La Gen Z “avrà bisogno di almeno £ 3 milioni” per ritirarsi comodamente
di tylerthe-theatre
La Gen Z “avrà bisogno di almeno £ 3 milioni” per ritirarsi comodamente
di tylerthe-theatre
23 commenti
Retirement wont be a thing by then, work until you drop.
I very much doubt the majority of Gen Z will be able to even consider retirement; hell, most millennials like myself have no retirement plans other than “work until I die”.
It’s so funny that the retirees of today think people who’re working age now will ever even get something they call retirement. The idea that people living hand to mouth every month will ever be able to amass anything approaching £300000 let alone £3mil is hilarious.
>The number, which the wealth manager arrived at using the Pensions and Lifetime Savings Association’s definition of a ‘comfortable retirement’ and assuming two per cent annual inflation, is more than double the current estimate of £1.4m you need for a decent life when you retire.
So they just took an unreasonable number and ran it through ~40 years of inflation.
I never understand this
Let’s assume you have worked a £30k job for 30-40 years and paid into an average pension pot.
A big chunk of people will have paid off an average house by mid 60’s or if lucky inherited one.
This puts you mortgage free with £12k a year tax free state pension PLUS your private pension. Not rolling in it but at £20k a year and no mortgage you wouldn’t be destitute.
On top of that you have free healthcare, travel etc
All of that comes from a LOT less than £3m
Pension age will continue to increase, most of us won’t see retirement
£875/month pension contributions for 45 years in to something that tracks S&P500 (based on historical returns) to make a pot of £3m.
How many 21 year olds can do £875 a month though?
So basically impossible? Assuming 5% interest and starting at 25 that’s nearly 20k annually with a 2% increase year on year and to earn enough to put 20k into your pension you’d be being taxed at a rate on the rest of your income where you can’t afford to put it in.
I’m sure some people will say “that should be your incentive to start saving for retirement now” …. But surely headlines like this make saving for retirement look so wildly unrealistic that they have the opposite effects and turn people off of pensions completely.
>*According to an analysis from Rathbones, a 25-year-old today will need a pension pot of £3.1m if they want to live comfortably for quarter of a century after retiring at 65*
Yeah Rathbones are known for talking absolute nonsense and have had complaints put against them in the past.
>*’The bottom line of my complaint about Rathbones’ performance is that the growth achieved has never reflected anything like either what was realistically possible in the market, or anything like Rathbone’s declared definition of its aims for our risk profile.’*
[Link](https://citywire.com/wealth-manager/news/rathbones-ordered-to-compensate-client-for-investment-breach/a1121182)
Well if you butcher the value of your currency of course you will need an awful lot more to retire
Something has to give or we will have a catastrophe on our hands. If they work until they drop then that means younger people will never get a job. It’s not just about not being able to retire its going to affect the whole structure of the workplace and beyond.
Civil war anybody?
Retiring is much cheaper if you own a house, like many of the UK’s issues, it stems from ludicrous house prices.
I can buy a house 5x the size of my UK property in almost any EU country, it’s crazy what we pay for housing vs salaries in this country.
The solution isn’t more pay (Although that would also be nice!), it’s considerably lower rents and property prices.
£1 million hasn’t been enough to retire on for years. Mostly because of house prices.
Sure, if you keep your savings in a 4% interest savings account like most people. Put your money in index funds and invest wisely and you’ll need far less. Assuming the world doesn’t implode. Which it probably will before Gen Z dies off.
Reading the article is always a good idea.
> The analysis also found that a ‘moderate’ lifestyle would require £2.2m for a single person… Gen Z savers would need £947,700 to live a ‘minimum’ lifestyle
Sounds like ‘comfortable’ means funding an upper middle class lifestyle. Probably a couple of cruises every year and a weekly trip to the theatre priced in.
In order to build up a £3.1m nest egg, a 25-year-old would need to save roughly £1,600 per month – just shy of £20,000 per year
How in the actual fuck is that possible for 99% of the population. This articles are so detached from reality, it’s almost like some sick perversion to make young people scared and depressed for the future.
Don’t worry folks we’re all going to die in the AI war soon anyway
honestly at this stage, just take me into the woods and shoot me
If you are going to die anyways, why not £3mil of debt?
3% employer contribution on a salary of £30k is…. £712.80 per year.
Even with the required additional 5% employee commitment that only makes £1900 a year. Nobody is retiring comfortably on that (especially as UK pension companies heavily invest in the UK stock market, which is crap). £2500 at £37k salary, still pitiful compared to the public sector.
Most private sector employees are on 3%-5% employer contribution. Basically nobody outside of the public sector is getting close anywhere near to £3m.
We really need to be mandating employers they need to contribute a lot more in employer contributions. Because guess what? If people are going to end up in poverty, the state ends up paying anyway and it will dwarf current pension commitments.
My company is higher than private sector average at 6%, and you’d have to earn £100k to earn the same employer contribution that a Band 1 NHS person makes (24% non contributory).
Don’t worry, they’ll have the triple lock, just like the current generation of pensioners that Gen Z have started paying for.
My plan is some sort of Futurama suicide booth if I’m going to be destitute. I am maxing out my contributions, but who knows if that’ll be enough. I fully expect the state pension to be means tested before I get anywhere near it, mostly as a benefit to lower earners and the unemployed, while middle earners like myself have to hope we’ve been prudent enough and not taxed even more.