Owen`

This is the first manifestation of politics in the matter. "Can't drill your way out of it" is a Democrat buzz phrase and they adopt it because environmental extremists are part of their donor base. But if one is facing incipient starvation of cities (where Democrats live), one does have to ask a much more direct question . . . just what good is that oil doing anyone sitting underground? Sure, if oil is depleting and its end is inevitable then alternative approaches will need to be sought, and yes, its "end" doesn't really arrive because oil shale and tar sands have yet to be harvested. [suncor in Northern Alberta harvests tar sands aggressively and has very nice production, but to get it they heat water with natural gas until it is high pressure steam and then they use that steam to blast the oil off the sand. There is some considerable question about the environmental aspects of that, but Canada prefers to just enjoy the production.] However . . . there is always a however . . . there is no law of the universe that says decent alternatives are going to arrive. Nuclear, solar, wind and whatever do not ship food on trucks to cities and don't push 747s across the sky. Only diesel and jet fuel does that. The US Dept of Energy was created in 1978 and has been fully funded since then . . . and those alternatives haven't arrived. Anyway, my read is plug in electric vehicles will not ship food to cities. Fuel cell vehicles won't either. Nor trucks with big solar panels on the roof. Or if any of those approaches are the eventual solution, they aren't going to arrive for a long time. If you want to eat during that long time, better start drilling.

Two pensions plus SS only adding up to 29K is surprisingly low. You may want to recheck that. And if SS is part of it, then I suppose you expect to be 62 in 2010. If so, recheck your health insurance. At age 65 many government health plans transition themselves over to Medicare, and Medicare won't send money outside the US. If this holds true for you, you really only get 3 years before you have a problem. Inflation. I probably ought to babble in a different topic thread created for that purpose, but what the hell. Oil. The oil problem is happening in an election year in the US and the result of this is the two sides are gathering into their own little caucus to decide what approach will win votes. I very much suspect that this problem is like predicting the stock or currency markets -- meaning no one has any idea of what is going to happen. But I have been looking at this for about 10 years and I have some tidbits to offer that aren't getting much attention. 1) Probably 80% of the quoted oil reserves from various countries (especially in the Middle East) are not audited. Worse, OPEC has, for about 20 years, allocated pumping quota by reserve total. Yes, those quotas were routinely exceeded, but nevertheless they were imposed and countries paid attention to them. The point being, each country has had enormous incentive for those 20 years to increase their quoted reserves. Case in point, Iran. Iran has increased its quoted reserves total by 50% since just 2000, and they have done so with essentially a 0 exploration budget. 2) The Saudis are pumping about 8 million barrels per day. They have pumped as much as 1.5 million barrels per day more in the past. The US is still pumping 5 million barrels a day. Iran is at 3.75 million, and there are no projections of them pumping 5 sooner than 15 years from now. Additional to these curious numbers, Russia last year was expected to increase its production 2%. Instead, their 2007 production dropped 4%. 3) The average US calorie that goes in your mouth traveled about 1500 miles to get there. It is apparently more than that in Europe. If oil truly is running out, the trucks that bring food to the store shelves in cities are not going to drive. Starvation is going to arrive rather fast. Bottom line: if oil's time has come, this is not going to be pretty.

Several addenda: 1) You seem to have some kind of income from a government pension at age 38. Maybe such things happen in the UK. If so, okay, and yes, it is inflation indexed (for UK inflation, which will be different than Thailand's, higher or lower at different times, one supposes). That will lessen your concerns a bit. Jacko's mention of inflation remains legitimate, however, because of the other sources of income you have that do not appear to be indexed. 2) The various calculators online (like Firecalc) do indeed focus sharply on the magical 4% number, but that number is not absolute. It's designed around 30 years. You don't truly know your date of death. If you live 50 years to age 88, 4% will run you dry. OTOH, that 4% number is always quoted as upside sacred, but it ignores any future indexed pension, and almost all people in the US and probably the UK are going to get a state pension of some amount (Social Security). In general, for a modest lifestyle of 110,000 baht per mo, the likely correct number is 4.5% -- because Social Security is going to arrive. That 0.5% is quite large. It's a 12.5% increase in permitted annual spending. Also, that 4% number derives from a 95% confidence requirement. If you were willing to accept 85% confidence, you'll be north of 5%. 3) You need some exposure to shares of stock. Interest from bank accounts do not keep up with inflation. Shares of stock can. The companies endure increases in their costs, so they increase the price of their products to hold profit margins. That means they have defended against inflation and the shares should reflect that. 4) Health care will be good in Thailand. But you must know how much of your 60K baht per month it is going to be. 5) I know . . . I KNOW . . . the UK guys have had their attitudes about where they live defined by the explosive increases in home prices in the UK. But please try very hard to accept and understand that there is no law of the universe that says you must, or that it is a good idea, to own where you live in Thailand. Yes, rents can increase. But also yes, where you have your cash invested to fund rent can also increase. At any moment some decision could be made to confiscate private residences of farangs using almost any excuse. There would not seem to me to be any reason to endure that risk.

