Pension Cashflow Retirement Planner - Key Info?

GSP

cfw1994 said:

GSP said:

cfw1994 said:

BritishInvestor said:

GSP said:

Before this thread goes off on a tangent about historical occurrences, can we please keep on topic, or start another thread. Thanks
Going back, my FA has sent me in his words a ‘quick and dirty’ planner which includes just a few metrics which he using to base my future activity on. Thinking more, I assume this is based on being cautious, and he has every right to advise that.
If I came up with my own planner, results and recommendations, would he welcome I have taken the time to look through numbers in more detail, or think I am trying to undermine him. It cannot look good if I provided something more fit for purpose perhaps.
Again, he described this planner as a start. I could tell him I am filling in more detail, as long as he agrees to that.
What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings.
The bit I am uncomfortable about is basing decisions just on one set of data and given the lack of it in there, it must be flakey to say the least. I prefer two sets of data or results to tell a story. If one contradicts the other one, you know you have a problem or at least something that needs looking into. That’s the ‘beauty‘ of data, sometimes!

"What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings."
I'm not sure how he can review holdings in the absence of a comprehensive retirement plan. How would you choose a retirement portfolio that aligns with the risk you need to take (and are happy taking) without undertaking a planning exercise first? 
It would cut a large chunk of time from the retirement planning exercise so I'm all ears

I was wondering the same.
I sometimes feel that some FAs hold a Svengali-like power over their victims customers!
Why would you be happy with his behaviour when you’ve come to a MSE retirement forum to get some advice!?  Very confusing.....

Not really..... Perhaps some people on here are after opinions, advice etc, something they are not able to get indoors. Why not ask for another opinion, question what my FA is doing if it’s freely available. It’s a forum, a place where people ask, contribute, inform, help, I am quite surprised you are confused at my posts. Why are you here? Quite, information, and why not.
Anyway, moving on from what a forum is for and why we frequent here.

Oh, I’m all for the opinions we find here: some very erudite and helpful posters!

I remain confused that you “don’t want to upset the relationship”.  
The relationship is that you are paying him for a service, and the ‘quick and dirty’ work he appears to have done for you have raised question marks in your head that you appear concerned about yet unable to raise with him for fear of...what?

You appear concerned that you might be better at planning than him, and he might take offence.  Perhaps he will....or perhaps he might be grateful for you doing his work for him!! 
To me, that sounds like you are ready to fly free and DIY.......what % could that save you every year?

Alternatively: why not discuss with him?  Surely a good relationship would make that a useful conversation?

My offer from page 1 to share a simple spreaddie that could perhaps be of interest still stands....others have mentioned theirs....what other snippets do you hope to glean here?

Some really good points here thanks.
I see FA’s as all working in the same shop, but it’s dependant on who serves you at the time as for service and capability. Maybe a bit pot luck in there where you seek and choose an FA.
For seeing a retirement planner into my fourth year of drawdown, is that acceptable?
I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?
The relationship, writing these out now has certainly given me food for thought. Perhaps I am too loyal and without knowing are FA’s fairly similar, so it’s not worth going to another if the service is the same.
When we started, I understood he would retire in 5 years so unless his plans have changed that makes it two years before he goes. Perhaps I should start sounding that out.

BritishInvestor

GSP said:

cfw1994 said:

GSP said:

cfw1994 said:

BritishInvestor said:

GSP said:

Before this thread goes off on a tangent about historical occurrences, can we please keep on topic, or start another thread. Thanks
Going back, my FA has sent me in his words a ‘quick and dirty’ planner which includes just a few metrics which he using to base my future activity on. Thinking more, I assume this is based on being cautious, and he has every right to advise that.
If I came up with my own planner, results and recommendations, would he welcome I have taken the time to look through numbers in more detail, or think I am trying to undermine him. It cannot look good if I provided something more fit for purpose perhaps.
Again, he described this planner as a start. I could tell him I am filling in more detail, as long as he agrees to that.
What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings.
The bit I am uncomfortable about is basing decisions just on one set of data and given the lack of it in there, it must be flakey to say the least. I prefer two sets of data or results to tell a story. If one contradicts the other one, you know you have a problem or at least something that needs looking into. That’s the ‘beauty‘ of data, sometimes!

