Gilgongo wrote:ReallyVeryFoolish wrote:I have to say, I think Itsallaguess is spot on there. The next generation are simply not going to have the luxury of defined benefits pensions that in effect arrive like a salary cheque does each month.
Exactly. Pensions used to be simple. The idea that millions of us will be wrangling spreadsheets in their dotage and making draw-down calculations based on how the FTSE has been behaving is utterly unbelievable. Much less casually paying a few grand a year for "advice". Flying blind to be slaughtered by sequence risk more like.
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What is this "slaughtered by sequence risk" you are concerned about exactly? I'm struggling to see what concern you have that is much different to the 1,000s of other probability events we encounter in a lifetime that we adjust to even if low probability events occur.
None of us know (or knew) how our careers would pan out over a 40+ time line. There was no prescriptive formula "get this job, you will be paid x rising by y% every year and retire in z years". We survived as jobs and plans adjusted. It will be even more uncertain for the generations that follow us.
Similarly nobody is given a formula that details their health issues, or an accurate personal longevity table to live with. We just "live" adjusting if we are unfortunate to need to.
So if you really want a prescriptive pension then pension freedoms haven't denied you of that. There is still a market for annuities after all. If the cost (or income from the other end of the lens) isn't satisfactory then you have to live with it. Earn more before retiring, or accept the risks of managing the pension, with in all likelihood a continuing (but low) state safety net.
Like I said in the thread you link to, you are likely an outlier (as am I, probably), but it is far from clear to me what the "silver bullet" you are seeking is. Most will just live with the risk, surely?