I don't see any way this can work and I suspect what we have here is a lack of some information and some erroneous perspective borne of being 38 yrs old. You expect 55K baht per month at age 38 from interest on savings plus a "pension". To be drawing a pension at age 38 suggests you are disabled in some way, which introduces other issues. Ignoring that for the moment, maybe a condo of adequate size for two people is indeed 6 million baht, but one suspects less. If you could downshift that number just 33% you would have an extra 7000 baht a month available. So here's the thing. Even if we talk in terms of 60,000 baht per month with no housing expense, I don't see how that funds two people -- especially with the presumed trip back to the UK each year (and any other travel you might do SEA locally). That trip home for both of you is 76K baht -- more than a month's expenditures -- and oil is driving that number higher every day. The focal issue is that you have to fund two people. You'll need two transportation budgets, two entertainment budgets and two medical insurance policies. If you are in some way disabled, that medical budget could be particularly expensive. If you are not, then you are 38 and think you are immortal and will never have medical issues. You will, times 2 for both of you.

A bit of economic musing, per Eneuckman's comment. Budget deficits and "government debt" have associated with them a somewhat insidious aspect of camouflage, namely, they can pay themselves off. Meaning, a country can run a budget deficit forever and see the value of its debt decline. How? Inflation. If a country has XXXXX of debt at an average interest rate of YYY% that generates ZZZ of interest costs, all that needs to happen is have the country's government pay 98% of ZZZ in each year's budget, which can be still in deficit, and the annual 3-4% inflation will erode the value of XXXXX. Too many letters. If you have 10 trillion dollars of debt and inflation runs 4%, that's 400 billion in value erased from that debt without anyone paying a penny on it. Of course, the 10 trillion is accumulating interest and probably beyond the 400 billion in inflationary dilution, but if the government pays a portion of that interest and gets the number down to < 400 billion, then a "deficit" will still show in the accounting, but the actual debt is shrinking in a real way. Gasoline/petrol is in the process of doing this to all debt worldwide right now. Borrowers are paying back the dollars they borrowed with less valuable dollars. So in general, sky is falling media stories about deficits and debt can safely be ignored. Debt pays itself off if you simply service the interest below inflation's erosion.

Joe, yes, there are "casino costs". I laid them out. They are 0.4% (annual) charged by the sponsoring outfit that runs the index and manages the ETF. It's like a mutual fund. The fund company, like Fidelity or TRowe Price, charges a fee to manage the fund -- buying and selling stocks within it to maintain some mixture they have declared sacred. A typical managed mutual fund will charge about 1% for that service, annually. You will never see it come out of your account. The price of the fund itself is adjusted. Additionally, these ETF things are bought and sold like shares of stocks, so whatever brokerage you're using will charge you the usual broker commission fee. A typical number for this is $7 for 1000 shares. Buy 1000 shares of anything and pay $7. If the price was 35, that's $7 out of $35,000 (or 0.02%, a very tiny cost). And yes, everyone wants a crystal ball. No one has one that is accurate all the time. It's because of this that obsessing over costs (the 0.4% and the $7) makes sense and defines this as a valid place to devote attention because it is the only thing over which you have 1) control and 2) an accurate crystal ball. Torrenova has always had good stuff to say and it's clearly based in experience. These currency ETF products are very new -- I think only invented months or a year or so ago -- but they do NOT erase experience. They are a convenience tool. They make it easier and cheaper to implement your own decision/judgment of what is going to happen next -- not that you should try.

