VLS results over last year shows still worthwhile holding bonds

moneyfoolish

atush wrote: »

Speak for yourself. Many others of us, of an age, think that given a retirement of 20-30+ years that we need a certain proportion of equities to make sure we dont run out of money.

I wonder just how many people when they reach retirement age merely invest just for the sake of making money they will never really need. I have pensions of around £40,000 per year pension, savings of around £235,000 and house worth around £450,000 and no mortgage. At the age of 74 do I really need to increase my money? I doubt it very much unless I want an extravagent lifestyle which I've never had nor wanted.

A_T

Linton wrote: »

It mostly talks about asset behaviour during the 2008 crash. At that time 20 year gilt yields were in the 4.5%-5.0% range, a very different situation to the current 0.9%.

the Fed and BOE rates were up in that range too.

bostonerimus

moneyfoolish wrote: »

I wonder just how many people when they reach retirement age merely invest just for the sake of making money they will never really need. I have pensions of around £40,000 per year pension, savings of around £235,000 and house worth around £450,000 and no mortgage. At the age of 74 do I really need to increase my money? I doubt it very much unless I want an extravagent lifestyle which I've never had nor wanted.

...but you could take the view that you are safe and can take risk to increase your net worth so you can pass on more to your heirs.

Prism

moneyfoolish wrote: »

I have pensions of around £40,000 per year pension, savings of around £235,000 and house worth around £450,000 and no mortgage. At the age of 74 do I really need to increase my money? I doubt it very much unless I want an extravagent lifestyle which I've never had nor wanted.

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.

itwasntme001

moneyfoolish wrote: »

I wonder just how many people when they reach retirement age merely invest just for the sake of making money they will never really need. I have pensions of around £40,000 per year pension, savings of around £235,000 and house worth around £450,000 and no mortgage. At the age of 74 do I really need to increase my money? I doubt it very much unless I want an extravagent lifestyle which I've never had nor wanted.

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.

itwasntme001

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 am guessing you are in yours 30s or 40s? I'm mid-30s and i agree that we have the disadvantage of not being able to secure DB pensions, wage inflation and the like. But if we have one thing in our favour it is the great technological advancement we are likely to see in the decades ahead which would mean low cost of living and better standards of living mainly through advancements in healthcare, automation etc.

bostonerimus

itwasntme001 wrote: »

But if we have one thing in our favour it is the great technological advancement we are likely to see in the decades ahead which would mean low cost of living and better standards of living mainly through advancements in healthcare, automation etc.

This implies we could live longer and work less. So one scenario is earning and saving less and having to fund a longer retirement - dystopian or what?

I'm in my late 50s and I've been retired since I was 52, but I have the advantage of a DB pension and rental income as a floor to my DC and other investments. I'm becoming increasingly grateful to have lived a good deal of my life already as I look around at the direction of today's politics, society and technology and I'm not sure I'm sanguine about what might be coming.

itwasntme001

bostonerimus wrote: »

This implies we could live longer and work less. So one scenario is earning and saving less and having to fund a longer retirement - dystopian or what?

I'm in my late 50s and I've been retired since I was 52, but I have the advantage of a DB pension and rental income as a floor to my DC and other investments. I'm becoming increasingly grateful to have lived a good deal of my life already as I look around at the direction of today's politics, society and technology and I'm not sure I'm sanguine about what might be coming.

Not necessarily. Improved healthcare could push up life expectancy but that could be done at low cost and improving quality of lives at the same time. Automation may get rid of low skilled jobs but it can also create new ones. Because of automation and the rise in productivity that this brings, we may not need to work longer. More wealth can be created, more then we imagined and so we can even afford to pay a basic living income to those who cant work.


I am not so sure things look as bleak as you suggest. Politics has always had its moments and we should be grateful we are more centralish rather then far left/right as is much of the western world. I don't see that changing. Technology is fast evolving so eventually the best type of technology for all of us should prevail.

grnglide

rather then far left/right as is much of the western world.

Really!


The UK has bounced from one to the other for years now. While it may be not truly extremes it isn't exactly middle of the road!

itwasntme001

grnglide wrote: »

Really!


The UK has bounced from one to the other for years now. While it may be not truly extremes it isn't exactly middle of the road!

Never said we were in the middle. But we have been and are a lot closer to the middle than at the extremes.