Die with Zero by Bill Perkins

robatwork

This particular forum is

a) Packed with expertise and free helpful advice - moreso than almost every other on MSE
b) Full of people with larger (and I'd speculate much larger) pots than most
c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

My speculations are based on many years of reading this and other forums. 

I admire your approach, but certainly am not planning to live on the state pension from age 75. It's peanuts compared to a decent final salary pension or annuity. 

Perhaps your plan should be more definite about selling at 75 and downsizing, you should be able to work out approx what you'd net if you move house, and what that pot would bring in (annuity or just drawing it down monthly).

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

SacredStephan

phlebas192 said:

Die with zero is the perfect solution, 

To what problem?

QrizB

SacredStephan said:

phlebas192 said:

Die with zero is the perfect solution, 

To what problem?

The problem of whether to disinherit anyone?

Albermarle

robatwork said:

This particular forum is

a) Packed with expertise and free helpful advice - moreso than almost every other on MSE
b) Full of people with larger (and I'd speculate much larger) pots than most
c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

My speculations are based on many years of reading this and other forums. 

I admire your approach, but certainly am not planning to live on the state pension from age 75. It's peanuts compared to a decent final salary pension or annuity. 

Perhaps your plan should be more definite about selling at 75 and downsizing, you should be able to work out approx what you'd net if you move house, and what that pot would bring in (annuity or just drawing it down monthly).

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

I would say if one was to generalise about Joe Public in this respect, then they are not big risk takers and probably either too scared of investing, or just ignore anything to do with personal finance planning/do not understand it.
A small minority of mainly younger people maybe dabbling in high risk areas, but not the majority.
We see many new  posters on here who are much too risk averse for their own good.

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

I would not dispute that though.

QrizB

dunstonh said:

Maybe a level annuity would be the better option here (or lower level indexation).

"Annuitize everything" would be one way to meet the stated goal of dying with zero, and (assuming at least some of it was a lifetime annuity) would mitigate longevity risk.

GenX0212

Albermarle said:

robatwork said:

This particular forum is

a) Packed with expertise and free helpful advice - moreso than almost every other on MSE
b) Full of people with larger (and I'd speculate much larger) pots than most
c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

My speculations are based on many years of reading this and other forums. 

I admire your approach, but certainly am not planning to live on the state pension from age 75. It's peanuts compared to a decent final salary pension or annuity. 

Perhaps your plan should be more definite about selling at 75 and downsizing, you should be able to work out approx what you'd net if you move house, and what that pot would bring in (annuity or just drawing it down monthly).

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

I would say if one was to generalise about Joe Public in this respect, then they are not big risk takers and probably either too scared of investing, or just ignore anything to do with personal finance planning/do not understand it.
A small minority of mainly younger people maybe dabbling in high risk areas, but not the majority.
We see many new  posters on here who are much too risk averse for their own good.

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

I would not dispute that though.

My personal view is that 'risk' is never properly discussed and explained when people enrol into their pensions and there is never any external prompts for people to review their position.

Ninety+ % of people probably invest in the default cautious/moderate fund when they enrol into a pension scheme. I certainly know I did. 

But if the risk had been properly discussed, historical trends/events, how long you are investing for etc, what people actually expect to have when they retire, all of the great things that are debated frequently on here then the choice may well be different.

One of the things I have noticed most often recently is the unrealistic expectations of a lot of friends and colleagues who don't really have a clue how much they will have when they retire but have ambitions of moving abroad, a cottage by the sea, a caravan by the sea etc. Many don't realise they will actually have a lot less than they currently live on.

Albermarle

GenX0212 said:

Albermarle said:

robatwork said:

This particular forum is

a) Packed with expertise and free helpful advice - moreso than almost every other on MSE
b) Full of people with larger (and I'd speculate much larger) pots than most
c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

My speculations are based on many years of reading this and other forums. 

I admire your approach, but certainly am not planning to live on the state pension from age 75. It's peanuts compared to a decent final salary pension or annuity. 

Perhaps your plan should be more definite about selling at 75 and downsizing, you should be able to work out approx what you'd net if you move house, and what that pot would bring in (annuity or just drawing it down monthly).

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

I would say if one was to generalise about Joe Public in this respect, then they are not big risk takers and probably either too scared of investing, or just ignore anything to do with personal finance planning/do not understand it.
A small minority of mainly younger people maybe dabbling in high risk areas, but not the majority.
We see many new  posters on here who are much too risk averse for their own good.

My final speculation is that plenty in here won't be dying with zero, but will be likely dying with a million. 

I would not dispute that though.

My personal view is that 'risk' is never properly discussed and explained when people enrol into their pensions and there is never any external prompts for people to review their position.

Ninety+ % of people probably invest in the default cautious/moderate fund when they enrol into a pension scheme. I certainly know I did. 

But if the risk had been properly discussed, historical trends/events, how long you are investing for etc, what people actually expect to have when they retire, all of the great things that are debated frequently on here then the choice may well be different.

One of the things I have noticed most often recently is the unrealistic expectations of a lot of friends and colleagues who don't really have a clue how much they will have when they retire but have ambitions of moving abroad, a cottage by the sea, a caravan by the sea etc. Many don't realise they will actually have a lot less than they currently live on.

This is very true. It is often said that the two biggest mistakes people make when thinking about their retirement lifestyle is:
1) They underestimate how much money/pension they will need to build up. ( often dramatically so)
2) They underestimate how long they could live.

Ninety+ % of people probably invest in the default cautious/moderate fund when they enrol into a pension scheme
There is at least one auto enrolment pension that states that 99% of its customers are in the default fund.
On the other side most default funds nowadays are reasonably growth orientated.
A lot are now based on lifestyling, so a younger member may well be in a fund with say 75% equities.

Triumph13

robatwork said:

This particular forum is
c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

I don't know about circumspect and cautious, but I'd bet good money that every last one of them would have waited for the second marshmallow.  OP seems to be very much an 'eat the first marshmallow' kind of person.

cfw1994

dunstonh said:

I would be concerned at several points
- age 75 is very early to move to breadline spending
- Breadline spending is harder to live with when you have been used to so much more.
- downsizing never delivers what the person expects unless it is really a significant amount.
- The pot is going down despite it being an above-average period for the stock market.    Even those with high draw rates should have seen stability or growth over the last 2 years.   So, this suggests an extremely high draw.

Maybe a level annuity would be the better option here (or lower level indexation).     Provides more early on and less later, but does continue to provide for life and doesn't require you to gamble your future lifestyle.

Some very good points, esp the one about the pot going down…we are up well over 15% YoY despite drawing down on it: the past 12 months have been very generous.

QrizB

Triumph13 said:

robatwork said:

This particular forum is
c) Full of very circumspect and cautious investors/retirees/soon to be retirees (I'd speculate much more cautious than the populous)

I don't know about circumspect and cautious, but I'd bet good money that every last one of them would have waited for the second marshmallow.  OP seems to be very much an 'eat the first marshmallow' kind of person.

Very nicely put! And yes, I think you're right.