"What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings."
I'm not sure how he can review holdings in the absence of a comprehensive retirement plan. How would you choose a retirement portfolio that aligns with the risk you need to take (and are happy taking) without undertaking a planning exercise first? 
It would cut a large chunk of time from the retirement planning exercise so I'm all ears

I was wondering the same.
I sometimes feel that some FAs hold a Svengali-like power over their victims customers!
Why would you be happy with his behaviour when you’ve come to a MSE retirement forum to get some advice!?  Very confusing.....

Not really..... Perhaps some people on here are after opinions, advice etc, something they are not able to get indoors. Why not ask for another opinion, question what my FA is doing if it’s freely available. It’s a forum, a place where people ask, contribute, inform, help, I am quite surprised you are confused at my posts. Why are you here? Quite, information, and why not.
Anyway, moving on from what a forum is for and why we frequent here.

Oh, I’m all for the opinions we find here: some very erudite and helpful posters!

I remain confused that you “don’t want to upset the relationship”.  
The relationship is that you are paying him for a service, and the ‘quick and dirty’ work he appears to have done for you have raised question marks in your head that you appear concerned about yet unable to raise with him for fear of...what?

You appear concerned that you might be better at planning than him, and he might take offence.  Perhaps he will....or perhaps he might be grateful for you doing his work for him!! 
To me, that sounds like you are ready to fly free and DIY.......what % could that save you every year?

Alternatively: why not discuss with him?  Surely a good relationship would make that a useful conversation?

My offer from page 1 to share a simple spreaddie that could perhaps be of interest still stands....others have mentioned theirs....what other snippets do you hope to glean here?

Some really good points here thanks.
I see FA’s as all working in the same shop, but it’s dependant on who serves you at the time as for service and capability. Maybe a bit pot luck in there where you seek and choose an FA.
For seeing a retirement planner into my fourth year of drawdown, is that acceptable?
I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?
The relationship, writing these out now has certainly given me food for thought. Perhaps I am too loyal and without knowing are FA’s fairly similar, so it’s not worth going to another if the service is the same.
When we started, I understood he would retire in 5 years so unless his plans have changed that makes it two years before he goes. Perhaps I should start sounding that out.

"Maybe a bit pot luck in there where you seek and choose an FA."
It's not if you know what to look for.
"For seeing a retirement planner into my fourth year of drawdown, is that acceptable?"
I think it's a bit of a stretch to class him as a retirement planner. It's a specialised area, IMO, much like an IFA that specialises in divorce. 
"I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?"
Can you give a high-level example?

GSP

BritishInvestor said:

GSP said:

cfw1994 said:

BritishInvestor said:

GSP said:

Before this thread goes off on a tangent about historical occurrences, can we please keep on topic, or start another thread. Thanks
Going back, my FA has sent me in his words a ‘quick and dirty’ planner which includes just a few metrics which he using to base my future activity on. Thinking more, I assume this is based on being cautious, and he has every right to advise that.
If I came up with my own planner, results and recommendations, would he welcome I have taken the time to look through numbers in more detail, or think I am trying to undermine him. It cannot look good if I provided something more fit for purpose perhaps.
Again, he described this planner as a start. I could tell him I am filling in more detail, as long as he agrees to that.
What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings.
The bit I am uncomfortable about is basing decisions just on one set of data and given the lack of it in there, it must be flakey to say the least. I prefer two sets of data or results to tell a story. If one contradicts the other one, you know you have a problem or at least something that needs looking into. That’s the ‘beauty‘ of data, sometimes!

"What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings."
I'm not sure how he can review holdings in the absence of a comprehensive retirement plan. How would you choose a retirement portfolio that aligns with the risk you need to take (and are happy taking) without undertaking a planning exercise first? 
It would cut a large chunk of time from the retirement planning exercise so I'm all ears

I was wondering the same.
I sometimes feel that some FAs hold a Svengali-like power over their victims customers!
Why would you be happy with his behaviour when you’ve come to a MSE retirement forum to get some advice!?  Very confusing.....

Not really..... Perhaps some people on here are after opinions, advice etc, something they are not able to get indoors. Why not ask for another opinion, question what my FA is doing if it’s freely available. It’s a forum, a place where people ask, contribute, inform, help, I am quite surprised you are confused at my posts. Why are you here? Quite, information, and why not.
Anyway, moving on from what a forum is for and why we frequent here.

The fact that you have identified potential concerns is a positive step. I recently heard of a broadly similar case where someone had been offered a full financial planning exercise (it was free so I assume it was used as a hook to sell a product) and the person in question found it so poor he abandoned it halfway through. I understand that he was a clued up individual so could understand that things weren't heading in the right direction. Others may not be so lucky and I think a poor planning exercise can be worse than not planning at all as it can give a false of security.

