How MUCH will my pension pot give me? £500K/£250K/£100K

[@akula9713]

I’ve saved into a pension since I was 24. I retired at 60, no pension income yet. I have income from bonds, and a flat rental. In total I get less than a basic pensioner would. I have to be careful with money, but you cannot put a price on not having the stress of a daily commute, or working in an office or factory. My biggest outgoing, apart from council tax, is food! I have all my hobbies, stacked years in advance. Often times people retire, and have nothing in their lives! No love, no hobbies or interests. It’s not just case of how much money you have, but more of what to you want to do?

[@denisfitzgerald3474]

Just watched this now and it’s great to see an advisor who doesn’t just work on retirement forecasts with pots over a million! Great content and I’ll definitely check out your other videos. Only one comment regarding spending, as a 55yr old couple with no mortgage we don’t spend anywhere near 28k per year and have a great lifestyle. Also as we get into very old age expenditure reduces dramatically, it would be good to see a forecast where spending drops as we hit mid late eighties. Thanks again!

[@PrinciplesPersonalFinance]

Thanks Denis, appreciate your kind words and watching. Yes, I didn't want to jump in at an amount which is well in excess of the average. There is often more complex planning around that range without a doubt, but can be a bit alienating! Interesting on the expenditure and thanks for taking the time to comment.

[@denisfitzgerald3474]

@@PrinciplesPersonalFinance Thanks for commenting back, much appreciated. It’s actually very scary to see the average pension pot size in the UK. I really worry about the future state of our population as they hit retirement. Thanks again! 😊👍

[@lyndonrichards5279]

The problem is he's not making your money work. If it's not working, he's failing you.

[@shaungregory1789]

OK the low down, if your interested, real world experience from 2 year retired at 55 people in the UK. 1st year we were getting 18% with Vanguard lifestrategy 60 fund (medium risk) this year after Ukraine war 2%. But no worries as our advisor has moved our funds to a 20% 30% 50% split in multiple funds with multiple risk ratings. We have a regular drawdown income from the 1st 20% so stable income. Still thousands ahead of company pension oh and income much higher. All the very best and don't wait, life is too short.😊😊

[@lyndonrichards5279]

This 💪

[@simonnewman4240]

Can’t believe you don’t have more subscribers George Thanks for the video

[@PrinciplesPersonalFinance]

Thanks Simon, very grateful for your support! KZbin algorithm can be love or hate you at various times. It's a strange beast! Appreciate your kind words and you watching. 🙏

[@patoises]

why did you say the cashflow on 10:58 is a definite fail? Everything is mostly blue even right up to 98!!! Looks pretty good to me and all you need to do as a financial advisor is ask your client if a slight reduction in spend (5 or 10%) after 75 is acceptable to their risk appetite?

[@PrinciplesPersonalFinance]

Thanks for watching and taking the time to comment. Appreciate you watching the channel. To answer the point. Where the funds go to beyond 98, the returns have been adjusted higher. (10:39) In cash flow modelling you can't just 'adjust up' returns if they deviate from the expected return and say it works. All assumptions must be reasoned and reasonable. I can't really argue the case for a specific solution when it's been given to a general example and posed as if it's a 'one size fits all.' You can do the same the other way on your solution. For example - what if their expenditure is already at a basic level and they can't adjust down? What do they do now the funds have run out at 76? What happens if unforeseen costs come up? The more you expand the context to a hypothetical you could argue either way. This is highly individual so any solution may or may not be appropriate. If the comment is - 'why couldn't we, for a hypothetical client, make an 'acceptable' adjustment. I agree and that's what we do, hence saying 'i'd be looking at other mitigation strategies.' (10:57)

[@patoises]

@@PrinciplesPersonalFinance Thanks for your reply. The examples are yours so I am not questioning the assumptions, generalisation and specificity of the models and solutions. My question is how "definite fail" is defined. The cashflow shows a shortfall of £2103 which is only 5%, and which only begins at 76, and thereafter the shortfall start to decrease percentage wise right up to 98. The question is important because depending on a FA's definition of failure, it would impact the advice being given i.e. whether a mitigation strategy is needed and to what extend.

[@marton349]

My view of it is yes, you will want to enjoy a decent income if you retire 60-70. You hopefully will be mortgage free and good enough health,But as you get older you wont be able to spend a lot of money because you wont have the energy to travel far etc.

[@davidfolts5893]

Thanks, George, outstanding job! Knowing how components of your cash flow work in retirement is essential.

[@PrinciplesPersonalFinance]

Thanks David, as always , really appreciate your support ! 🙏

[@welshhibby]

great content, just subbed !

