Over 55s hoping to enjoy a 'golden retirement' are facing poverty

smartn

Harry_Powell wrote: »

If they are coming up to retirement then they shouldn't have had their pensions invested in shares in the first place. The usual procedure is to start moving from riskier equities into safer government bonds and cash funds when you approach retirement so that a drop in the stockmarket doesn't impact you. Clearly a lot of these prospective pensioners haven't kept their eye on their retirement investments.?

Have you seen what little returns have been gained from stock investment over the last decade? To accuse these people of not keeping an eye on their investments would imply there were better returns elsewhere. The only asset class that has made significant returns I can think of is property, are you suggesting maybe even more people should have become BTL'ers?

Old_Slaphead

Harry_Powell wrote: »

If they are coming up to retirement then they shouldn't have had their pensions invested in shares in the first place. The usual procedure is to start moving from riskier equities into safer government bonds and cash funds when you approach retirement so that a drop in the stockmarket doesn't impact you. Clearly a lot of these prospective pensioners haven't kept their eye on their retirement investments.

Annuity rates are low if one tries to retire at age 55 due to longer life expentancies. If we retire at 55, it's not beyond the realms of fantasy that we could live to 95 and therefore spend 40 years in retirement. Given that most people start pensions in their 20's that means people spend longer in retirement than they did working, which is an untennable position. Those who retire at a more reasonable retirement age of 65, will have much better annuity rates available.

Of course this is all moot because we don't have to buy an annuity anyway. The choices are that you postone retirement until the stockmarket (and hence penson fund) recovers - easy to do if early retirement was the goal or to put your pension fund into 'Drawdown', which is an alternative to buying an annuity. With drawdown you keep your pension fund invested int he stockmarket and live on the gains.

Naturally, the newspaper neglected to mention all this....

This pension poverty will affect virtually everybody (except public sector) - lifestyling (which is a very blunt weapon and can cause more fund depletion if carried out mechanically) is only usually practiced by those with a few years to go before retirement (and they may will have 'lifestyled' down throught the stockmarket falls of the past 2 years and missed out of the recent upswing - further reducing their funds).

Not sure the point of the article was aimed at the impoverished the 55 year olds retirement funds it was more about what has happened to pension provision through a combination of longevity, government disinterest & greed, finance companies greed and lack of regulation, poor stockmarket performance etc.

Given that most people struggle to understand how pensions actually work - I think the concept of 'drawdown' would blow their minds (and anyway they probably wouldn't have sufficient funds to make this a viable proposition).

avalanche_3

I am one of these so called poor people in their 50's, sadly I remortgaged 15 years ago to buy a holiday cottage in Whitby for 35000 which we have had lots of good free holidays from and rent out to cover our extra mortgage payments plus make a small profit.

The Holiday cottage is now worth £150000, glad I extended my mortgage by 30000.

I also cashed in my poor performing endowment 7 years ago and put this down as a deposit for a flat to rent out. I kept this 12 months and sold for £40000 profit.

We now own another holiday property in Mallorca bought with cash 4 years ago when you could get 1.5 Euros to the pound.

My wage has never been above the average wage but I allways saved hard and I encourage my family and everybody else to do the same.

I think my age group had great opportunities but sadly by this article in the papers most of them must have squandered these, will the next generation do any better.

No point in people complaining they have had it bad if they don't make the best of any money they get.

smartn

avalanche wrote: »

I am one of these so called poor people in their 50's, sadly I remortgaged 15 years ago to buy a holiday cottage in Whitby for 35000 which we have had lots of good free holidays from and rent out to cover our extra mortgage payments plus make a small profit.

The Holiday cottage is now worth £150000, glad I extended my mortgage by 30000.

I also cashed in my poor performing endowment 7 years ago and put this down as a deposit for a flat to rent out. I kept this 12 months and sold for £40000 profit.

We now own another holiday property in Mallorca bought with cash 4 years ago when you could get 1.5 Euros to the pound.

My wage has never been above the average wage but I allways saved hard and I encourage my family and everybody else to do the same.

I think my age group had great opportunities but sadly by this article in the papers most of them must have squandered these, will the next generation do any better.

No point in people complaining they have had it bad if they don't make the best of any money they get.

You have been very fortunate to have been invested in property. Many people were sold pensions instead, something I'm sure they regret and wished they'd done the same as you, however at the time a pension was an equally valid choice as property.

dopester

avalanche wrote: »

I'm a boomer property tycoon.

You sounds a bit like this lady.

http://www.dailymail.co.uk/property/article-1249415/Pearls-property-gems-From-Marylebone-Kent-Last-Of-The-Summer-Wine-stars-growing-empire.html

You boomers... I'm almost blinded by your 'values-are-permanent', HPI mega-fuelled, long-wave boom glory.

Kohoutek

2010

It baffles me why people are reluctant to pay off their mortgages at the earliest opportunity even when some of them are able.

A mortgage is a debt, and I cannot see any reason why over a 25 year period,and if not sooner,it should not be fully paid off.

Live now pay later,only trouble is later is now.

silvercar

It baffles me why people are reluctant to pay off their mortgages at the earliest opportunity even when some of them are able.

'Cos people took out endowment mortgages that promised to clear the mortgage and leave a healthy wad of cash. Wind forward 25 years and it isn't happening.

2010

silvercar wrote: »

'Cos people took out endowment mortgages that promised to clear the mortgage and leave a healthy wad of cash. Wind forward 25 years and it isn't happening.

Not everyone took out endowments but those that did were talked into it by those very same people I referred to in my earlier post.
All that those "advisors" were interested in was a fat commission.
Why haven`t the endowments performed?
Stock market upheaval -- fiddling!

The most foolish people must surely be the ones that "released equity" from the rapid rise in value of their homes during the recent property bubble.
In other words they owe more now than when they took their mortgage out all those years ago.
Again "advisors" on fat commission saying "release equity" and use the money for x,y and z.

Later is now.

Cleaver

RabbitMad wrote: »

it will date so quickly though

Like all those mobile phone shops that opened in the late nineties called things like "Futurefones2000".