The way I see it you have 3 choices
1. Stick with the adviser and hope you can come to a reasonable outcome, with support from here
2. Terminate the relationship and find a professional that can offer a retirement planning service which gives you the confidence to enjoy your retirement (and you not spend so much time on here )
3. Terminate the relationship and DIY, with support from here.

3. is definitely off the menu thanks BI! No capability and skill for understanding things here. As I have just put in my last post he was due to retire in a couple of years unless his plans have changed. Perhaps I should bring that into a conversation very soon which might make or force me into seeking another FA.

GSP

jamesd said:

GSP said:

Going back to my OP, what would you consider to be the key metrics to create a planner? One observation when constructing, surely certain numbers need to be calculated separately. My FA came up with a real return figure of 1% which appeared to be growth of 3% less 2% inflation and applied every year for forty years. £36,000 outgoings remained constant as well. Surely the inflation relates to the outgoings, and the growth for the fund should be left alone with outgoings plus inflation deducted?

Key is your anticipated spending and of course it's fine to adjust that.

Investment returns are normally expressed as x plus inflation in this sort of planning and what he's doing is keeping the pot value expressed  in todays money a well as the spending. £36k is constant in today's money because inflation adjustments are being applied throughout. He's doing that correctly.

The key risk isn't the investment volatility that risk questions tend to be about but what the probability is of your plan succeeding. If 50:50 equities:bonds won't do it then the SWR can be increased by  increasing equities to 60% or perhaps 70%. Trading off higher investment volatility for lower risk of plan failure. If that volatility gets outside acceptable bounds, either the failure chance (adjustment beyond drawdown rules) must be accepted or the spending plan revised.

It's this sort of risk to the plan driving investment allocation that I think BritishInvestor has been getting  at. It's what can lead someone to recognise that quite low investment risk or partial or total annuitisation can do the job.

Thanks James. I would have thought the fund should be left on its own with whatever growth calculation applied. It’s the outgoings that are going to be affected by inflation, so shouldn’t this be applied here?

GSP

BritishInvestor said:

GSP said:

cfw1994 said:

GSP said:

cfw1994 said:

BritishInvestor said:

GSP said:

Before this thread goes off on a tangent about historical occurrences, can we please keep on topic, or start another thread. Thanks
Going back, my FA has sent me in his words a ‘quick and dirty’ planner which includes just a few metrics which he using to base my future activity on. Thinking more, I assume this is based on being cautious, and he has every right to advise that.
If I came up with my own planner, results and recommendations, would he welcome I have taken the time to look through numbers in more detail, or think I am trying to undermine him. It cannot look good if I provided something more fit for purpose perhaps.
Again, he described this planner as a start. I could tell him I am filling in more detail, as long as he agrees to that.
What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings.
The bit I am uncomfortable about is basing decisions just on one set of data and given the lack of it in there, it must be flakey to say the least. I prefer two sets of data or results to tell a story. If one contradicts the other one, you know you have a problem or at least something that needs looking into. That’s the ‘beauty‘ of data, sometimes!

"What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings."
I'm not sure how he can review holdings in the absence of a comprehensive retirement plan. How would you choose a retirement portfolio that aligns with the risk you need to take (and are happy taking) without undertaking a planning exercise first? 
It would cut a large chunk of time from the retirement planning exercise so I'm all ears

I was wondering the same.
I sometimes feel that some FAs hold a Svengali-like power over their victims customers!
Why would you be happy with his behaviour when you’ve come to a MSE retirement forum to get some advice!?  Very confusing.....

Not really..... Perhaps some people on here are after opinions, advice etc, something they are not able to get indoors. Why not ask for another opinion, question what my FA is doing if it’s freely available. It’s a forum, a place where people ask, contribute, inform, help, I am quite surprised you are confused at my posts. Why are you here? Quite, information, and why not.
Anyway, moving on from what a forum is for and why we frequent here.

Oh, I’m all for the opinions we find here: some very erudite and helpful posters!

I remain confused that you “don’t want to upset the relationship”.  
The relationship is that you are paying him for a service, and the ‘quick and dirty’ work he appears to have done for you have raised question marks in your head that you appear concerned about yet unable to raise with him for fear of...what?

You appear concerned that you might be better at planning than him, and he might take offence.  Perhaps he will....or perhaps he might be grateful for you doing his work for him!! 
To me, that sounds like you are ready to fly free and DIY.......what % could that save you every year?