[@PrinciplesPersonalFinance]

Thank you, very grateful for you watching and your support 👍

[@colinoreilly5438]

Fantastic advice as usual.

[@PrinciplesPersonalFinance]

Thanks Colin, glad it was useful! Very grateful for your support. 🙌

[@manishrana6]

Good video .

[@PrinciplesPersonalFinance]

Thanks, appreciate you watching!

[@StephenMcCready-y6n]

Is it true that in order to contribute towards a pension, a person has to earn over £10,000 per year ? I have a 25 year old son who has autism. At the risk of being pessimistic, and assuming that he may never be able to hold down any meaningful paid employment, if it’s affordable to me, am I allowed to start up and contribute towards a pension on his behalf ? If I was able to do anything like this, do you know if it would affect any benefits that he was entitled to from the government, ( when he reaches retirement age ) eg. Disability Living Allowance “DLA “ or housing benefit ? If I’m not allowed to contribute to a pension for him, would an ISA be anywhere near as good over a long number of years and do you know if any money in an ISA would still affect any benefits he was entitled to , if it would, does that mean that an ISA would need to be in someone else’s name ? I appreciate that this might not be your line of expertise, but any guidance would be very much appreciated.

[@michaeli160954]

Great informative video Thank you

[@PrinciplesPersonalFinance]

You're welcome, thanks for watching 🙏

[@lisag9493]

George,, what growth rates ? I retired at the end of Feb this year and my private pension has lost £445 in 3 months ,, I had planned on surviving on my savings for the next 2.5 years until I can get my small nhs pension (57 years old), at 60 but I’m a non earner now so I’m thinking about taking a lump sum of 12.5k out of my pension and putting it in an isa ,, this way I’ll avoid paying tax, be using my personal tax allowance and earn 4.4% interest in a cash isa ,, not worrying about it losing money,, as a financial planner, you rely on people following your advice and putting money into investments and pensions ,, it’s your bread and butter and how you earn a living,, I want peace of mind with a nice cushion ,, I’d appreciate your thoughts and others reading this ,, best wishes, Lisa

[@PrinciplesPersonalFinance]

Hi Lisa, thanks for watching. Appreciate you taking the time to comment and engaging with my content. I want to firstly say when the markets do decline, it is disappointing for any investor. I very much feel it too, that nagging feeling of uncertainty about whether ‘this time it’s different’ or if things are in fact, going to turn around. Although, after those initial thoughts, I am always reminded when that happens, that this is how it felt in every decline. In a well diversified investment, to get the ups, we must understand there will some downs. Investments have to be allowed time to grow and the markets definitely do not move in a straight line. If it is long term money, I would challenge a client and say they have not ‘lost’ money unless they sell or we deviate from their initial plan. This is why what I do with my clients is make sure the plan have enough money for the short term so that and then ensure we STICK to the plan to capture the growth in the long term. We keep the focus on the plan, not the whims of the markets which all of history teaches us, can be volatile. I have to be very careful about straying into any comment which could be seen as individual advice for you so forgive me for being indirect, as sadly I can’t know your position or when money is needed, what it is invested in etc which all will play a role to the best decision for you. So please bear that in mind as I can only tell you honestly how I would see it with my clients. I cannot give you any specific direction. I have done 2 videos where I expand on what I have just said. If you are in doubt, please do seek advice specific to you. What to do when your investments are losing money kzbin.info/www/bejne/iauykn2Hp6-rqKc Avoid the noise kzbin.info/www/bejne/q2W1iXhsqcaNnck Wish you all the very best for your retirement and thank you once again for watching. George

[@lisag9493]

@@PrinciplesPersonalFinance Thankyou George for your reply ,, I know I will be fine as I have savings to fall back on ,, it’s difficult to move from saver to spender and I have to squash that doubt of running out of money ,, I enjoy watching all things retirement so keep em coming,, best wishes, Lisa

[@PrinciplesPersonalFinance]

@@lisag9493 Thanks Lisa, appreciate your support and wish you all the very best!

[@alastairford7145]

Interesting to see you're using inflation at 2.5% and investment returns at 6%. Those feel like optimistic numbers in relation to each other. Do you think those are fair assumptions over the long term?

