Growth Rate in Drawdown

[Deleted User]

Agree with “comfortable” (although 25k is at risk if early bear markets) but let’s agree to disagree about It being “luxury”.

bostonerimus

Deleted_User wrote: »

Aghm. 55, retired and no DB pension or other income and just 0.75M of investable assets isn’t even particularly safe, let alone “luxurious” in my book. I would define “wealthy” as >10M. At that point you don’t really care what’s happening with the markets, you can afford actual luxury like a small second-hand yacht and bankers give such account holders a bit of extra love.

A "comfortable" retirement and "wealth" are a very subjective concepts and can vary greatly according to personal expectations. I feel comfortable on $40k/year from a DB pension and rent as I'm pretty certain that it will keep coming in and I have good control over my spending and a substantial DC and investment pot as a backup. Most people would class me as wealthy, but I don't live a luxurious lifestyle...the two are probably connected.

[Deleted User]

For starters, the value of your DB pension alone is worth more than GBP 750k.

bostonerimus

Deleted_User wrote: »

For starters, the value of your DB pension alone is worth more than GBP 750k.

DB pension is $20k/year, index linked, and started a couple of years ago when I was 55. My total contributions to get that were $280k. The US still has some good benefits where unions can negotiate contracts.

[Deleted User]

Ok, I misread. Was talking about $40k. So you are counting rental income but not the state pensions as part of your $40k/year?

We have a small civil service type DB from UK, around 10K GBP/yr. I used to have a rich work DB pension scheme in Canada but swapped it for commuted value when I changed jobs. Mainly because I still have a few years to go and the company felt weak/risky because of unionized Labour.

We are comfortable with quite a bit more in investable assets than what he called “luxurious” but I am 49 and there is lots of time for things to go wrong. So, I am still working but we also bought a farm and are trying to grow sales... Went from nothing 2 years ago to $20k last year. Its a start.

I like diversification, a bit like you

bostonerimus

Deleted_User wrote: »

Ok, I misread. Was talking about $40k. So you are counting rental income but not the state pensions as part of your $40k/year?

Gross annual income from rent is $20k and from my work DB pension is another $20k.

[Deleted User]

bostonerimus wrote: »

Gross annual income from rent is $20k and from my work DB pension is another $20k.

Are you drawing anything from England? What is the most efficient way to convert and transfer?

Linton

Deleted_User wrote: »

Aghm. 55, retired and no DB pension or other income and just 0.75M of investable assets isn’t even particularly safe, let alone “luxurious” in my book. I would define “wealthy” as >10M. At that point you don’t really care what’s happening with the markets, you can afford actual luxury like a small second-hand yacht and bankers give such account holders a bit of extra love.

According to data published 3 years ago, a household with more than about £3M total assets would be in the top 1% in the country. A classification that excludes more than perhaps 99.5% of people may not be too helpful, unless you have 4 or 5 other words to define lower levels of wealth.

I don’t recollect anyone claiming to be in your “wealthy” class ever asking for help from MSE. Relatively few have as much as £0.75M investable assets which you deem to be not particularly safe.

bostonerimus

Deleted_User wrote: »

Are you drawing anything from England? What is the most efficient way to convert and transfer?

Everything is from the US. I will get the UK state pension in around 10 years and that can be deposited directly to my US bank at the prevailing exchange rate.

[Deleted User]

Linton wrote: »

According to data published 3 years ago, a household with more than about £3M total assets would be in the top 1% in the country. A classification that excludes more than perhaps 99.5% of people may not be too helpful, unless you have 4 or 5 other words to define lower levels of wealth.

I don’t recollect anyone claiming to be in your “wealthy” class ever asking for help from MSE. Relatively few have as much as £0.75M investable assets which you deem to be not particularly safe.

Devils in the detail. Anyone with a good DB pension and paid up house has more than £0.75M. They just bought an “annuity” with it. Lots and lots of people like that.

And any percentage of the total number of people includes young doctors, accountants, engineers, lawyers, academics and entrepreneurs, all of whom could become well off if they work hard and invest wisely. Less than a quarter of population is in the “pension” age bracket.

There was an article in the Economist last year, asking what is the new “millionaire”? Too many people worldwide have more than $1M investable assets; because of inflation “millionnaire” no longer has the same meaning it used to. They are no longer considered “rich” by the majority of people. I seem to recall the Economist came up with $20M USD - based on how the banks treat them, not having to sweat during the bear markets and being able to afford luxury items.

In general, “poor” and “rich” ought not be based on a percentage. If we define “poor” as the poorest 10% in the country and rich as 1%, then Liberia and Luxembourg have the exact same percentage of poor and wealthy people.