WEBVTT - Why Dying Broke May Not Be a Bad Idea

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Welcome to Merin Talks

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<v Speaker 1>Your Money, the personal finance edition of Merin Talks Money

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<v Speaker 1>and these bonus podcasts, we talk about the best strategy

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<v Speaker 1>for making the most of your money. A Merin sumset

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<v Speaker 1>web and with Me, senior reporter and author of The

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<v Speaker 1>Money Just Tells the newsletter, John step back, Hi, John, Now, listen.

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<v Speaker 2>We really like.

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<v Speaker 1>Getting questions and feedback from our listeners, don't we jump

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<v Speaker 1>back me up on this?

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<v Speaker 3>Yeah, it's great, it's extremely interesting, and so.

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<v Speaker 1>We're going to answer a listener's question today ask us

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<v Speaker 1>to talk about non equity baskets. But before we get

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<v Speaker 1>onto that and explain to you what a non equity

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<v Speaker 1>basket is, of course, but you go through some of

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<v Speaker 1>the other notes we've had from listeners, because we promise

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<v Speaker 1>you we do read them all. Not all of them

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<v Speaker 1>become episodes, but we definitely read them all and we

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<v Speaker 1>think about them right. First up is Tracy. Tracy is

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<v Speaker 1>a long term listener and she takes issue with her

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<v Speaker 1>idea about holding cash. She feels that holding six months

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<v Speaker 1>worth of expenses in a cash I ser is sensible

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<v Speaker 1>for most people, but not for everyone. She cites two

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<v Speaker 1>other groups of people, first though saving for a first

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<v Speaker 1>house to posit, saying it doesn't seem sensible for them

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<v Speaker 1>to invest a posit in And I said, and the second.

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<v Speaker 2>Category would be the elderly. She talks about her mother.

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<v Speaker 1>Tracy explains her mother has just sold her house, now

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<v Speaker 1>lives in a care home and the cash in the

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<v Speaker 1>house is being used to pay care fees. Therefore it

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<v Speaker 1>doesn't make sense to invest that cash. That's actually an

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<v Speaker 1>extremely sensible piece of feedback, I think. And one thing

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<v Speaker 1>I would say, John, I don't know what you think,

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<v Speaker 1>but it might be a good idea if you if

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<v Speaker 1>you're talking about quite a lot of money from the

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<v Speaker 1>sale of a house, just leaving that sitting in one

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<v Speaker 1>cash account could be a mistake because you're only protected

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<v Speaker 1>up to eighty five thousand pounds in each bank account,

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<v Speaker 1>So that's worth thinking about.

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<v Speaker 3>Technically, there is comfort for temporary big sums. If you

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<v Speaker 3>are selling the house and you'll be wee noses for

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<v Speaker 3>a few months, then double check with your preveder. But

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<v Speaker 3>I think that it's covered for up to a million

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<v Speaker 3>in certain circumstances.

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<v Speaker 2>But that's not what we're talking about here.

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<v Speaker 3>No, absolutely not. This is long term, so yeah, she bit.

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<v Speaker 2>Tough to splatter.

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<v Speaker 1>Yeah, and there is a case, and again there's probably

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<v Speaker 1>something we should look at probably another time. There is

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<v Speaker 1>a case for holding short term guilts and just continuing

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<v Speaker 1>to roll those over getting the income from that, and

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<v Speaker 1>there's some tax advantage there as well, So there's definitely

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<v Speaker 1>a case for that if you've got a very large

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<v Speaker 1>amount of money that you're holding on to for an

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<v Speaker 1>elderly parent who's in a care home, because as we know,

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<v Speaker 1>those care homes can come in at a one hundred

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<v Speaker 1>grand a year plus, right, So you know, I hope.

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<v Speaker 2>It was a big house, Tracy. I hope it was

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<v Speaker 2>a big house, and I hope your mother as well.

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<v Speaker 1>And the other thing on the housing point, that's absolutely true.

