ok I am confused, what's new...
'I don't understand this: why would you save £1m then buy an annuity?
Why not save £1m and live on the money itself?'
if you have £1,000,000
and you want to retire on £1,500 per month
then Shirley....
£1,500 x 12 = £18,000
£1,000,000 / £18,000 = 55 years !!!
add in interest on the £1,000,000 compounding....
why to buy the annuity ?
why not just live off a combination of the draw down of the cash and interest ?
or am I missing something ?
Alternatively, buy for cash a combination of properties with solid rental capabilities and live from the rents therefore protecting the investment pot and getting the benefit of capital appreciation on the properties ?
and before anyone asks I'm not talking about numpty buy to let ramped up apartments that nobody will even rent
so, why the annuity ?
have you actually physically saved the £1,000,000 in cash in a bank account or is it that your pension fund product will be worth £1,000,000 and you will have not choice than to purchase an annuity ?
I guess this is the case.
Milan.
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Reply to: To retire in 20 years....
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Previously on "To retire in 20 years...."
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For Goodness' sake, please either work it out in today's money from start to finish, or work it all out in variable money with an estimated inflation rate. Never mix them in any one calculation, or it will bite you back.
For example, I do it in today's money: I want an annuity of £40k (2010 equivalent) so I need to save a pot of £750k (2010 equivalent). I can work out how much to save, assuming say a growth of 3% on top of inflation. This method makes the calculation easy, but you still have to figure in inflation to get the nominal figure for any given year. Come retirement I need to have saved £750k in 2010 money: whatever that may become with the passage of the years.
You might do it in nominal money instead: You assume 4% inflation for the next 20 years, so your annuity of £40k in 2010 money will be £87,644 in 20 years time. You would assume nominal growth of 7% per year, which would be the equivalent of the above-mentioned 3% plus inflation.
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It seems to me that those who manage to get themselves into positions where they are raking in enough dough to retire comfortably only manage it by working in a field they enjoy. Once there, why retire just when you're enjoying yourself?
For the rest of us, take time out when you can to do those things you expect you'll want to do in your old age. They won't be as enjoyable when you're old, and whose to say you'll even get there, or that if you do, they'll still be possible.
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There is no way to retire in 20 years with enough money, unless you have a Crystal Ball or a Time Machine. So forget about it and live for today, and visit those nice people in Zurich with your last 5K.
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Originally posted by rootsnall View Post40oddK = 40 odd thousand = >40K and <50K
Google for an annuity calculator and put in aged 57 etc
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Originally posted by Jeebo72 View PostYou're right. It's what you do, all I'm saying is that everyone says they'll retire early, tour the world, but the people I know (and there's a few more), who've genuinely had the chance to persue "their/those dreams" haven't. Their work defines them. It's their life. They are scared, I suspect, of leaving even though they've enough money never to worry about the rest of their lives. I've had friends die of cancer at 26 and 37. One this year at 62 (a very rich man) has just found out he's got prostate cancer...we all worry about tomorrow, and forget today. You can't take it with you.
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Originally posted by DieScum View PostWell now we know why you can so relaxed about retirement saving. You have a rich father-in-law and a big inheritance coming.
Regarding "Nobody does it." Doesn't matter what everyone else does. As long as you do it who cares about other people. They are probably happier that way... but you want to at least give yourself the choice.
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Originally posted by DieScum View PostWell now we know why you can so relaxed about retirement saving. You have a rich father-in-law and a big inheritance coming.
Regarding "Nobody does it." Doesn't matter what everyone else does. As long as you do it who cares about other people. They are probably happier that way... but you want to at least give yourself the choice.
I am really glad I did the homework. It puts the whole thing in proportion for me.
A lot of saving is required me thinks. I don't want to be poor when I am old....
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Well now we know why you can so relaxed about retirement saving. You have a rich father-in-law and a big inheritance coming.
Regarding "Nobody does it." Doesn't matter what everyone else does. As long as you do it who cares about other people. They are probably happier that way... but you want to at least give yourself the choice.
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Originally posted by DieScum View PostI dunno. I quite fancy being an old codger with time on my hands and money in my pocket.
Imagine retiring at 55 with enough cash to tour the world. You can expect at least another 15 years, probably more, of good health. Sounds wonderful.
My freinds wife had the option last year to sell up at £3m at the age of 44. Even though she wants to "find herself" yada yada, she didn't and went back in for a min 5 years ...
We all fancy it, no one really does it... work til the grave is suspect.
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Originally posted by Platypus View PostI don't understand this: why would you save £1m then buy an annuity?
Why not save £1m and live on the money itself?
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Live fast die young. Who really wants to go about for 10 years without a prostate peeing into a bag (granted this is a male perspective!). Spend your money, that isn't being used on fast cars, on high class hookers, coke and mdma. The rest just waste.
Imagine retiring at 55 with enough cash to tour the world. You can expect at least another 15 years, probably more, of good health. Sounds wonderful.
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£1500 with inflation factored in at 3% pa
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Live fast die young. Who really wants to go about for 10 years without a prostate peeing into a bag (granted this is a male perspective!). Spend your money, that isn't being used on fast cars, on high class hookers, coke and mdma. The rest just waste.
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Originally posted by DieScum View PostDoes that mean you have to save 1500 in today's prices every month ie going up each year with inflation or is it 1500 forever regardless of inflation?
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