Anyone got their retirement plans on hold?

Bianchiintenso

I find I am now in that situation, I was planning to transfer pension into a SIPP and start drawdown a few weeks ago, but in the present fluctuating markets I have had second thoughts.
I have enough cash/freelance work to hold on a little longer. Ideally only 6 months but 18 months maximum. I have a figure in mind I'd like to hit from a psychological point of £500,000 which I hoped would hit in 2022. Unfortunately the figure has remained stubbornly below that amount for the last 2 years.
A few weeks back I optimistically thought I saw green shoots in performance and an opportunity, but a 3.5% drop in the space of a week means, alas the time is still not right for me. Looking on the bright side, another year of contributions means an even better retirement... when it happens 

Sea_Shell

You never really know when the "right time" is.  Even putting an arbitrary £££ on it might go out the window, shortly after you make a decision .

We pulled the pin and within 8 months COVID happened!!!

All turned out ok...so far 😉

Bianchiintenso

So true, it could all be going in the right direction, you make the decision, then CRASH!
I'm fortunate compared to lots of people in that, if I had to I could. I feel it's a bit like doing the lottery when you pull the pin (be different if we both had SP due... I think). Who knows how I will feel this time next week

Malthusian

People who were planning to annuitise their pension funds in retirement are usually in a better position to retire than they were before the market falls, because of the increase in annuity rates.
If the plan was to use drawdown rather than an annuity, and last year's fall was enough to change your plans, then your plans were never viable in the first place. Better to change your plans now and work a bit longer than to have to cut your income or go back to work when you'd already retired a year or two ago.
If you plan to remain invested, there will be far bigger and longer crashes than this one.

TywysogLloegr

No one knows, you can be lucky or unlucky. Teachers retiring in September are unlucky as the scheme factors are changing in October. You have a finite amount of time and no one knows how much. At 60 you have an approximate 1% chance of dying per year. If we are still here we are lucky even if our investments go down. Part time work is not so bad if you need to top up. I do admit it is scary taking the jump. After seeing people retire early then I still say go as early as you can. You do however need something to do, I have seen a few go back to work because of the social aspects, community and purpose it gave.

dunstonh

A few weeks back I optimistically thought I saw green shoots in performance and an opportunity, but a 3.5% drop in the space of a week means, alas the time is still not right for me. Looking on the bright side, another year of contributions means an even better retirement... when it happens  

Nothing happened in 2022 that should have prevented a viable retirement strategy from requiring change.   It would only require change if it was not viable or borderline.

Most people were down around 10-20% in 2022 (2023 is positive YTD, so we can ignore that).    Coronavirus falls were larger for equity heavy investors but smaller for bond heavy investors..  2018 & 2015/16 falls were similar ballpark. 2008 and 2000-2002 falls were bigger.       So, if 2022 has derailed your plans and caused you to delay then you should consider it a good thing as it means you were not ready.   If a dot.com period or credit crunch style loss had occurred years after finishing, then it would have been more painful for you and the ability to continue work would have been gone (or harder to restart).

If you think 2022 was bad (and not 2023 as it hasnt been), then you have a lot worse to see in your retirement years.  

TywysogLloegr

In answer to your question we both have just retired, as soon as we could. Fortunately most of our income will be DB schemes. Our money in pots seems to be holding up but not quite inflation levels, but not a huge hit. I have watched investments over a short time scale in the past, it was not a good idea watching the ups and downs, was terrifying. Over the long term they have steadily grown, I am sure we won’t be cashing out at their peak.
Good luck.

dunstonh

 it was not a good idea watching the ups and downs, was terrifying.

There is a lot to be said of the pre MIFID II days (an EU directive that mandated quarterly statements) and pre online access.

Most people didnt see the 2015/16 or 2018 loss periods.   Even 2020 wasnt seen to its actual peak to trough by most.    However, those that look frequently  see warts and all.      The answer is to stop looking.

Pat38493

Have you done some modelling of retirement scenarios either in spreadsheets or other tools?  

The issue is that setting an arbitrary target of £500K and waiting until you reach that target doesn’t take into account where the markets are sitting in relation to their most recent peaks etc - retiring with 500K after a 40% crash is one thing, but with 500K at the peak of the market is not the same.

Bianchiintenso

Malthusian said:

People who were planning to annuitise their pension funds in retirement are usually in a better position to retire than they were before the market falls, because of the increase in annuity rates.
If the plan was to use drawdown rather than an annuity, and last year's fall was enough to change your plans, then your plans were never viable in the first place. Better to change your plans now and work a bit longer than to have to cut your income or go back to work when you'd already retired a year or two ago.
If you plan to remain invested, there will be far bigger and longer crashes than this one.

Not necessarily true, perhaps I can afford to wait until I feel the time is right for me

Bianchiintenso

Pat38493 said:

Have you done some modelling of retirement scenarios either in spreadsheets or other tools?  

The issue is that setting an arbitrary target of £500K and waiting until you reach that target doesn’t take into account where the markets are sitting in relation to their most recent peaks etc - retiring with 500K after a 40% crash is one thing, but with 500K at the peak of the market is not the same.

Yes Pat, used all tools available to me, all looking fine, I think some people are misreading my 'need' to hit my number with me complaining about market ups and downs, nothing could be further from the truth, I'm in a happy place now and also happy to wait it out to hopefully get to my figure and then pull the trigger