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<v Speaker 1>The last thing you want to do if you're saving

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<v Speaker 1>up for a housing deposit is to put that money

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<v Speaker 1>at risk in stock markets because it's short term savings.

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<v Speaker 3>Right well, yeah, absolutely, And to be fair, we've never

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<v Speaker 3>said that. I think this slate thing Tracy was taking

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<v Speaker 3>Asue with as well was the eighty the cash ISA

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<v Speaker 3>allowance should be reduced, and I think as a slightly

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<v Speaker 3>trickier concept because I don't think that many people saving

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<v Speaker 3>up for a deposit. I mean, there's gonna be a

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<v Speaker 3>locket of twenty grand, which is the annual allowance for

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<v Speaker 3>one year, let alone multiples of that. I can certainly

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<v Speaker 3>see why you would want to keep a large sum

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<v Speaker 3>of cash in an ISA so that it's tax free.

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<v Speaker 3>For the second scenario, a kind of elderly person in

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<v Speaker 3>care at home fees. At the same time, I think

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<v Speaker 3>that there still is a discussion to be had about

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<v Speaker 3>whether the cash annual allowance should be as generous as

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<v Speaker 3>it currently is, but that there's an element swings and

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<v Speaker 3>round the boots.

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<v Speaker 1>There one other thing that we wanted to look at.

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<v Speaker 1>Lucy got in touch to ask if there are any

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<v Speaker 1>free or low cost personal finance resources specifically for women.

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<v Speaker 1>I would say on that, but I'm interested to hear

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<v Speaker 1>what you said, Jonas Sanfrees. Yes, there are loads of free,

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<v Speaker 1>low cost personal finance resources.

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<v Speaker 2>Welcome to the Merin Talks Your Money podcast on.

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<v Speaker 1>Which which is free at your your favorite podcast provider,

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<v Speaker 1>and we do a lot of personal finance. Then of

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<v Speaker 1>course there's Money Saving Expert. There's Money Week, where John

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<v Speaker 1>and I both used to work, which has a lot

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<v Speaker 1>of free stuff on its website. There are boards of

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<v Speaker 1>websites there blonde money, John, can you think of some.

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<v Speaker 3>Others boarding money, Holy Planks, very money.

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<v Speaker 2>Yeah, that's what I'm meant totally. So there's loads. Yeah,

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<v Speaker 2>that's good. It's very much all it is. Yeah, not

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<v Speaker 2>quite what Lucy's after.

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<v Speaker 1>So there are lots and lots of free resources and

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<v Speaker 1>money saving expert is that go to for so many

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<v Speaker 1>people when it comes to looking at the granularity of

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<v Speaker 1>personal finance, And I'm not sure that you need to

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<v Speaker 1>look at anything specifically for women. The rules are the

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<v Speaker 1>same men and women. There are a few things that

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<v Speaker 1>are different about female personal finances. Of course, we are

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<v Speaker 1>the ones who take perhaps longer breaks to take care

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<v Speaker 1>of early relatives, to look after children, et cetera. So

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<v Speaker 1>maybe are there are issues about how much we should

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<v Speaker 1>put independents, etc.

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<v Speaker 2>But the rules don't change. They're the same for everybody.

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<v Speaker 1>So I'm not sure that you ever need to look

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<v Speaker 1>at female specific finances. I say that as someone who

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<v Speaker 1>wrote a book on female specific finances about twenty years ago.

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<v Speaker 2>The rules of the same, the emotions might be different,

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<v Speaker 2>is that, fat John?

