How long will your savings last?

sandsy

mgdavid wrote: »

eh? now who's making assumptions!!
The savvy perhaps never did those things, when we had money to burn (as you put it) we saved some and invested some, (there IS a big difference and to ignore it is financially immature) and only then spent a little. Now in retirement we can still afford new phones, new household goods when needed, and weekend breaks and indeed longer holidays (now we have the time too).

It's being reported today that pensioner inflation is one-third of that for younger people:


http://www.theguardian.com/money/2016/may/09/inflation-rate-three-times-higher-uk-millennials-pensioners

http://www.thisismoney.co.uk/money/news/article-3580806/Inflation-three-times-higher-30s-retirees.html

justwantedtosay

mgdavid wrote: »

eh? now who's making assumptions!!
The savvy perhaps never did those things, when we had money to burn (as you put it) we saved some and invested some, (there IS a big difference and to ignore it is financially immature) and only then spent a little. Now in retirement we can still afford new phones, new household goods when needed, and weekend breaks and indeed longer holidays (now we have the time too).

Dear, oh dear. I was responding to a post saying that older people's inflation was, in part at least, higher because they bought fewer manufactured goods [rather than eating too much fibre] - my assumption was that that was correct. (Apparently not according to the next post.) It also reflects my experience, personal and observed. How many pensioners do you see on the news reports of the midnight queues for the launch of the latest pointless gadget? Anyway, when you were young you didn't have the option of buying iPhones. Presumably now you buy a new phone because the old one's [nearly] died, not because it's got a new feature you don't really need.

To me, terribly immature as I am ;):D:cool::rotfl::T:(:):eek::j:shocked:, my savings are my savings, whether in the biscuit tin or in Neil Woodford's hands. If someone has put £50,000 in the building society and left it there for decades ready for their retirement, how is that not "investing"? And how is putting £25 a month into an S&S ISA to spend on a holiday in five years' time not "saving"? So is the difference, outside your expert definition, the medium or the timescale? Or, more importantly, does it matter? It's staggering how dogmatic people can be without thinking too hard about what they're so certain of.

I'm surprised you have the time for holidays, I imagined you spent all your time dispensing pearls of homespun, self righteous wisdom to your inferiors. It must be wonderful always being right.

Johnny_Doe

1. How much do you need in retirement (some of us savvy money savers can very easily live on £10k yr with holidays and treats)

2. How Long will you live? or let me rephrase that - How long will you enjoy life before Travel Insurance is too expensive and your health deteriorates so you can't actually enjoy the money..! I'm figuring anything up to aged 80 is a bonus (assuming retirement at 60 - a good 20 years of the good life). Depressing thought I know! but you have to be realistic.. If all else fails sell the house..

3. What is your personal inflation? - as someone else wrote earlier their personal expenditure hasn't changed a huge amount over a number of years..

4. Do you have debts/mortgage?

5. Could you downsize and move abroad to sunnier climes and tap into the equity of your house

More realistic example:

£300k at 60 = £15k yr over 20 yrs (taking into account savings/inflation) or £10k yr over 30 years..(pay yourself more or less some years..) ie £13k yr up to 80 £8k after 80.. should be easily enough for most. In fact compound interest should work in your favour.. - This is my goal anyway - we're all different and have different needs.

Worst case you live to 80 (with your assumed £600k fund) and still have £300k left over..

AnotherJoe

justwantedtosay wrote: »

To me, terribly immature as I am ;):D:cool::rotfl::T:(:):eek::j:shocked:, my savings are my savings, whether in the biscuit tin or in Neil Woodford's hands. If someone has put £50,000 in the building society and left it there for decades ready for their retirement, how is that not "investing"? And how is putting £25 a month into an S&S ISA to spend on a holiday in five years' time not "saving"? So is the difference, outside your expert definition, the medium or the timescale? Or, more importantly, does it matter? It's staggering how dogmatic people can be without thinking too hard about what they're so certain of.

This is a classic problem of words in common parlance that have specific meanings within a particular area, such as finance.

