retirement age increase

jamesd

lvader wrote: »

Unless they are already retired they would have still benefited from a period of being able to buy funds (as part of their regular pension contributions) at a greatly discounted price. Big corrections in stock prices are generally beneficial to people saving for a pension.

Particularly if you deliberately practice putting in a lot more during down times and backing off later. That's why there's one investing strategy that tries to keep the at risk pot invested constant (or constantly increasing) over time. When prices drop that causes more money to be added to the at risk part, at the best buying times. When they rise it causes money to be taken out, again at good times for that.

Hard to know the tops but drops are obvious even while they are happening, even if the precise bottom isn't. So I used the drop in early 2008 as a buy signal for regular investments and acted on it. The Mr. Buffett provided some good general advice later in the year for non-regular contributions.

dunstonh

Anyone investing from 2007 to now will still be pretty glum - sitting on a 10% loss.

All my 2007 growth portfolios are in surplus. Remember that sensible investing doesnt mean going 100% in to the FTSE100. A balanced portfolio would include investments from all areas and many areas are back at pre recession levels.

Bit unfortunate though for those retiring around 2008 with a decade of investments going no-where.

Crashes always hit those in the short term. However, those getting close to retirement should either have reduced their investment risk in the years getting closer or used an IFA to do it or used a contract that has lifestyling risk reduction. Staying in medium/high risk investments with a year or two to go is more high to speculative on the risk scale.

Old_Slaphead

dunstonh wrote: »

However, those getting close to retirement should either have reduced their investment risk in the years getting closer or used an IFA to do it or used a contract that has lifestyling risk reduction. Staying in medium/high risk investments with a year or two to go is more high to speculative on the risk scale.

Not so good for those a couple of years younger who would have been exposed to the 'crash' only to see their lifestyling strategy kick in shortly afterwards and deprive them of much of the bounceback.

There's simply no substitute for taking an active interest in and responsibility for one's own investments and not suffering from BSE syndrome.

dunstonh

Not so good for those a couple of years younger who would have been exposed to the 'crash' only to see their lifestyling strategy kick in shortly afterwards and deprive them of much of the bounceback.

Yes. Some lifestyle structures are too quick. Some start as many as 10-15 years earlier.

I seem to recall some research that found that statistically, you stand a better chance remaining in equities until the end than you do by using risk reduction in that remaining in equities would have paid off in more periods than it would have done if you had reduced risk. The problem is that reducing risk is not so much about making more money but losing less money.

With annuity compulsion gone and more people likely to remain invested during retirement, then such a scale of risk reduction will not be required.

However, that leads on to your next comment that whatever you do, you need to take an active responsibility for your own investments (or use an IFA in a servicing contract - not transactional to do it for you but still take an interest so you follow it and understand why).