made redundant can i live off 170k.

agsnu

ILW wrote: »

There are massive returns to be made from investing in Bulgarian and Latvian new build flats. Quite a few posts on this forum.

I want some of what you're smoking. Latvia's property market has crashed (down over 50% from peak), their economy was described as "clinically dead" by their central bank's governor, the government resigned, the IMF has bailed them out to the tune of billions and they are desperately clinging on to their Euro currency peg.

agsnu

ctdctd wrote: »

How about:-
So 54-66 - income £9000 per year using up savings
66 - 70 - income £13940 per year inc pension and savings used up
70 onwards - income £7540 per year

Is this enough?

Also consider that RPI has doubled in the past 30 years, so in 30 years time (if you want to assume that inflation stays the same in the future, who knows what's going to happen) £7540 will be worth half what it is today.

jamesd

agsnu wrote: »

Also consider that RPI has doubled in the past 30 years, so in 30 years time (if you want to assume that inflation stays the same in the future, who knows what's going to happen) £7540 will be worth half what it is today.

That's why the figures I gave were allowing for inflation. Quite possibly those of ctdctd were as well.

bendix

Isnt the question kind of impossible to answer?

Could the OP advise us when he plans to die please? Then we can perhaps be of some assistance.

jon3001

CluelessJock wrote: »

Pray tell, where is 5% available?

mattwallisuk wrote: »

I think you'll find most bonds at the moment are now 4% and not 5%.

dylanlewis2000 wrote: »

Where are you getting 5.8% from ? Best i can get is 3%

I think this thread is yet again highlighting people's ignorance in trying to derive a long-term income from savings accounts and fixed-rate deposits. Such instruments are no good for that. The capital needs to be invested to provide an adequate income that keeps pace with inflation.

It doesn't help when you've got the buffoons at Natwest pushing savings for retirees wanting income either:
http://www.visit4info.com/advert/Natwest-help-their-customers-save-money-in-the-recession-Natwest-Personal-Accounts/69746

Investment yields in excess of 5% are readily available now on asset classes such as corporate bonds, high yield bonds, equities and even property. These can be the building blocks of an income portfolio.

mattwallisuk

You can achieve 5% in investments with capital risk.... but if you have 170k to live from you do not want to expose yourself to capital risk, and as such its much harder to find investments that will pay more than 5%, even on longer terms.

srg751

my wife and my joint state pension is forcast at 11k, she is 54 like me but can't recieve it until 65 like myself but she has a small pp with an annuity of 3 k per year at 60 with a lump 4k. your annalasiss is brilliant thaaaanks!!!

dunstonh

You can achieve 5% in investments with capital risk.... but if you have 170k to live from you do not want to expose yourself to capital risk, and as such its much harder to find investments that will pay more than 5%, even on longer terms.

If income is a requirement then there are more options available that can provide 5% net for life. There are also options with types of guarantees that can pay higher than 5% as income as well. Of course, you wouldnt do 100% in any one thing as a combo is usually best.

jamesd

srg751 wrote: »

my wife and my joint state pension is forcast at 11k, she is 54 like me but can't recieve it until 65 like myself but she has a small pp with an annuity of 3 k per year at 60 with a lump 4k.

Updating my earlier projections, with 170k and 7% total investment return and not wanting to run out of money until age 100 you could take £14,200 a year in income. If switching property added £50,000 to the pot you could instead take £16,500. I'm assuming that the £3k annuity is inflation-linked, if it isn't you should cut these by 100 or so.

That 7% total return implies a mixture of investments that includes a range of corporate bond, equity income and other funds as well as a little in savings accounts.

If you can arrange roughly level income for each of you then most of this will be income tax free now and all of it will be income tax free after you reach state retirement age. The basic tax plan is to put 3600 for each of you into a pension each year until state pension age at least and to put 7200 a year for each of you into ISAs until all of the money is in either pension or ISA. Until then the parts that are used to provide some chance of capital growth are the ones that would be outside the pension or ISA and the ones providing income (corporate bonds mainly) the ones that are given first priority for the pension or ISAs.

An IFA can discuss other investment options with you, this is just a very generic projection.

mattwallisuk wrote: »

You can achieve 5% in investments with capital risk.... but if you have 170k to live from you do not want to expose yourself to capital risk, and as such its much harder to find investments that will pay more than 5%, even on longer terms.

You either expose yourself to capital risk (up and down variations), spend it on an annuity and lose the capital that way or take reduced income. Though there are some structured products around that provide some degree of capital protection and could be used for part of it. The projection above assuming savings accounts that pay 1% more than inflation, which is optimistic long term, would be £12,500 a year instead of £14,200 a year. Both assuming it's acceptable to have spent all of the capital by age 100.

eeja

Lokolo wrote: »

Corporate Bonds

Yes without doubt I also would have thought the 8%- 15% return on corporate bonds of the major UK banks was the most attractive option.
But there are hidden catches. Only AFTER buying Barclays long/undated bonds did the broker reveal a hushed up clause which said that should Barclays not declare a dividend to its SHAREHOLDERS then you will not get the interest on your bonds....not a penny !

Yesterday came an even more disturbing bit of news for those investors who may have bought corporate bonds . This news item concerned HBOS and RBS bonds but who knows .......could apply to HSBC , Stanchart or Barclays bonds
Comments and views from anyone esp. our resident advisors much appreciated.

''RBS yesterday offered to exchange or buy back $23 billion of bonds, and Lloyds offered on March 25 to exchange more than 7.5 billion pounds ($10.7 billion) of bonds into senior unsecured debt to bolster their financial strength.
Barclays has about 34 billion pounds of non-equity capital, Jonathan Pierce, an analyst at Credit Suisse Group AG in London, wrote in a note to investors. An offer to swap 5 billion pounds at 50 pence in the pound would add 0.6 percent to core Tier 1 capital, he said.''