Pensions Planning: The NUMBER

collinsca

kimwp said:

collinsca said:

An interesting read on this topic (Use 'Immersive Reader' mode to view):
How much you really need to NEVER run out of money in retirement - even if you live to 100 | This is Money

Needs a subscription to read, does it assume a full state pension alongside that?

This is why i said "(Use 'Immersive Reader' mode to view)"; you can bypass subscription... great tip; works on lots of sites


Given state pension doesn't kick in until 67/68 and most of the table is for ages before that' i'm going to say no.

Re state pension, it is mentioned here:

"Of course, the earlier you want to retire the more you'll need.

For example, if you want to retire aged 60 on an income of £30,000 a year you'll need to build a pot of £678,795. 

But if you want to be financially free ten years earlier and receive the same £30,000 income each year, you'll need a £931,366 pot. For more conservative spending of £20,000 a year from 65, you'll need £304,997.

But if you want a £60,000-a-year lifestyle at 65 you'll need £1,364,291 to make sure your money won't run out before 100. These figures assume the full new state pension increases in real terms and is taken at 68, inflation is set at 2 per cent and investments grow at 4 per cent a year."

HTH

QrizB

collinsca said:

These figures assume the full new state pension increases in real terms and is taken at 68, inflation is set at 2 per cent and investments grow at 4 per cent a year."

Thanks for the "immersive reader" tip
The para quoted above tells us they've used a simple linear model - the sort of thing you can knock together in Excel in 20 minutes - rather than any SWR assumption, back-testing or Monte Carlo analysis.

kimwp

James shack did a video where he derived numbers for different levels of income based on the last 100 years of events:

https://youtu.be/S9y8tsaZ3b4?si=BDigBusoQMCSQpef

kimwp

collinsca said:

kimwp said:

collinsca said:

An interesting read on this topic (Use 'Immersive Reader' mode to view):
How much you really need to NEVER run out of money in retirement - even if you live to 100 | This is Money

Needs a subscription to read, does it assume a full state pension alongside that?

This is why i said "(Use 'Immersive Reader' mode to view)"; you can bypass subscription... great tip; works on lots of sites


Given state pension doesn't kick in until 67/68 and most of the table is for ages before that' i'm going to say no.

Re state pension, it is mentioned here:

"Of course, the earlier you want to retire the more you'll need.

For example, if you want to retire aged 60 on an income of £30,000 a year you'll need to build a pot of £678,795. 

But if you want to be financially free ten years earlier and receive the same £30,000 income each year, you'll need a £931,366 pot. For more conservative spending of £20,000 a year from 65, you'll need £304,997.

But if you want a £60,000-a-year lifestyle at 65 you'll need £1,364,291 to make sure your money won't run out before 100. These figures assume the full new state pension increases in real terms and is taken at 68, inflation is set at 2 per cent and investments grow at 4 per cent a year."

HTH

Ooh thank you, I'll read up on that!

I think the paragraph implies that entitlement to a full state pension is assumed.

collinsca

kimwp said:

collinsca said:

kimwp said:

collinsca said:

An interesting read on this topic (Use 'Immersive Reader' mode to view):
How much you really need to NEVER run out of money in retirement - even if you live to 100 | This is Money

Needs a subscription to read, does it assume a full state pension alongside that?

This is why i said "(Use 'Immersive Reader' mode to view)"; you can bypass subscription... great tip; works on lots of sites


Given state pension doesn't kick in until 67/68 and most of the table is for ages before that' i'm going to say no.

Re state pension, it is mentioned here:

"Of course, the earlier you want to retire the more you'll need.

For example, if you want to retire aged 60 on an income of £30,000 a year you'll need to build a pot of £678,795. 

But if you want to be financially free ten years earlier and receive the same £30,000 income each year, you'll need a £931,366 pot. For more conservative spending of £20,000 a year from 65, you'll need £304,997.

But if you want a £60,000-a-year lifestyle at 65 you'll need £1,364,291 to make sure your money won't run out before 100. These figures assume the full new state pension increases in real terms and is taken at 68, inflation is set at 2 per cent and investments grow at 4 per cent a year."

HTH

Ooh thank you, I'll read up on that!

I think the paragraph implies that entitlement to a full state pension is assumed.

Yes, absolutely, plus the table being mostly with ages before the state pension kicks in, we can safely assume that

vacheron

Seems a little on the high side compared to my calculations for my planned retirement age and figure (57 & 60K) , but not too far away. Maybe 18-20% above. May assume more cautious investment / savings growth estimates?

Can't understand why there isn't a larger step change between retiring at at 60, 65 & 70 though if the state pension is factored in?

jimi_man

vacheron said:

Seems a little on the high side compared to my calculations for my planned retirement age and figure (57 & 60K) , but not too far away. Maybe 18-20% above. May assume more cautious investment / savings growth estimates?

Can't understand why there isn't a larger step change between retiring at at 60, 65 & 70 though if the state pension is factored in?

Agreed. At 70 with SP that’s £12k a year meaning only £8k per year is needed for the £20k per year column which seems out of whack with the figure given. 

westv

What is "immersive reader" mode?

QrizB

westv said:

What is "immersive reader" mode?

A setting in your browser.

In Firefox on Android it's an icon showing a rectangle with lines in (like a printed page) in the address bar.

Other browsers / OSs may vary.

westv

QrizB said:

westv said:

What is "immersive reader" mode?

A setting in your browser.

In Firefox on Android it's an icon showing a rectangle with lines in (like a printed page) in the address bar.

Other browsers / OSs may vary.

I will have to Google it. I've never heard of it.