Perhaps bad phrasing on my part. "Portfolio insurance" is a phrase that was invented back in the late 80's. It's mostly "derivatives". Meaning call or put options. If you owned some shares of some company and you were afraid it would go down in some time period, you could buy put options, while still holding the shares. Put options increase in value if the underlying stock decreases in value. So by buying put options you were "taking out insurance" on the stock itself. You held the stock, which decreased in value, but your put options increased and if you calculated how many puts you bought properly, the entire event would be a non event. You lose no money . . . you "insured" the value of the stock. These ETFs carry an annual expense ratio of 0.4% (for FXB, as an example). That, plus the commissions on the trade, is what they "charge you for the insurance". This is quite low as funds go. A commodity ETF like DJP charges 0.75%. For the case of FXB, priced in dollars and reflecting the UK pound wrt to the dollar, it goes up if the pound goes up. Similarly FXE does the same for Euros. FXA is the ETF for the Australian dollar wrt US dollar. So let me see if I can construct an example. You are preparing to move some US dollars to Thai baht. You are going to get XXX exchange rate when you do. You have a lot more money in your US bank that eventually will need to move to Thailand, but you're not comfortable with the risks of bank corruption or politics resulting in some kind of confiscation or some other fear and so you just don't want to move it all to Thailand now. BUT. You also are bothered that the exchange rate is eroding and may continue to do so. Well, there is no USD/Thai Baht ETF currently being traded, but there is a USD/Chinese Yuan ETF and if you decide that the USD erodes vs the Yuan similarly to its erosion vs the Baht, then (I do not claim this is so) this ETF is insurance. You "insure" the baht (yuan) value of the money in the US bank. You buy the USD/Chinese ETF and it will go up if the dollar declines vs the Yuan. FYI guys, as of now the USD has declined by about 3% vs the Thai Baht since April 2007. There's been a lot of volatility, but the decline is 3% Y-Y. The UK pound over that same period has declined 4%.

I have no predictions. There are some new investment vehicles out, however, that you folks can use to insure whatever decision or timing you choose with moving money from one currency to another. http://www.etftrends.com/currency/index.html

Eneuckman, this is another quirk of US tax law driving Gary's comments about this. Corporations are taxed on their profit in the US. Some portion of what is left after that taxation is paid to individuals as dividends. And then the US tax laws declare this to be income to the individual to be taxed at his individual tax rate. Dividend dollars are taxed twice in the US. "Double taxation of dividends" has been complained about and ignored for decades. Recipients are the filthy rich, you see, and deserve to have all of their assets taken away to fund the lives of people who prefer to spend their time standing on street corners talking to their friends. It is my understanding this double taxation thing is rare elsewhere around the world.

Be all this as it may be, my overall point is that there is nothing new under the sun. There have been financial crises in the past, and there will be more in the future. The US markets are only down 15% from their all time high, reached just a few months ago. Guys, 15% is not a huge move. The hyperbole we are hearing about the end of the world is coming from people who want their own annual bonuses funded by a government bailout. So far, it's not happening. Every Fed action taken of late has been, in effect, a 30 day loan. All the talk about "providing liquidity" has been made for consumption by people who don't look deeper. Yes, the Fed is providing banks access to money, but the money provided must be repaid in 28 days. There is no net influx of money into the system. It is phrased to sound that way, but that is not what is happening. Those annual bonuses, so far, are not getting funded by the taxpayer. This is a good thing.

SubPrime mortgages. Well, here's the deal for you UK guys. In the US (and not in Canada), interest paid on the loan used to buy your primary residence is tax deductible right off your income. The US real estate industry got this stuck into US tax law decades ago and it is now sacrosanct. If you pay $5000 in mortgage interest and you made $70,000 last year in paychecks, that 5,000 comes right off the top and makes the number 65,000 (before all sorts of other maneuvers take place). This means a home mortgage is subsidized by the US government. The financial industry went out and found borrowers who might not be able to qualify for other sorts of loans and persuaded them to borrow under these various "sub prime categories. Sub Prime refers to the quality of the borrower, not the quality of the bank. There is all sorts of talk going on as the various interest groups involved with this try to mold public opinion. One of the first things to do when you are trying to understand this is do a very quick translation of a simple phrase when you hear it. "Home owner". That is the way things are phrased right now. Home owners are losing their homes. It's not true in the sense that it is not the majority. The majority are "house owners". When you hear any discussion of this matter, translate all occurrences of the phrase "home owner" into "house owner" and the nuance appears. The majority are flippers. They are real estate investors. They had 4 or 5 houses they had bought hoping for a continued big price rise and they would just flip that house over to someone else, take the proceeds and buy another . . . or another two. Because they were so heavily in total debt, they fell into the category of poor quality borrower. That put them into the sub prime arena and those are the sorts of mortgages they got. Also, in point of fact, most were lying to the US government about the houses with respect to "primary residence". ALL, no exceptions, ALL declared the house with the biggest morgage interest to be their primary residence regardless of where they actually lived. Some . . . some cheating number of them declared multiple placess to be private residence by filing multiple returns. So these people are facing the situation where the price of the house has fallen lower than the remaining loan (mortgage) on the house. In rational times, the law would say that they borrowed the money, they must pay it back, and the house's value is at best ancillary to that obligation. Unfortunately, some state legislatures were paid off by the real estate industry and embedded laws saying that if a house value dropped to less than a mortgage, the owner could walk away and the bank could not pursue them. Thus, the banks are left holding the bag and that investing category of people essentially were speculating risk free. And worst of all, California has this law. Biggest state in the US and they are letting flippers walk away owing nothing for their speculation.