Here, in these forums, its generally accepted that investing means in shares, funds etc & saving means cash. Its a very useful as a way of distinguishing the different risks.

Your "savings" if in Neil Woodfords hands, might be worth 30% less next year. Or even less. If in an S123 account, you know your "investment" will be worth x+3%.

But thats can be confusing since someone not thinking it through may see Mr W got 20% last year and so put their money for their first house purchase in six months time into "savings" with Mr W and find it falls by 20%. To avoid this confusion, most here would keep it clear by investing with Mr W and saving with Santander.

You can choose to define the words you use any way you want, but then you run the risk of not being understood.

justwantedtosay

AnotherJoe wrote: »

This is a classic problem of words in common parlance that have specific meanings within a particular area, such as finance.

Here, in these forums, its generally accepted that investing means in shares, funds etc & saving means cash. Its a very useful as a way of distinguishing the different risks.

Your "savings" if in Neil Woodfords hands, might be worth 30% less next year. Or even less. If in an S123 account, you know your "investment" will be worth x+3%.

But thats can be confusing since someone not thinking it through may see Mr W got 20% last year and so put their money for their first house purchase in six months time into "savings" with Mr W and find it falls by 20%. To avoid this confusion, most here would keep it clear by investing with Mr W and saving with Santander.

You can choose to define the words you use any way you want, but then you run the risk of not being understood.

It's a fair point and if it's what the forum is used to then I'm not going to try to change you, but if I saw someone who hadn't posted many times saying he/she, or actually a hypothetical person, had saved a hypothetical amount for their retirement I wouldn't necessarily have assumed they meant all in cash - and for their argument I really don't see it mattered. Personally, if I were to differentiate at all, I might think of the act of saving as short term and investing as long term, regardless of where they are, while the actual money might be savings in the BS but investments in funds or property etc. (Actually, I might well say "I'm saving for my old age by investing in the stock market", in fact I almost did just a few lines back, though probably not "I'm investing for my retirement by saving in the building society", so I appear to be contradicting myself - I think I'm over-complicating it and am about to disappear somewhere fundamental. Lord, no wonder you stick to a sensible convention!)

I guess the poor old OP who came in for so much stick for not being precise enough is thinking something similar. I've saved for my retirement, therefore I have savings.

And I'm not giving Mr Woodford my money if he's going to lose 30% of it!

edinburgher

I guess the poor old OP who came in for so much stick for not being precise enough is thinking something similar. I've saved for my retirement, therefore I have savings.

Be honest, you're the OP on his/her 3rd account, aren't you?

justwantedtosay

edinburgher wrote: »

Be honest, you're the OP on his/her 3rd account, aren't you?

If I were the OP, why I wouldn't continue to post under that name...? I can't think how I can prove I'm not though. (Unless MSE doesn't allow multiple accounts?) I got the feeling they were single and not yet retired, but I could be wrong again. And I don't think we could live on £4k like they - can't go on with the he/she thing - claimed they did! I just thought they made a reasonable point and, as someone else said, were being picked on; "I find it disappointing that instead of realising that the OP had a lightbulb moment on the maths of returns and drawdown rates, the majority of the forum found it more entertaining to attack the OP's lack of investment terminology and tried to tie him/her up in knots." (Re that; Doesn't everyone talk about "pension savings"?) After all, they were calling themselves Please explain, not Ask me I'm a financial genius.

edinburgher

f I were the OP, why I wouldn't continue to post under that name...?

Why did the OP abandon their first account? Because people disagreed with them (or picked on them, or something else entirely, some people are just weird online and constantly jump between identities).

After all, they were calling themselves Please explain, not Ask me I'm a financial genius.

Ah, but they were acting as if they were a financial genius!

In any case, my interest in this thread has waned, I hope it lives a long and happy life, regardless of who is/isn't who :rotfl:

justwantedtosay

edinburgher wrote: »

Ah, but they were acting as if they were a financial genius!

We all fall into that trap.

bigfreddiel

This thread is getting so tedious, but you all keep feeding it!

Time to C&D methinks fj