If you ever plan on retiring you need to watch this
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- Опубликовано: 25 сен 2021
- If you don’t know the size of the problem, how will you know when you’ve solved it? Or if you’re even making progress?
You'll never be able to work out exactly how much money you'll need in retirement but it's really important you try to get a good estimate.
Financial Planning
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about our services, please follow this link: go.novawm.com/getintouch
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This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (whilst James is a financial adviser, he does not provide advice through this RUclips Channel, which is not affiliated with his employer).
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Two grandfather's and an uncle, all died shortly after turning 60. All worked until they were diagnosed with cancer.
All said "well do X when we retire" none of them got to do X and other people inherited their life's work.
I look forward to your next video. Personally I'm checking out of the corporate grind as soon as I have enough assets to cover my current modest cost of living.
Thanks for sharing that Lee, you’ve clearly learned from their experience and now you’ve shared it hopefully others will too!
Did they take good care of themselves during their lifetimes? the best investment is health, then monetary. most cancers in my family were caused by lifestyle for sure.
@@bradturner7678 none of them were biologically related or ever lived together. I train 6-7 days a week, so my health and fitness standards are hard to judge others by. And with that said I'll let their memory rest in peace rather than judgement
@@King_Harrold p
Soooo true!
Just coming up to our 1st year of retirement at 55. Having a blast ! Don't wait.
Great videos James. Retired at 55 six years ago. Wise old owl who took retirement course said two things…1) the rainy day that you have saved for has arrived, spend some of your savings and 2) don’t let yourself go! We’ve had fantastic round world holidays, revamped the house top to toe, bought a motorhome and a car and given the kids a few bob whilst they need it. All this in mind whilst we still have our health and the inclination to do things. Too many people caught out with health issues.
Very wise words!
Some of us just are workaholics and don't want to quit work and spend time with their boring partners and uninterested kids and phone-addicted grandkids
That’s a v intense comment… and worrisome though we all respect that darling
Are you Victor Meldrew 😂
get good at golf
Such great content James!!!! We need this information in schools
James I just want to say a massive thank you for all your content, I've been watching a lot of your videos recently and they have been a complete revelation. What you are talking about here about losing your health and not being able to enjoy the fruits of your labour has been made very clear to me as I'm currently dealing with a chronic illness (aged 40) which has cast my whole future into doubt. I'm working through a lot of issues with one of them being my problematic attitude to saving and money. Your videos have shown me that I'm actually in a much better position than I thought and on the right track and have made me feel a lot more positive. Thank you, you are doing an amazing job and spreading incredibly important information! 🙌
Wise words, several parts are relevant to me. My spreadsheet goes up to age 99 but my hospital doctor ain't convinced that's right.
One of the best retirement planning videos I have see....and I have seen a lot. My aunty and uncle always planned to do a mega cruise when they retired but when they came to retirement age my aunty got breast cancer and died in 18 months without them having taken that cruise.
Thank you! Yes live whilst your alive!
Thank you James a really thoughtful video, not spoken to an advisor that has positioned things as clearly as you do here.
It definitely helps if you have a base that is mortgage free.
No one does these videos quite like you James ..........brilliant
Aww thanks man!
Hi James, I am a new follower, and I like your data-based/psychology-based style. I decided to retire early (and often - I took a year off every five or six years to travel) very early in life because I met a guy who was dying of cancer when he was 64, just before traditional retirement age. Even though I was only 19 I thought to myself "sod that! I’m going to retire well before I die!" At about the same time I read an article called ‘the miracle of compound interest’ or something like that.
Well….I seem to be there! I have about £900K in my pension (I’m 53). Now I have discovered that I could fall foul of the lifetime allowance! I used to think the lifetime allowance was about how much money one puts INTO a pension but now I know (I think) that this is not the case. So a video about how to avoid any major tax penalties due to breaching this limit would be much appreciated.
That's exactly why I enjoy life now while still save, invest and plan for the future. Tomorrow is not guaranteed so I live my best life today while also plan for the future. One example is going on holidays. I'd rather go on holiday now while my knees are fit rather than years later when retired whereby my fitness level won't be at its peak to make the most of life etc. Health is wealth.
Great content James. Im a new subbie :)
Well said and welcome!
