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I guess we’ve all got used to prices going up again by now. But a £2,100 jump in just 12 months in the income needed to fund a comfortable retirement is still a little shocking.
That figure comes from the latest Pensions UK Retirement Living Standards survey:
Source: Retirement Living Standards
Most people are not on track to enjoy the right-hand side of that reality. Yet if you talk to them about their imagined retirements, they hardly describe a basic Pot Noodles and the telly lifestyle.
As Which reports:
Pensions UK says that around 82% of the working population are expected to reach the minimum standard of living in retirement, with just 23% and 9% expected to reach the moderate and comfortable standards respectively.
Last week, the Pension Commission warned that 15 million people are undersaving for retirement.
Of course Monevator readers are a different breed: mostly numbers run, plans in place or crystallised. But if you want a quick sanity check, wealth manager Quilter calculates you now need a £691,000 pot to retire comfortably.
Its figure is based on a single person retiring at 66 on a 6.1% escalating annuity, and with no housing costs:
Source: Trustnet / Quilter
We’ve looked at the Retirement Living Standards numbers before. They always generate disbelief disgust disquiet a lively discussion.
The Accumulator has called dibs on diving deeply into them again in the near future, so don’t go retiring* until you’ve read his take.
Have a great weekend!
*Not investment advice. Retire when you’re ready to. But be prepared to do so with fewer of TA’s puns and 1970s children’s TV references at your back.
From Monevator
UK tax brackets and personal allowances – Monevator
Laissez-FIRE – Monevator
From the archive-ator: Comparing the cost of electric car ownership – Monevator
News
Half of London flats are selling at a loss, and the crash is spreading… – This Is Money
…with house prices in most regions mostly softening, too – Which
Cash ISA rush sees savers pour £83.2bn into accounts – This Is Money
UK assets face underestimated risk event [Andy Burnham], analysts warn – CNBC
Britain to suffer biggest G7 jump in unemployment, says OECD – This Is Money
Tenant unions mobilise to oppose any rent increases – This Is Money
Third of Britons say university not worth it, as student loan inquiry begins – BBC
Alphabet’s $80 billion stock sale in ‘unprecedented territory,’ says Goldman – CNBC
Puffin and bumblebee among 18 creatures shortlisted to feature on banknotes – BBC
CAPE ratios haven’t been indicating like they used to – Piper Sandler
Products and services
Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn’t guarantee future results.
Barclays scraps monthly customer fee for self-directed investors – Yahoo Finance
Monzo is launching a mobile network with a loyalty bonus – Be Clever With Your Cash
Seven mistakes to avoid with your mortgage application – Which
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link. Terms apply – Charles Stanley
Cheapest buy-to-let deals for landlords – Which
How to keep your Amex points when you cancel – Be Clever With Your Cash
Get up to £200 cashback when you open an Interactive Investor SIPP. Terms and fees apply, affiliate link – Interactive Investor
How to save money on cinema tickets – Which
Landlords rush to protect income over Renters’ Rights Act fears – City AM
Homes for sale with water views, in pictures – Guardian
Comment and opinion
The dangerous allure of Die With Zero – Jordan Grumet
Being useful is more attractive than being rich – Of Dollars and Data
How much should retirees worry about inflation [US but relevant] – Morningstar
MSCI: the global equity tollbooth – Fiscal.AI
“Am I lower-value human capital?” [Paywall] – FT
William Bernstein: the many utilities of retirement – Advisor Perspectives
Please, stop chasing fund performance – Behavioural Investment
The triumph of capital – Slow Boring
Selling abstraction [Deeeeep…] – Asterix
Investors don’t allocate rationally shocker [Research] – Alpha Architect
SpaceX IPO mini-special
How will these IPOs change the face of the stock market? – Morningstar
UK investors have just a few days to sign-up for IPO shares – This Is Money
By catering to SpaceX, index companies have destroyed their credibility – Phil Bak
What is SpaceX really worth? – Morningstar
SpaceX needs to get to $5 quadrillion to rival Mag 7 magic – Bloomberg via A.P.
