What to do??

john5001

Hope someone can help.

I currently have a bit of an issue.

I am 54 and hope to retire on a pension in 3 years or so, but need additional savings funds to build up. ( Bad timing I know )
A friend advised that my regular savings £400pm in investment funds, ISA and general managed funds (although well down in value) I should still pay in as I will be buying shares more cheaply.
The 64k question is:-

Not looking for advice, just points of view as if you were in this situation.

A Do I cancel DD from banks and redirect to a regualr save plan with a good fixed interest rate and leave funds already built up alone. In the hope they accrue.

B Cash in everything and put in a bond or similar.

C. Kepp it all going because 18 months down the road the recovery will bring gains to wipe out recent losses.

I would appreciate any comments. Thanks.

Lokolo

There could be another slump in 6 months time and then may not recover in 3 years. What happens then?

3 years is too short to hope for a decent return, especially as we aren't out of the crap yet.

john5001

So you would cash in and redirect to safe deposit accounts... or just stop paying in?

Lokolo

No I would keep the investments going but I would keep it going for longer than 3 years.

As long as you don't cash in your pension when you retire (not all of it I mean) then it still leaves time for it to grow more. Which lowers chances of the value you staying low.

But thats just my view, I am young and naiive so you might not want to listen to me

Mikeyorks

Your choice on A) or C).

But (assuming the funds are reasonably well diversified) .... you would, IMHO, be pretty daft to actively consider . You will simply crystallise your losses that way .... and then use the denuded result to buy fixed term deposits at (arguably) their lowest point. It's double jeopardy?

Wherever we are on the downturn .... we can't be that far from the end of the elastic? As you specifically ask for points of view ....... you've sat it out thus far .... I would just make yourself more comfortable and continue doing so.

fergual2

Ok John - quoting from telegraph website.

"Retiring is no longer a cliff-edge event," says Julian Webb, head of DC business at Fidelity. "People are living longer, delaying buying an annuity and moving into drawdown. They may want to maintain a high exposure to equities as they egt older, rather than reduce it in favour of fixed interest investments."

Your retiring relatively early so I would say if you can afford to keep a good proportion of equities then do so - as they are bound to upturn in 5+ years and you'll still be getting annual dividends from the equities.

Hope it helps with the thought process.
;-)

Lokolo

Did you read on the BBC website about the man who is 100 and still working? Yes its not exactly a stressful job or whatever, but he works 37 or something hours a week.

Thats what I want to be like when I am that age! (if I get there)

john5001

Thanks its just depressing getting statements showing considerable lower values, and just wonder if I am throwing good money after bad every month.

john5001

Reason I am considering retiring, is for maybe a better quality of life and cheaper cost of living, possibly abroad.

Work in IT under high pressure which means I am at that dangerous 50 something age...
(came so fast)

So this current situation for me, is bad timing as I no longer have the time to build funds of any resonable size. So decisions now will reflect big time on my future.