Great video I agree with pretty much everything except for one point made about not knowing the number needed to retire can lead to over spending and yes it could be a problem if you reach retirement with much much more but that's assuming you get there, I would rather save a lot more while I'm young just in case I get to my '50s and something happens and I can't work anymore well at least I still will be ahead whereas if saved and invested less
Great video James, keep them coming!
Another eye opener. Great video James.
Care homes are very good at hoovering up people’s excess wealth.
Very true
100% agree, the fees are staggering. Having seen a couple of relatives seemingly being kept alive only until the money ran out I really hope I don’t become one of their cash cows.
This exact same thing happened to my mother and father....a very sorry tale viewed in the cold light of day. I've told my boys to wait for the bus coming down the hill...
James, you are really helping people. This whole area is mired with misinformation. I love these videos. Great work...!
That’s great to hear! Thanks for supporting the channel!
Great video James, thank you.
Another great video and extremely relevant mate! tks again, keep up the wonderful work you've been doing.
Love your channel. So happy I found you
Welcome!!
Thanks James, informative as always.
You've welcome!
Thanks James. We are very close to FI and on track for FIRE within 5 years. The closer we get, the more we relate to finding opportunities to save/earn more money to get there sooner. We work in healthcare and are very familiar with how every year of good health, fitness and even parental health status can not be taken for granted. Some content on having the confidence/strategies to minimise sequencing risk would be greatly appreciated.
That’s great to hear! Well done.
@@JamesShack bro what about dollar fiat currency collapse. How will that impact our investment or future retirement. No finance adviser talk about this and pretend our monetary system stays same. Please reply
@@meenalimbu2553 if the dollar let alone all fiat currency collapses then retirement will be the absolute LEAST of your worries. You may aswell be asking what will X apocalyptic event have on my investment?
Super informative video, thank you James!
This is so refreshing... Thank you so much..
Very practical and relevant video, gives a lot of food for thought 👍
Another very informative video and eye opening. Thank you James👍🍀
You’re welcome Marianela!
Great video - I was 55 yesterday so very much where my mind is. I will get a teacher DB pension - hard to predict where I am at the moment as waiting for McCloud judgement to be sorted out.
We were very lucky. We started planning for retirement with professional advice when we were in our 20s. We managed to retire when we were 52 knowing we could live how we wanted to on the income we would have. We travelled when young and still do now in our late 60s. We are not wealthy but we are debt free and financially independent and can afford to do all the things we want to.
Our advice would always be, start young and get professional independent advice. Winging it won't work.
Thanks for sharing. As you say, winging it won’t work. If you choose to do it without professional help just make sure you fully commit to the task at hand.
I think it's really about balancing want vs. need and making choices about what's really important. I purchased a new car in 2020 but I had driven my previous car for 14 years. I just purchased and iPhone 13 but my previous phone was an iPhone 8 which I used for 6 years. I keep my monthly expenses low. I don't have any consumer debt and I do pretty much what I want. I'd like to travel more but I prioritize my trips and travel within reason. I saved between 35% to 40% of my income for the last 10 years of work. That savings allowed me to take early retirement and change careers. I just started a new job and in the next 2 to 3 years, I'll decide whether to retire completely or just work a few hours a week. It can be done but you really need to have your priorities sorted, follow a reasonable plan and make the right choices when temptation presents itself. I always ask myself, "Do I really need this?" or "Does this add value to my life?" or "Could that money be invested an grow instead of being spent?" Those three questions help me stay on track.
Omg so interesting, glad I came across your channel!
Welcome!
I understand what your saying about not saving too much but I'm worried about inflation and future legislature. We live in a incredibly uncertain world with a incredibly uncertain future.
Thanks - Josh.
Hey James! I'm around since your first videos and I love the content.
I have done some kind of spreadsheet calculator for how much I would need to save (invest in an ETF) per month in order to retire early at a certain age. The savings are given by my salary minus rent, gen spending, etc. Then I can also see how certain decisions change my retirement age. This year I got a new job and decided to buy a stupidly expensive shiny carbon bike instead of an electric car for my commute. Happiness is subjective, but when comparing cheap-bike/expensive-bike/cheap-car/decent-car, the spreadsheet made the influence of that choice very clear. Now let's see how it feels in the winter.
