What age do you plan to retire?According to the Daily Telegraph, one year ago, a major UK Wealth Manager estimated that a £447,195 pension pot would fund a ‘moderate’ lifestyle from the age of 55 to 92. Other pension advisors produced similar estimates.That same UK Wealth Manager now calculates that this £447,195 will runout 15 years sooner, at the age of just 77. Financial outcomes in 2022 have been challenging, but not unexpected in the context of the timeframes we are talking about. Aeroplane pilots and ship captains know they will face their fair share of bumpy weather, and so must investors.Imagine a pilot realising halfway across the Atlantic that he’d made a serious fuel miscalculation. Hopefully, he could divert to an alternative airport! What might an equivalent action look like in pension land? Going around old people’s care homes saying, “Sorry ladies and gentlemen, it’s back to work for you!” Bouncy markets are nobody’s fault, but they happen’ and the risk must be factored in. False accuracy is dangerous. It can ruin people’s lives. Which is why when people ask us how long their pension will last, at Eriswell, we say, “We don’t know! We can make educated guesses, but they could be way off”We’d love to have a better answer, but we don’t. And neither does anybody else.
Through the Eyes of a Hedge Fund Manager, Series #13