it can earn you just have to pay tax on the amount in excess.Sorry if I've missed something, but what's the precise point in achieving the SFT limit so far ahead of retirement?
It seems to me to be a poor use of resources to aggressively build up a fund only to be forced to then leave it idle and not earning a cent for 10-15 years.
Early retirement? If I hit the SFT early I'd want to really love my job to keep working for another 10-15 years.Sorry if I've missed something, but what's the precise point in achieving the SFT limit so far ahead of retirement?
It seems to me to be a poor use of resources to aggressively build up a fund only to be forced to then leave it idle and not earning a cent for 10-15 years.
Hi interested
That is great.
So, it starts with a pension fund of €70k at age 30
The default growth seems high. 4% would be a better estimate.
But even with that, it shows that someone contributing the maximum is likely to blow their SFT .
But at 55, they could reduce their contribution to 7% and it would still exceed the SFT.
Brendan
Sorry if I've missed something, but what's the precise point in achieving the SFT limit so far ahead of retirement?
It seems to me to be a poor use of resources to aggressively build up a fund only to be forced to then leave it idle and not earning a cent for 10-15 years.
You're using the SFT as a benchmark for Amount Needed to Comfortably Fund a Retirement at Fifty.Early retirement? If I hit the SFT early I'd want to really love my job to keep working for another 10-15 years.
That's not what's being discussed here though.Alternatively, by contributing aggressively early you can stop or significantly reduce payments early and let compounding bring you up to the SFT. With 6% growth, you can stop contributing when you hit 1M at 45 and let compounding alone bring you up to 2M by 58.
Yes, which makes it a poor use of resources.it can earn you just have to pay tax on the amount in excess.
Sorry, I was being a bit facetious! Of course a full pension pot is only part of the equation for early retirement.You're using the SFT as a benchmark for Amount Needed to Comfortably Fund a Retirement at Fifty.
Is it not? You claim its a poor use of resources to aggressively build up a fund when young. My point is that the bigger and earlier you build it, the more you can benefit from the compounding gains. Anything I put in at 30 has 25-30 years to grow until retirement. Anything I put in at 50 has 5-10 years to grow. My euro at 30 goes significantly further towards my retirement than my euro at 50That's not what's being discussed here though.
Is it not? You claim its a poor use of resources to aggressively build up a fund when young. My point is that the bigger and earlier you build it, the more you can benefit from the compounding gains. Anything I put in at 30 has 25-30 years to grow until retirement. Anything I put in at 50 has 5-10 years to grow. My euro at 30 goes significantly further towards my retirement than my euro at 50
What milestones should one hit (at ages 30/35/40/45) if you'd intend to hit the SFT limit at age 50?
I made no such claim.You claim its a poor use of resources to aggressively build up a fund when young.
Sorry if I've missed something, but what's the precise point in achieving the SFT limit so far ahead of retirement?
It seems to me to be a poor use of resources to aggressively build up a fund only to be forced to then leave it idle and not earning a cent for 10-15 years.
I don't know how else to interpret this statement.I made no such claim.
What do you suggest the OP should do so if they're worried about hitting the SFT early?No, the OP's question, the logic of which I queried, was something else entirely, viz.
"What's the precise point in achieving the SFT limit so far ahead of retirement?" (ie at age 50) is hardly cryptic, even if you misquoted it to claim that I said something else.I don't know how else to interpret this statement.
They've made no indication that they're worried about that. I'm sure they can find alternative uses for their money.What do you suggest the OP should do so if they're worried about hitting the SFT early?
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