These are the new retirement savings rules

Looking ahead, both assets face challenges. Shares are pricier than the long term average (22 times earnings in the US, versus 15 on average since 2000). Bond valuations are even more extreme, with yields at a level that looks vulnerable to even a modest return of inflation and consequently higher interest rates.

Relying on just these two asset classes looks risky now.

At the very least, it makes sense for the bond portion to include some high-quality corporate debt, which offers a better yield than the paltry returns from government bonds. Most likely it will require a multi-asset approach that throws property, commodities, infrastructure and private equity into the mix.

The lower-than-expected returns from both shares and bonds casts doubt on the second formerly reliable rule of thumb. This says that retirees can safely draw down 4pc of their accumulated savings as income every year without fear of running out of money in later life. Again, this is a rule that has worked well for many years.

It has done so for the simple reason that the total returns, income and capital gains combined, from shares and bonds have been well ahead of the 4pc income requirement. The occasional bad years in which you have needed to dip into capital to hit that level of drawdown have quickly been offset by more productive years in which the pot has been refilled and then some.

At recent average total returns, withdrawing cash at 4pc leaves more than enough growth to compensate for today’s low inflation rate. In real terms, even after you’ve taken out what you need to live on, the value of your savings has been higher at the end of the year than at the start. Lucky you, and lucky beneficiaries of your will when that time duly arrives.

The problem looking into the future is that bond yields cannot go much lower.