that's going to walk dogs. And I'm like, okay. So how many dogs are you going to walk? How much are you going to make a week? And we made some guesses. And she's a radiology and she just doesn't want to work any longer than she has to. So because she's told me about the dog thing, I'm factoring that into the cash flow now. which means that we're getting to move her stop being a radiologist date closer. I'm not going to call it retirement. She could be a dog worker. But it's having this information just, like I said, too many movement parts. You can see why people's heads just

Sara [00:20:42]:

Yeah. Yeah. It also actually shows why if you can and it is good to try and get some help and advice, but also to have a another good look at the figures and things at least once a year because life changes how you feel changes and all those your aspirations change. So it's a it's moving target. I think I think we've probably covered that quite a lot. It's very fluid.

Julie [00:21:11]:

Just like life. I like that. It's fluid. I think maybe the other thing that keen to my mind when we were talking about doing this episode is the I'm sure you've both seen this in clients as well and in people that you know. where they are throwing money at their pension, and they are saving like crazy. And how do you know when you've got enough? You've got people that could have retired already or could have slowed down. But because they don't actually know what that money can do for them, they don't know what's possible, they carry on doing it. And I was like, well, how do you know when to stop or when you've got enough or when you can slow down? Any thoughts? That's really

Michelle [00:21:56]:

yeah. No. That's true. It is really unfortunate. Yeah. Because clients, I've had the situation, actually, quite a few times, where clients come with, I have this pension. I have this asset. I hate my job. I don't want to count on doing it, but I know I've got to. And, actually, when we've gone through the process, I can think of 3 clients straight away that I've gone. You can retire. You have enough to retire. 1, that's one of the most rewarding things that I think we can ever do because you're actually showing somebody that they have what they have. and the options available to them. And that's the very powerful thing. But, again, until and that is where we come in, I think, Sarah, because until you work with us, we can show you what that means, and we can show you how that income can last. I have one client who actually she retired. So for 2 years, she didn't work at Poole. And she was lucky. Is this is this temp lady? The lady that does temp -- -- she's gone about temping. Yeah. And she's literally just tense because she says I have no commitment to them. I'm earning living, and I can go to different people and do different things. And that works for her really well. And if she doesn't want to work for a few months, she doesn't have to. But the plan that we put in place has enabled her to do that, and that's probably one of the, like I say, the most valuable thing. I have another client again. She retired for 3 years. She's now just gone back to work full time because she said I was bored, really. I didn't really know what else to do. You know? She she's actually in every step. She's gone back to work full time, but she's picked the roots that she wants to do so she's off to sort of Miguel Barbados. And she, you know, she's loving it, but she had the flexibility. There wasn't this. I've got a sustained job that I hate. She was in our house just years ago and then wanted to do something different and hated it. But, again, it's Sometimes, you do need to get advice, and it is hard because I realize we cost people money, but we can actually show you where you are, and then I think said, you know, earlier in this episode that a lot of what I do is I do a retirement overview. I'm not telling them that I'm going to move this to do this, do that. I'm showing them what you have and what that's going to give you. I'll give you some ideas as to what I think you can do. But if you just want that as a standalone piece of advice that I've given you a report that shows you absolutely fine with me because I've got they've gone away, and they've then got motivation to do or come back or whatever is right for them. But until you you're in an informed position, you can't make a decision.

Sara [00:24:39]:

Yes. Yeah. A little knowledge goes a long way. And, also, I don't think of it. I don't think people think about retirement in the same way anymore. Do they? I was thinking it's the date it's the date from which you have complete choice. As you can say, whether you want to go part time or Open your surf shop or learn and bed and do nothing for the rest of your life, whichever you're doing. But it's the day you have to you can choose. Can't you could choose. whether to stay in that grocery job or change your job or -- Options, isn't it? Well, sometimes it's not about giving up work. It's just having the money you might be happy in your work. You don't want to retire, but you want to retune use some of your trauma to do other things. It might be did you start with your family or your kids or people just have so much more choice now and which is, again, make even more complicated, but I think there's a lot more flexibility now. I think that's great.

