The (other) Number

marlot

ONS -How long will my pension need to last?


https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/whatismylifeexpectancyandhowmightitchange/2017-12-01

badmemory

Well it would appear the grim reaper is to come for me in 4 years less a few days. Well that isn't going to happen! I think that site is just designed to scare you into being "that person" who drives everyone else in their lives mad with their - but you should or you shouldn't!

MEM62

Sanxxx wrote: »

in simple terms a £500k pot would last 20 years

Errr..... I don't think so.


Even allowing for a 2% increase in your annual income to offset inflation a £500k pension pot should last in excess of 30 years with a moderate investment portfolio. You need to get this right before you even start looking at the other assumptions.

DairyQueen

Probabilities, rather than possibilities, are my choice for LE planning. The average couple (one male, one female), with the male slightly older, can anticipate that the male will be the first to go. The female is likely to live around 3 years more than male life expectancy.

Do the maths.

However, OH and I do nor have a level playing field and my LE is likely to be some years less than average. For us, it will be a race to the finish.

Notwithstanding that, I have used genetics to make an educated guess. My father's family is long-lived; my mother's family not so. OH's maternal side is long-lived; his paternal side not so.

We have therefore based our LE's around the probability of 80-85 for each of us. However, we have contingency (LE 85-95) just in case either of us beats the odds.

drumtochty

MEM62 wrote: »

Errr..... I don't think so.


Even allowing for a 2% increase in your annual income to offset inflation a £500k pension pot should last in excess of 30 years with a moderate investment portfolio. You need to get this right before you even start looking at the other assumptions.

The poster was not making any assumptions with regards investment returns, they simply said it would last a certain time based on capital value divided by simple annual withdrawal from the initial capital value .


Therefore they are correct if someone had taken that simple approach.


They were not saying they would do that!!!!

cjking

I use the ONS calculator linked to earlier in the thread. If you specify a 54-year-old male, it gives a life expectancy of 31 years, i.e. age 85. But if you plug in age 85, it says 6 years, or 91. So by plugging my current life expectancy into my calculations each year I will gradually adjust to the evolving prediction of life expectancy.

In theory this could mean decreasing income if I live longer than was expected at the outset, but in reality because of various other measures in my plan, I don't expect that to happen. If there were any danger of low income, once life expectancy has fallen below 15 years, I'd start looking at buying annuities.

GunJack

michaels wrote: »

Hmm, thought experiment

If you had the choice of living to 100 (including the last 10 years in pretty considerable decrepitude, possibly constant pain and or alzheimers) and spending 20kpa in retirement or living to 90 (and dying of a quick and hopefully painless condition) and spending 30k pa which would you choose?

Think I'd settle for 90 in that scenario....

michaels

cjking wrote: »

I use the ONS calculator linked to earlier in the thread. If you specify a 54-year-old male, it gives a life expectancy of 31 years, i.e. age 85. But if you plug in age 85, it says 6 years, or 91. So by plugging my current life expectancy into my calculations each year I will gradually adjust to the evolving prediction of life expectancy.

In theory this could mean decreasing income if I live longer than was expected at the outset, but in reality because of various other measures in my plan, I don't expect that to happen. If there were any danger of low income, once life expectancy has fallen below 15 years, I'd start looking at buying annuities.

So by this logic does it make sense to re-estimate your life expectancy each year and adjust your drawdown accordingly much as you might due to asset price changes?

Also on retirement are there any medical tests you could take that would increase the accuracy of any longevity forecast so that you could plan accordingly? Sounds morbid but also to make perfect financial sense.

Edit: Try this calculator if you want to think that your money might have to go a long way.
http://media.nmfn.com/tnetwork/lifespan/#13

JoeEngland

michaels wrote: »

So by this logic does it make sense to re-estimate your life expectancy each year and adjust your drawdown accordingly much as you might due to asset price changes?

Also on retirement are there any medical tests you could take that would increase the accuracy of any longevity forecast so that you could plan accordingly? Sounds morbid but also to make perfect financial sense.

Edit: Try this calculator if you want to think that your money might have to go a long way.
http://media.nmfn.com/tnetwork/lifespan/#13

Month of birth may also affect life expectancy:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC30243/#!po=4.41176

Ganga

badmemory wrote: »

Well it would appear the grim reaper is to come for me in 4 years less a few days. Well that isn't going to happen! I think that site is just designed to scare you into being "that person" who drives everyone else in their lives mad with their - but you should or you shouldn't!

I think you better make plans just in case,only kidding:rotfl::rotfl::rotfl: