Can you tell me what an Index funds are.? I am selling my home soon. In the USA one can only put $ 250 k into a checking account. Btw... it is true that men pass away earlier than their wives. so a wife should be very informed of all finances.
How about if aged 55 want to retire and only buy an annuity to cover you for 12 years until the state pension kicks in? E.g. how much would an annuity that pays a 55 year old £10k per annum for 12 years cost? Leave rest of the pension to grow and use drawdown as and when - basically the annuity and state pension being the buffer…
Like the thinking, could do better putting £120,000 in a cash account from TFC and getting 5% on it. Split over two banks means it is protected as well.
Adaptive working. Like it! I have no problem with premium bonds. It's not the financially optimal etc etc... but life is short and some like playing for the win! Thanks for watching 🙌
Thanks, good video. Quick question on the Buffer Assets: I understand that they are to prevent you being forced to realise your assets at the bottom of a Bear market, so don't they have to last significantly longer than the average Bear Market, so that if your regular income stops at the very beginning of a Bear market (unfortunate timing!), you can delay realising your retirement assets until well into the next Bull Market rather than near the beginning, or bottom, of it?
Yes, that's effectively it. 'Buffer assets' aren't there to be a perfect answer to how long a bear market lasts or to remove the need to draw on your assets entirely. Bear markets can last some time. That said, they are there to reduce the impact of sequence of returns risk (having to draw down on assets when the market is in decline.) So if someone was to have 1 or 2 years of 'buffer assets' depending on a bear market that lasts 4 years. They don't stop the need to withdrawal on retirement assets, they do help lighten the impact though. It's certainly a guide and backup more than a solve-all strategy.
Maybe consider a money market ETF to protect your assets in this critical period? Only 1 GBP denominated ETF for UK investors I can see. Might work well for those on HL platform where holding a money market fund is expensive
Must admit I have hated the prospect of an annuity but some of the term annuities on offer would seem to provide a solid income with a final cash benefit. As part of a mix, then, just possibly a good buy?
There can be a good argument for a mix in my view. If people love the 4% rule and part of the portfolio can do that with removing longevity risk via annuity or partial annuity. It's quite a compelling case. Thanks for watching! 👍 (views stated as individual, information and not advice)
you can over think this sort of thing this is my view i am 65 and i start takeing my pension this year Hopefully i will have another 10 years of good health and when i get to 75 from what i can see is health issues start just like an old car things start going wrong the ten years from 65 to 75 have been the gold time every old person i know who passes 75 start to slow down and state pensions and private pensions start to mount in the bank because your not spending i have seen this happen time and time again its all to do with balance take 5% and forget the rest and stay invested
I think there's definitely a case for making sure the spending is maximised in the earlier years, while fit and healthy. The challenge sometimes can be knowing how to get that balance right. Appreciate you watching and taking the time to comment! 🙌
Excellent this exactly what I have done..65-75 yrs..10 yrs. chance of 3 Drawdowns.. or maturity at 75.. and can be left Tax free for your kids who inherit the Pension.if you die.
Would love you to do one on a Dividend portfolio were your not using drawdown and don’t need to sell your assets. This is what I’m working on but not sure I’m doing it right. Note this is in an ISA
Thanks for the suggestion and watching the channel! Appreciated 🙌 I don't typically support dividends as an income strategy. That is just as dividend focus often pushes clients into portfolio biases of certain sectors which has hidden risks. Might do a video on that. (information and not advice to take any action 🙃)
I start to watch, and am waiting for the bit, where as a guy of 60, I have to go back in time to implement it…I will note the running time location here…oh hold on, none of this applies to me, it requires that you already have quite a bit of money. As a tory once somewhat obviously remarked to me ‘You needed to choose different parents’. A really good guide to your likely financial wealth, is how wealthy your parents and grandparents were. Actually as a guy who paid off several mortgages, I didn’t need a lot of inherited wealth and indeed did not get much, but it needn’t have mattered…what I needed would you believe, was that at a single moment, someone offered to back me up, IN CASE a legal situation didn’t go my way, because I wouldn’t be able to pay both mortgages…in the end, I won the case, but had to sell one of my properties because I had a child coming, and had no way to ensure I could meet my mortgage commitments. Thus, I only needed a PLEDGE from my surviving parent, no actual money would have been needed in the end…the problem was I couldn’t trust them as far as I could throw them, and their 2nd wife would probably have demanded their names go on the deeds…and there your nightmare begins. At a judicious moment, have you a ‘sponsor’ or backer, who will block the damage that could be levied on your property or investment, from doing it’s worst? If you do, you are very lucky, well done, you probably chose the right parents. A good vid, but as always there is no substitute for parents or a guardian who acts as ‘ice-breaker’ and can tell you the rules of the road, and shield you when times are hard. I had a faithless, absent cheater for a parent, and unfortunately the lovely fair-minded one died, and that was that. Good luck to you, I hope yo have chosen your parents wisely.