Alternatively: why not discuss with him?  Surely a good relationship would make that a useful conversation?

My offer from page 1 to share a simple spreaddie that could perhaps be of interest still stands....others have mentioned theirs....what other snippets do you hope to glean here?

Some really good points here thanks.
I see FA’s as all working in the same shop, but it’s dependant on who serves you at the time as for service and capability. Maybe a bit pot luck in there where you seek and choose an FA.
For seeing a retirement planner into my fourth year of drawdown, is that acceptable?
I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?
The relationship, writing these out now has certainly given me food for thought. Perhaps I am too loyal and without knowing are FA’s fairly similar, so it’s not worth going to another if the service is the same.
When we started, I understood he would retire in 5 years so unless his plans have changed that makes it two years before he goes. Perhaps I should start sounding that out.

"Maybe a bit pot luck in there where you seek and choose an FA."
It's not if you know what to look for.
"For seeing a retirement planner into my fourth year of drawdown, is that acceptable?"
I think it's a bit of a stretch to class him as a retirement planner. It's a specialised area, IMO, much like an IFA that specialises in divorce. 
"I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?"
Can you give a high-level example?

Higher levels of money appearing in the cash account (for whatever reason) and not invested. Admittedly, two errors by the provider between pre and post retirement funds, but not picked up by FA. The first error happened ten months before. It was me that questioned why the crystallised money from the pre retirement fund hadn’t moved over to post retirement. I had expected him to have an eye and handle on it and not have to spot these myself. 

cfw1994

GSP said:

BritishInvestor said:

GSP said:

cfw1994 said:

GSP said:

cfw1994 said:

BritishInvestor said:

GSP said:

Before this thread goes off on a tangent about historical occurrences, can we please keep on topic, or start another thread. Thanks
Going back, my FA has sent me in his words a ‘quick and dirty’ planner which includes just a few metrics which he using to base my future activity on. Thinking more, I assume this is based on being cautious, and he has every right to advise that.
If I came up with my own planner, results and recommendations, would he welcome I have taken the time to look through numbers in more detail, or think I am trying to undermine him. It cannot look good if I provided something more fit for purpose perhaps.
Again, he described this planner as a start. I could tell him I am filling in more detail, as long as he agrees to that.
What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings.
The bit I am uncomfortable about is basing decisions just on one set of data and given the lack of it in there, it must be flakey to say the least. I prefer two sets of data or results to tell a story. If one contradicts the other one, you know you have a problem or at least something that needs looking into. That’s the ‘beauty‘ of data, sometimes!

"What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings."
I'm not sure how he can review holdings in the absence of a comprehensive retirement plan. How would you choose a retirement portfolio that aligns with the risk you need to take (and are happy taking) without undertaking a planning exercise first? 
It would cut a large chunk of time from the retirement planning exercise so I'm all ears

I was wondering the same.
I sometimes feel that some FAs hold a Svengali-like power over their victims customers!
Why would you be happy with his behaviour when you’ve come to a MSE retirement forum to get some advice!?  Very confusing.....

Not really..... Perhaps some people on here are after opinions, advice etc, something they are not able to get indoors. Why not ask for another opinion, question what my FA is doing if it’s freely available. It’s a forum, a place where people ask, contribute, inform, help, I am quite surprised you are confused at my posts. Why are you here? Quite, information, and why not.
Anyway, moving on from what a forum is for and why we frequent here.

Oh, I’m all for the opinions we find here: some very erudite and helpful posters!

I remain confused that you “don’t want to upset the relationship”.  
The relationship is that you are paying him for a service, and the ‘quick and dirty’ work he appears to have done for you have raised question marks in your head that you appear concerned about yet unable to raise with him for fear of...what?

You appear concerned that you might be better at planning than him, and he might take offence.  Perhaps he will....or perhaps he might be grateful for you doing his work for him!! 
To me, that sounds like you are ready to fly free and DIY.......what % could that save you every year?

Alternatively: why not discuss with him?  Surely a good relationship would make that a useful conversation?

My offer from page 1 to share a simple spreaddie that could perhaps be of interest still stands....others have mentioned theirs....what other snippets do you hope to glean here?