FYI, the US stock markets closed up 4% today, largest gain since 2002. The overseas markets will follow in lockstep when they open in a few hours. Markets fluctuate. With this move the market is down from its all time high about 15%. The bottom of the 2000-2002 (which started under Clinton, btw) decline was -48%. Financial reporters write their articles to win awards and hold attention so advertisers get seen. They do so on the way to lunch or home for the day, on deadline. They aren't the fount of genius. Neither are the people they quote in their articles, who usually were the only people at the number they dialed who were not so busy doing productive things that they had time to answer reporter questions. When it comes to financials, just look at the numbers and ignore the text.

There is almost never anything new under the sun. The US stock markets are down about 18% from their high of October. In the great crash of 2000, the US NASDAQ lost about 50% and then another 20% over the next two years. The S&P measure lost about 48% from 2000 to 2002. There was a recession of GDP growth that lasted several months. The costs of 9/11 and people unwilling to fly and expenditures on security aggravated it, but in the end there were tax cuts and "rebates' and the normal cycle of economic activities and . . . growth boomed in 2003, and 2004, and 2005, and 2006 and started to erode only last year. The current decline is generating headlines, but numerically it is nothing particularly special. The US stock markets have been up for 5 years in a row as of Dec 31, 2007. This year, maybe not. Or maybe so. No one knows. The only thing that is "new" in this context is the world is indeed running out of oil. Waving a hand and saying "there will be other energy sources" is somewhat glib. If they existed and were superior to oil, they would be dominant. Nothing good will come from the upheaval of oil depletion, and it will affect everyone everywhere. But in terms of the US economy and financial structure . . . there have been times of crisis before and there will be times of crisis again. The market will be down about 20% since October probably at the end of trading today. This is a somewhat mild decline historically in comparison to some of the big declines of history. The latest 2002-2003 style Bush stimulus of $600 per household will arrive in a few months. Expect to see results from that later this year.

Interesting. That rule seems to have worked. Also, the pension mathematics will soon fall apart for entire pension systems if they are paying a benefit to widows who are 25. There has to be some downshift in payout for very young age. These are usually indexed schemes and no system can afford to pay an indexed benefit for life to a 25 yr old.

Soc. Security will be one of the last to be hit. Company pensions first, government pensions next (both federal and state), military pensions next, and last Social Security. That's crystal ball future predicting so maybe it's wrong, but my motivation in assessing it is simply that old people in the US vote at a far higher percentage than young people. Roughly 85% of all elderly people in the US draw some sort of Social Security, and most of them vote. The funding for Social Security gets very complex politically as time progresses. There are no alternatives when the matter is one of mathematics: you either increase revenue or you decrease pay out. On the revenue side, as Emil mentioned, the number is about 6% of income up to $95,000 per year. It is popular in liberal circles to point at that and declare that "the rich don't pay" because someone making $150K pays in only up to $95K. But what is less widely understood is that benefits are capped. The 150K guy gets the same pension as the 95K guy. It's mathematically fair. Also on the revenue side there is the issue of minorities. Minorities are scheduled to become the majority of the US workforce somewhat soon. Their representatives in Congress will inevitably look at this reality, and at the reality that the retirees whose pensions they are funding are majority white, AND at the reality that minorities tend to die earlier and thus collect less in pensions, and have serious reservations about tax increases. On the benefits side, the quietest, easiest, least voter painful way to cut benefits is what Emil suggested, an inflation adjustment reduced to less than the official number. This looks like a benefit increase each year, even though it is not, and it doesn't cost too many votes. The problem with this is the senior advocacy organizations are staffed by younger people burnishing their own executive credentials and salaries, so they need seniors to have plenty of discretionary income to pay dues into those organizations (and the executives' salaries). They are on top of any such attempt and scream bloody murder, galvanizing senior resistance and maybe even vans to give them a ride to the voting polls on election day. In other words, these effects will make Soc. Sec. last to be hit. We should start to hear about cuts in state government pensions soon (for you UK guys, "state" means California or Maryland, not your "state pension").