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<v Speaker 3>I think that's fair. The one thing I would say,

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<v Speaker 3>and I think one of the things that came across

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<v Speaker 3>in your book originally is that it's not so much

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<v Speaker 3>about the rules as the situations. And obviously that's always

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<v Speaker 3>a tricky thing to talk about because people simultaneously kind

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<v Speaker 3>of like the idea of equality but also don't like

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<v Speaker 3>the idea of admitting that there are differences, and that

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<v Speaker 3>there are situations like pregnancy, for example, which are almost

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<v Speaker 3>bound to cause differences in your life path that are

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<v Speaker 3>not the same as those of the average man. What

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<v Speaker 3>kind of always irritates me about this discussion is that

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<v Speaker 3>it kind of often focuses on kind of stupid things

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<v Speaker 3>like are women more or less risk averse than men,

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<v Speaker 3>which is clearly just situational, as opposed to focusing on

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<v Speaker 3>the kind of more important things about, well, okay, what

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<v Speaker 3>should you do if your career is more likely to

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<v Speaker 3>not be a straight kind of line from twenty to

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<v Speaker 3>sixty five and more likely something that's broken up? And

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<v Speaker 3>I actually don't think there's enough coverage of those things.

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<v Speaker 3>I think we like to sweep those under the carpet.

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<v Speaker 3>That's kind of a separate issue that is more about

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<v Speaker 3>the different life path of you know, of your average

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<v Speaker 3>women compared to your average.

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<v Speaker 1>We've got John the Feminist on the show where.

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<v Speaker 2>You do.

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<v Speaker 3>Only creepy man to strivee themselves as feminists. Really totally sorry,

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<v Speaker 3>its thing late women and sympathize with women and the issues.

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<v Speaker 3>But I think that you can only be a feminist

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<v Speaker 3>if you're a woman. Actually, that's a whole different topic.

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<v Speaker 1>All right, Listie, I'm going to take that one offline

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<v Speaker 1>with John, but I will definitely dedicated podcast over the

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<v Speaker 1>next few months specifically to the different different pathways to pensions.

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<v Speaker 1>I think is probably what it's all about. That's the

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<v Speaker 1>man and women with it. Well, we'll come back to

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<v Speaker 1>that one. Thank you very much for it.

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<v Speaker 2>Right.

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<v Speaker 1>One more, I got in touch about the government's move

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<v Speaker 1>to abolish the lifetime allowance, how it affects people.

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<v Speaker 2>If there's any way you can get back tax that

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<v Speaker 2>he's already paid.

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<v Speaker 1>Oh, took a a retirement in twenty twenty a mixture

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<v Speaker 1>of defined benefit and defined contribution pensions. Games my sympathy

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<v Speaker 1>slipping away in slipping away over the years, my DC

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<v Speaker 1>did pretty well. Okay, it's gone, and I ended up

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<v Speaker 1>my total pension exceeding the lifetimee lifetime allowance. I'm definitely gone.

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<v Speaker 1>In fact, I stopped contributing and got individual protection status.

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<v Speaker 1>Do I have to go on with this?

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<v Speaker 2>However, so the.

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<v Speaker 1>Send the government doesn't bolished the lifetime allowance because it

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<v Speaker 1>was coming to punitive for public sector employees, especially senior

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<v Speaker 1>doctor doesn't even said yes, Starma had his own specific

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<v Speaker 1>civil service pension scheme that exempted him from the lifetime allowance.

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<v Speaker 2>Yes he did.

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<v Speaker 1>By the way, my sympathy for him is also entirely evaporated.

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<v Speaker 1>So my question is, is there any way I can

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<v Speaker 1>get that tax back now the lifetime allowances be abolished.

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<v Speaker 2>Now.

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<v Speaker 1>There may be a more complicated answer to this, but

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<v Speaker 1>my answer is no, I don't think so, John, I.

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<v Speaker 3>Mean, I can't imagine that that is. And I think

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<v Speaker 3>the main thing that ian Zimia was illustrates is the

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<v Speaker 3>problem with the government constantly changing the rules, so it

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<v Speaker 3>creates I mean iansawenna he's sad to apply for lightfstime

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<v Speaker 3>allians protection, which means he's even got higher bakestiame alans

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<v Speaker 3>than most people hide. But the point is the fact

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<v Speaker 3>that it does keep changing, and that's very detrimental. It

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<v Speaker 3>creates winners and losers, and it also puts people off

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<v Speaker 3>saving anti pensions understandably.