Some really good points here thanks.
I see FA’s as all working in the same shop, but it’s dependant on who serves you at the time as for service and capability. Maybe a bit pot luck in there where you seek and choose an FA.
For seeing a retirement planner into my fourth year of drawdown, is that acceptable?
I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?
The relationship, writing these out now has certainly given me food for thought. Perhaps I am too loyal and without knowing are FA’s fairly similar, so it’s not worth going to another if the service is the same.
When we started, I understood he would retire in 5 years so unless his plans have changed that makes it two years before he goes. Perhaps I should start sounding that out.

"Maybe a bit pot luck in there where you seek and choose an FA."
It's not if you know what to look for.
"For seeing a retirement planner into my fourth year of drawdown, is that acceptable?"
I think it's a bit of a stretch to class him as a retirement planner. It's a specialised area, IMO, much like an IFA that specialises in divorce. 
"I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?"
Can you give a high-level example?

Higher levels of money appearing in the cash account (for whatever reason) and not invested. Admittedly, two errors by the provider between pre and post retirement funds, but not picked up by FA. The first error happened ten months before. It was me that questioned why the crystallised money from the pre retirement fund hadn’t moved over to post retirement. I had expected him to have an eye and handle on it and not have to spot these myself. 

Perhaps easily slipped....kind of reinforces my *personal* belief that the best FA you can ever have would be yourself - it's in YOUR interest to know this stuff!   
(also aware that for many people, that might also be the worst FA they have.....depends on personal traits, I suspect!).
It does sound to me like you are approaching the end of the road for this FA.   Maybe do some research to find a replacement - be sure to find an IFA, not FA, and given you have used this one for some time, you should know what the going rate for costs should be. I'd still chose DIY, but you are clearly against that, which is fine.  Good luck!

GSP

cfw1994 said:

GSP said:

BritishInvestor said:

GSP said:

cfw1994 said:

GSP said:

cfw1994 said:

BritishInvestor said:

GSP said:

Before this thread goes off on a tangent about historical occurrences, can we please keep on topic, or start another thread. Thanks
Going back, my FA has sent me in his words a ‘quick and dirty’ planner which includes just a few metrics which he using to base my future activity on. Thinking more, I assume this is based on being cautious, and he has every right to advise that.
If I came up with my own planner, results and recommendations, would he welcome I have taken the time to look through numbers in more detail, or think I am trying to undermine him. It cannot look good if I provided something more fit for purpose perhaps.
Again, he described this planner as a start. I could tell him I am filling in more detail, as long as he agrees to that.
What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings.
The bit I am uncomfortable about is basing decisions just on one set of data and given the lack of it in there, it must be flakey to say the least. I prefer two sets of data or results to tell a story. If one contradicts the other one, you know you have a problem or at least something that needs looking into. That’s the ‘beauty‘ of data, sometimes!

"What I don’t want to do is upset the relationship though. I am happy with the way he has reviewed my holdings."
I'm not sure how he can review holdings in the absence of a comprehensive retirement plan. How would you choose a retirement portfolio that aligns with the risk you need to take (and are happy taking) without undertaking a planning exercise first? 
It would cut a large chunk of time from the retirement planning exercise so I'm all ears

I was wondering the same.
I sometimes feel that some FAs hold a Svengali-like power over their victims customers!
Why would you be happy with his behaviour when you’ve come to a MSE retirement forum to get some advice!?  Very confusing.....

Not really..... Perhaps some people on here are after opinions, advice etc, something they are not able to get indoors. Why not ask for another opinion, question what my FA is doing if it’s freely available. It’s a forum, a place where people ask, contribute, inform, help, I am quite surprised you are confused at my posts. Why are you here? Quite, information, and why not.
Anyway, moving on from what a forum is for and why we frequent here.

Oh, I’m all for the opinions we find here: some very erudite and helpful posters!

I remain confused that you “don’t want to upset the relationship”.  
The relationship is that you are paying him for a service, and the ‘quick and dirty’ work he appears to have done for you have raised question marks in your head that you appear concerned about yet unable to raise with him for fear of...what?

You appear concerned that you might be better at planning than him, and he might take offence.  Perhaps he will....or perhaps he might be grateful for you doing his work for him!! 
To me, that sounds like you are ready to fly free and DIY.......what % could that save you every year?

Alternatively: why not discuss with him?  Surely a good relationship would make that a useful conversation?

My offer from page 1 to share a simple spreaddie that could perhaps be of interest still stands....others have mentioned theirs....what other snippets do you hope to glean here?

