Bear Market/Crashes: how do Retirees Deal with it?
Comments
-
gadgetmind wrote: »Oh, and I've spent my career working in jeans and T-shirt about 99% of the time and wouldn't know how to work a trouser press!
From a person who's worked remotely from home since 2005.0 -
I’m using a PC.0
-
The Apple bug is described here. On a PC you might be first typing into a word processor that has smart punctuation then copying and pasting here.
You’ve knocked that on the head, thanks.
Edit: the punctuation was all my own work I’ll have you know.0 -
There's a risk of you getting blocked by the MSE spam filters, see Warning: Do not copy and paste content from Word, PDFs etc into your posts.0
-
There's a risk of you getting blocked by the MSE spam filters, see Warning: Do not copy and paste content from Word, PDFs etc into your posts.
Edit: thanks for the link, I!!!8217;ll have to have a good think about this one.0 -
chucknorris wrote: »This looks like the sort of thing that I wanted to read, I'm rushing out to the gym right now, so I'll read this tomorrow:
https://www.unbiased.co.uk/news/pensions/drawdown-or-annuity-crunching-the-numbers
https://www.unbiased.co.uk/news/pensions/drawdown-or-annuity-rolling-with-the-risks
1. It never annuities in drawdown. It gives a dual life annuity paying 5.1% at 65 with 66% survivor payment as the comparator. Current level dual life at 50% spousal pay only 4.75% at 65, 5.35% at 70 and 6.23% at 75 so to try to be consistent in time when that was written I'll scale the 70 and 75 rates up by 5.1/4.75 to 5.74% and 6.69%.
After 5 years at age 70 the remaining pot is given as £83,305 and at 5.74% that would buy £4,781 a year of annuity income. At 75 the pot is given as £60,961 and at 75 that'd buy an annuity of £4,078. Unfortunately this suggests that my attempted correction is inadequate because mortality effects should be causing the possible annuity income to increase with age, not decrease. Needs to be recalculated wholly at current rates and preferably for 80 and 85 years old because 75 is still quite young. Also increased chance of an enhanced annuity paying more as you get older.
2. The couple could buy "annuity" income by deferring the state pension. That pays more per Pound than the annuity and matching drawdown assumption and provides good longevity insurance. The existing comparison shows some pot left at 990 so there's time to break even and get ahead, though using 50% spousal is what both deferring delivers.
Really needs full reworking using current rates and deferral rules to see the effects.0 -
At what point approaching 65 would it be prudent to start building up the cash reserve?
There are two kinds of cash reserve -
1) Small sums to handle boiler death, car failing MOT, that kind of thing.
2) Multi-year reserves to handle stock market bad times. As it happens, LOYM doesn't (that I recall) discuss this and assumes you'll keep drawing (albeit with tweaks to the amount) from your bonds and equities.
I'm finding it hard to justify our (inadvertent!) current high cash position and intend to unwind it, but I need to read LOYM again, and do some more thinking about tax and much more.
I'm also planning to speak to another IFA in the hope of finding one who comes across as knowing more than I do on the subject of retiring using drawdown. The 1st one seemed to give up a mere 20 minutes into a one hour free meeting. I don't claim to know everything, far from it, but a professional more advanced than even myself in years should be able to run rings around me.
Maybe that's why I'm retired and he isn't?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
"Don't" is what I suggest
Ah yes, market timing.
We took £400k from our ISAs to help rellies with house and it needs to go back in by April 5th. We're going back in with markets lower than when we went to cash.
We won't be drawing on these ISAs for 13+ years and I've left them at 75% equities as a result despite being 50:50 bonds elsewhere.
I could reinvest with a different risk profile, and may after doing more reading, but it might even be a profile higher in EM and smaller companies!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »There are two kinds of cash reserve -
1) Small sums to handle boiler death, car failing MOT, that kind of thing.
2) Multi-year reserves to handle stock market bad times. As it happens, LOYM doesn't (that I recall) discuss this and assumes you'll keep drawing (albeit with tweaks to the amount) from your bonds and equities.
I'm finding it hard to justify our (inadvertent!) current high cash position and intend to unwind it, but I need to read LOYM again, and do some more thinking about tax and much more.
......
In normal times safe short or medium term bonds would provide a better large scale reserve than cash. However at the moment such bonds provide no benefit and extra risk over cash so it seems cash is what it has to be. I am trying out Wealth Preservation Funds but as I also have some other sources of income a sizeable secure reserve is less important to me.0
This discussion has been closed.
Categories
- All Categories
- 342.5K Banking & Borrowing
- 249.9K Reduce Debt & Boost Income
- 449.4K Spending & Discounts
- 234.6K Work, Benefits & Business
- 607.1K Mortgages, Homes & Bills
- 172.8K Life & Family
- 247.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.8K Discuss & Feedback
- 15.1K Coronavirus Support Boards