Do annuity rates differ much?

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I retired early at 55 about 18 months ago, and went down the drawdown route as it gives my family the security of the fund being part of my estate. The advice I received at the time was to disregard annuities for all the reasons stated above.

I was fortunate to have 2 reasonable pension pots, having split my career over just 2 financial services firms, spending a similar time with each. I could therefore keep one pension intact and receive the usual index linked monthly pension, and transfer the other to a drawdown fund. Fortunately the provider was giving favourable transfer multiples and, despite Covid, the fund value has far outperformed forecasts. I haven't had to draw down yet as the plan is to utilise other savings before doing so, given low interest rates.

You do need to get advice to do such a transfer, but the costs are deducted from the fund, and for me, it was certainly worth it.
 

SpokeyDokey

67, & my GP says I will officially be old at 70!
Moderator
Not sure we will ever get rid of the credit cards: if anything, COVID has taught me that cards are king.....but perhaps the number on them will come down a bit! Started to use Monzo as a “entertainment card” to track that....not that it got much use this past year. Made it a personal duty to keep the local pub and another local small brewery going with regular purchases...a sacrifice worth making🍻

I’ve been reconciling things with Quicken 2000 for 2 decades (& versions prior to that!). I’m quite sad like that :laugh:
Still looking for a nice replacement (since I have it running in a Windows 7 virtual machine :wacko:). Old dog...looking for a new trick, but the old one just works....


Same I’ve heard, from a few good friends (former workmates) who have retired over the past 1-10 years.
Quite encouraging really :okay:

It's a rare occasion for me to bump into someone who tracks their money on this scale.

TBH I got the idea from someone else back in the 90's - a friend of mine had a really expert grasp of his financial position and I asked him to share the secret. You know what the answer was.

Ironically, in the various businesses I have been involved in over my career they all hinged around financial data which I loved immersing myself in. But being dopey I'd never thought to translate the principles into my personal life.

The big catalyst was shutting down our corporate careers and transitioning into a much more chilled lifestyle in the early 2000's. To make the 'jump' we needed the analysis to preserve our sanity! Fortunately, and surprisingly, the numbers were kinder than we imagined. The only blot on the landscape has been the drop in interest rates although it has had no real world impact on us as our forecast basically shows a decent positive cash flow ad-infinitum. Our investment income is down by around £30k pa on our 'day 1' projection due to the state of play in the wider economy these days. Cest la vie - we are hardly destitute.

***

One thing I will mention to other posters on this thread is that people, sadly, die.

One of the principles we applied when forecasting was a number of obvious miserable scenarios - again these work out fine for us. Being 7 years older than my wife I was paranoid about leaving her destitute tbh and the forecasting basically negated this paranoia!

On the same theme, unless someone is hell bent on leaving a fortune to their kids, and this may not be an option for some people anyway - there is absolutely no point dying (or the last person in a couple dying) with a whole heap of money in your estate. That's a tricky judgement call of course but it's worth bearing in mind.
 
i've only recently started looking into my pension. i was overly confused by it all so just left everything at default
glad to say i've investigated it and have a grasp on what's happening now (more or less :wacko:😊)
the annuity forecasts are absolutely dire, it's likely i'll look at drawdown.
i'm upping my contributions in the hope i can get a decent pot going. i've around 20years left to pay into it
i'm reading you would need about £150k - £180k pot to retire comfortably. i'm a good way off that yet :sad:
 
i'm upping my contributions in the hope i can get a decent pot going. i've around 20years left to pay into it i'm reading you would need about £150k - £180k pot to retire comfortably. i'm a good way off that yet :sad:

Despite having worked in banking and finance all my life, it is a scary decision to make over retirement, especially if you do so early. To go from having a comfortable monthly income, and savings to fall back on (added to from time to time), to a scenario where monthly income falls significantly, although you maybe have a lump sum invested to draw down, requires a change in mind set.

I did all the calculations/forecasts etc predicting what we would need to draw and spend and was at first hesitant about using capital which will not be replaced. However, in a short space of time I adjusted and now feel as comfortable as I was when earning. The state pension will also change things positively when that is eventually payable. It is true that most spend less in retirement - well we do anyway, especially with no mortgage.