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<v Speaker 1>All right, Well, leaving that one, we are now going

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<v Speaker 1>to go onto today's actual episode. Today we will be

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<v Speaker 1>answering a question from Nelma, and she says, at sixty eight,

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<v Speaker 1>I self manage my money, which is all either in

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<v Speaker 1>a sip or an I say, well done. I increasingly

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<v Speaker 1>want less in equity investments and more in safer holdings.

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<v Speaker 1>I wish to reduce my sixty percent equities. I have

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<v Speaker 1>cash itces and very short term guilts. Where else can

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<v Speaker 1>I put my money to increase my non equity basket?

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<v Speaker 1>Is it money marketing funds and bond funds? Well, this

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<v Speaker 1>is really interesting one, isn't it, John, Because sixty percent

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<v Speaker 1>equity is at at sixty eight when it's self managed,

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<v Speaker 1>I'm not sure that many financial advisors would necessarily advise

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<v Speaker 1>now pulling that much below sixty And when we were

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<v Speaker 1>looking at this the other day and wondering exactly what

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<v Speaker 1>it is that NILIMA is is after hearing that there

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<v Speaker 1>are if it's income you're after, there are a lot

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<v Speaker 1>of what you might call safe income equity products. And

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<v Speaker 1>one of the things that you and I look at

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<v Speaker 1>a lot is the dividend heroes, the AIIC, so the

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<v Speaker 1>investment trust sort have put their dividend up every year

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<v Speaker 1>for however many years. I've actually had a new list

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<v Speaker 1>just in the nick of time.

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<v Speaker 2>So lots of them.

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<v Speaker 1>Scottish American has put its dividend up for fifty one years,

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<v Speaker 1>Merry Income Trust fifty one years, Runner Investment Trust fifty

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<v Speaker 1>three years, etc. Caledonian Investments fifty seven years, City of

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<v Speaker 1>London fifty eight years.

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<v Speaker 2>They're not going to break that record.

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<v Speaker 1>So what you know is if you go out and

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<v Speaker 1>you buy the City of London Investment Trust, you can't

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<v Speaker 1>guarantee that that dividend will constantly be put up to

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<v Speaker 1>match inflation if inflation goes berserk. But nonetheless, what you

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<v Speaker 1>know is that it's more than likely to rise every year.

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<v Speaker 1>So that seems if it's income you're after and hanging

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<v Speaker 1>on to your capital at the s same time, that

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<v Speaker 1>would seem a reasonably sensible way to go, even though

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<v Speaker 1>it's still an equity product.

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<v Speaker 2>So that's one thing to look at.

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<v Speaker 3>One of the things here is is it's just being

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<v Speaker 3>curious as to what Neliam's overall goal is at this point.

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<v Speaker 3>I mean, if she's got more than enough money and

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<v Speaker 3>she actually just wants to reduce the absolute amount of

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<v Speaker 3>risk that she's taken in her portfolio, then I can

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<v Speaker 3>get why you might want to move more money towards

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<v Speaker 3>kind of cash type assets because you just don't want

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<v Speaker 3>to take any risk by the inflation risk. It's tricky

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<v Speaker 3>about knowing exactly what she's aiming to do. And I know,

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<v Speaker 3>I mean because Neliam has been quite a regular correspondent

0:10:40.120 --> 0:10:42.040
<v Speaker 3>over the years, and so I'm pretty sure that she's

0:10:42.160 --> 0:10:44.960
<v Speaker 3>quite clued up in the fact that she's managing her

0:10:45.000 --> 0:10:49.320
<v Speaker 3>own set and all of that is impressive. But so

0:10:49.320 --> 0:10:51.920
<v Speaker 3>I'm sure she knows what she's doing. But in the

0:10:51.960 --> 0:10:56.000
<v Speaker 3>absence that kind of gold structure is a thing, it's

0:10:56.080 --> 0:10:57.000
<v Speaker 3>much harder to say.

0:10:57.840 --> 0:11:00.240
<v Speaker 1>I suppose, I'm the real question is she loo looking

0:11:00.280 --> 0:11:02.800
<v Speaker 1>for to maintain her income or is she looking to

0:11:02.840 --> 0:11:05.800
<v Speaker 1>hang on to her capital one undred percent in real terms?

