It's time to start digging up those Squirrelled Nuts!!!!

DT2001

Sea_Shell said:

It appears I've inspired a spin-off series....thanks Stubod!!!!

Well here we are, still ticking along.    Same s**t, different day!!!     Actually, what day IS it???

Trying to stay positive, and have kept running and walking as the weather allows.    Trying not to just munch my way through our kitchen cupboards!!

Financially, everything's looking pretty rosy....but I'm wary about that lasting.   Seems to good to be true!?    However, I think I'm over thinking it (me, overthink!!) as we're still only spending about 2% of our overall pot....well within "safe withdrawal rate" territory.

Anyway, not much else to report.    Take care all, stay safe and well and fingers crossed we get some nicer, warmer weather soon!

I think you are over thinking. If we see a 25% correction you’ll still only be at 3% withdrawal rate and whilst you are very young, SP means your funds do not need to ‘pay out’ at that level for 25/30 years that SWR’s are estimated on. Just relax and enjoy the squirrelled nuts!

cfw1994

DT2001 said:

Sea_Shell said:

It appears I've inspired a spin-off series....thanks Stubod!!!!
Well here we are, still ticking along.    Same s**t, different day!!!     Actually, what day IS it???
Trying to stay positive, and have kept running and walking as the weather allows.    Trying not to just munch my way through our kitchen cupboards!!
Financially, everything's looking pretty rosy....but I'm wary about that lasting.   Seems to good to be true!?    However, I think I'm over thinking it (me, overthink!!) as we're still only spending about 2% of our overall pot....well within "safe withdrawal rate" territory.
Anyway, not much else to report.    Take care all, stay safe and well and fingers crossed we get some nicer, warmer weather soon!

I think you are over thinking. If we see a 25% correction you’ll still only be at 3% withdrawal rate and whilst you are very young, SP means your funds do not need to ‘pay out’ at that level for 25/30 years that SWR’s are estimated on. Just relax and enjoy the squirrelled nuts!

I concur, M’Lud.  The jury is always out on the SWR, but even the creator himself of the 4% rule agrees it was extreme, & that “ based on the current environment he thinks a new retiree should be safe if they start with a withdrawal rate of…no more than 5%” - see https://www.marketwatch.com/story/the-inventor-of-the-4-rule-just-changed-it-11603380557
C’mon Sea_shell: make like Viv Nicholson, & spend, spend, spend 

Sea_Shell

DT2001 said:

I think you are over thinking. If we see a 25% correction you’ll still only be at 3% withdrawal rate and whilst you are very young, SP means your funds do not need to ‘pay out’ at that level for 25/30 years that SWR’s are estimated on. Just relax and enjoy the squirrelled nuts!

cfw1994 said:

I concur, M’Lud.  The jury is always out on the SWR, but even the creator himself of the 4% rule agrees it was extreme, & that “ based on the current environment he thinks a new retiree should be safe if they start with a withdrawal rate of…no more than 5%” - see https://www.marketwatch.com/story/the-inventor-of-the-4-rule-just-changed-it-11603380557 C’mon Sea_shell: make like Viv Nicholson, & spend, spend, spend   

Thanks guys.    I promise to try!!!!     

Spending is OK, but we still feel we want value for money, and some things that many people spend money on we just don't feel ARE value for money!!    It's a dilemma, but I could think of much worse ones!!!

So far, in the last 12 months to date, we have spent £10,800.    Shameful.   But it's not exactly been a typical year!!

Sea_Shell

What percentage of equities would you all have in our position.   

Our pot is now pushing £600k and we're currently sitting at about 60% equities across the whole portfolio (including cash).

As we move into the initial drawdown stage, for the next 10 years, would you reduce this %, keep it pretty much the same, or maybe even increase it?

Hubby is erring towards reducing it to nearer 50%.

Thoughts?

quirkydeptless

Just my thoughts, not advice.

I am retiring this July, close to my 56th Birthday and will be at about 40% equity.

I am thinking of increasing my equity % by consuming bonds and cash as the equity will have quite a few more years to ride. I think getting to 50% would be fine for me, so approaching that number, but from the opposite direction to you

shinytop

Sea_Shell said:

What percentage of equities would you all have in our position.   

Our pot is now pushing £600k and we're currently sitting at about 60% equities across the whole portfolio (including cash).

As we move into the initial drawdown stage, for the next 10 years, would you reduce this %, keep it pretty much the same, or maybe even increase it?

Hubby is erring towards reducing it to nearer 50%.

Thoughts?

It depends what you're trying to achieve I suppose.  If you already have enough and just need to keep up with inflation then it might be a different answer than if you were trying to push the boundaries of a SWR.   I'm in the former position as DB pensions account for a large part of our income.  On the one hand I could be very cautious and go for wealth preservation but OTOH I could take more risk because I have the capacity to cope with loss/volatility.  So in the best hedge-sitting tradition, I'm about 60% equities. 

michaels

I think it matters a lot what the non equity portion is invested in as we are likely falls in the price of bonds if interest rates and inflation increase so cash or wealth preservation/short bond funds is they way forward for risk reduction/near term spend monies IMHO.

Costabit

cfw1994 said:

C’mon Sea_shell: make like Viv Nicholson, & spend, spend, spend 

The legend that was Viv Nicholson eh !
Bet there is a few youngsters on the forum who had to google her.
If I remember it was £150K she won and spent, doesn’t seem much nowdays

Stubod

..I (we) still find it difficult to "spend spend spend", even though our long term xcel budget planning sheet suggests we can probably spend twice as much as we are now, (and we don't have anybody to leave it to).

Like Seashell, we still look for "value for money", but a lifetime of saving is a hard habit to break. When we switched from saving to spending mode I changed the emphasis on our planning spreadsheet from an annual "savings target", to highlight the difference between what we originally budgeted to spend (based on some fairly pessimistic projections), and what we actually spend,

I find this helps focus the mind a little as each year for the last 4 years we have been retired is showing a significant surplus! (even the pre covid), so I am not sure even that strategy is working how I intended, but I am sure we will get there!. 

Sea_Shell

It's like a "Magic Porridge Pot" strategy!!