[Misc] Retirement

[dazzer6666]

my wife and i were just saying that it’s a shame that losing pounds in weight isn’t as easy as losing pounds in value of our pension pots seems to be.
It seems relentless

Very short term in the great scheme of things…….when you say ‘losing’, for example, how does the value compare with say 3 years ago ? May seem crap at the moment because some markets have plummeted but unless you’re forced into accessing it, it’s probably going to pay off long term.

 

[Doonhamer7]

Glad to read this whole thread - I’m only 53 but decided I need to plan to retire early having done very little thought into this until late last year. Scared of using an IFA due to horror stories so watched so many YouTube videos, articles, reading books and attending work pension seminars. My company pension provider website says to have a really good pension lifestyle you need £43k a year for a couple, this seemed to match a lot of other sites (they said £32k for comfortable and £20k needs real management). The one thing I’m not sure is the ‘rule of 4%’ where you draw down your capital by 4% each year, is this too optimistic especially with current inflation?

 

[A mex eyecan]

Gaining back pounds in weight will probably be easier! Unless you need your pension pot immediately, stick with it - it should recover over the longer term ( inflation, war and pestilence permitting).

in seriousness, we are fortunate that we may well go 3 - 4 years before we need to touch the pension. and we count ourselves extremely fortunate to be in such a luxurious position. It is the culmination of many years hard work and sacrifice, however, non the less, it’s upsetting to see the numbers go backwards. I’m sure it will come back eventually.

 

[Eric the meek]

Bloomberg say the US has just had its worst first half of the year for 40 years.

It also says that the first half performance should not be regarded as an indicator of second half performance. You could toss a coin on it.

 

[dazzer6666]

Bloomberg say the US has just had its worst first half of the year for 40 years.

It also says that the first half performance should not be regarded as an indicator of second half performance. You could toss a coin on it.

Wouldn’t even look at it with a six month view personally…….min 5 years really. Interesting example chart here showing what US ‘crashes’ really look like longer term

https://www.reddit.com/r/CanadianIn...a_better_graph_the_growth_of_1_dollar_in_the/

 

[Lyndhurst 14]

My 401k (US pension fund) has recently taken a dive of about 15% as it pretty much tracks the Dow Jones. It's a long term investment so not too concerned but just shows how volatile the markets can be

 

[A mex eyecan]

My 401k (US pension fund) has recently taken a dive of about 15% as it pretty much tracks the Dow Jones. It's a long term investment so not too concerned but just shows how volatile the markets can be

my FA told me that the typical drop UK investment pots is down between 15 and 23% this year.

 

[Eric the meek]

Wouldn’t even look at it with a six month view personally…….min 5 years really. Interesting example chart here showing what US ‘crashes’ really look like longer term

https://www.reddit.com/r/CanadianIn...a_better_graph_the_growth_of_1_dollar_in_the/

That's an interesting chart Dazzer. I've never seen a chart of the US market looking so linear. It just shows what a long time horizon (= smoothing) and a log scale can do. Very useful.

You're right about the timeframe of course. All four bear markets lasted around 15 years, give or take. I don't know why, but I'm drawn to the inflationary bear market from c.1970-1985.

 

[Daddies_Sauce]

The one thing I’m not sure is the ‘rule of 4%’ where you draw down your capital by 4% each year, is this too optimistic especially with current inflation?

4% is usually quoted for US drawdown, reading through it seems to be around 3% for the UK. If you plug your numbers into guide.co.uk it gives you an idea, at the end of the day its all assumptions, and no IFA has a crystal ball, if if they have its quite probably broken.

 

[dazzer6666]

my FA told me that the typical drop UK investment pots is down between 15 and 23% this year.

Pretty much where mine is overall. It’ll recover, and of course that drop is against gains from prior years. As an example, I put some money into one pension vehicle about 4 years ago and it’s still showing a reasonable gain over the period despite this year’s fall (certainly better than I would have got from cash). Only really an issue if you need to withdraw significantly when values are depressed.

 

[Tim Over Whelmed]

Glad to read this whole thread - I’m only 53 but decided I need to plan to retire early having done very little thought into this until late last year. Scared of using an IFA due to horror stories so watched so many YouTube videos, articles, reading books and attending work pension seminars. My company pension provider website says to have a really good pension lifestyle you need £43k a year for a couple, this seemed to match a lot of other sites (they said £32k for comfortable and £20k needs real management). The one thing I’m not sure is the ‘rule of 4%’ where you draw down your capital by 4% each year, is this too optimistic especially with current inflation?