0:11:06.040 --> 0:11:06.720
<v Speaker 2>Or is it both?

0:11:07.040 --> 0:11:09.280
<v Speaker 1>These are very important ways to look at it. If

0:11:09.320 --> 0:11:10.960
<v Speaker 1>you want to preserve your capital, do you need to

0:11:10.960 --> 0:11:12.599
<v Speaker 1>preserve it in real terms? Do you just want to

0:11:12.600 --> 0:11:14.679
<v Speaker 1>preserve it in nominal terms? Why do you need to

0:11:14.679 --> 0:11:16.840
<v Speaker 1>preserve your capital I mean that's the other question that

0:11:16.880 --> 0:11:18.080
<v Speaker 1>we should often be asking people.

0:11:18.120 --> 0:11:19.840
<v Speaker 2>What are you preserving your capital? Four?

0:11:20.280 --> 0:11:22.559
<v Speaker 1>Is it because you want to leave it to somebody?

0:11:22.640 --> 0:11:25.559
<v Speaker 1>Is it because you're frightened of these you know, care

0:11:25.600 --> 0:11:26.360
<v Speaker 1>home fees, etc.

0:11:26.840 --> 0:11:27.240
<v Speaker 2>What is it?

0:11:27.360 --> 0:11:29.640
<v Speaker 1>And one of the things that we often ask people

0:11:29.679 --> 0:11:30.640
<v Speaker 1>is why wouldn't.

0:11:30.280 --> 0:11:31.000
<v Speaker 2>You just die broke?

0:11:31.360 --> 0:11:32.160
<v Speaker 3>Yeah?

0:11:32.200 --> 0:11:33.800
<v Speaker 1>Why hang on to the money? What's going on there?

0:11:33.840 --> 0:11:37.040
<v Speaker 1>So that's a good question to ask yourself. But outside that, yes,

0:11:37.120 --> 0:11:39.760
<v Speaker 1>it is money market funds, it's short term guilts, it's.

0:11:39.640 --> 0:11:41.000
<v Speaker 2>I'd be quite worry of bond funds.

0:11:41.000 --> 0:11:43.160
<v Speaker 1>Actually, with the inflation environment, there's a lot of crazy

0:11:43.160 --> 0:11:45.880
<v Speaker 1>stuff going on out there. I'm not entirely sure that

0:11:45.920 --> 0:11:48.200
<v Speaker 1>I would look at a bond fund these days and go,

0:11:48.240 --> 0:11:49.600
<v Speaker 1>oh look, aye, buy that, I'm safe.

0:11:49.640 --> 0:11:49.920
<v Speaker 2>You're not.

0:11:50.160 --> 0:11:53.040
<v Speaker 3>Yeah, I cannot feel with boinds you probably need to

0:11:53.080 --> 0:11:56.400
<v Speaker 3>be looking more to And this says quite complicated, but

0:11:56.480 --> 0:11:59.040
<v Speaker 3>it's kind of structuring your own boindlide or tape. Thing

0:11:59.160 --> 0:12:02.800
<v Speaker 3>weird because probably bond funds is that they constantly sell

0:12:02.840 --> 0:12:05.760
<v Speaker 3>the boinds before the mature, and so that means that

0:12:05.800 --> 0:12:08.920
<v Speaker 3>they can take a whack when interest rates change, whereas

0:12:08.960 --> 0:12:11.480
<v Speaker 3>if you're an individual holder, you can hold the bonds

0:12:11.920 --> 0:12:14.920
<v Speaker 3>and I mean you'll still get whacked by inflation in

0:12:15.040 --> 0:12:16.880
<v Speaker 3>terms of you know, if you hold it for five

0:12:16.960 --> 0:12:18.319
<v Speaker 3>years and it turns out of the interest rate and

0:12:18.360 --> 0:12:21.679
<v Speaker 3>the guilt wasn't enough to compensate you for the inflation

0:12:21.720 --> 0:12:24.280
<v Speaker 3>over that time, you've lost money in real terms, but

0:12:24.360 --> 0:12:28.640
<v Speaker 3>your nominal money will come back. So I think if

0:12:28.679 --> 0:12:33.720
<v Speaker 3>you're really worried about the protection of your your nominal value,

0:12:34.280 --> 0:12:37.320
<v Speaker 3>then you have to look at individual bonds for yourself.

