My pension pot is taking a big hit

dean350

Since 2013 when I started investing my pot has increased (or decreased) each year as follows:

+21%

+18%

+9%

+22%

+11%

+11%

-8%

+43%

-23%

There have been a couple of bad years, a couple of really good years and a few OK years in between. Volatility is the price you pay for long term returns and you have to learn to live with that.

Albermarle

Elmer_BeFuddled said:

So now, or very shortly would be a good time to add some more funds to my Nutmeg package (not huge, £3k by me so far, 5/10 on risk, 23 months left 'til SP retirement.)?

If I knew when the right time to invest in the markets was, I would be say on a mega yacht in the Bahamas, rather than posting on this forum !

DT2001

garyelder said:

Should I be concerned about my pension pot dropping from 540k to 520k in the last 2 weeks
I don’t plan to take any money for the next 3/4 years
my financial advisor will probably say don’t worry 
he was expecting it to grow 50k by June this year 

No, for thé reasons other posters have explained.

I regularly check my fluctuating investment pots BUT try whenever they are down to remind myself of: - 
1. How much I paid in
2. What they would be worth if left in a savings account.
3. The tax advantages of a pension
4. Thé annualised growth even at the new lower figure 
5. My pension pot was mainly down to one large sum which 12 months after investment was 6/7% down now ‘falls’ are just lower paper profits.

In addition keep an eye on your end goal. What figure do you need in 3 to 4 years to allow you to retire? Are you there already? Is any future gain just for a more comfortable retirement? Would a drop of 20% mean you couldn’t do as planned, if so is there a better option for your asset mix or do you need to build up a larger cash reserve to give time for your pot to recover any blips

garyelder

What is a reasonable figure my pot should be say in 4 years time 
it’s in medium risk 
I know there will be ups and downs 

MK62

garyelder said:

What is a reasonable figure my pot should be say in 4 years time 
it’s in medium risk 
I know there will be ups and downs 

All anyone can tell you is the historical average projected forward for 4 years, but the real outcome could be wildly different to that - this is the nature of equity investing.

QrizB

garyelder said:

What is a reasonable figure my pot should be say in 4 years time 
it’s in medium risk 
I know there will be ups and downs 

Here's a FTSE chart from a few years ago:

If today was 28th Jan 1999, rather than 2022, then in four years time your £500k pot could be worth about £300k.

If today was 28th Jan 2003, then in four years time your pot could be worth £1M.

I suspect that the real outcome will be somewhere in-between those two values but we won't know until 2026.

garyelder

My pot today is 521k so it will be interesting to look back on 
ive already retired I’m 61 and living off a rental property and sold a property last year 

steampowered

garyelder said:

Should I be concerned about my pension pot dropping from 540k to 520k in the last 2 weeks

How much did you put in?

If you calculate that it will probably make you feel better. You probably only paid in less than £300k.

garyelder

I expect your right about 300k
 but the last 3 years I put in 120k

AlanP_2

garyelder said:

What is a reasonable figure my pot should be say in 4 years time 
it’s in medium risk 
I know there will be ups and downs 

Is the value of your pot in 4 years time relevant, or, is it more relevant to think about what income you want to take from it and when?

OK, the income will be influenced by the pot size I know but the pot value isn't the target, the income is.

If you need / want £5k a year say and are working on a 40 year retirement you need a £200k pot (ignoring inflation on your £5k)/

If you need / want £25k a year you are looking at £1m pot value.

Someone who wants / needs £5k shouldn't be worried whether their pot is £540k or £520k. someone who needs /wants £1m should.

Have you worked out what your target is?