Pension Pot

suziewong62

I have a small pension pot, over the last few months I have lost £12000 which I know is because of the current situation.  Should I leave the money in or is it worth taking it out and just putting it on my mortgage.

dunstonh

What did you decide to do in 2020 when markets went down by more?
What did you decide to do in 2018 when markets went down by a similar amount?
What did you decide to do in 2015/16 when markets went down by a similar amount?
What did you decide to do in 2008 when markets went down by a larger amount?
What did you decide to do after 2000-2002 when markets went down by a larger amount?

Why do you think you should do any different this time?

Albermarle

If it was £12,000 on a £25,000 pot it would be abnormal.
If it is say £12,000 on a £80,000 or £100,000 pot, then it is perfectly normal in the current markets

Marcon

suziewong62 said:

I have a small pension pot, over the last few months I have lost £12000 which I know is because of the current situation.  Should I leave the money in or is it worth taking it out and just putting it on my mortgage.

How big is 'small'? If £12K is 10% of the pot that's par for the course in today's markets; if it's 50% of the pot, then changing your investment choices might make sense.

Are you old enough to access the cash? Are you aware of the tax charges for doing so, and the fact it would trigger the Money Purchase Annual Allowance if you take out the whole pot?

suziewong62

Thanks, I am thinking it is normal then for the current climate.

dunstonh

suziewong62 said:

Thanks, I am thinking it is normal then for the current climate.

And current climate is normal.  Things like this happen.  Financial crisis occur on average every 7 years.  Reasons are always different (although some things repeat every generation or two).

Workerdrone

dunstonh said:

suziewong62 said:

Thanks, I am thinking it is normal then for the current climate.

And current climate is normal.  Things like this happen.  Financial crisis occur on average every 7 years.  Reasons are always different (although some things repeat every generation or two).

Oh !!!!!!. I plan to retire in 14 years. It will be just my luck if we're in the middle of the second one by then :-(

HappyHarry

Workerdrone said:

dunstonh said:

suziewong62 said:

Thanks, I am thinking it is normal then for the current climate.

And current climate is normal.  Things like this happen.  Financial crisis occur on average every 7 years.  Reasons are always different (although some things repeat every generation or two).

Oh !!!!!!. I plan to retire in 14 years. It will be just my luck if we're in the middle of the second one by then :-(

It will only be bad for you if you plan to pull out of all your investments the moment you retire. Most people would not do that.

[Deleted User]

HappyHarry said:

Workerdrone said:

dunstonh said:

suziewong62 said:

Thanks, I am thinking it is normal then for the current climate.

And current climate is normal.  Things like this happen.  Financial crisis occur on average every 7 years.  Reasons are always different (although some things repeat every generation or two).

Oh !!!!!!. I plan to retire in 14 years. It will be just my luck if we're in the middle of the second one by then :-(

It will only be bad for you if you plan to pull out of all your investments the moment you retire. Most people would not do that.

Sequence of return risk is a thing.  It can be bad for a retiree who depends on the market if the markets go south when he/she retires even if he does not pull out.  Like it got pretty bad for a year 2000 retiree in the US.  And it might get bad for a year 2022 retiree. Too early to tell. 

[Deleted User]

suziewong62 said:

I have a small pension pot, over the last few months I have lost £12000 which I know is because of the current situation.  Should I leave the money in or is it worth taking it out and just putting it on my mortgage.

In general its bad to sell investments during a turmoil. You may want to consider your strategy once volatility and market fear die down.  If we assume that you have a while to go before retirement then the fact that stocks are on sale is a good thing: you get a deal.  After all, you are a buyer, not a seller. Do you complain about sales at the shops? 

Workerdrone

Deleted_User said:

HappyHarry said:

Workerdrone said:

dunstonh said:

suziewong62 said:

Thanks, I am thinking it is normal then for the current climate.

And current climate is normal.  Things like this happen.  Financial crisis occur on average every 7 years.  Reasons are always different (although some things repeat every generation or two).

Oh !!!!!!. I plan to retire in 14 years. It will be just my luck if we're in the middle of the second one by then :-(

It will only be bad for you if you plan to pull out of all your investments the moment you retire. Most people would not do that.

Sequence of return risk is a thing.  It can be bad for a retiree who depends on the market if the markets go south when he/she retires even if he does not pull out.  Like it got pretty bad for a year 2000 retiree in the US.  And it might get bad for a year 2022 retiree. Too early to tell. 

Well, I'd like to be done by 60, but if we are in a downturn I can carry of for a few more years. I don't want to be locking in my cash buffer when the markets down.