In my years as an investor, I’ve always paid a lot of attention to my pension.
Starting in my 20s when I made my first contribution, I’ve continuously believed in the power of long-haul investing and one day retiring with a lot of money.
It has not been a straightforward journey, though.
Certainly in the early days, understanding things such as tax relief and protected rights – as well as monitoring how my chosen fund was doing – was never easy.
And as I changed jobs, I had to decide what to do with the old schemes – choices which in hindsight weren’t always correct.
But as time marched on, I’ve become older, wiser, wealthier… and much more knowledgeable about investing for my retirement.
3 milestones on my path to pension prosperity
My history with pensions has involved all sorts of decisions – both good and bad. But there are three that I look back on now and see as milestones.
Milestone 1 – starting a SIPP
The first milestone was to open a SIPP during 2001 and transfer in an old personal scheme.
I was excited by taking full control of that pension and being able to buy my own hand-picked shares, instead of watching my money languish in a costly fund.
A few years later I transferred my protected rights into the SIPP when the rules allowed. That gave me another lump sum that went straight into individual shares.
Looking back, I’ve never regretted the decision to start a SIPP (though I have regretted some of my share picks!).
Milestone 2 – committing to regular contributions
My second milestone occurred during 2002 when my current employer began a stakeholder pension scheme. I have committed to monthly contributions ever since in a bog-standard index tracker, and the payments have been matched by my workplace.
Thinking back to 2002, the timing here was lucky as the dotcom crash was entering its latter stages and the market was at a relative low. But I did not know that at the time.
Some 12 years on, I am pleased with my decision to make regular payments and benefit from the matching contributions.
Milestone 3 – go all in on stock-picking
At the start of last year, I took the decision to convert all my employer pension tracker investments into a batch of individual shares within my SIPP.
Simply put, I was bold enough to believe I could beat the market with the stock-picking skills I’d developed over the last 20 years.
So far at least, it has been a good move. But I am fully aware this decision could easily backfire!
2 reasons why I am looking forward to 2026
After:
- Starting early;
- Making regular contributions, and;
- Some adept stock-picking
…my pension wealth has grown to become a meaningful six-figure sum.
And I am now looking forward to passing two further milestones – both of which I hope can occur when I turn 55 in 2026.
The first is starting to enjoy the benefits of my SIPP.
In particular, new proposals announced in the Budget mean we can all:
- withdraw as much of our personal pension cash as we want (subject to paying income tax) when we turn 55, and;
- no longer have to suffer from buying an annuity.
Quite frankly, these are superb changes for the likes of us with decent-sized private pension pots and who have some years to go before we turn 55.
I mean, we’ll soon have the flexibility to plan what we really want to do with our SIPP investments at 55…
…which in my case will be to withdraw how much I want, when I want, and leave the rest invested in my hand-picked shares.
It is full steam ahead to achieve the magic million
The other milestone I hope will occur when I turn 55 is becoming a SIPP millionaire.
Now I recognise this is a bold target. But I think it can be done.
As I say, my pension wealth has grown to become a meaningful six-figure sum.
And I have 12 years to go before reaching 55.
Plus, I have even more motivation to advance my pension as fast as I can…
…because now I’ll be able to access all the money (after tax) and not be lumbered with an annuity.
So it is full steam ahead for me to get to the magic million.
Just so you know, I’ve calculated I need 10%-plus annual returns to get there, which I dare say is achievable if my stock-picking is up to the job.
So who else is with me and wants to become a SIPP millionaire at 55?