Julie [00:25:30]:

I ask a good point. And especially what you were saying before about make check in with the numbers each year. So the because things a lot can change in a year, what you want can change in a year. that can change the numbers. And I think I don't think it was episode 34, but I know in a previous episode, I mentioned My retirement plan is I left it a tad late. I was late to the pension party, but I'm fully invested now. And I've got my magic spreadsheet. And I think I shared that, like, even though I've left it late, I'm still on track to have a £1,000,000 pension pot. And I got all blamed it by that shiny thing for a little while, like, wow. I can't believe you can leave it as late as me, and you can still do that. That's insane. And then I sat down, and I used we use software. So I used my software up. You don't actually need a £1,000,000 pension. So why wait till you've got a £1,000,000 range, but I thought I don't need that much. It's about half that if even that. I'm like, Oh, and so I keep revisiting it. And in preparation for this episode, I did it the old fashioned way with a quick and dirty spreadsheet. Like, if you're try if you're sitting there trying to figure out how close am I or have I over shop. So one of the things you could do is, like, work out what you need in today's terms and then deduct from that whatever you state pension visa. That's 10,600 off it. Any final salary schemes that you might have, little ones, whatever, knock that off it. any dog working or soft shop income, knock that off it. Right? And whatever number you've got left, You want to compound that forward to x date by 3%. That's a guess for inflation. That's what I did. At that number, so it's going to be a big number. probably a few 100,000. You want to divide that into point 4. And that's going to take tell you the fund value that you're aiming for. The point 4, that's quite contentious, but it's known as this 4% withdrawal the safe withdrawal rate. We're not going to have a debate whether it's safe or not, but there's this general idea that if you have a pot money and if all you ever do is take 4% out of it. you do not deplete the pot of money. It can just you're living off the growth from it. So if you go in and do that calculation and the number that comes back, is less than you've already gotten your pension. You've done that. You can chuck your job in today. But it'll maybe give you an idea how far or how close to what you are. Michelle, you look like you've got something to add there.

Michelle [00:28:13]:

No. No. That I actually did that myself. And I think my first or circumstances of, you know, I've had a journey through my life. I then saw what I needed to contribute each month. And that that scared me slightly, but it also gave me a goal to the work towards because, like, usually, I know. And we always do things in our job that we don't do in our personal lives. So that's just something that happens. But, again, it shows you so, again, using that kind of software you can show forward is Okay. So I can't achieve what that's telling me. I should be contributing a month. But if I did this, this is sort of a compromise because that's affordable to me. what does that mean? What difference does that make? Yeah. Yeah. And I and I think that's the bit that you have to don't be scared by that number. It's just one of the factors that come into it. And, again, there is no bad time to start putting money into your pension regardless of how much it is.

Sara [00:29:13]:

I think there's another important thing to bear in mind, and that is don't rely on a partner's pension. Just to just to point right out there.

Julie [00:29:26]:

Right. List as if you're listening, you didn't you didn't hear me shake my head and go, oh my god. No. It's a visual thing. Right? But I think you probably all knew of us doing that. Oddly enough, Sarah, I wrote a blog on this. A man is not a financial plan. nor as a dog. It's the link.

Sara [00:29:43]:

I don't think my dog just cost me money. It's so annoying.

Julie [00:29:46]:

I will put a link to Amanda's not a financial plan in the show notes as well. Yeah. I think that's a really good point. -- or anyone else. Any partner in your life is not a financial bad. But yeah. Oh, do you know what? I'm having a moment of clarity. That's this year's one. But when I wrote that blog, it was off the back of a conversation you and I had had Sarah. Uh-oh. Oh, You told right. So we had a conversation about a woman who years ago saw financial saw a hospital's financial adviser, I think, because she want start saving into a pension. Let's say for argument's sake, you only have £50 a month. Financial adviser. -- a page. Yeah. Financial adviser, £50 a month. It's not worth it. Your whole got a really good pension just rely on him. Yes. That is just not pension.

