How MUCH will my pension pot give me? £500K/£250K/£100K
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- Опубліковано 2 чер 2024
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In this video, I explain how my your pension pot is likely to give you.
TIMECODES
0:00 - How MUCH will my pension pot give me?
0:37 - What you NEED to know
1:08 - Retirement income types
2:10 - How much will your pension pot grow?
3:05 - How long are you going to live?
3:38 - Retirement spending patterns
4:06 - Inflation expectations
4:50 - Costs to expect
5:40 - Individuals wanting to retire
7:00 - Cash flow modelling
9:50 - Unequal splits of pensions
11:30 - Can you retire on £100k?
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A BORING BUT IMPORTANT DISCLAIMER:
This channel provides information on general financial planning. It is for educational purposes only and does not constitute financial advice. The information based is believed to be accurate and currently however should not be solely relied upon. Unless you take regulated financial advice only YOU are responsible for your own decisions therefore we cannot be responsible for any action or inaction you take. Please take advice specific to you before making any decisions. Principles Personal Finance is an educational channel and is not affiliated with my employer. As such views are stated are individual and should be seen as such.
Investment involves risks. The investment return and principal value of an investment may fluctuate so that an investor's portfolio, when redeemed, may be worth more or less than its original value. Past performance is no guarantee of future results. The information provided in this presentation has been compiled from sources believed to be reliable and current, but accuracy should be placed in the context of the underlying assumptions.
A WARNING
There are some scams on UA-cam where a profile image is copied and then used to promote cryptocurrency scams and all that nonsense. I will never, ever, contact you selling any investment product or service. I would never do that, am not allowed by regulation and it goes against the intention of this channel to educate and inform.
Just watched this now and it’s great to see an advisor who doesn’t just work on retirement forecasts with pots over a million! Great content and I’ll definitely check out your other videos. Only one comment regarding spending, as a 55yr old couple with no mortgage we don’t spend anywhere near 28k per year and have a great lifestyle. Also as we get into very old age expenditure reduces dramatically, it would be good to see a forecast where spending drops as we hit mid late eighties. Thanks again!
Thanks Denis, appreciate your kind words and watching.
Yes, I didn't want to jump in at an amount which is well in excess of the average. There is often more complex planning around that range without a doubt, but can be a bit alienating!
Interesting on the expenditure and thanks for taking the time to comment.
@@PrinciplesPersonalFinance Thanks for commenting back, much appreciated. It’s actually very scary to see the average pension pot size in the UK. I really worry about the future state of our population as they hit retirement. Thanks again! 😊👍
OK the low down, if your interested, real world experience from 2 year retired at 55 people in the UK. 1st year we were getting 18% with Vanguard lifestrategy 60 fund (medium risk) this year after Ukraine war 2%. But no worries as our advisor has moved our funds to a 20% 30% 50% split in multiple funds with multiple risk ratings. We have a regular drawdown income from the 1st 20% so stable income.
Still thousands ahead of company pension oh and income much higher.
All the very best and don't wait, life is too short.😊😊
Can’t believe you don’t have more subscribers George
Thanks for the video
Thanks Simon, very grateful for your support!
UA-cam algorithm can be love or hate you at various times. It's a strange beast! Appreciate your kind words and you watching. 🙏
Thanks, George, outstanding job! Knowing how components of your cash flow work in retirement is essential.
Thanks David, as always , really appreciate your support ! 🙏
great content, just subbed !
Thank you, very grateful for you watching and your support 👍
Fantastic advice as usual.
Thanks Colin, glad it was useful!
Very grateful for your support. 🙌
Good video .
Thanks, appreciate you watching!
My view of it is yes, you will want to enjoy a decent income if you retire 60-70. You hopefully will be mortgage free and good enough health,But as you get older you wont be able to spend a lot of money because you wont have the energy to travel far etc.
Another get video from George ❤
Thank you, very grateful for your support!
Been enjoying your videos very informative.
I have a question do you work with people who don’t live in the uk reason I ask I have a small old company pension pot back in England small due to the fact I was wrongly advised to stop paying into my company pension plan because I knew at some point in the future I was leaving the uk
Hi Mark, thanks for watching the videos and your support. It's greatly appreciated!
I sadly don't work with individuals outside of the UK. It can be a bit of minefield working with differing legislations so it's not an area we advise on.
Sorry I couldn't be more help and wish you the best for your future planning.
Interesting to see you're using inflation at 2.5% and investment returns at 6%. Those feel like optimistic numbers in relation to each other. Do you think those are fair assumptions over the long term?
Hi Alastair, yea they reasonable in general, but could be seen as a bit punchy depending on the asset allocation. Definitely not something that anyone can assume will apply to them regardless. One of the many reasons why this type of planning is so bespoke.