0:12:37.400 --> 0:12:40.240
<v Speaker 3>If the longer term. Obviously, money market funds are just

0:12:40.679 --> 0:12:42.960
<v Speaker 3>that is what they had do, just short term treasuries

0:12:42.960 --> 0:12:45.720
<v Speaker 3>and boinds that are shouldn't then rEFInd us by the

0:12:45.720 --> 0:12:49.320
<v Speaker 3>government very rapidly, so they're basically just cash accounts, but

0:12:49.679 --> 0:12:50.560
<v Speaker 3>in the bond market.

0:12:50.640 --> 0:12:52.120
<v Speaker 1>Yeah, So in the end, if you want to be

0:12:52.160 --> 0:12:55.839
<v Speaker 1>said you really are cash cash equivalent, I think so

0:12:56.520 --> 0:12:59.000
<v Speaker 1>Jason just moving into cash. And the other thing is

0:12:59.040 --> 0:13:00.880
<v Speaker 1>that we're not going to get ded get into gold now.

0:13:00.920 --> 0:13:03.040
<v Speaker 1>But you know that's a sort of cash equivalent that

0:13:03.120 --> 0:13:05.200
<v Speaker 1>might or might not preserve the value of your capital.

0:13:05.240 --> 0:13:07.079
<v Speaker 1>So if you have look on the Bluebook website, you'll

0:13:07.080 --> 0:13:09.520
<v Speaker 1>find lots of stuff about gold, and obviously in our

0:13:09.559 --> 0:13:11.680
<v Speaker 1>podcast last week was about the line, we talked about

0:13:11.679 --> 0:13:13.880
<v Speaker 1>gold at some length. I mean, that's worth thinking about.

0:13:13.880 --> 0:13:16.480
<v Speaker 1>But of course it's not going to guarantee the preservation

0:13:16.559 --> 0:13:19.120
<v Speaker 1>of your capital, because it's not like that.

0:13:19.120 --> 0:13:22.040
<v Speaker 3>That's important to emphasize, just because I do think that

0:13:22.080 --> 0:13:25.680
<v Speaker 3>people get partectar in gold's going up as it is now,

0:13:26.040 --> 0:13:31.679
<v Speaker 3>people start to believe that it is something that invariably

0:13:31.760 --> 0:13:35.200
<v Speaker 3>protects the capital. We like gold on this show. We

0:13:35.280 --> 0:13:36.640
<v Speaker 3>think it. You know, we've been talking about that you

0:13:36.640 --> 0:13:38.320
<v Speaker 3>should have part of your portfolio in it for like,

0:13:38.400 --> 0:13:41.120
<v Speaker 3>you know, twenty or years now. But the point is

0:13:41.160 --> 0:13:43.760
<v Speaker 3>it does go down in nominal terms, and it does

0:13:43.800 --> 0:13:46.400
<v Speaker 3>go down in real terms. You know, if if you

0:13:46.440 --> 0:13:48.800
<v Speaker 3>buy it and it falls by twenty percent, which is

0:13:48.800 --> 0:13:51.080
<v Speaker 3>perfectly possible, then if you have to sell it, then

0:13:51.080 --> 0:13:52.360
<v Speaker 3>you're going to make it twenty percent loss.

0:13:52.400 --> 0:13:53.520
<v Speaker 2>You know, that's just that.

0:13:53.679 --> 0:13:55.960
<v Speaker 3>So it's not like cash from that point of view.

0:13:56.640 --> 0:13:59.360
<v Speaker 3>Just think it's important to emphasize, and I think.

