Cash valuation transfer out of final salary scheme

jamesd

aldershot wrote: »

Can you tell me which low risk investments (ie not to risk savings) are offering real yields of 1 to 2 per cent?
Long term index linked gilts currently yield minus 1.8%.

For income drawdown that choice typically wouldn't be made for all of the money because once you go much below 60% equities you start to more significantly reduce the safe withdrawal rate. Instead you can achieve a better result by combining:

1. safe withdrawal rates
2. state pension deferral
3. gradual annuity buying
4. a year or two of cash buffer that's topped up normally by dividends and bond interest

The state pension and annuities provide a protected income floor, the cash then bonds avoid the need to sell during an equity downturn while the SWR provides a well understood income potential.

aldershot

jamesd wrote: »

For income drawdown that choice typically wouldn't be made for all of the money because once you go much below 60% equities you start to more significantly reduce the safe withdrawal rate. Instead you can achieve a better result by combining:

1. safe withdrawal rates
2. state pension deferral
3. gradual annuity buying
4. a year or two of cash buffer that's topped up normally by dividends and bond interest

The state pension and annuities provide a protected income floor, the cash then bonds avoid the need to sell during an equity downturn while the SWR provides a well understood income potential.

I understand that and those are certainly sensible and practical mitigations. My point was that there are no risk free real returns available. Real yields are very negative and so we all have move further down the risk curve to achieve a real return.

jamesd

aldershot wrote: »

My point was that there are no risk free real returns available. Real yields are very negative and so we all have move further down the risk curve to achieve a real return.

Yes.

Except for small amounts using regular savings accounts or for those that have them, mortgage offset accounts.

VikingWood65

Sorry to jump in on this thread all, I too have a similar situation to Mick70. However my CETV multiplier is nowhere near that level. I am 54, have been quoted a forecasted pension in 2030 of circa £31,000 and they offered my £507,000 CETV. I have just requested a further CETV a year later as I am approaching my 55th and want to know whethere to transfer to my current SIPP which also has around £200k in it.This gives me acces to a good sum to pay off my mortage and start living today as I intend to keep working as a consultant post 65 if I need to. However, the quotes I am getting for a repprt are circa £15-20k which to me is a captive sitiation for the financial industry as even as a consultant in a specialist market myslef, I couldnt kustify charging that much for a 30 page report which in the mainn would be fairly generic with the exception of the numbers based on my circumstances themselves. Seems like a massive con to me given I know what I am doing, understand the risks but then I have to rely on losing £15k for the priveledge od someone else telling me what i already know. Is it essential to pay this much for a report? My FA won't do this either as he is telling me that mahy FA's are dropping out due it being seen as the next PPI risk area and that you need many qualifications to carry out such an anlysis. Thanks all. Mike

Dazed_and_confused

Why the duplicate post?