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Assumptions for Retirement


Steelstripes

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Planning retirement in the next 4 - 6 years, and I've generated a budget to see what we can afford to live on from savings plus the pension pot. 

I need to make assumptions about a) inflation & b) pension pot growth rates, and keen to see what others think reasonable. Until the stock market crash in March, my Standard Life pension was doing just fine, and growing at around 7% per year on top of my contributions, but I want to be conservative about future expectations, so we don't run out of money aged 75. My initial thoughts are to plan for 2% inflation & 3.5% stock growth, averaged over a 25 year period. Any thoughts?

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2 hours ago, Steelstripes said:

My initial thoughts are to plan for 2% inflation & 3.5% stock growth, averaged over a 25 year period. Any thoughts?

Sounds safely conservative. 

One thing I will say is definitely do a lot more research on other forums. bogleheads would be a good start, maybe reddit subs.

Be aware that this forum has a very negative disposition and treat responses accordingly.

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What kind of black-market skills do you have? Can you do household repair jobs (fixing decks, small painting jobs, gardening, etc.) for cash? Most tradesmen I know tell me that they have never been so busy as after they retire.

If you are a vanilla-type generic office worker or client hand-holder, you can always learn some cash-earning skills and work on the side part time. You are going to get bored sitting at home all the time. 

If you only spend money on basic essentials (as opposed to buying collectable stuff, purchasing luxury items, or wining/dining/travelling), then you should be able to get by on very little. 

Go to the gym and look after your fitness. Watch your BMI. At the end of the day, if you've got your health, you've got just about everything. 

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On 04/09/2020 at 11:08, dugsbody said:

Be aware that this forum has a very negative disposition and treat responses accordingly.

That's why I like it!

On 04/09/2020 at 09:05, Steelstripes said:

Planning retirement in the next 4 - 6 years, and I've generated a budget to see what we can afford to live on from savings plus the pension pot. 

I need to make assumptions about a) inflation & b) pension pot growth rates, and keen to see what others think reasonable. Until the stock market crash in March, my Standard Life pension was doing just fine, and growing at around 7% per year on top of my contributions, but I want to be conservative about future expectations, so we don't run out of money aged 75. My initial thoughts are to plan for 2% inflation & 3.5% stock growth, averaged over a 25 year period. Any thoughts?

Welcome!  Do you have a sense of what your own personal inflation rate after retirement might be, as opposed to the price indices?

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