10 Year Plan? Am I Dreaming?

kidmugsy

jamesd wrote: »

Historic average growth of the UK stock market has been about 5% plus inflation.

Demography might make that much harder to achieve in future.

kidmugsy

10yearplan wrote: »

My plan was, once we no longer need the income/hassle to sell off 1 to pay the mortgages off the other 2 and perhaps gift them to my kids. It depends on the capital growth over the next 15-20 years as theres not enough equity there to do this yet.

Now all you have to do is guess the rate of CGT in 20 years time.

kidmugsy

kangoora wrote: »

PS I'd suggest you ignore inflation & pay-rises and work on todays money and merely assume your pots will increase/decrease by inflation + your contribution/drawdown rate, I used 3.5% drawdown to err on the safe side.

I've done some sums assuming that investment returns equal the rate of earnings inflation - so that the person concerned can keep up with a (presumably?) increasing standard of living of those still working. And then I just use, as you suggest, 'today's money". Withdrawal rate is easy as pie: 3.14% p.a.

UPDATE: you have to start somewhere, but in a way this is all fantasy. Your future might be dominated by economic or social catastrophes, or by personal travails - medical and care expenses, for example. Hey ho - it's best not to fall in love with a spreadsheet "model". And yet it would be ridiculous not to use some models, whether in spreadsheets or paper and pencil.

uk1

The most important thing the OP can do before anything else is get some basic spreadsheet skills. Everything follows from trying to understand the problem and the assumptions you then need to get to grips with and understand. Everything you do with a spreadsheet forces you to ask further questions. It constantly tells you what you do not currently know.

If you don't get to grips with a spreadsheet for your own life you are relying on not getting to grips and on second hand stuff that other people tell you on internet forums.

Build a spreadsheet and ask questions.

jamesd

kidmugsy wrote: »

Demography might make that much harder to achieve in future.

It might, though there's no constraint on just using the UK market and demographics are different in some other places. Too soon to say what the possible exodus from buying annuities will do to money in drawdown and hence probably dominated by UK shares rather than gilts and bonds held by annuity firms for much of their investing.