When to withdraw money from a stocks and shares ISA?

Thrugelmir

Langtang said:

lozzy1965 said:

 that there is a 'risk' to leaving your money in cash, or in an account that pays less than the rate of inflation, in that your money will be worth less over time.

I appreciate that it will lose money over extended periods of time, but is there a "sweet spot" of time that would be OK to have plenty of cash? Say 2, 3, 5 years? I hear of people having cash funds to use instead of having to cash in investments on the downside.

In the absence of a decent return on Government bonds. We are entering a new era of sticking ones finger up in the air and hoping that the right call is made. Cash will suffer from the rate of increase in inflation. Equities face the economic headwinds that lie ahead. Do what's best for youself. How much of a risk can you afford to be exposed to. 

Linton

Langtang said:

lozzy1965 said:

 that there is a 'risk' to leaving your money in cash, or in an account that pays less than the rate of inflation, in that your money will be worth less over time.

I appreciate that it will lose money over extended periods of time, but is there a "sweet spot" of time that would be OK to have plenty of cash? Say 2, 3, 5 years? I hear of people having cash funds to use instead of having to cash in investments on the downside.

I suggest you have a look at the Pensions board as how to manage taking a steady income  from investments is often discussed there. It is a complex problem with no answer that is right for everyone.

Two of the key problems
1) Taking a fixed amount of money from a volatile pot can be dangerous,  If you withdraw too much money when prices are low you risk depleting the investments that you hope will generate future income.
2) There are psychological factors involved.  If you need a steady income and have minimal cash you may have problems sleeping at night when markets crash.  This may be more important to you than short term inflation. I find that 5 years cash is sufficient to take crashes with a shrug of the shoulders, 2 would not be.

Langtang

Linton said:

Langtang said:

lozzy1965 said:

 that there is a 'risk' to leaving your money in cash, or in an account that pays less than the rate of inflation, in that your money will be worth less over time.

I appreciate that it will lose money over extended periods of time, but is there a "sweet spot" of time that would be OK to have plenty of cash? Say 2, 3, 5 years? I hear of people having cash funds to use instead of having to cash in investments on the downside.

I suggest you have a look at the Pensions board as how to manage taking a steady income  from investments is often discussed there. It is a complex problem with no answer that is right for everyone.

Two of the key problems
1) Taking a fixed amount of money from a volatile pot can be dangerous,  If you withdraw too much money when prices are low you risk depleting the investments that you hope will generate future income.
2) There are psychological factors involved.  If you need a steady income and have minimal cash you may have problems sleeping at night when markets crash.  This may be more important to you than short term inflation. I find that 5 years cash is sufficient to take crashes with a shrug of the shoulders, 2 would not be.

Excellent, thanks for your insight. We have been thinking about 5 years worth of "pension" in cash, therefor not having to dip into the investments at all during the 5 years (preferably longer). We could have a bigger buffer, but not sure how it would fare over the longer period.

Trouble is, we're not looking to leave (much of) an inheritance, so its trying to decide how long to leave it vs trying to spend it. As someone mentioned before, 1st world problems...

jbuchanangb

Someone asked about my portfolio. Here's the list:

Two thirds of the investment amount divided equally between the following ten funds:

GB0030029069 Liontrust Sustainable Future Corporate Bond SC2 Inc

GB0030030067 Liontrust Sustainable Future Global Growth SC2 Acc

GB0008449075 EdenTree Amity International Fund B Income

GB0033145045 BMO Responsible Global Equity 2 Acc

GB00B4RB3Z95 BMO Responsible Sterling Corporate Bond Fund C Net Inc

GB00B71DPP64 Janus Henderson Global Sustainable Equity Fund I Acc

GB00B4KLC262 Jupiter Ecology Fund I Acc

GB00B018K352 Kames Ethical Corporate Bond B Acc

GB00B77DQT14 Rathbone Ethical Bond Fund Institutional Acc

GB00B708KW45 ASI Ethical Corporate Bond Fund Platform 1-Acc

Remaining one third of investment amount divided equally between the following seven funds

GB0009371757 EdenTree Amity UK Fund B Income

GB0007450884 Kames Ethical Equity Fund Class B Net Accumulation Shares

GB00B0CNH940 Legal & General Ethical Trust I Acc

GB00BK35F408 Legal and General UK Property Feeder Fund I Acc

GB00B7SX7S61 M&G Feeder of Property Portfolio Sterling I Acc

GB00BYPHPB97 Standard Life Investments UK Real Estate Accumulation Feeder Fund Institutional Accumulation Shares