Sara [00:30:35]:

By the time she saw him, she realized she was expecting her first child. which point he said there's no point because £50 a month's not worth it. So she ignored it at that point. Didn't do anything. Later on, we'd see another one. a male. And he still said, well, you don't need it because your husband's got a good pension. By the time she'd finish that sentence, I was imploding in all directions as you get I think that's what I've told you that. I mean, we're both imploding in all direction. It's just yeah. I don't want to do the man bashing thing, but, you know, traditionally, yes. obviously, in the past, the men earn more. They didn't have gaps in their employment. They tend to have larger pension funds. But equally, depending on the type of the pension they got, there might not be as much or at least even if it's final salary. It will halve if something happens to them. We do still just about generally live longer. So, you know, if you haven't pushed them downstairs because you can't cope with them in retirement, then you will lick I paid you better. Yeah. You will you will need your own financial planning and pension and yeah. But it's important for couples in general to

Julie [00:31:47]:

to be aware of. Just for clarity then, 50 per month is a perfectly acceptable

Sara [00:31:54]:

amount to start a pension on. -- amount is because you have to start.

Julie [00:31:58]:

Uh-huh. Same to someone that it's not worth it. Being a regulated person telling someone it's not worth it at £50 a month, the stupidest financial advice I've ever heard. Financial Crime in my opinion. Uh-huh. So, like, Michelle, what you were saying when you see is, like, going to take a really big number to get to where you want, let's say, to work to get what you want, you need to start contributing a 1000 per month right now today. You're like, holy shit. I can't do that. I can do £50 a month. £50 a month is perfect to start with the £50. because it's a lot more than 0. And then my top tip is always then when we get to next year. So you've been putting £50 a month in every month for a year and get to the anniversary. Can you afford to do it 55 per month? This can. Keep doing that. Next year, can you increase it by another 10%. If you can keep increasing it by 10%, you will you after the 1st 5 years, your mind will be blown by how by how we're on track you are.

Sara [00:33:00]:

Yeah. But do keep revisiting it. Don't do as a as a lady. I'm at who said, no. I've been really good. I've been saving you the pension. £10 a month, never been reviewed, still £10 a month. She's still done quite well because of the compound growth because she's been doing it for a long time. But she said, I could easily afford to pay more than, but didn't I didn't really think about it.

Julie [00:33:25]:

Yeah. Well, I know when I listen if you listen to Pete Matthews podcast, he says I think he says review it every 6 months. So but the point is review it and increase it when you can and stick with it. It's all these tiny, tiny steps that get us to where we want to be. It's worth noting as well that that

Sara [00:33:44]:

if you start pension contributions, it's important to, yes, try and keep them going, and it's important to increase them. if life really shows you throws you a shitty curve ball, you can pause them. You can reduce them. As long as you remember to go back and restart or increase when you can. You know? It it's yeah. it can move with you.

Julie [00:34:08]:

I don't know about yourselves, but I know that what I found, as I say, self-confessedly to the pension party. But I don't know part of it's a main set thing as well. Because when I was younger, so I've got so much money coming in a month, and my priority was to enjoy myself. and to pay my bills. Sometimes in that order. But as I've got a little bit older and, like, the way I look at my pension contribution now is the priority that it takes. It's like a non-negotiable. No. And I don't know if that became because I started with small regular amounts, and I kept at it, and I proved to myself, look, I can do this planning for retirement thing. So a mobile into that being a monthly outgoing that I have. So it's as essential as paying the mortgage, paying the council tax. You know, do I want more takeaway this month, or do I want to go on a shopping search? No. I want to do my pension. So I don't know if it's about doing that small regular bit at the start. Just build a habit and a belief in yourself that this is something I want to do, and I can do.

Sara [00:35:15]:

and is important to me. Also, if you like the spontaneous stuff and you like having fun, do you want that to stop when you can't work anymore? No. So you need to take a little bit of fun away now so that you can continue to have fun for as long as you are able. I'm not that spontaneous, Sarah. I know. I know I am.

Julie [00:35:38]:

Well, thank yourself, Michelle. What are you thinking?

