My pension pot is taking a big hit

dunstonh

This is an audacious prediction. 

No, it is not.    Indeed, it is audacious to believe that interest rates will never again get up to 7%.    How you can predict they wont ever do that again is impossible.

[Deleted User]

dunstonh said:

This is an audacious prediction. 

No, it is not.    Indeed, it is audacious to believe that interest rates will never again get up to 7%.    How you can predict they wont ever do that again is impossible.

I can’t. That’s why I didn’t.  There are 2 logical fallacies in your last point:

1. Saying one can’t predict that there will be 7% interest rates isn’t the same as predicting that there won’t be such rates.
2. “Never” is a long time.  Its completely irrelevant because people don’t live forever; nor do they take out annuities in their 90s. 

Besides, as already noted, its not the overnight rate that impacts annuities but 15/30 year bonds.   

Am I right to guess that advisers are in a position of conflict of interest when telling clients to avoid annuities? Ongoing fees for an advised portfolio of stocks and bonds would be much, much more profitable  than a one off adviser’s fee for buying an annuity. 

jim8888

I feel the OP's pain. Since retiring last year, and now having to take practical steps to spend my money instead of theoretical spreadsheet modelling where I never actually had to withdraw any real cash, I can't help but fret over my investments. I really wish there was a halfway house between rotten returning, but guaranteed, annuities and having a pension pot exposed to whatever Putin is planning to do next. What I once viewed as quite a fun pastime, monitoring my DC pot, switching funds and so on, now really feels like a massive and quite risky responsibility. 

lisyloo

Audaxer said:

garyelder said:

And my pot is still dropping and the outlook looks bleak
What should I do 

 Just don’t look 

You could think about it as opportunity to invest more to take advantage of the lower prices. 

Yep I did that yesterday.
if you are buying then don’t you want to buy as cheaply as possible?

it’s only an issue if you HAVE to sell.

SouthCoastBoy

jim8888 said:

I feel the OP's pain. Since retiring last year, and now having to take practical steps to spend my money instead of theoretical spreadsheet modelling where I never actually had to withdraw any real cash, I can't help but fret over my investments. I really wish there was a halfway house between rotten returning, but guaranteed, annuities and having a pension pot exposed to whatever Putin is planning to do next. What I once viewed as quite a fun pastime, monitoring my DC pot, switching funds and so on, now really feels like a massive and quite risky responsibility. 

Yes this is something that will impact many and as one ages it will get more difficult. The transition from dB to dc is massive and could have some economic impact if pensioners become more reluctant to spend their savings

[Deleted User]

jim8888 said:

I feel the OP's pain. Since retiring last year, and now having to take practical steps to spend my money instead of theoretical spreadsheet modelling where I never actually had to withdraw any real cash, I can't help but fret over my investments. I really wish there was a halfway house between rotten returning, but guaranteed, annuities and having a pension pot exposed to whatever Putin is planning to do next. What I once viewed as quite a fun pastime, monitoring my DC pot, switching funds and so on, now really feels like a massive and quite risky responsibility. 

There is. One can buy an annuity with half the pot. 

Bimbly

jim8888 said:

What I once viewed as quite a fun pastime, monitoring my DC pot, switching funds and so on, now really feels like a massive and quite risky responsibility. 

Indeed. Not drawing mine yet, but I am always simultaneously worried my investments are both too risky and not risky enough.

Albermarle

Bimbly said:

jim8888 said:

What I once viewed as quite a fun pastime, monitoring my DC pot, switching funds and so on, now really feels like a massive and quite risky responsibility. 

Indeed. Not drawing mine yet, but I am always simultaneously worried my investments are both too risky and not risky enough.

Which probably means you have got it about right !

Thrugelmir

bostonerimus said:

Is anyone checking annuity rates? The shifting of the financing and risk of pensions from the employer to the employee with the creeping replacement of DB pensions by DC plans and drawdown is going to lead to a lot of sleepless nights for many retirees. That's just another fact of today along with NHS waiting lines and inflation...

Tapering of Government sheets is going to result in markets absorbing copious amounts of Government debt. As a consequence interest rates will rise. 

I'd much prefer dealing with the NHS than the US healthcare system. Americanisation appear to have made you a champagne socialist. Looking in from the outside the US appears to be an increasingly divided dysfunctional society. Not somewhere I'd like to live for many decades. 

Linton

Deleted_User said:

jim8888 said:

I feel the OP's pain. Since retiring last year, and now having to take practical steps to spend my money instead of theoretical spreadsheet modelling where I never actually had to withdraw any real cash, I can't help but fret over my investments. I really wish there was a halfway house between rotten returning, but guaranteed, annuities and having a pension pot exposed to whatever Putin is planning to do next. What I once viewed as quite a fun pastime, monitoring my DC pot, switching funds and so on, now really feels like a massive and quite risky responsibility. 

There is. One can buy an annuity with half the pot. 

Or have a portfolio allocation that matches your needs.  Hold sufficient non-equity so that you can withstand a 5-10 year crash and just accept that if the world as we know it collapses then you will have to join the soup kicthen queue like most other people.