The UK guys can benefit a bit from this, too. Social Security pays a "full pension" at age 65 (it is already in the law that this number is 66 or 67 if your date of birth is later than X or Y -- meaning they ALREADY increased the "full retirement age" in the US and did this several years ago). If you choose, you can start your pension at age 62 and accept a reduction, forever, of the pension payment. The amount of reduction is 20% if your date of birth would have let you retire at "full pension" at 65, 25% for age 66 and 30% if your date of birth allowed it at 67. The dates of birth for these thresholds are: born earlier than 1937, age 65. Gradual increase a few months at a time to 1938-1943 up to age 66. 1943-1954 holds at age 66. Then a few months at a time from 1955-1960 up to age 67. Anyone born after 1960 full retirement is 67. One of the UK BMs might be kind enough to lay out whatever the similar thing is for state pension? The UK guys probably have a similar arrangement. If you start drawing money at 62, you come out ahead overall if you die before the larger full pension payout at 65 has time to catch up and pass the amount collected from 62 to 65.

I don't tend to talk too much about corporate finance in babbling here, but this may be a time it is justified. One of the reasons pensions became so generous in decades past was because accounting (bookkeeping, or whatever the UK terminology is) norms permitted management to offload pension expense into a separate category for reports to shareholders. It was something they could dismiss as "not reflective of the quality of management's stewardship of the shareholder's money". Meaning, it was moved to an outsourced pension fund management company and it no longer involved the corporate management itself -- and they in many cases just stopped counting its cost in corporate results and told shareholders how lucky they were to have such genius management who should be rewarded by the Executive Compensation Committee of the BoD. So management LOVED to offer early retirement with lots of incentives in order to get salary expense off the books -- and even for those companies that were "forward looking" that actually including the costs of pensions on the books, moving someone from 100K salary to 40K pension looked like a cost savings in year 1 and an earnings boost and management looked very good and quickly got their glowing resumes sent out to get hired elsewhere. It was one of the most absurd realities of business of the past 20 years that "forward looking" companies were paying people . . . literally paying people to become a lifetime burden on the company in return for no further work. It's very similar to company management that loves to buy other companies. On their own personal resume they get to write, "during my 2 year tenure as CEO, corporate revenues increased 300% and profit increased 70%". He doesn't mention on that resume that he BOUGHT those extra sales and profit with the shareholder's money. But for that, and for pensions, of course, 1 + 1 eventually does equal 2. DrMick, it would not surprise me if your situation getting such high level review is one of the first to start to encounter the resistance to this stuff in the future. There are too few young folks paying into pension funds to cover the retirees. We'll hope you get past that resistance. All this was known to be coming, but . . . frankly, Microsoft Office's arrival in the world of business increased productivity in the 90's for a solid 8 years, buoyed stock markets worldwide for those years and that stock market bubble buoyed up pension funds -- so management's folly was hidden. The bad news is here: http://moneycentral.msn.com/investor/chart...;CP=0&PT=10 and here: http://moneycentral.msn.com/investor/chart...bol=%24GB%3AUKX There has been no growth in the S&P for 8 years. The same is true of the FTSE. You can't fund pensions that have inflation indexes if the pension fund itself doesn't grow. It is for this reason that I keep cautioning folks dependent on pensions to continue to LBYM (Live Below Your Means) because those "Means" are pretty much certain to erode. A little bank interest or share dividends to supplement them would be a good idea. And it is for this same reason that I tell younger guys to just forget about pensions. They will never return in your lifetime. You have to take care of yourself.

For any younger guys reading this and looking ahead with glee, odds are high none of these options will be around for you in 10 years or more. Pensions are going away. For private sector and government sector. They are too expensive to fund when the demographics have more elderly than young.

>> I WOULD TAKE % OF LUMP SUM AS THIS IS TAX FREE ,so pay less tax as month pension would be tax >> Get the numbers correct and you'll be good. I had no idea you folks get lump sum pension distributions tax free. That is astonishing and good news for you all. And, of course, if you get it lump sum (provided your net present value is well computed) then the future of the company has no significance. Remember, odds are private insurance will not be covering people past 65 in the future. Plan to go home then.

