How Much Can I Spend in Retirement with £500k Pension?

[@AlexNorman-Jones]

If you would like me to model a particular scenario you would find interesting for other videos, let me know! Thanks Alex

[@thepropertyflipper]

The PLSA set down 3 lifestyle types that I think have just been updated. I've not seen anyone link the amounts of pension savings ( SIPP, Company, ISAs etc) that would be needed to sustain these lifestyles, maybe at early retirement ( say 60) and at state pension age. To me there seems to be a massive disconnect between anticipated lifestyle and pension savings. I know of loads of people who either don't have pension ( self employed) or have a pittance saved up. Nobody seems to be talking about this pension time bomb. I'm guessing that most IFAs' and / or pension advisors on YT only work with relatively wealthy customers ( it makes more sense as a business - I get it), but there are huge parts of society that have nowhere near enough saved and will be really struggling going into later years. It would make an interesting video to look behind the numbers and see what's really happening. Been loving the videos so far - thanks.

[@AlexNorman-Jones]

@@thepropertyflipper sorry missed this comment. ok ill have a look at a video based on the lower end of the living standards survey! Thanks for the feedback!

[@BendyChoy]

Retirement planning is an important aspect of financial stability. It’s crucial to make informed decisions and seek expert advice.

[@BarbaraPearson55]

It is very crucial to know that planning to earn in today's market is an intricate process that necessitates not only strategic foresight but also expert guidance. It's paramount to align ourselves with seasoned financial advisors who can steer our investments toward optimal growth.

[@ZhannaDavidova]

Indeed, Recessions have a way of affecting people's financial stability and investment portfolios in profound ways.

[@ClayneBanks]

It's crucial for individuals to diversify their portfolios, seek professional financial advice, and stay informed about market trends to navigate these challenges effectively.

[@sebastiaanthijn7982]

How did you find a good finance advisor? How do you know if they are trustworthy and competent.

[@cherylhills3227]

I also started out with Eric Paul Elmer,great advisor. I got very lucky to have found him especially after my marriage crisis & consider him a good friend now.

[@Abdul_Rahman86]

If you put 500k into a dividend etf. A decent dividend paying etf is probably 4%. You’ll receive £1666.66 per month. There are higher paying dividend funds out there but usually ones that pay 4% tend to appreciate over time too. This is a very broad generalisation by the way.

[@AG-so4gl]

I sold up cashed in my chips , heading to SE Asia. Make your hard earned savings work even harder for you. Live a quality early retired life for 2k a month

[@AlexNorman-Jones]

nice - where abouts went 10 years ago....crikey that does make me feel old....

[@martinbower2915]

I'm looking for a cashflow planning tool similar to cashcalc which is availible to end users rather than financial planners. Rather than modelling our own cashflows, are there any online tools we can use ?

[@dtlittle8]

Hey Alex - do you factor in "elder care" (care home costs, etc) into your planning ? something like aged 85-88 onwards maybe ?

[@AlexNorman-Jones]

I didnt on this occassion as I didn't want overcomplicate it. I did toy with the idea though. I have compensated for this by assuming they take the higher income for a relatively longer timeframe (right up until 80 at which point drop by 25%). Food for thought....maybe next time i'll modela spike in expenses for potential care fees.....

[@markevans1947]

At 55 you showed he can take just over £2,200 until 80 does that include state pension from 67?

[@AlexNorman-Jones]

Yup so the state pension is factored into that. In other words, even with the state pension kicking in at 67, this is how much income he can take from 55-80. At which point modelled his expenses dropping by 25%.

[@tommitchell7262]

@@AlexNorman-Jones Hi Alex, I have the same question and it's one which impacts almost every one of the many retirement planning videos on YT. It's still not explicit what he lives on: does he live on £2,200pm PLUS his state pension of about £1,000pm (so he lives on £3,200pm) or does the £2,200 include his state pension so he's living on £2,200 (in which case, he isn't taking £2,200 pm from his pension, he's taking just £1,200pm from the age of 67). The first financial advisor who is explicit about this will generate the most views, I'd say!

[@pete1996]

I watched lots of videos like this and not one of them details the impact of tax on pension income, especially when the state pension kicks in - Why Not?

[@AlexNorman-Jones]

takes tax into account on the figures automatically. I can show it easily enough....will bear in mind for next time thanks

[@3thinking]

£500k pension pot is plenty if you are 98 or older 😄

[@OneAndOnlyMe]

500k for a 30k a year for a single life annuity, I'd take that option.

[@AlexNorman-Jones]

become a lot more popular with rates rising....

[@OneAndOnlyMe]

@@AlexNorman-Jones I always figured annuities would come back around into favor.

[@OneAndOnlyMe]

@KevinOLoughlin-ys5ef Logic would suggest the best time to buy an annuity is during an inflationary period, as inflation peaks come and go in cycles. So buying one at the peak could result in a retirement with a falling period of inflation in the beginning, then a rising one in the latter half, giving time to adjust. (Of course, there could be future black swan events.)

[@coderider3022]

Inflation will wipe buying power after 8yrs. Crazy to get one with no uplift /linking. Bond ladder is more flexible and cheaper.

[@DeeCee-nb6ev]

With only 12% of people having a pension pot of this size or larger it’s hardly relevant to the average person.

[@Hawks1980]

I'd suggest that people watching pension-related content on KZbin are likely to be taking an active interest in their pension and therefore likely to consist mainly of that 12%. The "average" person doesn't take enough interest in what will happen to them when they retire which is why most won't end up with a decent pension. If you invest small sums each month over your working life then reaching £500,000 should be achievable even on the average wage in the UK, particularly with auto-enrolment and matched contributions from an employer

[@AlexNorman-Jones]

well said!

[@lyndonrichards5279]

​@@Hawks1980I'm average, I'm over that

[@barnoluk9272]

Also average pension pots will rise as current retirees haven’t benefitted fully from auto enrolment. Just because you haven’t saved up that amount doesn’t mean others arent

[@OneAndOnlyMe]

I'm an average person, have 500k in my ISA and another almost 300k in my pension, and 300k equity in home. I'm 53. It comes down to being proactive in your 30s/40s. I started my ISA in 2010 with 40k.