0:13:59.200 --> 0:14:02.520
<v Speaker 1>We're confidence saying that it will preserve the value of capital.

0:14:02.160 --> 0:14:03.240
<v Speaker 2>Over the very long term.

0:14:03.240 --> 0:14:05.439
<v Speaker 1>But no one could argue for a long time about

0:14:05.480 --> 0:14:08.080
<v Speaker 1>what the very long term is exactly, And I suppose

0:14:08.120 --> 0:14:11.800
<v Speaker 1>the only other option for Neirlima, which is something that

0:14:12.080 --> 0:14:14.800
<v Speaker 1>I'm sure she's thought about already, is an annuity.

0:14:15.240 --> 0:14:15.440
<v Speaker 2>Yeah.

0:14:15.480 --> 0:14:19.280
<v Speaker 3>Again, if she's really worried run in there, then that's

0:14:19.320 --> 0:14:20.520
<v Speaker 3>somethingty consider.

0:14:20.680 --> 0:14:22.640
<v Speaker 1>And it's also a lot more attractive now if you

0:14:22.680 --> 0:14:25.280
<v Speaker 1>think about it in terms of the way that pensions

0:14:25.280 --> 0:14:28.480
<v Speaker 1>will be taxed going forward. In the old Azima was

0:14:28.520 --> 0:14:30.880
<v Speaker 1>slightly assuming that she's looking to leave her money to somebody,

0:14:31.400 --> 0:14:33.880
<v Speaker 1>hence the need to preserve the capital, etcetera. It used

0:14:33.920 --> 0:14:35.280
<v Speaker 1>to be you could just leave your money on your

0:14:35.320 --> 0:14:37.680
<v Speaker 1>pension and it would effectively become a trust fund for

0:14:37.720 --> 0:14:39.680
<v Speaker 1>your heirs. But this isn't going to be the case

0:14:39.760 --> 0:14:42.040
<v Speaker 1>anymore with the reforms or should I say changes to

0:14:42.080 --> 0:14:45.359
<v Speaker 1>pension taxation. It's now going to be liable for inheritance

0:14:45.400 --> 0:14:48.840
<v Speaker 1>tax and then liable for your income tax after that.

0:14:48.960 --> 0:14:51.360
<v Speaker 1>So that's quite a big percentage of the capital it's

0:14:51.400 --> 0:14:54.040
<v Speaker 1>going to vanish on your death anyway, assuming she's in

0:14:54.080 --> 0:14:57.400
<v Speaker 1>the zone for inheritance tax. So with that in mind,

0:14:57.520 --> 0:15:00.040
<v Speaker 1>given that you're likely to lose the majority of that

0:15:00.080 --> 0:15:03.280
<v Speaker 1>capital if you're reasonably wealthy when you die, makes more

0:15:03.400 --> 0:15:06.000
<v Speaker 1>sense than it used to to use the money inside

0:15:06.000 --> 0:15:08.560
<v Speaker 1>that wrapper to buy an annuity which will pay you at

0:15:08.880 --> 0:15:10.920
<v Speaker 1>a relatively good income because in unity right, so obviously

0:15:10.920 --> 0:15:12.080
<v Speaker 1>they've gone up quite a lot recently.

0:15:12.360 --> 0:15:12.760
<v Speaker 2>Is that fair?

0:15:13.080 --> 0:15:16.480
<v Speaker 3>Absolutely? And she also doesn't have to spend all of

0:15:16.520 --> 0:15:19.880
<v Speaker 3>the money on an innuity, and you know, shit can

0:15:20.200 --> 0:15:23.400
<v Speaker 3>get a certain amount of inflation proofing as well, although

0:15:23.400 --> 0:15:25.280
<v Speaker 3>obviously that means that you have to pay more for

0:15:25.320 --> 0:15:27.960
<v Speaker 3>the annuity. If we having this chat eight years ago,

0:15:28.320 --> 0:15:30.280
<v Speaker 3>in the idea of buying an innuity, would it seemed

0:15:30.520 --> 0:15:33.200
<v Speaker 3>kind of only if you were really desperate for certainty.