Here are the things of most interest to you for this sort of arrangement, and I suspect this applies to both UK and US. 1) Is your pension to be inflation indexed? Wait, let me reword that. IS YOUR PENSION TO BE INFLATION INDEXED? There is essentially no question more important that this. If it is not, find out what the lump sum payment options are. You will have to do some very serious net present value calculations to see if they are stealing, but you're an engineer so you know how to punch a calculator. 2) If you get a pension OR a lump sum, are you permitted to remain within the company's group health plan?? You have been with a big company all your life. You Have No Idea How Health Care Works. Please understand this concept. You have NO idea of the real world. If you're a Brit, this doesn't apply . . . yet. If you're American, it applies effective NOW. You have to know if they will let you remain in their group health plan and you have to know if that health plan will cover you outside your home country. 3) Do not presume the answer to either of those two questions is forever. A great many companies thought to be immortal are not. Or if they are still around, they changed their nature. One of the VERY FIRST things a company in trouble seeks to rid itself of is indexed pensions and health care expense. Get Educated.

nidnoyham, talk to a bank about setting up a trust with the kid as sole beneficiary. They will know costs, etc, but you'll have to dance carefully about excluding the mom from access. Maybe let it compound until the kid is 18 and then she starts to get an income stream from it.

See, there is no point in me typing what I'm about to type. But when was that not true of all of our posts haha. Let's ignore inflation that will take 3% per year out of that hoped for 5%, because it takes 3% per year out of everything else, too. The magic formula guys . . . 1.05 ^ (which means raised to the power of) N where N is number of years. You say 5% per year for 10 years is going to get you to 500 pounds? Cool. Here's what that means: 1.05 ^ 10 = 1.629. 750K (picking a number between 500 and 1 million) is your expectation in 10 years. Well, that means as of today your house is worth 460K pounds. Yes? It can be much less if you have a mortgage because a mortgage gives you favorable financial leverage (amplification) on that 5%, but since we don't know how much you owe I won't go into it. In general, without amplification, you seem to have a 460K pounds net worth now. If you don't, maybe 750K is farther out than 10 yrs. Out of curiosity I WILL ask, what are you paying in interest on the mortgage, what are the annual house repair costs, what is your annual homeowner's insurance costs, what is your annual property tax (UK calls it council tax? Not sure) and have you ever computed the depreciation cost per year on all the appliances in the house? All those, to some extent, deduct from the 5%.

You know what, sinbinjack? You're right. The concepts we talk about are supposed to have value to everyone, but when I glibly say . . . take 1/2 your money and put it in stocks, and 1/2 in bonds -- that is of zero value to guys who worked for a living their whole lives at maybe a low income job. Hey, they made the choice to do that rather than suck at . . . I think y'all call it DOLE. That means they earned some help. What those guys need is a little crash course from the guys here on how to get their money into 1/2 stocks and 1/2 bonds. For Americans, it is index funds at Vanguard They have the lowest costs of just about anyone. You go to vanguard.com and get some phone numbers, call them, talk to a human and get them to lead you through the process of getting the paperwork. You do have to file a few forms to get your signature on file. Eventually you mail them a check and a few days later the numbers will appear in your account online at their website. That's pretty much it. Nothing more complex than that. You know . . . for you guys who have not done this before, take it easy on yourselves. Just send some small amount of money at first so you avoid stressing yourself out while you learn how it works. If you send a big check right at first, you will scare yourself. Send a small check and learn how it works first. When you are confident, you can arrange the entire amount. For Brits, someone step up and describe the easiest path to doing this for guys who know NOTHING about it. For pension retirees, it's just direct deposit of your checks into your bank accounts. If it's not enough for comfort, do some part time work and sock some away in those same accounts I just described. Let the proceeds add to your pension.

Aha. Another similarity. See, the problem with threads this complex is that it is about a subject no one wants to deal with, and it's complex. The combination turns guys away from it, and they simply must not do that. This stuff must be understood or life will get miserable in later years. [One last tidbit, mentioned in previous threads. US Military veterans, do not forget that your military service increases your Social Security benefits and that increase is NOT reflected in the earnings form you get each year. Read about it on www.ssa.gov.]

An FYI that may help frame of mind. When someone's arteries are closed to the point that bypass is the only solution, they are in big trouble regardless because the grafted arteries soon close up after they are put in place. And worse, odds are at least 50/50 he would have died in the hospital recovering from the bypass. The arteries replaced by grafted arteries would not be the only ones clogged. The lesson is cut back on smoking and get some exercise.