Hi George. Got another unrelated question about pensions. My tight employer makes pension payments almost 1 month after my salary is paid. So for the last period of tax year 2022/23 the pension payment doesn't hit my pension account until period 1 of tax year 2023/24. Does that pension payment count towards 2022/23 or 2023/24? Cheers in advance.
Hi Jason, short answer is you need to check with your provider here! That's not me being off-hand, that's as practice can vary. I had a client whose statements all said they were contributing the new tax year, however when I queried the figures they had provided for the purposes of calculating annual allowance as they looked wrong. They came back and said that despite the fact the date of the contribution was post-tax year, the funding had actually been done earlier. That I can imagine is an outlier, but it underlines the importance of checking to see what the providers are actually doing when they apply this. I'm also required to say. If in doubt, get advice specific to you! 👍
@@PrinciplesPersonalFinance Thanks George. I also see that the rules of salary sacrifice are that it can’t take your salary lower than national minimum wage. This would mean that anyone on minimum wage can’t be in a salary sacrifice arrangement. Is that right?
@@PrinciplesPersonalFinance I spoke to someone a few months ago, and he said payment would be deposited to my bank account; that never happened. So I contacted them again and they said they would send forms for me to fill in again. I am waiting for the forms; it would appear they are disorganised, or don't want to pay....
@@claywithers523 I'd suggest following that up with them. Pension scheme administrators aren't known for their expediency.... however, that doesn't mean you should be left without answers or action for an unreasonable period of time. Best of luck
@@PrinciplesPersonalFinance On the forms it says payment date, one day before my 67th birthday. Even though I am getting my state pension now. I can't contact them by phone brcause the queue keeps you waiting for at least 45minutes. It's a mess.
What do you think about constricting a DIY bond ladder to replace the annuity?
Another great video mate - this will help a lot of people as always
Thanks matey, appreciate you watching.
Also, nice one for the big views on your investing book video. It was very good and deserves it. 👏
Your content is superb
Thanks Will. Appreciate your kind words and support.
Keeps me going during the long edits so thank you! 🙌
Can you tell me what an Index funds are.?
I am selling my home soon.
In the USA one can only put $ 250 k into a checking account.
Btw... it is true that men pass away earlier than their wives. so a wife should be very informed of all finances.
How about if aged 55 want to retire and only buy an annuity to cover you for 12 years until the state pension kicks in? E.g. how much would an annuity that pays a 55 year old £10k per annum for 12 years cost? Leave rest of the pension to grow and use drawdown as and when - basically the annuity and state pension being the buffer…
Like the thinking, could do better putting £120,000 in a cash account from TFC and getting 5% on it. Split over two banks means it is protected as well.
Premium bonds for the buffer? Could get lucky with a decent amount in.
For me, adaptive spending with adaptive working should work well.
Adaptive working. Like it! I have no problem with premium bonds. It's not the financially optimal etc etc... but life is short and some like playing for the win!
Thanks for watching 🙌
Fantastic video, George. Practical, realistic and actionable.
Thanks Pete. Means a lot coming from you. 🙌
Grateful for your continued support!
If I was to go into a care-home, how do I make sure I don’t lose my house,
Thanks, good video. Quick question on the Buffer Assets: I understand that they are to prevent you being forced to realise your assets at the bottom of a Bear market, so don't they have to last significantly longer than the average Bear Market, so that if your regular income stops at the very beginning of a Bear market (unfortunate timing!), you can delay realising your retirement assets until well into the next Bull Market rather than near the beginning, or bottom, of it?
Yes, that's effectively it. 'Buffer assets' aren't there to be a perfect answer to how long a bear market lasts or to remove the need to draw on your assets entirely. Bear markets can last some time. That said, they are there to reduce the impact of sequence of returns risk (having to draw down on assets when the market is in decline.) So if someone was to have 1 or 2 years of 'buffer assets' depending on a bear market that lasts 4 years. They don't stop the need to withdrawal on retirement assets, they do help lighten the impact though. It's certainly a guide and backup more than a solve-all strategy.
Maybe consider a money market ETF to protect your assets in this critical period? Only 1 GBP denominated ETF for UK investors I can see. Might work well for those on HL platform where holding a money market fund is expensive
Must admit I have hated the prospect of an annuity but some of the term annuities on offer would seem to provide a solid income with a final cash benefit. As part of a mix, then, just possibly a good buy?
There can be a good argument for a mix in my view.
If people love the 4% rule and part of the portfolio can do that with removing longevity risk via annuity or partial annuity. It's quite a compelling case.