GB00B6Y80X40 ASI UK Ethical Equity Fund Platform 1-Acc
Was selected for me by an IFA. I've no idea about choosing investments, and have never heard of any of them.
I have withdrawn the money from the Legal and General UK Property Feeder Fund because it was the worst performing, at the time I needed some money.

eskbanker

jbuchanangb said:

I have withdrawn the money from the Legal and General UK Property Feeder Fund because it was the worst performing, at the time I needed some money.

jbuchanangb said:

I have sum invested in an S&S ISA since 2016, which seems to be worth 45% more today then when I invested it. The portfolio was chosen for me by an IFA. Seems to be a reasonable arrangement. I withdrew some money earlier this year, the first withdrawal since investing. Might take some more out next year.

Obviously money invested isn't left there forever, but in general the principle should be that it's there long enough to achieve your objectives and that you plan your financial requirements and timescales.  It's typically best to have an emergency fund of readily-accessible cash in deposit form specifically so that unforeseen requirements can be met without having to dip into investments at a time that may not be suitable in terms of their value, and likewise if you feel you'll have something better to do with some of the money next year then it shouldn't really be invested at the moment, as it could lose value between now and then.

Linton

jbuchanangb said:

Someone asked about my portfolio. Here's the list:

Two thirds of the investment amount divided equally between the following ten funds:

GB0030029069 Liontrust Sustainable Future Corporate Bond SC2 Inc

GB0030030067 Liontrust Sustainable Future Global Growth SC2 Acc

GB0008449075 EdenTree Amity International Fund B Income

GB0033145045 BMO Responsible Global Equity 2 Acc

GB00B4RB3Z95 BMO Responsible Sterling Corporate Bond Fund C Net Inc

GB00B71DPP64 Janus Henderson Global Sustainable Equity Fund I Acc

GB00B4KLC262 Jupiter Ecology Fund I Acc

GB00B018K352 Kames Ethical Corporate Bond B Acc

GB00B77DQT14 Rathbone Ethical Bond Fund Institutional Acc

GB00B708KW45 ASI Ethical Corporate Bond Fund Platform 1-Acc

Remaining one third of investment amount divided equally between the following seven funds

GB0009371757 EdenTree Amity UK Fund B Income

GB0007450884 Kames Ethical Equity Fund Class B Net Accumulation Shares

GB00B0CNH940 Legal & General Ethical Trust I Acc

GB00BK35F408 Legal and General UK Property Feeder Fund I Acc

GB00B7SX7S61 M&G Feeder of Property Portfolio Sterling I Acc

GB00BYPHPB97 Standard Life Investments UK Real Estate Accumulation Feeder Fund Institutional Accumulation Shares

GB00B6Y80X40 ASI UK Ethical Equity Fund Platform 1-Acc
Was selected for me by an IFA. I've no idea about choosing investments, and have never heard of any of them.
I have withdrawn the money from the Legal and General UK Property Feeder Fund because it was the worst performing, at the time I needed some money.

Selling a fund because it was the worst performing is often not the best thing to do.  The reason why the fund was chosen in the first place may be because it was lower performance but lower risk.  It is often a better idea to take money from the best performing fund since funds that perform extremely well are also capable of performing extremely badly when economic conditions change.  Preventing them becoming over-dominant would reduce that risk.

Are you moving from investing for the future to starting to take a steady income? If so I think it be would be prudent to review your portfolio as short term events will becoome of greater importance.

There seems a lot of duplication in your portfolion from multiple funds in the same area probably holding the same underlying investments. Reducing that would make your portfolio easier to understand and manage. Perhaps another reason to review te portfolio.

Audaxer

Langtang said:

Linton said:

Langtang said:

lozzy1965 said:

 that there is a 'risk' to leaving your money in cash, or in an account that pays less than the rate of inflation, in that your money will be worth less over time.

I appreciate that it will lose money over extended periods of time, but is there a "sweet spot" of time that would be OK to have plenty of cash? Say 2, 3, 5 years? I hear of people having cash funds to use instead of having to cash in investments on the downside.

I suggest you have a look at the Pensions board as how to manage taking a steady income  from investments is often discussed there. It is a complex problem with no answer that is right for everyone.

