After investing in a pension for 14 years, I understand why 99% eventually cancel
An independent exercise, not a statement by the video creator or verification of every claim in the video.
The same returns can leave different balances when you withdraw
Start with 100 and withdraw 10 at the end of each year, after applying that year’s return. A 20% loss followed by a 25% gain leaves 77.5. Reversing the order leaves 82. Without withdrawals, both paths end at 100.
Check for yourself
- What funds outside the pension account could cover living expenses during a down year?
- How would reducing or delaying withdrawals change the gap between the two paths?
Limits of application
This example uses hypothetical annual returns and fixed withdrawals. It excludes taxes, fees and inflation and does not predict how long withdrawals can continue.
- What to look for
- See why gains and losses grow in currency terms as a balance grows and how lump-sum expenses can interrupt saving.
- Why it matters
- Assess tax credit limits, affordable contributions and tolerable withdrawal risk separately.
Timeline
4 segmentsThe creator says that after contributing for years, a given percentage move produced a larger change in the balance. Balance growth reflects both new contributions and investment gains or losses, which should be tracked separately. Compounding does not begin in a particular year, and a larger balance also means larger losses when prices fall.