Pension growth

[skip207]

What growth rate does everyone use for their SIPP (if you have one?)
Mine has 20 years to run and trying to update my excel sheet and currently use 4%.
Any thoughts!?

[Monkeytennis]

I use 5% investment growth and I don’t account for inflation, I assume a 2.5% wage increase. Part of it is behavioural, if I used a high growth assumption I might be less likely to save hard.

[poppydog]

I’m similar to Monkeytennis.  I model 7% including 2% inflation, which is pretty much the same. I’ve read that 7% is the long term market return. 

[ExitViaTheCashRamp]

Given how far we are into a bull run, I am assuming just 2.5% over inflation to take into account a serious correction in the short term.

[dreams_and_discoveries]

I've gone for ultimate geek, my spreadsheet allow me to model many different rates. My fav number at the moment is the return needed to retire in Dec 20.

[never give up]

I’m so cautious I use 0%! I don’t do anything predictive or attempt to project/forecast future returns. I’m probably slightly odd in that I don’t have a FIRE date although I do have a FIRE number. I’m just concentrating on keeping my savings rate as high as possible and assume I’ve got to reach my total number on my own. Any investment gains are a bonus!

Over 20 years 4% probably isn’t a bad shout. It I was forecasting I would rather the markets overachieved relative to my target than under achieved.

[Rightflyer]

I'm using 3% which is what the actual dividends/income are on our portfolio.

No accounting for inflation, as I am assuming nominal dividends (as in payments NOT yield) will rise with inflation over the long term.

I also assume that the underlying securities will at least keep pace with inflation over the long term.

Seems to be the worst case scenario given the tendency of stocks to return to the mean.

 

[skip207]

I have left it at 4% for now. 

Hopefully will give me a base line.

I have a 15 year delta between FIRE and SIPP age so quite important to get the numbers in the ball park.

[PhilB]

4% real pre-retirement, 3.6% real post retirement.  The drop is because I lose the option to work longer to make up for bad returns.  My withdrawal strategy is a fixed 3.6% of actual fund value so I'm betting that just increases with inflation on average.