In this example I'm assuming 3.5% real and then 0.75% in charges. You'd need a decent equity allocation. World Ex US has delivered 4.5% real return from 1900-2021, US 6.7% (source Dimson, Marsh and Staunton - Credit Suisse Yearbook). Slightly better returns from 1970 onwards. When we do client modelling it's always based on the asset allocation recommended, we reference Defaqto research as future return expectations vary depending on market pricing. Asset allocation and investment strategy is without doubt one of the big variables in any planning and certainly one which has to be monitored closely!
Thanks for watching 👍
Great informative video Thank you
You're welcome, thanks for watching 🙏
May I ask what the software you are using in this video is?
Hi Pam, thanks for watching. This is Voyant. 👍
George,, what growth rates ? I retired at the end of Feb this year and my private pension has lost £445 in 3 months ,, I had planned on surviving on my savings for the next 2.5 years until I can get my small nhs pension (57 years old), at 60 but I’m a non earner now so I’m thinking about taking a lump sum of 12.5k out of my pension and putting it in an isa ,, this way I’ll avoid paying tax, be using my personal tax allowance and earn 4.4% interest in a cash isa ,, not worrying about it losing money,, as a financial planner, you rely on people following your advice and putting money into investments and pensions ,, it’s your bread and butter and how you earn a living,, I want peace of mind with a nice cushion ,, I’d appreciate your thoughts and others reading this ,, best wishes, Lisa
Hi Lisa, thanks for watching. Appreciate you taking the time to comment and engaging with my content.
I want to firstly say when the markets do decline, it is disappointing for any investor. I very much feel it too, that nagging feeling of uncertainty about whether ‘this time it’s different’ or if things are in fact, going to turn around.
Although, after those initial thoughts, I am always reminded when that happens, that this is how it felt in every decline. In a well diversified investment, to get the ups, we must understand there will some downs. Investments have to be allowed time to grow and the markets definitely do not move in a straight line. If it is long term money, I would challenge a client and say they have not ‘lost’ money unless they sell or we deviate from their initial plan.
This is why what I do with my clients is make sure the plan have enough money for the short term so that and then ensure we STICK to the plan to capture the growth in the long term. We keep the focus on the plan, not the whims of the markets which all of history teaches us, can be volatile.
I have to be very careful about straying into any comment which could be seen as individual advice for you so forgive me for being indirect, as sadly I can’t know your position or when money is needed, what it is invested in etc which all will play a role to the best decision for you. So please bear that in mind as I can only tell you honestly how I would see it with my clients. I cannot give you any specific direction. I have done 2 videos where I expand on what I have just said. If you are in doubt, please do seek advice specific to you.
What to do when your investments are losing money
ua-cam.com/video/SzOaJQrJxrE/v-deo.html
Avoid the noise
ua-cam.com/video/u4RXE6taZgg/v-deo.html
Wish you all the very best for your retirement and thank you once again for watching.
George
@@PrinciplesPersonalFinance Thankyou George for your reply ,, I know I will be fine as I have savings to fall back on ,, it’s difficult to move from saver to spender and I have to squash that doubt of running out of money ,, I enjoy watching all things retirement so keep em coming,, best wishes, Lisa
@@lisag9493 Thanks Lisa, appreciate your support and wish you all the very best!
Dreadful returns. Plenty of funds out there that consistently give 10%.
....and that's why DIY planning can be so dangerous
Why do we need so much money at £100 years of age ? surely you aint going to be doing much and if nything left it will goto the kids etc or the government,also with money in the bank you may have to pay for care if its required,so why not just say i want to spend the bulk of my saving whilst i`m in my eighties....
I agree that we don't want too much in savings. There is definitely a balance to be struck here, no point being the richest person in the graveyard. Even a heavy spending strategy in someone's 80s is less than ideal, they aren't the most active years, to be frank.
This is where when doing full planning discussions around this, the importance of legacy, and how potential mitigations like downsizing or equity release may come into it.
It's a tough balance and one that has to be regularly reviewed. While all of the above may be true, it would be terrifying to run out of money at 90. So running provisions so they exhaust entirely is not likely to be a good strategy for most. We need to have enough for the knowns and the unknowns. If that means slightly more at a later age, that is better than none when needed the most.
Thanks for watching and taking the time to comment 🙌
@@PrinciplesPersonalFinance thanks for the in depth reply.. As not trying to pick holes or anything like that, my question was genuine as I'm thinking of retirement in the next 4 years (63) but never seen anyone plan on the pension lasting to 100 before, hence my question.
I do like the way you explain all aspects of retirement etc
Keep up the great work.
Regards Neil
Thanks Neil, don't worry at all. Did not think you were picking holes. All important considerations and salient points you made.
Appreciate you watching and your support 🙌@@neilp7024
Most people spend about £3.50 a month once they are in there 70s .. put that in your algorithm .. 2 cups of tea and a news paper .