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What made you 'pull the trigger'?

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  • GSP
    GSP Posts: 894 Forumite
    Seventh Anniversary 500 Posts Name Dropper Combo Breaker
    sgx2000 said:
    I really appreciate posts like this....

    While all the pensions, tax and investment advice is invaluable....  (thank you everyone who helps)

    The more personal help with the decisions and outcomes is also invaluable...

    I am 62 and am at the point of wanting to go,  but really struggling to make the jump.....
    My finances are a fraction of most of the posts on the forum... So making the decision a little harder....

    I do laugh at the posters who say they have pots of £700k and dont know if they can afford to retire...lol
    pots of £700k have further to fall at times of stock market dips.  A drop of 10-15%  (very common at the moment) can knock £100k easily off larger pots. We have DB pensions so luckily we have  a more secure drawdown plan but our S and S ISAs and SIPPs are about 15% down on 2021 valuations.  That is our supplementary pot to cover our early retirement years though until state pensions kick in to boost our DB pensions. 
    A number of posters have mentioned that the recent drop in markets has made them nervous about retiring, or are now nervously newly retired.
    This is fully understandable from a psychological/ emotional point of view, but from a more purely financial view it is not very logical. During a 30 year retirement markets will go up and down  many times, and for sure at least a couple of the drops, will be a lot more dramatic than the current one. Also if you take into account the very good years of the previous decade, then it still looks pretty good.
    Basically it means if a drop of 15% or thereabouts scuppers your plans, you probably did not have enough in the pot to begin with.
    Caveat is that the current inflation at the same time as a market drop, is particularly painful, but I think the logic still holds.
    Think the ‘problem’ is while you mention ups and downs over periods as in growth, or not, there are further downs as with the withdrawals themselves which take the pots down further.
    And when that pot drops to a certain amount and recovers less and less because there is less and less in it, boy will you have to make changes that income drying up.
  • NedS
    NedS Posts: 4,446 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    GSP said:
    sgx2000 said:
    I really appreciate posts like this....

    While all the pensions, tax and investment advice is invaluable....  (thank you everyone who helps)

    The more personal help with the decisions and outcomes is also invaluable...

    I am 62 and am at the point of wanting to go,  but really struggling to make the jump.....
    My finances are a fraction of most of the posts on the forum... So making the decision a little harder....

    I do laugh at the posters who say they have pots of £700k and dont know if they can afford to retire...lol
    pots of £700k have further to fall at times of stock market dips.  A drop of 10-15%  (very common at the moment) can knock £100k easily off larger pots. We have DB pensions so luckily we have  a more secure drawdown plan but our S and S ISAs and SIPPs are about 15% down on 2021 valuations.  That is our supplementary pot to cover our early retirement years though until state pensions kick in to boost our DB pensions. 
    A number of posters have mentioned that the recent drop in markets has made them nervous about retiring, or are now nervously newly retired.
    This is fully understandable from a psychological/ emotional point of view, but from a more purely financial view it is not very logical. During a 30 year retirement markets will go up and down  many times, and for sure at least a couple of the drops, will be a lot more dramatic than the current one. Also if you take into account the very good years of the previous decade, then it still looks pretty good.
    Basically it means if a drop of 15% or thereabouts scuppers your plans, you probably did not have enough in the pot to begin with.
    Caveat is that the current inflation at the same time as a market drop, is particularly painful, but I think the logic still holds.
    Think the ‘problem’ is while you mention ups and downs over periods as in growth, or not, there are further downs as with the withdrawals themselves which take the pots down further.
    And when that pot drops to a certain amount and recovers less and less because there is less and less in it, boy will you have to make changes that income drying up.
    Yep, SoR risks. If you have a robust plan, where market drops of 40-50% have been modelled, and your plan incorporates a cash buffer and allows some flexibility, you should be good to go. But I am so glad I'm not in that boat as I can imagine the choppy nature of the ride will not make retirement plain sailing for those of a financially nervous disposition. For such people, converting a proportion of the portfolio to fixed / guaranteed income may be beneficial.

  • Albermarle
    Albermarle Posts: 27,602 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    GSP said:
    sgx2000 said:
    I really appreciate posts like this....

