Hello,

My view is that 4% average growth, net of charges, is no where near realistic, for most people in retirement.

Conan is entirely correct to draw everyones attention to the need to invest heavily in equities and remain in them for the long term, if your hoping for 4% growth (net) pa.

There's a reason why the large majority of pension funds reduce the risk profile of peoples retirement funds, as they get near retirement age, it's to reduce the volatility to near zero. With that, comes very low growth (in a low interest rate environment), but you get the comfort of knowing that you won't incur significant losses over a short period of time etc.

Anyone looking at their numbers and forecasting average growth of 4% pa net, needs to answer one question very honestly here... Are they really prepared to risk losing 25% of their fund, or possibly even more, in one 12 month period, then perhaps another 15% the following year, particularly if they are no longer working (retired) and need this money to help fund their retirement?

My bet is that most people are not prepared to take that level risk, and those people need to consider an average growth rate of closer to 1% pa, then 4% pa.

Long term government bond rates remain extremely low, with very little sign of them increasing over the next 5 years or more... Cash deposit rates are even worse. That's where most people need to be getting their expected growth rate from when considering their fund's annual growth in retirement, not the equities market.

Things may change in 10-20 years time, with growth rates increasing without the need to take on significant risk, but my crystal ball tells me that its that far out, and certainly won't happen in the next 5 or so years.