0:15:33.200 --> 0:15:35.880
<v Speaker 3>But at this point it's definitely something to throw into

0:15:35.880 --> 0:15:36.200
<v Speaker 3>the mix.

0:15:36.440 --> 0:15:39.600
<v Speaker 1>Yeah, Okay, anything else, John, That's all my thoughts on

0:15:39.640 --> 0:15:40.000
<v Speaker 1>the matter.

0:15:40.400 --> 0:15:43.000
<v Speaker 3>Yeah, it's one thing. I've got any more thoughts on

0:15:43.040 --> 0:15:45.040
<v Speaker 3>it either. I do think it does boil down to

0:15:45.200 --> 0:15:49.680
<v Speaker 3>what Nellima's overall goals, and the thing is sixty eight

0:15:49.760 --> 0:15:51.840
<v Speaker 3>is I don't know. I feel that it's quite a

0:15:52.160 --> 0:15:57.240
<v Speaker 3>tricky age in terms of thinking about you know, you

0:15:57.320 --> 0:16:01.880
<v Speaker 3>might actually have much longer to go, and alternatively, perhaps

0:16:02.080 --> 0:16:04.760
<v Speaker 3>you know you may not, And so I think, you know,

0:16:04.760 --> 0:16:07.520
<v Speaker 3>it's what's kind of like thinking about in those terms

0:16:07.560 --> 0:16:10.360
<v Speaker 3>of what is it that you also want to achieve

0:16:11.200 --> 0:16:14.440
<v Speaker 3>in your remaining time and thinking about what you want

0:16:14.480 --> 0:16:16.640
<v Speaker 3>to do and know what that's all about, existential and

0:16:16.640 --> 0:16:19.520
<v Speaker 3>gem But it'll be cool first pension planning for you.

0:16:20.000 --> 0:16:22.280
<v Speaker 1>Thanks John for giving us that note to end things on.

0:16:22.640 --> 0:16:24.680
<v Speaker 1>But I would just say, by the way, that we

0:16:24.760 --> 0:16:28.760
<v Speaker 1>do not know everything about Ilima's personal circumstances. So absolutely

0:16:28.800 --> 0:16:30.720
<v Speaker 1>nothing that John and I have discussed today is to

0:16:30.720 --> 0:16:33.800
<v Speaker 1>be construed as advice, either for her or for that matter,

0:16:33.880 --> 0:16:36.080
<v Speaker 1>for anybody else. We're just shooting the breeze about what

0:16:36.080 --> 0:16:38.560
<v Speaker 1>we think, right John, Yeah, do not take this as advice.

0:16:38.640 --> 0:16:42.080
<v Speaker 2>And if you want to do anything like we've discussed.

0:16:41.720 --> 0:16:44.000
<v Speaker 1>And you're not expert on these things, do please consult

0:16:44.040 --> 0:16:45.680
<v Speaker 1>a financial advisor.

0:16:49.360 --> 0:16:51.400
<v Speaker 2>Thanks for listening to this week's Maren Talks to Your Money.

0:16:51.440 --> 0:16:54.040
<v Speaker 1>If you like our show, rate review, and subscribe wherever

0:16:54.080 --> 0:16:56.720
<v Speaker 1>you listen to podcasts also be showed. Follow me and

0:16:56.800 --> 0:16:59.360
<v Speaker 1>John on ex or Twitter at marens w and John

0:16:59.440 --> 0:17:00.360
<v Speaker 1>Underscores Effect.

0:17:00.600 --> 0:17:02.000
<v Speaker 2>This episode was produced.

0:17:01.680 --> 0:17:04.360
<v Speaker 1>By Summersadi and Moses, and the sound designed by Blake.

0:17:04.400 --> 0:17:07.080
<v Speaker 1>Maple's questions and comments on this show and all our shows,

0:17:07.080 --> 0:17:10.360
<v Speaker 1>as always welcome, our show emails Marimani at bloomberg dot net,