Shocked

blisteringblue

Thrugelmir said:

I wondered when the safe "4% drawdown" rate would materialise. Only time will tell if it was. Certainly far from "safe". 

!!!!!!. I don't know why I post on here now, I know we all need to have different ideas, but god its monotonous.   CETV isn't the devil, if you know the risks then go for it.

MarkCarnage

blisteringblue said:

Thrugelmir said:

I wondered when the safe "4% drawdown" rate would materialise. Only time will tell if it was. Certainly far from "safe". 

!!!!!!. I don't know why I post on here now, I know we all need to have different ideas, but god its monotonous.   CETV isn't the devil, if you know the risks then go for it.

I share some scepticism that 4% can be considered "safe" as a blanket statement. There is a high probability that it will be safe in most circumstances might be better way of putting it. I'm not sure that the current scenario has been seen in any of the backtesting periods, though I accept that there have been ones which have been pretty significantly negative. The historically low yields on almost all assets make me concerned about the 4% dictum. 

I would also question whether all the risks are fully understood. The phrase ' there are known knowns, unknown knowns, and unknown unknowns ' springs to mind. 
Having read more on the OP's circumstances, I share the view expressed above that taking the CETV on one pension might be a sensible middle ground, and it mirrors what I did three years ago.  Being single probably strengthens the case too. 

Thrugelmir

blisteringblue said:

Thrugelmir said:

I wondered when the safe "4% drawdown" rate would materialise. Only time will tell if it was. Certainly far from "safe". 

!!!!!!. I don't know why I post on here now, I know we all need to have different ideas, but god its monotonous.   CETV isn't the devil, if you know the risks then go for it.

Nothing at all to do with ideas. More the fact that it's reeled out as if the Holy Grail of investing has been found. Which it most certainly hasn't. I'm all for making informed decisions. However nothing like an extended bull run to breed complacency for those new to investing their own money. 

blisteringblue

Its the condescending BS that accompanies every "should I transfer a pension" post.  It's every single one.   Most like me don't bother posting because we know what is coming back.   If you read my posts I've been in DC since 2006, my pot halved in 2008 so believe me I know, yet I still chose to transfer 13K of Final Salary to a SIPP.    It recovered all within 2 years as we all know, so you make provisions for this.  I'm comfortable with all my decisions but you really should read how your posts sound, they are frankly patronising.

Thrugelmir

blisteringblue said:

Its the condescending BS that accompanies every "should I transfer a pension" post.  It's every single one.   Most like me don't bother posting because we know what is coming back.   If you read my posts I've been in DC since 2006, my pot halved in 2008 so believe me I know, yet I still chose to transfer 13K of Final Salary to a SIPP.    It recovered all within 2 years as we all know, so you make provisions for this.  I'm comfortable with all my decisions but you really should read how your posts sound, they are frankly patronising.

To be honest I don't care how you read my posts. You are entitled to your opinions as I am mine. The one certainty regarding managing ones own investments is that there is no certainty. I've been managing my own for a very long time. As didn't accrue the majority of  my DB benefits until very late in my working life. Hence my personal perspective. I know which I'd prefer to have given the choice again. 

Likewise the 4% gets rolled out without many people having any understanding of it, or holding a portfolio that in no way even comes close top replicating it. 

I lost 50% of the investment I made in a Japanese Unit trust in 1990.  Hasn't stopped me investing. Just a little wiser and more cautious. 

xylophone

I knew a very senior employee who died at the age of 95 - he joined the  firm when he was 30 and retired on full FS pension at 60.
Admittedly he was married with children being expensively educated (so the security offered to dependants was a major consideration) but I wonder how long the money would have lasted  had  he transferred out at the age of 60.

Albermarle

I'm comfortable with all my decisions but you really should read how your posts sound, they are frankly patronising.

The problem is that most of the new posters who come on after seeing some large CETV are pretty naive and inexperienced in financial matters. Often they just see the transfer value as the main benefit of the pension and do not even mention what the annual pension would be . In other words looking at it back to front.. On another live thread someone was using the pension figure given to them when they left the employer 18 years ago, without adjusting for inflation in the meantime.

In this case I think it is right that the more experienced posters take a cautionary line and make them step back and think a bit more clearly and of course question Holy Grail figures like the 4% SWR.

Maybe for the minority who have a better idea of risk, investing etc it might sound a bit patronising , then that is a price to pay for at least making others, blinded by the huge sums on offer , at least think twice.

SonOf

Actuarial advice in the UK is that 3% is considered more suitable for someone in their 50s and 3.5% in their 60s as a withdrawal rate using medium risk investments or above.

Using a the credit crunch as an example of before and after is good on the one hand.  However, there are two other scenarios that are worth modelling.   1 - dot.com style decline.  i.e. three negative years in a row.  and 2) Japan style decline. i.e. a drop in value with no recovery.
Most people making posts on DB transfers do not have any past experience of investing and virtually no understanding.  So, I make no apology about my comments and I suspect other regular posters here giving similar warnings feel the same way.

Dazed_and_C0nfused

Benny2020 said:

Why wouldn't I take the tax free money?
I have thought about taking the smaller CETV (191k) and leaving the other one.
My state pension forecast is £156 at 67.
£850k is a hell of a lot of money and much more than I was expecting.
Who would handle the transfer, I am in Lincolnshire.

Is the £156 what you have already accrued to 05:04:2019 or what you will accrue at State Pension age if you keep on working all the way to State Pension age.  You should check your forecast on gov.uk to be certain of this.

HHarry

lisyloo said:

£850k is a very nice pension, but it’s comfortable, well-off not rich when you divide it by 35 or 40 yers. Investment performance and inflation as well as longevity are risks that you are not immune to even with that amount.
btw - is that just for you or for two people.
id say it’s great for one person but not so amazing for a couple.

Surely that depends on your lifestyle and expectations? With an £850k pot and 2 x state pensions, my Wife and I would be bathing in champagne every Friday.