Misery looming for the 'have it all generation'

ruggedtoast

http://www.telegraph.co.uk/finance/personalfinance/pensions/10481003/Pensions-misery-looms-for-the-have-it-all-generation.html

Pensions misery looms for the 'have-it-all’ generation
As the baby boomers approach retirement, many face a pensions crisis thanks to quantitative easing. Central bank money-printing has impoverished a generation of older, small savers

Some boomers, running from the misery

CLAPTON

ruggedtoast wrote: »

http://www.telegraph.co.uk/finance/personalfinance/pensions/10481003/Pensions-misery-looms-for-the-have-it-all-generation.html




Some boomers, running from the misery

it's good to see that Toastie has finally realised how wrong he has been all this time

doubtless now he will be posting daily tales about hard up boomers and will start a lobbying group to push for special extra payments / pension / free gas / electricity etc by way of atonement for his previous sins.

p00hsticks

But according to the anti-boomers, aren't the majority in gold plated final salary schemes amd so wonlt need to be looking to but annuities ?

michaels

I'm confused, is this the same generation that 'own all the assets' and have thus benefited most from QE creating asset price bubbles?

Perelandra

I don't understand this article...

People aren't forced to buy annuities, drawdown is an option.

Also-

The size of the pension pots have also been inflated by QE, with bond prices having been pushed up considerably, and equity to a lesser extent. Anyone who is retiring "now" should have been moving into bonds some years ago, so although they're getting a lower rate than they were, the pot size will be larger than it would've been without QE.

Timing, of course, will impact on how adverse for the individual the net impact of the two opposing movements has been.

ruggedtoast

If less boomers wasted money on frippery like iPhones they would be better off.

kabayiri

ruggedtoast wrote: »

If less boomers wasted money on frippery like iPhones they would be better off.

Conrad will be along shortly to explain that Boomer pension funds are invested in the likes of Apple !

Boomers don't really understand how to work these iPhone thingies, they are just trying to support the share values underpinning *all* our pensions

Loughton_Monkey

ruggedtoast wrote: »

If less boomers wasted money on frippery like iPhones they would be better off.

I find I spend rather more on Gin & Tonic and Champagne than I do on iPhones.

The Telegraph article is, however, a usual piece of ill-informed journalism, full of half truths and inconsistent logic.

He mentions a boomer on "Middle Income" with a "Reasonable Hope" of amassing a pension pot of £200,000.

Well anyone who has 'been there' knows that:

1. It's not all about pension pots, and we should talk about the whole range of "Retirement Assets". Although pension savings is 'good' from a tax angle, there are other assets like S&S ISA's and as a 'safe' balance, why hasn't this middle income earner amassed some cash in Cash ISA's over the years?
2. Even when annuity rates were more reasonable, any fool can work out that to retire at around 65 with an income of roughly one's final salary, it is essential to be thinking of roughly 20 times your current spending. A middle earner on, say, £30K would therefore need £500/£600K in retirement assets. [Say he spends £25K, then £25K less state pension is £17K. This divided by £600K is equivalent to an annuity rate of 2.8%]. In the very old days, one might have got an RPI linked annuity with a better rate, but not now.
3. So this guy is a serial "under-investor", and not a sensible planner, if he's not really considered anything until retiring, and then waltzing into the IFA to buy an annuity!
4. It is not compulsory to buy an annuity, and many would say it is the last thing you should do in the middle of a period of financial instability with record low interest rates. Drawdown keeps your options open.

I think the most crass statement in the piece is:

The unfairness lies not in the fact that the old are in aggregate so much richer than the young – this has always been the case – but that children from poorer backgrounds will generally be at a substantial disadvantage to those from richer ones

This is a totally different point. One that has nothing whatsoever to do with retirement saving. And nothing to do with "Boomers". Why on earth is it mentioned?

ruggedtoast

Truly it is a salutary lesson to hardworking Gen X and Millennial citizens to strive diligently and prudently throughout their working life. To save with probity and enthusiasm, and not to be left in a penurious retirement, inadequately provided for like the feeckless boomers before them.

Grasshoppers who fiddled while the industrious ants worked and prepared for Winter. Surely that homily has never been so apposite as now!

purch

I fail to see why, just because a guy can only afford a pair of shorts and no shoes he should be classed as impoverished.

I'm sure he has a working kidney, or retina he could sell to fund himself

System

So there are in fact two different kinds of boomer:
those who have good pensions and have pinched all the best assets, and those who aren't so well off.

Perhaps they are just ordinary people, rich and poor, like everyone else.