Quite simply – all of the pension calculators that I came across are too simple to meet my own needs and most of the people who need them. Few of us have had one job, or one pension throughout our lives and you need to take each of them into account to build up a true picture of what your pension could be like.
There are numerous online calculators that will total up your pension pot based on your monthly savings or tell you your likely annuity based on your predicted pension pot. Some of the better calculators I’ve found are:
Candid Money – have a variety of calculators
However, everybody is different and usually has a financial situation that’s way more complex than those calculators allow. For example, you may have one or more final salary pensions and some private pensions. You might also have property, or even more than one property. What you do with each of these and when you do it can allow you to optimise your pension.
I also learnt that pensions are very tax efficient, so in some cases it’s better in the long run to invest more in your pension than it is to pay off your mortgage. This seems counter-intuitive but that’s what my spreadsheet model has allowed me to calculate. The spreadsheet will allow you to model lots of “what if” scenarios – my own motivation for doing that was thinking “I really don’t want to be doing this same 9-5 job until I’m 67”
At this stage, there’s not going to be any advice on which pensions to choose or how to cash in on your pension – that’s best left of others with more expertise. Over time I will start and research that and share my thoughts with you, but seek professional advice if you’re unsure.
I hope this helps to explain my thought processes. In my next post we’ll get back to building up the spreadsheet data.