How cash rich should we aim to be at retirement?

cfw1994

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

How do you "harvest income" from cash?   Or do you mean taking the ~1% you can get?
I guess there are some small amounts feasible with linked savings accounts.
That's part of the problem today - making inflation or above with cash in 100% safe funds doesn't seem possible!

kinger101

cfw1994 said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

How do you "harvest income" from cash?   Or do you mean taking the ~1% you can get?
I guess there are some small amounts feasible with linked savings accounts.
That's part of the problem today - making inflation or above with cash in 100% safe funds doesn't seem possible!

Think you misinterpreted.
 I read as the cash would be outside the pension fund, and pension fund remains invested.  

jimi_man

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

Albermarle

jimi_man said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

Sometimes the threads on the forum get a bit disjointed , and not all posts relate exactly back to the OP.
If the majority of your income is DB/SP then all other things being equal, then yes you need less cash than someone taking the majority of their income from investments/DC pension.

Audaxer

Albermarle said:

jimi_man said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

If the majority of your income is DB/SP then all other things being equal, then yes you need less cash than someone taking the majority of their income from investments/DC pension.

On the other hand if your full income needs are covered by DB and SP, you could want to keep more cash on hand for large spend/luxury items, rather than have it all invested.

scdandem

jimi_man said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

As the OP - I'm actually a woman but don't hold it against me - this is the crux of my query, how do you know how much cash you need?
DH is already semi-retired and drawing 2 DB pensions with a 3rd due in 1.5 years and SP due in 2.5 years. I have a paltry DB from way back but a DC fund currently of £250k but my SP doesn't kick in for another 10 years after DH.
Net pension income will be between £30-40k ish depending on age, and I'm leaning towards thinking we should aim for a cash pot of £100k plus extra for any specific big buys we can knowingly budget for (eg motorhome).
This is actually 2 years plus an emergency fund so maybe on the same lines as jimi_man's thinking.

Audaxer

scdandem said:

jimi_man said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

As the OP - I'm actually a woman but don't hold it against me - this is the crux of my query, how do you know how much cash you need?
DH is already semi-retired and drawing 2 DB pensions with a 3rd due in 1.5 years and SP due in 2.5 years. I have a paltry DB from way back but a DC fund currently of £250k but my SP doesn't kick in for another 10 years after DH.
Net pension income will be between £30-40k ish depending on age, and I'm leaning towards thinking we should aim for a cash pot of £100k plus extra for any specific big buys we can knowingly budget for (eg motorhome).
This is actually 2 years plus an emergency fund so maybe on the same lines as jimi_man's thinking.

As even £30k per year is deemed to be a comfortable pension income for most retired couples, I would think you are in a healthy position as to be able hold as much cash as you want to cover specific big buys.  

BritishInvestor

Audaxer said:

scdandem said:

jimi_man said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

As the OP - I'm actually a woman but don't hold it against me - this is the crux of my query, how do you know how much cash you need?
DH is already semi-retired and drawing 2 DB pensions with a 3rd due in 1.5 years and SP due in 2.5 years. I have a paltry DB from way back but a DC fund currently of £250k but my SP doesn't kick in for another 10 years after DH.
Net pension income will be between £30-40k ish depending on age, and I'm leaning towards thinking we should aim for a cash pot of £100k plus extra for any specific big buys we can knowingly budget for (eg motorhome).
This is actually 2 years plus an emergency fund so maybe on the same lines as jimi_man's thinking.

As even £30k per year is deemed to be a comfortable pension income for most retired couples, I would think you are in a healthy position as to be able hold as much cash as you want to cover specific big buys.  

https://www.lboro.ac.uk/media-centre/press-releases/2019/october/retirement-living-standards/
For a couple, comfortable might be a tad higher.

atush

cfw1994 said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

How do you "harvest income" from cash?   Or do you mean taking the ~1% you can get?
I guess there are some small amounts feasible with linked savings accounts.
That's part of the problem today - making inflation or above with cash in 100% safe funds doesn't seem possible!

you misunderstood.  harvesting income was from pensions which will be 90-95% invested.  The cash will be outside of pensions (not from TFLS but from savings/investments etc)

atush

jimi_man said:

atush said:

A min of one year cash, i'm going for 2.  Plus an emergency fund.  Most of this is outside of pensions, intend to keep them invested and harvest income.

Hi. Could you explain your rationale for this please? The OP states that the majority of his income is DB pension (I’m in a very similar situation) so I was wondering why I need two years cash plus an emergency fund as well? 

I said i was going for 2 years, not for the OP.

A years outgoings in cash is sensible for an emergency fund for many.  But i wouldnt convert a DB pension income into a TFLS if you havent been sensible enough to save the cash up before retirement.  The conversio factor tends to be poor.