On a more technical side, I have set my retirement goal as the year where the average return of the market would cover for my (target) monthly budget. This means that the money never really runs out, and I also never completely realize my investment (as I think you have covered in one of your videos). Whenever I try to take the other "naive" approach of planning to cash-out and figuring out when I would run out of money, the answer is basically "in a couple of years later" and is super sensitive to the exact year of retirement, my expectations of inflation, monthly budget etc. The way i see it, the compound interest effect also works on the way down, and worse, because I spend more than I save. I find it very curious that you are able to give your clients an expected "running out of money" date with a an easygoing downward trend. I tried to optimize my model to get an ideal flat curve after retirement, but the exponential behavior means that it either crashes down way too soon or just keeps going up to make me a low-effort billionaire by age 150. Anyway, I think in my case the sensitivity is mostly related with targeting an early retirement, assuming no gov retirement fund and a small cash reserve. So I'm really looking forward to the next video to see how I can "complicate" my model. Don't spare the math and technicalities please :)
Cheers!
Hi Daniel, sure thing. The math is quite simple but there’s lots of variables you need to consider and have good assumptions for!
Excellent advice. Look forward to rest of the series. So refreshing not to have another video saying you need 1M to 2.5M in savings to retire.
Brilliant advice
Great video. Very detailed and insightful. I like your idea of the personal business plan for your life
Thanks. When you think about it, it seems silly that we don’t all have one. Yes there are lots of unknowns in life, but so are there in business but business plans still help companies make better decisions and plan for whatever eventuality in the future!
I really like the way that, rather than just focussing on saving for retirement, James is talking about planning for retirement, trying to land reasonably within a Goldilocks zone between over caution (resulting in a potentially short retirement with money you can’t spend) and under caution (resulting in hardship in old age). Choosing to give up a monthly income you’ll never get back feels supremely risky, but James balances this by shining a light on the riskiness of not accepting any risk. Difficult, difficult decisions. Worth remembering - in the UK at least - that what you can live on before age 67 is topped up a little by the state pension thereafter, but leaving actual retirement till then... well, some won’t have the choice, but it’s a very long haul.
Thank you very much for the Keith!
The confidence of knowing when enough is enough is difficult because your pension needs to be resilient to possible black (or grey) swan events in the market, or extended periods of low returns, such as in Japan. Cash flow bucketing means that investment growth across the buckets is reduced and difficult to predict. So confidence will always be low unless you ‘enough’ number errs on the too much side.
Really well presented!
Cheers Simon, I’m glad you liked it!
Great informative video thanks 😊 👍
Nice video and looking forward to the next one. I'm definitely someone who worries they won't have enough in retirement but that is because I want to:
1) Retire early (late 40's!)
2) Help fund wife's retirement as she won't access her NHS pension until late 60s.
3) Help the kids out with deposits for houses if the housing market is still in the mess it currently is by the time they get there.
I'm estimating a pot of £850k is needed to fund that - to have a decent level of confidence I(/we) will not run out mid 80s, just when we might need it most.
Much harder estimating needs than someone retiring mid 60's who will have the majority of their retirement income made up from state pension!
Yes it is hard to model that far out as there are still so many uncontrollable events to come.
But the key to any plan is flexibility. If you’re willing to be flexible on your expenditure or even take odd jobs to earn extra income on the side of things go bad, it massively increases your chances of success.
Rob, I don’t know how you live … BUT I can say , that unless inflation is zero, 850K will never be enough to retire in your late 40’s!
@@maxflight777 I'm hoping inflation is less than asset appreciation at least! 850k modelling is based on 4% real returns for the next half century so could be better, hopefully not worse. That figure also doesn't include my partner's NHS pension which will give some additional assured income for a bit.
But yeah it's extremely tough to model. Could run out early, could die millionaires. How do you judge when to down tools and life a little on the beach James when the range of outcomes are so vast?
Looking forward to that future video.
I won't be retiring for ~40 years, but trying to work out how much I'll need after 40 years of inflation has fried my brain lately
Great video James. I will also rep Ben Felix's video on 'Investing in Happiness' which discusses a similar topic. No hard feelings I hope, I learned of him through you!
Great video !!!
There is a lot of wisdom here.
James, as someone who follows a typical FIRE strategy I think this content is amazing. I literally worry about the cross over from saving to spending. You have a very good way of clearly and confidently speaking.
Thanks, Matthew. It's only natural to worry, we humans don't like uncertainty but you have to live we a degree of it. Flexibility of the plan is key.
FIRE?