Inflation is going to be the key over the year, or so.

Pot value will normally increase over time.

My tips:

Find a good IFA .... the advice for me two or three years prior to retirement was invaluable.

You don't need as much as some people say, unless you continue the same lifestyle, which, in reality, you don't.

Spread your investments so you're not too exposed in one area, we've avoided property, only because on moral grounds I feel this is causing those less fortunate too much of a disadvantage (but then again the pension funds probably are too but not directly as I see it)

I haven't commuted the 25% tax free element of the pensions, I think some people do so and treat it as a "one-off" lottery type win, but I say leave it in the pot to grow or, if taken out, reinvest in some way.

Due to my illness I've researched what I wish to do in terms of travel and hobbies and there's loads of money saving and useful tips on that new fangled interweb thing ... it'll never last!

 

[SIMMO SAYS]

I'm sixty six today. Get my pension in four weeks.
Took enforced retirement exactly four years ago. What a time it has been. Plumbing and Heating was a doddle

 

[BN9 BHA]

I'm sixty six today. Get my pension in four weeks.
Took enforced retirement exactly four years ago. What a time it has been. Plumbing and Heating was a doddle

Happy Birthday.

 

[dazzer6666]

Inflation is going to be the key over the year, or so.

Pot value will normally increase over time.

My tips:

Find a good IFA .... the advice for me two or three years prior to retirement was invaluable.

You don't need as much as some people say, unless you continue the same lifestyle, which, in reality, you don't.

Spread your investments so you're not too exposed in one area, we've avoided property, only because on moral grounds I feel this is causing those less fortunate too much of a disadvantage (but then again the pension funds probably are too but not directly as I see it)

I haven't commuted the 25% tax free element of the pensions, I think some people do so and treat it as a "one-off" lottery type win, but I say leave it in the pot to grow or, if taken out, reinvest in some way.

Due to my illness I've researched what I wish to do in terms of travel and hobbies and there's loads of money saving and useful tips on that new fangled interweb thing ... it'll never last!

Agree with all of that……

Taking the 25% depends on a whole ton of factors. I wasn’t going to but the IFA actually explained why it was better to in my circumstances (won’t go through it all here as it’s boring and complicated and related to the lifetime allowance and inheritance tax planning - but leaving it in the pension isn’t to my advantage). Really just reinforces the need to have a good IFA

I’ve just completed a coaching qualification as out fishing club is running a programme to get new people into it. Had our first open day last week and it was brilliant, so enjoyable !

 

[A mex eyecan]

I'm sixty six today. Get my pension in four weeks.
Took enforced retirement exactly four years ago. What a time it has been. Plumbing and Heating was a doddle

Very Happy Birthday to you. Have a glass or three and enjoy.

 

[Tim Over Whelmed]

Agree with all of that……

Taking the 25% depends on a whole ton of factors. I wasn’t going to but the IFA actually explained why it was better to in my circumstances (won’t go through it all here as it’s boring and complicated and related to the lifetime allowance and inheritance tax planning - but leaving it in the pension isn’t to my advantage). Really just reinforces the need to have a good IFA

I’ve just completed a coaching qualification as out fishing club is running a programme to get new people into it. Had our first open day last week and it was brilliant, so enjoyable !

Think I may be leaving mine for the same or similar reasons to you, I'm maxing pension pay in's at the moment and then, in twelve months time I won't be.

 

[Rugrat]

at the end of the day its all assumptions, and no IFA has a crystal ball, if if they have its quite probably broken.

Most IFA's I know rely entirely on a crystal ball

 

[Wrong-Direction]

I can't wait to retire, only another 40 years or so..

Sent from my SM-A326B using Tapatalk

 

[Weststander]

I'm sixty six today. Get my pension in four weeks.
Took enforced retirement exactly four years ago. What a time it has been. Plumbing and Heating was a doddle

Happy birthday [MENTION=11499]simmo[/MENTION]. I hope @W-D spoilt you.

 

[Weststander]

Agree with all of that……

Taking the 25% depends on a whole ton of factors. I wasn’t going to but the IFA actually explained why it was better to in my circumstances (won’t go through it all here as it’s boring and complicated and related to the lifetime allowance and inheritance tax planning - but leaving it in the pension isn’t to my advantage). Really just reinforces the need to have a good IFA

I’ve just completed a coaching qualification as out fishing club is running a programme to get new people into it. Had our first open day last week and it was Brilliant, so enjoyable !

Very subtle