Two of the key problems
1) Taking a fixed amount of money from a volatile pot can be dangerous,  If you withdraw too much money when prices are low you risk depleting the investments that you hope will generate future income.
2) There are psychological factors involved.  If you need a steady income and have minimal cash you may have problems sleeping at night when markets crash.  This may be more important to you than short term inflation. I find that 5 years cash is sufficient to take crashes with a shrug of the shoulders, 2 would not be.

Excellent, thanks for your insight. We have been thinking about 5 years worth of "pension" in cash, therefor not having to dip into the investments at all during the 5 years (preferably longer). We could have a bigger buffer, but not sure how it would fare over the longer period.

It's a good safety net to have a cash buffer, but I wouldn't use all the cash before you dip into the investments. The investments could rise for the next 5 years while you are taking only cash. If you have no cash left after 5 years and there is a big equity crash, you would have to draw from investments in a falling market. If you decide on a cash buffer of x number years, you should keep that number of years as a cash buffer, to only draw on when markets are falling, and replenish when markets rise again.

Langtang

Audaxer said:

Langtang said:

Linton said:

Langtang said:

lozzy1965 said:

 that there is a 'risk' to leaving your money in cash, or in an account that pays less than the rate of inflation, in that your money will be worth less over time.

I appreciate that it will lose money over extended periods of time, but is there a "sweet spot" of time that would be OK to have plenty of cash? Say 2, 3, 5 years? I hear of people having cash funds to use instead of having to cash in investments on the downside.

I suggest you have a look at the Pensions board as how to manage taking a steady income  from investments is often discussed there. It is a complex problem with no answer that is right for everyone.

Two of the key problems
1) Taking a fixed amount of money from a volatile pot can be dangerous,  If you withdraw too much money when prices are low you risk depleting the investments that you hope will generate future income.
2) There are psychological factors involved.  If you need a steady income and have minimal cash you may have problems sleeping at night when markets crash.  This may be more important to you than short term inflation. I find that 5 years cash is sufficient to take crashes with a shrug of the shoulders, 2 would not be.

Excellent, thanks for your insight. We have been thinking about 5 years worth of "pension" in cash, therefor not having to dip into the investments at all during the 5 years (preferably longer). We could have a bigger buffer, but not sure how it would fare over the longer period.

It's a good safety net to have a cash buffer, but I wouldn't use all the cash before you dip into the investments. The investments could rise for the next 5 years while you are taking only cash. If you have no cash left after 5 years and there is a big equity crash, you would have to draw from investments in a falling market. If you decide on a cash buffer of x number years, you should keep that number of years as a cash buffer, to only draw on when markets are falling, and replenish when markets rise again.

Thanks very much for your reply. We're fortunate enough to have the funds to be able to keep a nice buffer. My thought was to use that to live on, whilst growing the investments but others have suggested I check out the pension board on ways to build a retirement portfolio rather than an investment one.

This is where my naivety comes in, thinking the way I am. 

[Deleted User]

I started a fund in around August 2017, slowly paying in and changing funds a couple of times as my risk profile expanded (I am mostly in 7 but have a small going into a mix of 9). The fund itself was up about £2500 (on around £10k invested) so I cashed out £1600 into cash as I need it, I wasn't planning on doing it but sometimes needs must. I continue to pay into it and will "take the profits" for want of a better phrase if I need to, unless the funds are valued at less than I paid in. I don't know if I get any dividends or not (not seen any paperwork saying either way in the many, many, notices I get in the app which I largely ignore as they're largely notifications of buy/sell stuff), if I do they're certainly not in cash or they are and are used to buy more fund shares so I don't see them

Thrugelmir

Deleted_User said:

I started a fund in around August 2017, slowly paying in and changing funds a couple of times as my risk profile expanded (I am mostly in 7 but have a small going into a mix of 9). The fund itself was up about £2500 (on around £10k invested) so I cashed out £1600 into cash as I need it, I wasn't planning on doing it but sometimes needs must. I continue to pay into it and will "take the profits" for want of a better phrase if I need to, unless the funds are valued at less than I paid in. I don't know if I get any dividends or not (not seen any paperwork saying either way in the many, many, notices I get in the app which I largely ignore as they're largely notifications of buy/sell stuff), if I do they're certainly not in cash or they are and are used to buy more fund shares so I don't see them

If the investments you hold make no distributions. Then any income received will automatically be being reinvested into further investments. Growth isn't just achieved by the increase in market value.