@@MyVanMyfanwy Acronym FIRE: Financial Independence Retire Early. There's a large community around this concept.
I think 1 is passive income monthly dividends. I like dividend growth as.you can reinvest all or some and use some now.
Really like your presenting style, JS - kudos!
My cousin died last month age 39 from cancer. My dad died from cancer at 61. You need to plan for the future without doubt as nobody can predict when your time will come. Retire as early as you can and don’t forget the state pension comes at 67 and it is a welcome pay increase so drawdown and have the life you always wanted!
Have you ever tried to work out how much you’ll need in retirement? And if so what did you find out?
Yes. 1. Tracking spending over a few years made this process much easier. 2. Taking out money spent on Life/income protection insurance & supporting adult children’s college/healthcare from the calculation makes a dramatic difference in $’s needed. 3. It is hard to estimate what one off expenses will arise in any given year other than to realise they arise EVERY year.
@@suedechaneet6149 Sounds like your got most of the process nailed!
Great video thanks James. I have worked out my target retirement income & I plan to follow the Vanguard “dynamic spending” strategy. It’s establishing the initial safe withdrawal rate that I struggle with. I know the 4% rule is now considered over-optimistic, but what value would be safe to use instead. I hope to retire in 2025 but then reduce my withdraws as state pension kicks in for my wife & I in 2029 & 2032. It’s not clear how these step-downs in withdrawals would play into the dynamic spending calcs , I.e how much is “safe” in those early retirement years.
Yes. Track spending which makes the process easier and then project this over the lifetime until 100.
WAlso realised that your income needs reduce as you get older as what you can do in 50’s and 60’s probably can’t do in 80’s and 90’s so income needs drop. Also have equity in property if need long term care.
I find most pension advice is based on a fixed level of income over retirement which is never usually the case. It reduces as you get older and most advice doesn’t take this nuance into consideration.
However the excel pension model you produced does which I find an excellent tool to give you an idea of what you need over retirement and if you can achieve it
This all very good if you are high earners!! What about advice for low income people??
But after you retire if you have grand children you have another place to leave your money to. I retired at 55 but was lucky to have a Final Salary Pension which is still fine for my income needs some 17 years later. I save so that my wife and I and my family can enjoy life and have some nice holidays . We have used IHT exemptions and take advantage of SIPPS and ISAs so are comfortable. My car is 17 years old but will soon become a classic and is in wonderful condition BMW 3 series sports coupe . Not having a final Benefit pension would have meant me working to at least 60 or even more. My generation was pension lucky.
Hi James, any idea where I can get one of those glass-balls that can see into the future?
Just found your channel James as a 58 wondering if I should sell my business and start taking it easy,your swaying me on selling and enjoying my time as it’s going quick.
Love your channel keep up the fantastic work 😄👍
Haha, well maybe you should!
Hi Jack,
Thanks for the video. What cash flow modelling tool was used to make that lifeline graph?
Is a nice simple graph !
Thanks,
F
Hi Frederick, it’s custom built skin that takes the output from Voyant and makes it look nicer! There’s lots of innovative new business in this space though so we’ll probably move over to one of them soon!
@@JamesShack ah thanks for getting back to me. Would be interested to hear your thoughts on different cash-flow modellers.
Best,
F
Would be interesting to include some info about overall retirement decision/ position if continuing with a retirement interest only mortgage rather than paying it off thus maximising invested cash.
That may make rational sense, rates are so low right now. You just need to make sure there is a payoff strategy normally either downsizing or an investment portfolio.
Hi James, I'm a new subscriber and love the down to earth way you explain everything. I'm really keen to get your help with financial planning for my retirement (i'm 54 this year) and I've attempted to use the above videoask link but none of my browers seem to like it and throw me out. I did get as far as entering my name and email address but unfortunately it wouldn't continue. Is there any other way i can get in contact? btw, i'm not very technical lol. Many thanks.
I escaped from my corporate fur-lined rut aged fifty. Since then, I’ve renovated and sold a flat, built and sold a 5,500 sq ft barn and now do whatever I want, whenever I want….freedom from commuting, meetings, appraisals, corporate bullshit is invaluable….pump money into your pension and ISA’s as fast as you can and get out as soon as you can!
Great stuff Doug!
