Pension growth question

Thrugelmir

Create your own good fortune by saving a reasonable % of your earnings over your entire working life.  This you can control. Stock markets, inflation and global growth are out of direct control and influence.  

Over the years I've targeted a return of an annual net return of 2% above inflation. Where this wasn't achieved , i.e. because the value of the portfolio fell, I tried wherever possible to up the amount I saved monthly. However small it might be, to compensate. 
I've never assumed anything.  Stock markets like life itself is full of uncertainties. 

If you understand the principles of compounding fully. You'll appreciate that the later you leave drawdown, the greater you portfolio is likely to grow. By sizable sums as well. 

El_Torro

I assume 5% growth, including fund and platform fees. Inflation of 2%, so net growth of 3% after inflation.

A lot of points have already been made on this thread about what you can and can't control. I'd argue that for many of us the amount you pay into your pension / other investments is also difficult to project with great certainty, especially the longer in the future you look.

You might get a promotion, allowing you to pay more into your pension. Or you might be made redundant in your 50s or 60s, and find it difficult to get a new job. Or you might be single and think you'll never have kids, and this then changes too. 

So yeah, all you can do is make sensible assumptions based on what you know today. Just prepare to be flexible when the unexpected happens.

randompenitent

Long term, around 3% over inflation, after costs. 
Of course, the one thing you can guarantee is that in the short term, returns will be all over the place, and in the medium term nowhere near your average. So safe withdrawal rates, as mentioned by @jamesd earlier in the thread, may help prevent alternating between panic and euphoria in successive years as things bump around.

shinytop

I have a growth column in my drawdown spreadsheet that represents a single figure after inflation and costs for the whole portfolio.  I use 1-2 per cent for the next 30 years, with a few negatives thrown in if I'm feeling pessimistic.   I'm about 55% of my total (including cash) in equities  although will move towards 60.

arnoldy

I assume 7% growth - basically the long term average on FTSE All share although the outcome over the last few years has beaten that. I assume inflation 2% and costs <<0.2% as I hold mainly individual US, UK and European shares in a SIPP.
Make sure you use the advantage of the individual private investor: you can move quickly on dips and spikes and buy/sell in meaningful quantities - which the fund managers can never do. Also try and bias towards smaller and mid cap - which again big funds will struggle with.

Prism

I make no assumptions at all. It will be what it will be. My historical rate is 8% but that tells me nothing about the future

[Deleted User]

Apart from everything else, we have just had a fundamental change in monetary policy. Federal Reserve and several other central banks have just changed from an inflation based target to a growth based objective.  Recent datasets are no longer valid because the rules of the game have changed. 

TBC15

The games the same, you don’t know what will happen tomorrow.

1813

I dont have a dc or private pension, i have 2 db pensions, one small, one medium sized and with the state pension (18 years contributed) included in this, i see this as a reasonable projection :
DB Pension 1: £967
DB Pension 2: £6604
State Pension: £8486

Thought i would throw db pensions into the mix, too. I am 38 so at least time is on my side.

itwasntme001

In my late 30s and have a sizeable portfolio for my age (into the 7 figures).  Have averaged around 8% pa for last 6 years (as far back as I have records) plus I did the majority of my investments in 2016/17/18 (that's when I earnt substantial bonuses etc).  So my actual performance figures should be a lot higher as my 8% pa assumed the investments were made exactly 6 years ago.

I will now be happy for the pot to grow in line with inflation only (which I suspect won't be that easy...) to hold its real value as I have enough to retire early, but will still continue to work.