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

2010

avalanche wrote: »

With property it is the art of buying when prices are at the bottom of a price cycle.

Isn`t that the case with everything?

chucky

Pobby wrote: »

Misses P and I have paid into pensions since the 70`s. The last decade has been a disaster area. Stock markets up and down and poor annuities. What might have been £12 to £15k a year is now a by gone dream. However it will pay something and it can always be topped up with the state, serps and God willing, a bit of work on the side.

you would have had the same impact in the early 70s crash, the early 80s recession and the crashes in the late 80s and early 90s. this is just another hurdle in building that pension pot.

i know that you're getting closer to that retirement age Mr P but this is part of the economic cycle that is up to us to plan around.

C_Mababejive

Pah...£9k pension is hardly living it up in your "golden years". Its more like subsistence level and waiting to die.

abaxas

C_Mababejive wrote: »

Pah...£9k pension is hardly living it up in your "golden years". Its more like subsistence level and waiting to die.

Actually a good deal.

Putting 100 a month into a pension then getting 9k a year is amazing
even 2500 a year is an amazing return.

Harry_Powell

Radiantsoul wrote: »

I don't see that is certain. The UK and USA have stock markets that have performed while over the last 150 years. But over that timeframe many countries have not performed so well hyperinflation, nationalisation, war, economic collaspse, etc.

Do you have your personal pension in Zimbabwe, Somalia, or any other of these types of failing/failed countries?

Harry_Powell

Pobby wrote: »

Misses P and I have paid into pensions since the 70`s. The last decade has been a disaster area. Stock markets up and down and poor annuities. What might have been £12 to £15k a year is now a by gone dream. However it will pay something and it can always be topped up with the state, serps and God willing, a bit of work on the side.

Over the 30 odd years that you and Mrs P have had pensions, have you reviewed them on an annual basis, ensuring that they still match your risk profile and remain a balanced portfolio?

A lot of people seem to be 'hands on' when it comes to buying property, yet don't look at their pensions from one decade to the next. Little wonder then that they feel that they did better with property than with equities.

I'm sure that if I planted two roses in pots either side of my patio and lavished care, attention and plenty of feed/insecticide/etc. on one and left the other to it's own devices, that my 'favourite' would thrive while the other would struggle/die.

silvercar

Harry_Powell wrote: »

Over the 30 odd years that you and Mrs P have had pensions, have you reviewed them on an annual basis, ensuring that they still match your risk profile and remain a balanced portfolio?

A lot of people seem to be 'hands on' when it comes to buying property, yet don't look at their pensions from one decade to the next. Little wonder then that they feel that they did better with property than with equities.

I'm sure that if I planted two roses in pots either side of my patio and lavished care, attention and plenty of feed/insecticide/etc. on one and left the other to it's own devices, that my 'favourite' would thrive while the other would struggle/die.

Something that I was discussing with my IFA last visit. The difference is people think they understand property and can judge for themselves when to sell up, with pension funds it all seems a black art. The answer my IFA gave was something like stochastic process portfolio balancing - seemed to make sense when he explained it, but I wouldn't be able to tell you what it means, that is what i pay him for. Whereas selling a property because the area is going downhill fast is easier to understand.

silvercar

2010 wrote: »

The reason you`re only paying 1% for your mortgage is because you`re being "subsidised" by savers (who are getting low interest rates),tax payers (who are saddled with toxic bank debt)and the BoE ,who are government controlled, and scared witless to imposed a true base rate.
If people bite off more than they can chew why should they expect everyone else to bail them out.

As for your 5% savings rate,you either got that by fixing for 4/5 years or you fixed it before the current turmoil started.
Seems you`ve got your cake and have eaten it and you`re all right Jack.

What do you want people to do? Bail out of their 5% fixed rate saving because that means they are being subsidised by the bank? Offer to pay more on their mortgage to return the tax payer subsidy?

Harry_Powell

wymondham wrote: »

Ideally this is true, but I very much doubt though in this day and age many people can afford both a big mortgage and put away enough into their pension to make too much difference (unless they don't need food etc!). I know I could'nt. I only really focused heavily on the pension once the mortgage was gone - hopefully not too late at 40!

So you're 40 and have paid off your mortgage, neglecting your retirement. Had you instead taken a more balanced approach of paying into your mortgage over the full 25 year term while also putting money into a pension you would reach retirement age in a much better financial position than this bonkers 'crash diet MFW' approach where you blitz the mortgage and neglect everything else.

If you and I started work at the same time and retired the same time and you blitzed your mortgage and started a pension at 40, and I left my mortgage to run it's course and started a pension at age 20. I'd have 20 years of investment and growth.

When we both turned 65 and retired, we would both be mortgage free and we would both receive the same state pension. The difference would be that I would have a much larger personal pension - unless of course you decided to blitz your pension, but you'd have to put much more money into it than I have to and the net effect would be that you scrimped and saved to blitz your mortgage and get it paid off and you then scrimped and saved to fill up your neglected pension pot and over the same period I would have quietly paid into both (and had a better lifestyle) and ended up in exactly the same position as you.

The reality is that after reaching age 40 and becoming mortgage free after a period of scrimping and saving and doing without, it's highly unlikely you would want to embark on another 20 years of scrimping to fill a pension. Indeed, what a crappy life you would have had to have the same net result as someone who pottered along and simply paid into both.

Harry_Powell

silvercar wrote: »

Something that I was discussing with my IFA last visit. The difference is people think they understand property and can judge for themselves when to sell up, with pension funds it all seems a black art. The answer my IFA gave was something like stochastic process portfolio balancing - seemed to make sense when he explained it, but I wouldn't be able to tell you what it means, that is what i pay him for. Whereas selling a property because the area is going downhill fast is easier to understand.

I had no idea about the process of buying houses until I asked a few questions over on the Housing board when it came time for me to buy a house. I knew nothing about pensions and investing until I started lurking on the Pensons board. Housing is easier to understand, and while I'm no expert on pensions I certainly understand enough now to be able to discuss my aims with an IFA.

Knowledge is power and there is absolutely no reason, especially with the internet, for people to throw up their hands and decide that it's all too complex. I'm sure if you gave someone an attache case holding £200k and said, "you can have this if you learn about pensions", that they would knock you over in the rush to MSE, Fool and other financial sites.

There is also no reason not to consult an IFA if people don't have the time/inclination to sort out their pensions themselves. Many people will happily pay for a tradesman to do a job on their house that they don't have the skills/time to do themselves, yet baulk at paying for financial advise to sort out a major investment. Mad really.