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Thread: Saving half your age towards a pension. Does this include workplace contributions?

  1. #1

    Saving half your age towards a pension. Does this include workplace contributions?

    There's a rule of thumb that says that you should save half your age as a percentage of your salary when saving in a pension. So, for example, if you start at age 30, you should save 15% of your salary each year until retirement age.

    My question is, does this rule of thumb include employer contributions? In the above example, if my workplace contributes the 5% part, should me contributing 10% of my salary cover the "half your age" rule making 15%?

    I've seen this rule a lot mentioned a lot, but I cannot see any mentions of how much a workplace contribution makes up this "half your age" rule.

    (I know that each person has their own idea of how much they need etc., I'm just interested as a rule of thumb.)

  2. #2

  3. #3
    It clearly has to include employer contributions. That is the only way most people could get anywhere near that amount!

  4. #4
    If you can save 15% on top of your employer contributions, and a) it's tax-efficient to do so b) it would improve your standard of living in retirement c) you won't miss the money now, then by all means do it.

    But yes, in as far as the rule of thumb means anything, it includes employer contributions.

  5. #5
    Good to know, thanks! For me, it's the difference between saving nowhere near enough and comfortably contributing more than enough, and happily it's the latter.

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