You got it man!! One day I will hopefully be joining you :D
great video
I have been trying to figure this out for a while, however I work in NHS and it’s not clear what my pension may look like when I retire 🧐 it’s very confusing! I am contributing to a sipp as nhs retirement age 68 and doubt will last another 26 years in this job! A goal number would be helpful so will look forward to the next t video. This video is refreshing and not the normal you will need a million to retire videos I often see.
Hello James, new to the following and some excellent info.
I've had a look at your previous content and cannot find anything on if you should leave (pros and cons) DB Schemes, have you done anything on this?
I have not done anything on that, it’s a very sensitive area of advice so I’d need to have any content on that heavily vetted by my compliance team. It’s a regulatory nightmare DB transfer!
My wife died last year. Life Insurance and her pension paid off the mortgage. Everything else went into an investment portfolio. Retired after 36 years working. I’m 56.
Hi David, I’m sorry to hear that. I wish you luck with your investing journey!
So interesting. I have been working full time for 46 years since 16 years of age and at 62 I am trying to move to possibly retiring in 6 months rather than waiting till 65 years of age. I have a reasonably large pension pot and mindful of the LTA. However, my real struggle is making the jump from working to retiring!
It's a mind fog that makes us unable to accept the obvious - that you've probably got more than you ever need!
Although there are of course lots of reasons people continue to work other than money!
You need hobbies , interests , there is so many things you can do when your not at work , are your weekends ver busy now , doing all the things you can’t do Monday to Friday cos work gets in the way ?
A friend once said that his aim was to retire early with his pension pot running out just before the state pension kicks in. It was driven by a desire to ensure he didn't pick up the bill for social care, having paid into the system for 40 years.
Awesome way of thinking
Not totally different from mine
Looking forward to your upcoming videos sounds really interesting
My life philosophy is a human being has one possession, Time. Apart from our Memories, which are inextricably linked with Time, we truly take nothing with us, unless Dementia robs us of that as well. So what are most important assets ? Time and Health. I never thought about the third mentioned in this video IE. Sanity. Unless one's vocation truly brings pleasure and a sense of purpose, I don't see the point of hanging around the working world. Bank the memories while your health and sanity allows for it.
Yes indeed. I think sanity/mental wellbeing is that third factor. People forget how much their work environment changes them over the years. Often for the worse.
Whilst I 100% agree with saving for retirement and gaining FI as early as possible, all these predictions (not criticising you merely observing) are all based on guesswork as to rate of inflation and return on investments - if either is wrong then the predictions are likely to be way out
Personally I like the 25 x income needed in retirement theory (it's as good as any) and then allowing for spending a bit more in the early part of retirement when hopefully one is fit and able to enjoy activities
Many thanks for your videos v informative
You’re right; there are lots of assumptions that go into any financial plan, and even more so into a retirement strategy (future income, expected returns, inflation, life expectancy, expenses incl health care, etc). Using realistic assumptions and building in a sufficient margin for error is key. 25x expenses seems to be on the aggressive side imo. Imo the Vanguard research papers provided the best starting point for a dyi personal finance plan.
Looking forward to the model video James. Super interesting topic. 👍
A sister and her husband died in their 50s. Never got to retire. He had alpha 1 inherited emphysema and she died in her sleep from an unknown heart issue. LIVE your dreams NOW!
I totally get this mindset, and people always lean on the adage of hindsight being 20:20, but the fact people die before they can use their savings is a tricky one. None of us (unless given a time limit) know when we're going to die, the best we can do is try to plan ahead AND live in the moment as best we can. All things in moderation here and there :)
Jennifer… exactly ✅
I enjoyed the message of the video, just feel it could have been delivered in less than 3 mins for what it was, but thanks anyway 😉
Haha, I guess you could say that about every RUclips video!
Just found this channel. We don't live in a world any more where managed pension funds achieve 12% a year, so these videos will be interesting.
Great video. I’m saving and investing but not sure how to calculate how much I’ll need for financial independence and how to claim your pension tax efficiently. I believe you can take 25% lump sum tax free from age 55 currently but will be 57 by 2028. I know state pension is also accessible from about age 66. But calculating how best to withdraw from all of these pots effectively is a brain twister.
The main goal is to build up diversity so some in ISA some in Pension some even in a GIA if you've used up all your allowances. This means you can create a retirement income that draws on all of these so you can create that income in the most tax efficient way. But the amount you should draw out and when is another question!
