Re: How much money?
Posted: Wed Nov 23, 2016 11:09 am
The problem with only drawing down 3-5% is that you WILL die eventually. You don't really want to die with $500,000 or more in the bank. The optimum solution of course is to die the day that your money runs out, but no one can plan it that accurately.
I think from age 65-75 (i.e. when you will be most fit and active) 7% is fine. If after age 75 you're still feeling fit and healthy, maybe dial it back a bit so you'll have enough to get you until 90 (this will mean taking an income cut, of course).
It's true that it's more of a gamble if you have no state income to fall back on. UK IT's have an advantage here. AFAIK anyone can move to Europe, contribute to the national scheme there, and get a pension after a decade or two. But working in Europe has its own large disadvantages, namely the high cost of living and the women are much harder to get into bed. I wouldn't go to work in Europe just for the pension alone, that's for sure.
Remember to factor in any inheritance you might get too. Some people are uncomfortable discussing this, but if you're an only child and your parents own a house, the chances are that house is going to be yours someday, and will be a big asset when it comes to retirement savings.
Kinda disagree about the merits of property investment simply because property in the big European and American cities is priced extortionately these days, plus it's more difficult to get a mortgage when you work overseas, and the interest rate on said mortgage will be higher than if you were using it as your principle residence. On top of that, you're going to need to employ a property managing agent if you rent it out, pay for buildings insurance and repairs etc. I'd rather invest in low cost tracker funds personally as they don't require all that management and are easily sold if an emergency happens and you need some quick cash.
Back to the original topic though - I don't think the $30k average IT salary really cuts it at all to make a decent retirement. You either need to go to an area that pays well (i.e. not Europe) or move into leadership for more money. Preferably both. Or else be one of those elite IT's that land a job at a first tier school, but only a few will ever manage to do that.
I think from age 65-75 (i.e. when you will be most fit and active) 7% is fine. If after age 75 you're still feeling fit and healthy, maybe dial it back a bit so you'll have enough to get you until 90 (this will mean taking an income cut, of course).
It's true that it's more of a gamble if you have no state income to fall back on. UK IT's have an advantage here. AFAIK anyone can move to Europe, contribute to the national scheme there, and get a pension after a decade or two. But working in Europe has its own large disadvantages, namely the high cost of living and the women are much harder to get into bed. I wouldn't go to work in Europe just for the pension alone, that's for sure.
Remember to factor in any inheritance you might get too. Some people are uncomfortable discussing this, but if you're an only child and your parents own a house, the chances are that house is going to be yours someday, and will be a big asset when it comes to retirement savings.
Kinda disagree about the merits of property investment simply because property in the big European and American cities is priced extortionately these days, plus it's more difficult to get a mortgage when you work overseas, and the interest rate on said mortgage will be higher than if you were using it as your principle residence. On top of that, you're going to need to employ a property managing agent if you rent it out, pay for buildings insurance and repairs etc. I'd rather invest in low cost tracker funds personally as they don't require all that management and are easily sold if an emergency happens and you need some quick cash.
Back to the original topic though - I don't think the $30k average IT salary really cuts it at all to make a decent retirement. You either need to go to an area that pays well (i.e. not Europe) or move into leadership for more money. Preferably both. Or else be one of those elite IT's that land a job at a first tier school, but only a few will ever manage to do that.