Michelle [00:35:42]:

Yeah. I it's a habit forming, isn't it? So if you can form a habit and you start doing it and I think the well, as you know, one of my bug bears is the education, if we educate the people when they were at school, how important this is and what is needed, particularly because we're in a different generation for our parents. we wouldn't have the issues that we have, and it would be second nature. It would be like paying your gas bill, your electric bill, your water bill. You would do it automatically. We have auto enrolment, but there are failings within how that works and what it's based on. I think Australia it's mandatory that you have to do. You know, you have to, and they don't have the same issues we have. So its habit forming. And as you say, the small amount can help you start that habit. It becomes normal You know. If I look at how much my gas and electric bill is at this precise moment in time. And then I look at, you know, my pension and you go, actually, what's more important? Yes. I need my gas and electric. But if it's okay to pay that for that, why am I not paying that into my pension? Yeah. I mean, your gas and electric bill just for record has tripled in the last 6 months. So in terms of that, you know, that's a non-negotiable. I can't not have it. It should be the same mindset for pensions, but it takes a moment.

Julie [00:37:00]:

Well, that's a good that's a good point. I like that. And as I say, like, I'm living proof that you can build that harbour in the belief because it wasn't there. I know it is really there. So as we just start to wrap things up, you know, we started out saying, like, well, how much do you need for a time? And, hopefully, you've got some ideas and some rules of thumb now on what to on how to start applying this to your life. So, Sarah, is there any kind of the last thoughts or tips that you would share with the listeners on this topic?

Sara [00:37:37]:

Just start. Don't be afraid. And you've listened to well, Julie Michelle of Central. None of us have been brilliant about our pension savings. We've had all sorts of different things go on in our lives that have meant we haven't gone as much or started or perhaps considered. So never feel never feel guilty. Just start. Don't be afraid to just have a look and start and once you start to have it, as we've been saying, it becomes a lot easier.

Julie [00:38:06]:

Alright. Thank you. Michelle,

Michelle [00:38:10]:

Sarah said it's starting it. And if you want a rule of thumb, so there's one we haven't kind of talked about as we've gone through as to how much you want to contribute. If you're sat there going, well, I could do 50. I could do a 100. I could do a 150. You know? And just thinking, do I just pluck a figure out of the air? There is another sort of rule of thumb that's out there that is you look at how old you are. You have it, and that's the percentage of your salary that should be going into your pension. So it just gives you an idea that, again, the earlier you start, the easier that habit forming becomes because, obviously, a much lower percentage when you're younger. If you get older, it's a much more uphill battle, but it does give you a starting point. If you're they're going, like, you all talked about all these numbers. Which one do I pick? Just to give you a bit of guidance. It's not going to give you anything guaranteed, but it just gives you a place to start thinking.

Julie [00:39:04]:

Alright. I think that's a great one. And then I think what by parting sort of but would be it's going back to what Michelle said about one of the services she offers. Like, if you don't want the full on singing and dancing advice back, as, you know, that you you'll sit and help people just figure out where am I at and what will that do? So I think there's that. And then another plug for feedback just because we love him, anyway, is you've got his meaningful Money Academy. And if you pay for that and you go into it, they will give you access to Voyant, which is the best software that I use for all this stuff. So that's just another way you can go and get your hands on some information start playing around with this. If you're not ready to come and talk to a financial adviser, that that's one option. Maybe you just write in to figuring it all out yourself because you like that. then I would suggest that. But as always, there are lots of lovely advice out there that don't join in the moment of money, Kathy Podcasts oddly enough. But there's also us as well that Michelle, our pension gurus. So any questions or you just want to get a bit of a handle on this, then do reach out to us, and we would love to help. But, Michelle, thank you so much for your contribution. That was awesome. Alright. Say that, thank you for threatening violence on an episode. It's been a while since we've had that. Alright. I'm so sorry. That's okay. You are pushing people down the stairs, but we know that you were joking. Okay. Lambell contribution. Thank you to you for listening to us. And as always, we really We really, really do appreciate it because our download numbers have skyrocketed over the last few months. And that is all thanks to you for sharing the show talking about with your friends. We really appreciate it and all the reviews that you leave us. So until next time, take care of yourself.