    While all the pensions, tax and investment advice is invaluable....  (thank you everyone who helps)

    The more personal help with the decisions and outcomes is also invaluable...

    I am 62 and am at the point of wanting to go,  but really struggling to make the jump.....
    My finances are a fraction of most of the posts on the forum... So making the decision a little harder....

    I do laugh at the posters who say they have pots of £700k and dont know if they can afford to retire...lol
    pots of £700k have further to fall at times of stock market dips.  A drop of 10-15%  (very common at the moment) can knock £100k easily off larger pots. We have DB pensions so luckily we have  a more secure drawdown plan but our S and S ISAs and SIPPs are about 15% down on 2021 valuations.  That is our supplementary pot to cover our early retirement years though until state pensions kick in to boost our DB pensions. 
    A number of posters have mentioned that the recent drop in markets has made them nervous about retiring, or are now nervously newly retired.
    This is fully understandable from a psychological/ emotional point of view, but from a more purely financial view it is not very logical. During a 30 year retirement markets will go up and down  many times, and for sure at least a couple of the drops, will be a lot more dramatic than the current one. Also if you take into account the very good years of the previous decade, then it still looks pretty good.
    Basically it means if a drop of 15% or thereabouts scuppers your plans, you probably did not have enough in the pot to begin with.
    Caveat is that the current inflation at the same time as a market drop, is particularly painful, but I think the logic still holds.
    Think the ‘problem’ is while you mention ups and downs over periods as in growth, or not, there are further downs as with the withdrawals themselves which take the pots down further.
    And when that pot drops to a certain amount and recovers less and less because there is less and less in it, boy will you have to make changes that income drying up.
    As long as the withdrawal rate is not set too high and you have the flexibility to vary it, then you should be OK. In fact you are more likely to end up with more than you started with than actually run out. According to ' Safe Withdrawal Rate' theory anyway.
    I think a good cash buffer can help, even if it only helps you sleep at night.
  • GSP said:
    sgx2000 said:
    I really appreciate posts like this....

    While all the pensions, tax and investment advice is invaluable....  (thank you everyone who helps)

    The more personal help with the decisions and outcomes is also invaluable...

    I am 62 and am at the point of wanting to go,  but really struggling to make the jump.....
    My finances are a fraction of most of the posts on the forum... So making the decision a little harder....

    I do laugh at the posters who say they have pots of £700k and dont know if they can afford to retire...lol
    pots of £700k have further to fall at times of stock market dips.  A drop of 10-15%  (very common at the moment) can knock £100k easily off larger pots. We have DB pensions so luckily we have  a more secure drawdown plan but our S and S ISAs and SIPPs are about 15% down on 2021 valuations.  That is our supplementary pot to cover our early retirement years though until state pensions kick in to boost our DB pensions. 
    A number of posters have mentioned that the recent drop in markets has made them nervous about retiring, or are now nervously newly retired.
    This is fully understandable from a psychological/ emotional point of view, but from a more purely financial view it is not very logical. During a 30 year retirement markets will go up and down  many times, and for sure at least a couple of the drops, will be a lot more dramatic than the current one. Also if you take into account the very good years of the previous decade, then it still looks pretty good.
    Basically it means if a drop of 15% or thereabouts scuppers your plans, you probably did not have enough in the pot to begin with.
    Caveat is that the current inflation at the same time as a market drop, is particularly painful, but I think the logic still holds.
    Think the ‘problem’ is while you mention ups and downs over periods as in growth, or not, there are further downs as with the withdrawals themselves which take the pots down further.
    And when that pot drops to a certain amount and recovers less and less because there is less and less in it, boy will you have to make changes that income drying up.
    As long as the withdrawal rate is not set too high and you have the flexibility to vary it, then you should be OK. In fact you are more likely to end up with more than you started with than actually run out. According to ' Safe Withdrawal Rate' theory anyway.
    I think a good cash buffer can help, even if it only helps you sleep at night.
    Inflation is the enemy with regards to cash. I wouldn't be surprised if inflation stays high (5% +) for quite a while. 

    Historically I have quite a bit of cash, around 40%,but currently this is being eroded in real terms. I have bought more equities when the market was lower than it is now so most probably I have about 35%cash now, I want to get to a 80:20 equities:cash ratio before I reach retirement.

    It's just my opinion and not advice.
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