VLS results over last year shows still worthwhile holding bonds

moneyfoolish

Prism wrote: »

That £40k a year makes a huge difference. I will have a pension of £0 when I retire, at least until state pension age. The only way I can provide an income for myself and family for the next 30+ years is to invest at least 50% of what I have in equities. With the death of the DB pension many more people will need to follow the same path. Its not about increasing money, its about keeping up.

I agree and I didn't say that it applied to everybody. My point was that there are many who are never satisfied with what they have and always want more whether they need it or not. I agree having a decent pension makes a huge difference.

Thrugelmir

newbinvestor wrote: »

I think hyper inflation would make bonds worthless which is my fear

No signs of hyper inflation on the horizon.

moneyfoolish

itwasntme001 wrote: »

Does the £40k include state pension? Regardless if £40k a year is all you need to live then it makes sense to take (calculated) risk with the rest of your money in order to try grow the pot. Your heirs (or the taxman) will thank you for it.

Yes. That includes my state pension and my wife's state pension which is all she has as she never had any private pension although she will get just over £17,000 of my final salary pensions if I pop off first. We could live very comfortably off this amount although we use it all because we subsidise our children who constantly struggle to make ends meet.

itwasntme001

moneyfoolish wrote: »

Yes. That includes my state pension and my wife's state pension which is all she has as she never had any private pension although she will get just over £17,000 of my final salary pensions if I pop off first. We could live very comfortably off this amount although we use it all because we subsidise our children who constantly struggle to make ends meet.

It is a good position to be in. My parents will eventually have a total income of around £45k from annuity, state pension and rent. They are naturally risk averse so when reviewing their financial position i decided to invest the cash they had built up into equities so that they are mostly in equities now. They can afford to take the risk given they have enough income from other sources.


Me and my sibling are financially ok as well so it is not like we need to rely on our parents for financial support but obviously inheritance tax is an issue which we want to avoid as much as we can.

moneyfoolish

itwasntme001 wrote: »

It is a good position to be in. My parents will eventually have a total income of around £45k from annuity, state pension and rent. They are naturally risk averse so when reviewing their financial position i decided to invest the cash they had built up into equities so that they are mostly in equities now. They can afford to take the risk given they have enough income from other sources.


Me and my sibling are financially ok as well so it is not like we need to rely on our parents for financial support but obviously inheritance tax is an issue which we want to avoid as much as we can.

My wife got a substantial inheritance from her parents (around £280,00) a few years ago but she then spent a fortune on a new kitchen and bought cheap new cars for 2 of our daughters and me (although I didn't want a new car!) but she spends lots of money on 2 of our children who rent and really struggle financially and are without any prospect of ever owning their own homes. Neither of us would have any inheritance tax to pay on the first death but if she goes before me I will then get professional advice on the best way to avoid as much IT as possible so I can leave as much as possible to the children. If I go first it won't be as easy as my wife is clueless on financial matters and has no interest. Of course, if either of us has to go into care then there will almost certainly be nothing to leave in any case!