I think @platinum87 might have mistyped 65 as 45, otherwise I'm worried about his planning!
Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
- Start date
Soldato
Yea its the main problem in this thread, holding funds that are asbolute trash if your typing 5% return
So rob i didnt mistype i assumed 12%
Maybe they are pension pots within nutmet, maybe they have pots in multiple places
My calculation just based of average salary roughly of course, but i lowballed it
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Even the S&P 500 has only returned about 7% average over the last 30 years when adjusted for inflation!
I'd probably plan based on about 5% inflation adjusted, too.
Soldato
If we are going to look at the performance of pension funds vs the S&P500, its going to be ultra grim.
Obviously future is unknown we can only talk about the past and a lot of people should have double or triple in their pension via pure returns.
googling the data is just a huge headache tbh.
Yeah. Me too. Hope he gets/has a good financial advisor…
12% is a ridiculous average return to expect. I have bettered that for 3 years with a select set of US equities. I’m sure many have. But most put money in a fund with there retirement year in it’s name and get 4-7% over a 10 year period.
5% over a life time isn’t unexpected. I certainly wouldn’t be doing any maths with 12%… that would be extremely stupid.
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@platinum87 I am not one to give unwanted advice not asked for but as this is a serious topic….. Few of your comments suggest you're making some significant assumptions, badly.
If you have doubts get a financial advisor… I don’t want you to think all will be rosy for you if you’re just starting this financial journey.
If your minted, then this post is for others… lol
If you have doubts get a financial advisor… I don’t want you to think all will be rosy for you if you’re just starting this financial journey.
If your minted, then this post is for others… lol
And in the first 10 years of work people earn less and put less in. So it’s only the year 10 to 20 people that have a good pot to get the rewards of having most in equities.
In the last 10 years of work people should be pulling out in less risky vehicles. Might be putting more in, but I wouldn’t expect more than 4% return..
I’m going to 48 with equity then moving some out gradually. Hoping the US economy does well with trump and keeps my retirement pots on track.
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Soldato
Depends on your risk appetite. I'm 59, retired, and do two years cash (money markets etc) and everything else in 100% equities, mainly S & P. Less risky to me just means poor returns, and again, for me, is an old fashioned way of looking at pensions.
Totally comfortable with that. Then again, my outgoings are low, I could live quite happily on state pension alone.
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Soldato
Depends, you'll have to do the math. I think the common thing to do is leave the current work pensions where it is assuming you can get it investing into a good fund and the fees aren't ridiculous, and use a sipp to consolidate pensions from previous jobs assuming there isn't a protected pension age etc.
Don't assume Vanguard is good value though, I'm moving from Vanguard to ii and the fees will be about half.
Some other options to consider:
The Best SIPPs in 2025: Fees & Features Compared
Choosing the right SIPP depends on your specific needs and requirements. We'll help you narrow down your options and pick the best one for you.
financialinterest.com
Btw a nice rule is the rule of 72. Just for general use it’s worth knowing.
In a fairly healthy time, pension pots grow at 7%. So it’s fair to say a pension pot will double every 10 years without any more contributions in good times.
In normal times expect 4% and it to take 18years.
Again playing with 12% is a shocking number giving a doubling in just 6 years.
If that were the case I’d semi retire tomorrow knowing I’d be on well over a million in 12 years time.
Shoot, 2 million in just 18years.
In a fairly healthy time, pension pots grow at 7%. So it’s fair to say a pension pot will double every 10 years without any more contributions in good times.
In normal times expect 4% and it to take 18years.
Again playing with 12% is a shocking number giving a doubling in just 6 years.
If that were the case I’d semi retire tomorrow knowing I’d be on well over a million in 12 years time.
Shoot, 2 million in just 18years.
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Soldato
Personally after the last decade or two of bond performance, I don’t think the old adage of moving from equity to bonds as you approach retirement really makes sense these days. Index funds have been far more stable overall.
Default pension funds are so poor. Probably don't get much above 5pc YoY
12% is very unrealistic. Even the best performing single fund on my scheme only just made that number, and you'd be dumb to put your entire portfolio in it.
Edit - actually in my scheme 4 funds got 5 year average returns if 12% or more, as I highlight in this post:
forums.overclockers.co.uk
One of those was gold, the others were equity growth funds. All four had comparatively higher fees than other funds.
Edit 2 - wow it's been a year since I started this thread. Think it's time to download the fund fact sheets again and do a review.
Edit - actually in my scheme 4 funds got 5 year average returns if 12% or more, as I highlight in this post:
Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
I didn't know this could be done. Depends mostly on if your scheme/provider allows partial transfers out. There are other limitations if you have protected rights etc. Obviously only applies to DC pensions also.
forums.overclockers.co.uk
One of those was gold, the others were equity growth funds. All four had comparatively higher fees than other funds.
Edit 2 - wow it's been a year since I started this thread. Think it's time to download the fund fact sheets again and do a review.
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Agreed. Although what makes sense now, might not in 5 or 10 years for those at that stage.
My default was lucky to get 3% and so many are in it at work I feel for them. But Tbf many don’t care and have different perspectives on what later life might look like. Personally I keep options open. I’d rather have 3 good options that 1.
Same here. I like the 7pc. Doubles my pot every 10 years.
