Ritchie says we should all invest in bonds for our retirement

He’s made this case many a time. Forget the stock market, bonds are the thing:

The stark findings by the Organisation for Economic Co-operation and Development (OECD) will be presented in a report this week that highlights the impact of ultra-low interest rates on global retirement incomes.

It shows that a person buying an annuity today who saved 10pc of their wages into a pension for 40 years can expect just over half the earnings of someone who saved the same amount but retired 15 years ago.

Bonds just aren’t great things to have in a low interest rate environment.

8 thoughts on “Ritchie says we should all invest in bonds for our retirement”

  1. The Meissen Bison

    You’d have to be bonkers or excessively lazy to buy an annuity in the present climate but the bond argument isn’t quite right either.

    The coupon’s the thing and a bond acquired more cheaply when rates were higher may well be mutatis mutandis worth hanging on to now.

  2. Not such bad advise* – 20 years ago.

    *Yeah, I know, a mixed portfolio is better. Proportion of bond holding is related to age.

  3. “saved 10pc of their wages into a pension”

    What sort of pension? Different types of pension give different results over different time periods. Maybe he needs to check with an accountant.

  4. ‘Nobody knows anything.’

    Seriously. I was taught 30 years ago not to save for anything. I.e., don’t save FOR your kids education. Don’t save FOR retirement. Save. When you start saving FOR something, it affects your decisions. Adversely.

  5. @ Gamecock
    You were mistaught. Your life planning on how much you need to save and how much you can afford to spend depends on how much money you will need at different times in the future. If you just save regardless you will miss out on a lot of things that you can never enjoy when you a rich old man.

  6. I guess I’m just lucky then how things have turned out.

    ‘Your life planning on how much you need to save and how much you can afford to spend depends on how much money you will need at different times in the future.’

    That sounds like paid professional financial advisor talk. It’s junk.

  7. “That sounds like paid professional financial advisor talk…”

    But I wouldn’t call it junk. Some people a temperamentally suited to a well organised career, a steady job, a planned, anticipated future. And, with luck, it may even turn out that way.
    On the other hand you never know what shit life may throw at you, the best you can do is recognise when things are going rather too well, and have enough n reserve to ride out the storms.

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