Pensions/drawdown etc

[Wonky]

Today, I would suggest 5% drawdown is far too high to be sure you won't run out of money. Especially going into drawdown at 55 if you pull out money to live on. There is no magic number that's guaranteed to work. But it's going to be far less than 5% drawdown if you don't want to run out of money.

Fully depends on how it’s invested but conventional wisdom these days suggests 4% as the sensible figure to maintain a sustainable pot and maintain some protection against inflation.

understanding and acceptance of risk is a key factor both risk in your invested assets and some risk that future long term market conditions may dent the sustainability.

The age at which you start is neither here nor there if it’s truly sustainable.

The investments should be tiered and structured with 2-3 years worth in cash/near cash to mitigate the risk of having to sell assets in a market dip. The rest should be typically targeted at diverse assets with a reasonable chunk at the back in higher risk classes.

There’s a Meaningful Money pod cast series on retirement and pension structuring that is definitely worth a listen. If you are not sure on the way forward then there are companies / ifa out there who will help for a fee.

[Fred Bloggs]

Fully depends on how it’s invested but conventional wisdom these days suggests 4% as the sensible figure to maintain a sustainable pot and maintain some protection against inflation.

understanding and acceptance of risk is a key factor both risk in your invested assets and some risk that future long term market conditions may dent the sustainability.

The age at which you start is neither here nor there if it’s truly sustainable.

The investments should be tiered and structured with 2-3 years worth in cash/near cash to mitigate the risk of having to sell assets in a market dip. The rest should be typically targeted at diverse assets with a reasonable chunk at the back in higher risk classes.

There’s a Meaningful Money pod cast series on retirement and pension structuring that is definitely worth a listen. If you are not sure on the way forward then there are companies / ifa out there who will help for a fee.

It's possible you are right and 4 is the magic number.

However, that number has for a number of years been discredited as being too generous in today's economic climate. The number 4 originated in the USA, it may or may never have been totally appropriate elsewhere.

Indeed, it is all down to personal risk appetite at the end of the day.

But I encourage everyone to fully educate themselves so they stand a chance of understanding the very real risks associated long term with defined contribution pension plans. It has never been easier. All the information is out there.

I absolutely recommend avoiding any advisors in this space as they are conflicted in what they say and do. And then there's the issue of the appalling charges they levy, but that's another thread. The key here, as in so much else is self education.

With many pension pots in the high 6 or even 7 figures, an individual literally cannot afford to go without serious self education in personal finance matters.