Thanks for watching! 👍
(views stated as individual, information and not advice)
you can over think this sort of thing this is my view i am 65 and i start takeing my pension this year Hopefully i will have another 10 years of good health and when i get to 75 from what i can see is health issues start just like an old car things start going wrong the ten years from 65 to 75 have been the gold time every old person i know who passes 75 start to slow down and state pensions and private pensions start to mount in the bank because your not spending i have seen this happen time and time again its all to do with balance take 5% and forget the rest and stay invested
I think there's definitely a case for making sure the spending is maximised in the earlier years, while fit and healthy.
The challenge sometimes can be knowing how to get that balance right.
Appreciate you watching and taking the time to comment! 🙌
That's a very long sentence. Perhaps longer than your actual retirement.
Excellent this exactly what I have done..65-75 yrs..10 yrs. chance of 3 Drawdowns.. or maturity at 75.. and can be left Tax free for your kids who inherit the Pension.if you die.
Would love you to do one on a Dividend portfolio were your not using drawdown and don’t need to sell your assets. This is what I’m working on but not sure I’m doing it right. Note this is in an ISA
Thanks for the suggestion and watching the channel! Appreciated 🙌
I don't typically support dividends as an income strategy. That is just as dividend focus often pushes clients into portfolio biases of certain sectors which has hidden risks. Might do a video on that.
(information and not advice to take any action 🙃)
If you don't need to sell your assets just buy CTY . Current yield is 4.6% has increased its dividend for a least last 27years
I start to watch, and am waiting for the bit, where as a guy of 60, I have to go back in time to implement it…I will note the running time location here…oh hold on, none of this applies to me, it requires that you already have quite a bit of money. As a tory once somewhat obviously remarked to me ‘You needed to choose different parents’. A really good guide to your likely financial wealth, is how wealthy your parents and grandparents were. Actually as a guy who paid off several mortgages, I didn’t need a lot of inherited wealth and indeed did not get much, but it needn’t have mattered…what I needed would you believe, was that at a single moment, someone offered to back me up, IN CASE a legal situation didn’t go my way, because I wouldn’t be able to pay both mortgages…in the end, I won the case, but had to sell one of my properties because I had a child coming, and had no way to ensure I could meet my mortgage commitments. Thus, I only needed a PLEDGE from my surviving parent, no actual money would have been needed in the end…the problem was I couldn’t trust them as far as I could throw them, and their 2nd wife would probably have demanded their names go on the deeds…and there your nightmare begins.
At a judicious moment, have you a ‘sponsor’ or backer, who will block the damage that could be levied on your property or investment, from doing it’s worst? If you do, you are very lucky, well done, you probably chose the right parents. A good vid, but as always there is no substitute for parents or a guardian who acts as ‘ice-breaker’ and can tell you the rules of the road, and shield you when times are hard. I had a faithless, absent cheater for a parent, and unfortunately the lovely fair-minded one died, and that was that. Good luck to you, I hope yo have chosen your parents wisely.
Fantastic video :)
Thanks Daniel, really appreciate you watching and the support. 👏
Hi George. Got another unrelated question about pensions. My tight employer makes pension payments almost 1 month after my salary is paid. So for the last period of tax year 2022/23 the pension payment doesn't hit my pension account until period 1 of tax year 2023/24. Does that pension payment count towards 2022/23 or 2023/24? Cheers in advance.
Hi Jason, short answer is you need to check with your provider here!
That's not me being off-hand, that's as practice can vary.
I had a client whose statements all said they were contributing the new tax year, however when I queried the figures they had provided for the purposes of calculating annual allowance as they looked wrong. They came back and said that despite the fact the date of the contribution was post-tax year, the funding had actually been done earlier.
That I can imagine is an outlier, but it underlines the importance of checking to see what the providers are actually doing when they apply this.
I'm also required to say. If in doubt, get advice specific to you! 👍
@@PrinciplesPersonalFinance Thanks George. I also see that the rules of salary sacrifice are that it can’t take your salary lower than national minimum wage. This would mean that anyone on minimum wage can’t be in a salary sacrifice arrangement. Is that right?
Have you heard of anyone having a problem getting their pension fund from NEST?
Hi, I'm not quite sure what you mean by a problem getting the fund? Can you expand on this please?
@@PrinciplesPersonalFinance I spoke to someone a few months ago, and he said payment would be deposited to my bank account; that never happened. So I contacted them again and they said they would send forms for me to fill in again. I am waiting for the forms; it would appear they are disorganised, or don't want to pay....
@@claywithers523 I'd suggest following that up with them.
Pension scheme administrators aren't known for their expediency.... however, that doesn't mean you should be left without answers or action for an unreasonable period of time.
Best of luck
@@PrinciplesPersonalFinance On the forms it says payment date, one day before my 67th birthday. Even though I am getting my state pension now. I can't contact them by phone brcause the queue keeps you waiting for at least 45minutes. It's a mess.
How about investing in Bitcoin?
Hard pass