@ManLikeCam Last, just know that if you take your pension that early, your ability to accumulate further pension from self/employment is then restricted to £4000 atm, so it might be better to use your other savings a bit first before taking that, if there is any chance you might work again. It's a toughie.
Hi James Great video. You mentioned two other videos regarding planning and working out your Finance Independence figure ? have you published these yet ? also have you got your contact details please ? I would be very interested in the two areas above.
Hi Gary, I have not released them yet, they'll be coming over the next few weeks. Please follow the below link where you can learn more about working with me: www.videoask.com/f2ekvpc0a
Hmmmm. The key is to balance things out. My mortgage won't be paid off until I'm 62 and I can't afford to pay it off earlier. Retiring earlier would necessitate me having a massive pension pot - not realistic.
Great video. Recently discovered your channel and have been binge watching since. Thank you. Two quick requests 1) Would love to see a bit more content on retirement and the idea of using an ongoing portfolio of investment with cash buffer versus the old school annuity approach. I know you have done a bit on this in the past, but would appreciate a few more tips and thoughts on this one. 2) Would also be interested to get your view on how best to save for your retirement as a couple - Couples will end up with two pension pots, but often one is much larger than the other (especially if you have had kids and one of you opted to be a full-time parent for a while). Does this imbalance actually matter? Pension pots can’t be transferred (unless as part of a divorce, which seems a bit drastic!) although they can be passed on at death I think? What are the options and things to consider? Thanks again
Sure thing, i'll cover this stuff in upcoming content.
Thanks
10:12 what is the FCA mandated growth projection rate? I see most online pension estimate tools (probably all actually) using annual growth of roughly 1.5%, which is crazy low for a 20+ year projection. The result is those tools will almost always say you don't have enough to retire.
Divorce decimates your wealth , I lost 70k of my pension and a £550k house with no mortgage . Damn .
That it does!
Not sure if I'm just too late and they're all gone but when attempting to book in the 20 min call, there is no availability showing up to and including December 2021!
Required income / net div yield of the FTSE * 100.
FTSE is not what you should be looking at
Can you put up some information on people who are low earners who earn about 30k a year and is 60 years of age.
I do think about the die with zero book a lot
Make sure you ask plenty of questions. Such as ‘What if one of us needs ten years in long term care? What if both of us do? How will we pay for that? What if we have inflation of, say, 10% or more for several years?’ Etc. The amount you need might be a lot more than your first best guess. But it might be a lot less, if you don’t live long….
£20,000x25 years after retirement plus state pension. Problem with company pension is I have no confidence in their choice of funds which doesn’t yield good returns and also their choice of provider with is more fees than personal isa stock and shares. It’s expected future value is below what my calculations are I’m not sure what to do?
You should be able to get in there and change the funds, or you could even do a partial transfer to another provider that leaves the account open so your employer contributions can come in.
Watch this: ruclips.net/video/psH0JTS6PsI/видео.html
I've seen people wax lyrical about planning software such as New Retirement, Empower, and Portfolio Visualiser. However, unless I'm mistaken, these are all US-based products. Are there any programs available for other countries (for me the UK) out there and recommended?
You know, in the UK they changed the definition of retirement, it now means 'to die'. This solves the problem
Hi James, new viewer here. I recently graduated from university and have a good 40 years of saving ahead of me before retirement. The line of work I'm in doesn't give great pensions - I get 3% employer contributions and 5% myself. My line of work caps out at ~50k after around 10+ years in the job and I worry that I won't have enough at retirement at this trajectory. I have too many questions to list but any words of wisdom would be welcome.
Read ‘the Richest man in Babylon’, open a Vanguard lifetime index tracker, and play with numbers on an online compound interest calculator to simulate different outcomes .......Good Luck
You’ll be fine. Put away what you can and it will grow much more than you’d expect. Just start early.
Just invest 10 percent of what you earn for the next 40 years in a vanguard etf for example and you will be absolutely fine
300 pound a month for 40 years with average 8 percent per year
Gives you nearly 1 million quid
What’s the best way for self employed people to save for a pension?
Great video James but I wonder what you'd say to someone like me - age 52, no partner, no kids, some savings, pension I can't touch, get paid minimum wage, already had a cancer diagnosis. Good situation? Bad situation? Total lost cause? 🙂
Apart from the money, having a hobby or interest is also an important aspect of retiring. If you don't have anything, keeping working might be the best option even if you have enough money.