[@PrinciplesPersonalFinance]

Hi Alastair, yea they reasonable in general, but could be seen as a bit punchy depending on the asset allocation. Definitely not something that anyone can assume will apply to them regardless. One of the many reasons why this type of planning is so bespoke. In this example I'm assuming 3.5% real and then 0.75% in charges. You'd need a decent equity allocation. World Ex US has delivered 4.5% real return from 1900-2021, US 6.7% (source Dimson, Marsh and Staunton - Credit Suisse Yearbook). Slightly better returns from 1970 onwards. When we do client modelling it's always based on the asset allocation recommended, we reference Defaqto research as future return expectations vary depending on market pricing. Asset allocation and investment strategy is without doubt one of the big variables in any planning and certainly one which has to be monitored closely! Thanks for watching 👍

[@lyndonrichards5279]

That's low returns, Alastair.

[@UK-Property-Tax-Accountants]

Another get video from George ❤

[@PrinciplesPersonalFinance]

Thank you, very grateful for your support!

[@lyndonrichards5279]

Dreadful returns. Plenty of funds out there that consistently give 10%.

[@PrinciplesPersonalFinance]

....and that's why DIY planning can be so dangerous

[@lyndonrichards5279]

@@PrinciplesPersonalFinance well, not really. I've increased my pension drom £352000 to 647000 through researching funds throughly. Justbuse a core and satellite system, you'll learn with experience in sure.

[@lyndonrichards5279]

@@PrinciplesPersonalFinance if your not getting the returns, it's poor planning. Low cost funds that you can turn to cash during pullbacks are worth they're weight in gold. LG global 100, Vuag, and good world tracker cost pennies to run. Sattelites like nasdaq 100 and Pershing Square will boost revenues.

[@lyndonrichards5279]

As opposed to 'do it with you? ' Lol.

[@markhosbrough9180]

Been enjoying your videos very informative. I have a question do you work with people who don’t live in the uk reason I ask I have a small old company pension pot back in England small due to the fact I was wrongly advised to stop paying into my company pension plan because I knew at some point in the future I was leaving the uk

[@PrinciplesPersonalFinance]

Hi Mark, thanks for watching the videos and your support. It's greatly appreciated! I sadly don't work with individuals outside of the UK. It can be a bit of minefield working with differing legislations so it's not an area we advise on. Sorry I couldn't be more help and wish you the best for your future planning.

[@neilp7024]

Why do we need so much money at £100 years of age ? surely you aint going to be doing much and if nything left it will goto the kids etc or the government,also with money in the bank you may have to pay for care if its required,so why not just say i want to spend the bulk of my saving whilst i`m in my eighties....

[@PrinciplesPersonalFinance]

I agree that we don't want too much in savings. There is definitely a balance to be struck here, no point being the richest person in the graveyard. Even a heavy spending strategy in someone's 80s is less than ideal, they aren't the most active years, to be frank. This is where when doing full planning discussions around this, the importance of legacy, and how potential mitigations like downsizing or equity release may come into it. It's a tough balance and one that has to be regularly reviewed. While all of the above may be true, it would be terrifying to run out of money at 90. So running provisions so they exhaust entirely is not likely to be a good strategy for most. We need to have enough for the knowns and the unknowns. If that means slightly more at a later age, that is better than none when needed the most. Thanks for watching and taking the time to comment 🙌

[@neilp7024]

@@PrinciplesPersonalFinance thanks for the in depth reply.. As not trying to pick holes or anything like that, my question was genuine as I'm thinking of retirement in the next 4 years (63) but never seen anyone plan on the pension lasting to 100 before, hence my question. I do like the way you explain all aspects of retirement etc Keep up the great work. Regards Neil

[@PrinciplesPersonalFinance]

Thanks Neil, don't worry at all. Did not think you were picking holes. All important considerations and salient points you made. Appreciate you watching and your support 🙌@@neilp7024

[@rasikathakrar4923]

T.you.sir.v.good.information.t.you.

[@pambowell3640]

May I ask what the software you are using in this video is?

[@PrinciplesPersonalFinance]

Hi Pam, thanks for watching. This is Voyant. 👍

[@ChrisBird1]

Most people spend about £3.50 a month once they are in there 70s .. put that in your algorithm .. 2 cups of tea and a news paper .

[@harrydance1969]

Brilliantly unclear. Your constant referencing of state pension has me utterly confused as to whether your target figure includes the state pension or doesn’t include the state pension rendering this entire video useless..

[@izabelasowula532]

IMHO all similar illustrations include a full state pension from the age of 67, since you will be getting it (by default). If less than 100% then the software would have recalculated it for you. That is why he is saying this is for illustrative purposes. In your particular case figures may differ depending on your choice, but not the age when the state pension is made available for you. 67 or 68 at this time of commenting.

[@harrydance1969]

Thanks - but you’ve just illustrated my point again. So did his figures include the state pension? What is it about this subject which renders people incapable of absolutely clarifying anything.