Estimating pension pot - fund performance

JoeCrystal

Sunnylifeover50plan wrote: »

1/ am I sure what I pay my IFA per annum? answer is yes £1250 - no idea if that's low or high. He doesn't do much apart from an annual review with me and answer a few questions.
2/ what's the benchmark gain for a medium risk mixed passive fund pa these days?

Quite low at a modest 0.25%.

[Deleted User]

bostonerimus wrote: »

I have had a pretty simple and portfolio, I can look back at my portfolio with Vanguard to 1993 and before that with TIAA-CREF and come up with a CAGR value

So how do you come up with a CAGR value? Which formulae do you use?

I am still confused. It’s very easy if you have a single up front contribution and that’s it. Then CAGR is exactly the same as XIRR, you just look at the number of years, start and final values and voila. To my knowledge you can’t calculate CAGR if you contributed or withdrew anything since 1993. Surely you did contribute over the years?

lisyloo

30 years out the range from any projections will be massive due to possible variances in inflation and growth.

A younger person should concentrate on getting the best balance they can between investing for the future, enjoying themself now and sensible contingency for the unforeseable. About 20% of men and a lower figure for women will not live until retirement age so it’s important to find the right balance.

Pensions provide great tax advantages but money is tied up until retirement which is an important downside for someone young.

I’d suggest getting the balance right is more important that worrying about forecasts which will have a massive range.

Ngozi

Similiar situation to the OP but don't know what his/her pension pot size is?
Im 34 and have £48k in my pension via work, with my retirement at 65 (67 for state).
I pay in around £68, work match it and then what ever tax relief and my projected shows as below low, medium and high;

Low - £45k with lump sum of 11,500 and 1,343 each year (god knows why its gone down with 31yrs to go)

Medium - £103k with lump sum of £25k and 3,800 each year

High - £228k with lump sum of £57k and 10,600 each year

I don't think these figures hold any value to be honest but when you read them, even with state pension on top, its pretty grim and does make you worry a bit.


My pension is invested in "BlackRock 50/50 Equity and Bond tracker."
I did have it split down between two, half was going into a BlackRock US one, which was performing ok but the supplier increased the fees so I put it all back into one.
Including my contributions, my pot has grown £8k from this time last year which I think is ok but some years its stood still.

[Deleted User]

50/50 stocks and bonds is too risky for a 34 year old, in my opinion. The risk is that the pension fund will be too small when time comes to retire. Bonds generally hold more long term risks. For example a bout of unexpected inflation could really hurt 20% of your portfolio in the long term.

bostonerimus

Deleted_User wrote: »

So how do you come up with a CAGR value? Which formulae do you use?

I am still confused. It’s very easy if you have a single up front contribution and that’s it. Then CAGR is exactly the same as XIRR, you just look at the number of years, start and final values and voila. To my knowledge you can’t calculate CAGR if you contributed or withdrew anything since 1993. Surely you did contribute over the years?

I know my portfolio and can analyse that easily from my spreadsheets and using online tools. In Vanguard been Wellesley 20%, Bond index 20%, US stock 40% and international growth 20%. I also have some very old annuity type stuff in TIAA and a cash allocation elsewhere that I haven't included.

[Deleted User]

bostonerimus wrote: »

I know my portfolio and can analyse that easily from my spreadsheets and using online tools. In Vanguard been Wellesley 20%, Bond index 20%, US stock 40% and international growth 20%. I also have some very old annuity type stuff in TIAA and a cash allocation elsewhere that I haven't included.

Fair enough. If you can derive whatever it is by knowing your portfolio then all is cool. Really what matters is that you have plenty of $s but % growth you are quoting is not necessarily meaningful. Shares and bonds did well, on that we agree.

Ngozi

Deleted_User wrote: »

50/50 stocks and bonds is too risky for a 34 year old, in my opinion. The risk is that the pension fund will be too small when time comes to retire. Bonds generally hold more long term risks. For example a bout of unexpected inflation could really hurt 20% of your portfolio in the long term.

This is just what AEGON automatically set everyones account up as, unless they were near retirement.

For the average person is very hard to know where to allocate your pot, work out the fees etc... so kind of have to place faith in someone who you'd hope knows better.

I can easily move the pot or where future investments go, I can look at performance charts etc... but when there is hundreds of options, I wouldn't know where to begin.

Thrugelmir

Ngozi wrote: »

Similiar situation to the OP but don't know what his/her pension pot size is?
Im 34 and have £48k in my pension via work, with my retirement at 65 (67 for state).
I pay in around £68, work match it and then what ever tax relief

If you work on the basis that total monthly contributions into your scheme need to be as a % half your age, i.e. 17%. Then you'll be closer to the required mark. Far easier to ease off the pedal. Than leave matters too late.

Ngozi

Thrugelmir wrote: »

If you work on the basis that total monthly contributions into your scheme need to be as a % half your age, i.e. 17%. Then you'll be closer to the required mark. Far easier to ease off the pedal. Than leave matters too late.

I'd like to contribute more but unfortunately, even if I only did 13% (other 4% from employer) I can't exactly afford to have over £200 a month going out of my pay, not right now at least