No, you should start exploring hobbies and interests well before retirement. Try several things if you aren't sure. Most people should be able to find some activities to suit. Also there are plenty of volunteering opportunities whether that's with the national trust, your local museum, library, citizen's advice, hospice or theatre/arts centre. The options are endless.
Im 50 have already qualified for a full state pension at 67 as I have contributed for over 35 ,I can draw my military pension at 60 also have a private pension.I have roughly 75k in stocks and shares.I want to semi retire at 55 and travel the world on my motorcycle while I still have my health. Do you take clients on James and if so can I contact you as a potential client?
I really like your videos and your knowledge is second to non.
Just answered my own question seen your link in regards to 20 min call but unfortunately only day available is xmas eve !
I will try in the new year cheers
Hi Keet, that sounds like a great goal! You can find out more about working with me here: www.videoask.com/f2ekvpc0a
I'm nearly 31, self employed and I have nothing 😅 is investing in vanguard index fund monthly a good way and treating it like a pension ? From my very little understanding of it , I believe some do ?
It’s one way yes, so long as your comfortable investing for the long term.
How is it possible to come up with a number when government and central bank monetary policy continues to cause price rises through inflation. The calculation would continually need updating to keep up with the currency debasement…🤷♂️
Of course, you make assumptions and continue to update them so you can stay on track the best you can.
What exactly was meant by remodelled their short term cash needs and invested the difference?
Reducing the emergency fund?
Reducing their cash buffer to what they actually need. They were holding too much cash.
I have a pension from my union. I almost never hear you guys mention how that factors in to a portfolio. If I know I’m getting 5,000 a month at 62 how should I invest?
Who knows what unexpected expenses we'll have when we are older? Who'd have thought 40 years ago that everybody would need a mobile phone, a broadband connection, a scanner and a laptop just to function in the modern world. All things you couldn't have foreseen. I think it's always best to plan for more than you think you'll need. I need to plan for all the robots i'll need to buy that will be running my house when I'm 80!
Yes, it’s always good to have a buffer, but only up to a point!
Hi James, what are the FCA mandated growth rates?
I’ll be covering them in the next video.
Great video James. I'm interested if you would factor in the state pension in your retirement calculations? e.g. if you retire 10 years before current state pension age include extra money to cover these years. Or take it out of the equation completely? Although that would mean you'd have an excess amount when that did start being paid!
Definitely include state pension in your forecasts as it's not just how much you need but when and what vehicles you use to get to your needs. For example if you wanted a £20k income in retirement you could aim for a pot of about £400k, taking £20k for the first 10 years and then £10k thereafter. You'd be above the much written about SWR for the first ten years but should be at it or under it once state pension kicks in.
@@robmaxwell9054 as rob said, this should definitely be a consideration which means you can potentially draw down s larger % of income when you first retire.
@@robmaxwell9054 that’s my plan……hope to be at £500k in 5 years when I’m 55, looking for £25k/pa for 12 years at which point I’ll have a full state pension and another £7k/pa DB pension……and my wife will get her NHS pension 3 years later. Still living very comfortably at present as basic rate tax payer, exploring Asia on motorbike adventures once a year and holidaying in Europe in our motorhome when we want. I look after the pennies so I can spend the pounds on living! I do love a spreadsheet though 😬🤣👍
@@robmaxwell9054 £20k! Who can live on that?
James, im 35 and have £9500 in my lisa atm. Based on my trajectory this will be around £300k by age 60 based on full payments of £4000 a year until 50 and 7% average interest. Once this matures at age 60, is their any benefit in earning £40k over the higher rate tax threshold and moving £40k into my pension from my LISA? This should give me another 40% on top and take just over 6 years to complete. It seems to make some sense to me, but maybe their is no financial benifit to it. I dont plan to retire completely until at least age 70 unless something happens and I don't mind having more than I need in my pension as at least part of it will go to my daughter and any future children.
Hi Jonathan, yes that could be a good strategy if you're planning to work beyond 60.
Hi James, just followed your videoask link. got to the end and unfortunately it came up with no dates available for the rest of this year!
Hi Liam, I’ll ping you an email and try and free up some time
@@JamesShack Thanks!
Find a career you love and rewards you everyday, then you don't want to ever retire. The money is a bonus to a life of meaning.