It is a little disheartening forecasting how long your pot will last and what you will actually need in your 80s and beyond and makes you think more about mortality, but perversely it might encourage you to spend more as some good advice I heard, was to make sure you have spent it all by the time you die. My kids won't be relying on an inheritance, all are already established in jobs and homes, and they will have our house anyway when we both go.
 
I’ve been reconciling things with Quicken 2000 for 2 decades (& versions prior to that!). I’m quite sad like that :laugh:

Still looking for a nice replacement (since I have it running in a Windows 7 virtual machine :wacko:). Old dog...looking for a new trick, but the old one just works....

don’t know if it’s still possible but, certainly until a few years ago, as a Quicken 2000 user you could download Quicken 2004 free from the website and I’m managing to run it on a W10 64bit machine quite happily

Im still using Quicken 98 and W10 machines.

Will have to get round to updating it someday ^_^

I started with Quicken back in the mid-90s on what I guess would have been Win3.1.

I remember that I had to buy a co-pro for my 386 machine so that it would run.

I finally gave up with it when moving to Win10.

Nowadays I use HomeBank which, for a freebie, I quite like.
 

mikeIow

Guru
Location
Leicester
I started with Quicken back in the mid-90s on what I guess would have been Win3.1.

I remember that I had to buy a co-pro for my 386 machine so that it would run.

I finally gave up with it when moving to Win10.

Nowadays I use HomeBank which, for a freebie, I quite like.

Yes, I used earlier Quicken versions too! Shame they killed it. I did pop 2004 on at one point, but there was some issue & I went back to 2000.
HomeBank is interesting, although the Mac install looks mildly tortuous - not a simple .dmg package. Might look at it later: thanks for the pointer
 
OP
OP
swee'pea99

swee'pea99

Legendary Member
I retired early at 55 about 18 months ago, and went down the drawdown route as it gives my family the security of the fund being part of my estate. The advice I received at the time was to disregard annuities for all the reasons stated above.

I was fortunate to have 2 reasonable pension pots, having split my career over just 2 financial services firms, spending a similar time with each. I could therefore keep one pension intact and receive the usual index linked monthly pension, and transfer the other to a drawdown fund. Fortunately the provider was giving favourable transfer multiples and, despite Covid, the fund value has far outperformed forecasts. I haven't had to draw down yet as the plan is to utilise other savings before doing so, given low interest rates.

You do need to get advice to do such a transfer, but the costs are deducted from the fund, and for me, it was certainly worth it.
Could I ask, what was it about the advice that you found worthwhile? Did they find you a better provider/fund than you could have found solo, or was it about saving hassle, or what?
 
Not sure we will ever get rid of the credit cards: if anything, COVID has taught me that cards are king.....but perhaps the number on them will come down a bit! Started to use Monzo as a “entertainment card” to track that....not that it got much use this past year. Made it a personal duty to keep the local pub and another local small brewery going with regular purchases...a sacrifice worth making🍻

I’ve been reconciling things with Quicken 2000 for 2 decades (& versions prior to that!). I’m quite sad like that :laugh:
Still looking for a nice replacement (since I have it running in a Windows 7 virtual machine :wacko:). Old dog...looking for a new trick, but the old one just works....


Same I’ve heard, from a few good friends (former workmates) who have retired over the past 1-10 years.
Quite encouraging really :okay:

Cards are excellent for tracking your spends. I haven't been to a cashpoint since January 2020.

Credit cards - good to have one but I'll only use it if I know I'm not paying any interest or clearing it each month.

I was lucky that my employer provided pension workshops each year. As has been said - once you've paid off your mortgage and stopped the saving for your retirement - your costs are cut by a fair amount.

I'm sure there's plenty of people who haven't grasped this yet and think that they'll be needing their full salary to retire. You really don't.
 

SpokeyDokey

67, & my GP says I will officially be old at 70!
Moderator
I'm sure there's plenty of people who haven't grasped this yet and think that they'll be needing their full salary to retire. You really don't.

It's amazing how little you need to service the background costs of running your life and house when you have no debt. I've lost track of the number of people I've spoken to over the last couple of decades who are panicking that they will need their full salary equivalent in retirement - they may well do if their salary is low though.
 
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