Some really good points here thanks.
I see FA’s as all working in the same shop, but it’s dependant on who serves you at the time as for service and capability. Maybe a bit pot luck in there where you seek and choose an FA.
For seeing a retirement planner into my fourth year of drawdown, is that acceptable?
I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?
The relationship, writing these out now has certainly given me food for thought. Perhaps I am too loyal and without knowing are FA’s fairly similar, so it’s not worth going to another if the service is the same.
When we started, I understood he would retire in 5 years so unless his plans have changed that makes it two years before he goes. Perhaps I should start sounding that out.

"Maybe a bit pot luck in there where you seek and choose an FA."
It's not if you know what to look for.
"For seeing a retirement planner into my fourth year of drawdown, is that acceptable?"
I think it's a bit of a stretch to class him as a retirement planner. It's a specialised area, IMO, much like an IFA that specialises in divorce. 
"I’ve found things wrong with the holdings a few times now that he wasn’t on top of, is that acceptable?"
Can you give a high-level example?

Higher levels of money appearing in the cash account (for whatever reason) and not invested. Admittedly, two errors by the provider between pre and post retirement funds, but not picked up by FA. The first error happened ten months before. It was me that questioned why the crystallised money from the pre retirement fund hadn’t moved over to post retirement. I had expected him to have an eye and handle on it and not have to spot these myself. 

Perhaps easily slipped....kind of reinforces my *personal* belief that the best FA you can ever have would be yourself - it's in YOUR interest to know this stuff!   
(also aware that for many people, that might also be the worst FA they have.....depends on personal traits, I suspect!).
It does sound to me like you are approaching the end of the road for this FA.   Maybe do some research to find a replacement - be sure to find an IFA, not FA, and given you have used this one for some time, you should know what the going rate for costs should be. I'd still chose DIY, but you are clearly against that, which is fine.  Good luck!

Thanks. In truth, after paying someone to look after this I didn’t really expect to have to keep a lot of eye on it myself. But as you say it has forced me to take more of an interest where I have learned things from before, but just to protect my interests.

jamesd

GSP said:

jamesd said:

Investment returns are normally expressed as x plus inflation in this sort of planning and what he's doing is keeping the pot value expressed  in todays money a well as the spending. £36k is constant in today's money because inflation adjustments are being applied throughout. He's doing that correctly.

Thanks James. I would have thought the fund should be left on its own with whatever growth calculation applied. It’s the outgoings that are going to be affected by inflation, so shouldn’t this be applied here?

You can do it for pot or spending but it's normally done with the pot to keep everything in today's money. If you do spending instead it's a lot harder to follow the spending power.

GSP

jamesd said:

GSP said:

jamesd said:

Investment returns are normally expressed as x plus inflation in this sort of planning and what he's doing is keeping the pot value expressed  in todays money a well as the spending. £36k is constant in today's money because inflation adjustments are being applied throughout. He's doing that correctly.

Thanks James. I would have thought the fund should be left on its own with whatever growth calculation applied. It’s the outgoings that are going to be affected by inflation, so shouldn’t this be applied here?

You can do it for pot or spending but it's normally done with the pot to keep everything in today's money. If you do spending instead it's a lot harder to follow the spending power.

Thanks James. But applying the inflation % to the bigger number with the pot, wouldn’t that give a far different result i.e. 2% off c£700k v 2% off £36k?

GSP

This is interesting yet eye opening looking at certain data.
I was interested in how my wife and my funds have grown since we started just over 3 years ago. Our holdings are identical and as she is yet to drawdown, its a clean run of data with just fees excluded.
It really is interesting at the point in time you calculate growth from, such different results.
2019 data is not there but according to Moneyfacts data, average pension growth fund for 2018 (which I assume is end Dec 97 to end Dec 98) was -6.2%. This stacks up well with numbers from my wife’s fund of -5.9%.
When you compare growth at the point we were invested to year end, the results are quite different.
With fees included

Year on Year Growth Aug 17-18  3.8%.
YoY 18 -5.9%.
The big driver in this appears to a dip in Dec 18 (anyone know what that was), but while the Aug on Aug balance was c£5k higher, Dec on Dec was down c£10k.
My question is, if basing any decisions, shouldn’t this be from when your fund was invested or should you use the end year stats, though as you can see they can tell a different story?

Here is the rest of the Moneyfacts data. Is this more about catching things right.

Calendar year	% pension fund growth
2018	-6.2%
2017	10.5%
2016	15.7%
2015	2.6%
2014	5.8%
2013	13.9%
2012	10.8%
2011	-4.6%
2010	13.8%
2009	22.3%
2008	-19.7%