Stress Testing your Retirement plan....have you??

OldMusicGuy

I have a spreadsheet that projects forward 32 years. I can vary the inflation rate, investment returns, interest rate, personal tax allowance and our required income in every year of the 32 years. I have done quite a bit of stress testing but to be honest, a lot of it is academic. However it does give me assurance we should be ok in many negative circumstances.

westv

Cfiresim does all the stress testing I think I might need.

Thrugelmir

Sea_Shell wrote: »

without having to work FOREVER!!!!!

Buy an annuity that coupled with your other secure income guarantees a comfortable base level. Then anything else in the pot is expendable. Who wants to spend their retirement fiddling with spreadsheets! Using the time enjoyably while you still can is far more important. Even the healthiest can be struck down without prior warning.

A_Nice_Englishman

Defined benefit pension covers the bills + a few luxuries
State pension for some more luxuries once it kicks in at 66 and a bit
Savings and investments for big ticket items
House from which equity can be released for any care needs, or sold if I go into residential care.

Main risks are high inflation (future Government inflating debt away?) devaluing my savings or a collapse in property prices. I can't see both of those happening.

Triumph13

Thrugelmir wrote: »

Who wants to spend their retirement fiddling with spreadsheets!

Some of us quite like fiddling with spreadsheets!

JoeCrystal

I am planning to start doing a spreadsheet although my hopeful retirement age is at 60 so I got 28 years to go! My goal is basically put aside combined 25% of my salary into a pension, save few hundred pounds per month into S&S ISA and keep an emergency fund of six months salary. Hopefully, I will build up enough savings to tide me over until State Pension pension kicks in at 68.

My goals are to stimulate the living cost 28 years down the line and see if I will have enough savings and investment to cover my living cost plus a little bit on top. I am really hoping that this pension forum will still be around. I cannot think of any other message boards which got this helpful community to ask about retirement and pension. Indeed, it was lurking in this board that allows me to get enough confidence to start one with an IFA!

kidmugsy

marlot wrote: »

Abolishing the state pension?

Chances are too remote to worry about.

marlot wrote: »

Making the state pension means tested [to some extent it already is, given that it is taxable]?

Conceivable.

marlot wrote: »

A stock market crash early in retirement [Sequence of returns risk]?

Easily possible, therefore a Big Thing to defend against.

marlot wrote: »

A crash in the pound?

Doesn't matter of itself; what matters is any inflation it brought in its train.

marlot wrote: »

Onset of dementia requiring a very long stay in a home?

I'm damned if I see any way around this for us except to pray it doesn't happen twice. If the first of us dies cheaply then dementia for the survivor will be paid for by the house.

marlot wrote: »

An incoming government wanting to do extensive wealth redistribution?

No euphemisms please - a Corbyn government confiscates wealth.

A likely problem that goes strangely unmentioned in such discussions is the effect on us when the Eurozone breaks up. Or the effect on us of whatever economic horrors are inflicted by Brussels to try to ensure that the Eurozone doesn't break up.

Silvertabby

“ An incoming government wanting to do extensive wealth redistribution?
Originally posted by marlot ”

No euphemisms please - a Corbyn government confiscates wealth. Posted by kidmugsy

In Labourspeak, the rich are those who don't qualify for means tested benefits and the poor are those who do.

Bravepants

Triumph13 wrote: »

Some of us quite like fiddling with spreadsheets!

I :heart2: Microsoft Excel!

Novice_investor101

My state pension age currently is 68 (expecting that'll be 70 before I get there). I've a small deferred DB pension currently valued at £3.5k a year from age 65. I'm 37 next month.
I've a DC pension receiving a combined 22% of my salary each month. This will grow as I progress my career & is all in equities seeing as I can't do anything with the money for about 20 years.

As well as those I've a S&S ISA, a LISA & 6 months salary in a fixed rate ISA as a complete disaster fund, & £1k in premium bonds as a "in case anything breaks" fund. These all have regular monthly contributions going in too.
I'll be mortgage free at the latest age 55, (overpaying so will be sooner).

My plan is to just keep building the investments. From age 70 my basic income will be covered by SP & DB, and (fingers crossed) my LISA & DC will let me retire at 60, or earlier.

The S&S is for a slush fund/enjoyment/new property if I ever want to move, which I'd like to be mortgage free.

I've no dependents & don't plan on having any. If my investments really pay off, I'll retire early & live the high life! If they don't, I reckon I'll still be ok.