Naughty corner: Active antics
Why isn’t oil more expensive? – Semafor
What if the AI boom goes into reverse? – Reuters
Disrupted or dead: AI is crushing pre-ChatGPT startups – CNBC
Are auditors good stock pickers? – Klement on Investing
Berkshire beyond Buffett – Max Anderson
Are Diageo shares a recovery play? [Affiliate link] – II
Software stocks bounce on comments from nVidia’s CEO – Sherwood
The family feeling – Investment Masterclass
Kindle book bargains
Quit Like a Millionaire by Kristy Shen – £0.99 on Kindle
The Algebra of Wealth by Scott Galloway – £0.99 on Kindle
Misbehaving: Behavioural Economics by Richard Thaler – £0.99 on Kindle
Wankernomics by James Schloeffel – £0.99 on Kindle
Environmental factors
The way Americans farm pigs is a sin – Noahpinion
UK’s green economy worth more than £100bn a year, research finds – Guardian
The Amazon’s path from crisis to durability – Mongabay
“Day and night no longer exist”: life in the hottest place in India – BBC
Dismay as Trump officials to dismantle key ocean monitoring system – Guardian
Reform council vows to call off the climate emergency – BBC
Robot overlord roundup
How do you teach a robo-taxi London? Waymo explains – City AM
Model routing is one fix for AI overspending – CNBC
Is OpenAI on its way to becoming Lyft? – Sherwood
Inside the AI boom’s arctic outpost – Time
Starbucks retired its AI agent just months after deployment – Fortune via Yahoo
Can we trust AI to build a better version of itself? [Paywall] – FT
Microsoft says new quantum chip 1,000 times more reliable – BBC
Not at the dinner table
Britain is a swamp of lies, and we got here on the Brexit bus – Guardian
Why Europe shouldn’t close its doors to immigration – Uncharted Territories
Trump’s puzzling strategic retreat from East Asia – Drezner’s World
Wealthy Americans: just stop moaning and pay your taxes [Paywall] – FT
Trump takes his cut – The Atlantic
Off our beat
Did you already win at life? – Kindness FP
Doing weights for two hours a week slashes the risk of early death – Sky
Restaurant critics on 14 ways to order the perfect meal… – Guardian
…and Feynman’s formula to find the best holiday restaurant – Guardian [& Paper]
Orcas and ourselves – Aeon
After a baby, there’s no ‘normal’ way to return to work – The Joint Account
No slave to the smartphone – Simple Living in Suffolk
Just make the coffee – The Retirement Manifesto
[Want to feel old?] Spotify’s most-streamed albums ever – Voronoi
And finally…
“If you look at a 40-year chart, the market-performance graphs are smooth and rising. But living through this period on the ground, there were many moments of terror when it seemed like the world was coming to an end.”
– Lloyd Blankfein, Streetwise
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I loved Jordan Grumet’s deconstruction of Die With Zero.
I recently had reason to apply extreme force financially to get out of an unforeseen bad situation, nobody’s fault, just shit happening. Most of what I risked to fix this will probably return to me in time, but I could take the risk without requiring that guarantee.
Before then I have given people significant amounts to clear crappy situations people I care about ended up stuck in.
As you get older it’s not about the stuff and the experiences you buy, it’s more about what you stand for, what do you know, whom do you serve. The whiff of Protestant work ethic in Jordan’ post slightly grated, I am not sure that a good Lord who valorises works is worth believing in.
But regarding what you do/did with your one wild course through life, the bits that matter aren’t on the Instagram feed. They are your character. How did you affect those around you. And I am short on this in many ways, but the greatest things I have done with money once I had some were things you can’t touch. So from a slightly different angle to Jordan, I agree. DWZ is bunk. It helps in clarifying the thought processes, but that extreme position is there to train the mind, not inform it, as a mystic once said of her magnum opus.
@ermine – you are quite close here to Luke 12:13-22 (the parable of the “rich fool”) – and indeed the latter verses are a bit of an antidote to the Protestant work ethic in my own reading (although too laisser-faire for almost any Monevator reader, I suspect).
As I get older, despite being more or less atheist, I find these kinds of older wisdoms make more and more sense, and modern expressions of the same ideas less compelling.