FIRE Girls Pension Diary - Aim High & Dream Big

Firegirl

Hope you’re all well! 😀

I’m sorta gutted my TYE numbers have taken a dip because it was looking so good a few months ago😆

I’ll post my TYE figures on Thursday!

WitsEnd101

I’m thinking of doing the cash ladder as withdrawal method but again yet to figure out exactly my cash ladder method and funds etc.

Hi, what is meant by the cash ladder withdrawal method?

Storcko14

https://forums.moneysavingexpert.com/discussion/comment/81945511#Comment_81945511

It's where you set up a series of fixed term cash deposits so that their maturities align with your cash requirements with the aim that the interest paid ensures that your funds retain purchasing power. The ladder can also be created using gilts - conventional or index-linked - the latter giving more certainty of purchasing power particularly with longer ladders.

WitsEnd101

https://forums.moneysavingexpert.com/discussion/comment/81945526#Comment_81945526

Thanks, that's very helpful. I wonder if you could flesh this out with an example of how that might work? Is it a case that you have a 1 year cash bond, 2 year cash bond etc up to say year 5? Then you 'rince and repeat' each year on maturity of that year's bond with a new 5 year bond?

QrizB

What you've described is a rolling ladder.

You can also build a collapsing ladder where you cash in each "rung" of the ladder as they mature, giving you a predictable income stream.

You can generate example ladders using nominal gilts, or index-linked ones, using the LateGenXer tool:

https://lategenxer.streamlit.app/Gilt_Ladder

WitsEnd101

https://forums.moneysavingexpert.com/discussion/comment/81945659#Comment_81945659

I am fully aware that this is more than slightly off topic and I really should start a new thread / find an existing one on topic.

QrizB - thanks for the post but this is far too complicated for me. I really need to find a simple guide / explainer about gilt and cash ladders to assess if I should incorporate one into my withdrawal strategy. Cheers anyway.

Storcko14

If it's a withdrawal strategy you're looking for then it's a collapsing ladder you want, i.e., you're intending to spend the proceeds as they mature. As you allude to above, if using cash you would typically invest in fixed term deposits over, say, 1-n years and hope that the cash interest rate at least keeps up with inflation. With index-linked gilts you have near certainty that you'll match inflation.

With gilts you would use a tool like the one linked to above and select gilts with a maturity profile that matches your cashflow needs.

But as you say, OT, so let's leave it at that otherwise @Firegirl will get annoyed!

Firegirl

Never annoyed, love a tangent. 😆

That’s how we learn from each other. I haven’t put a lot of thought into how I will set up my cash ladder so all these comments are very useful. 😀

kempiejon

https://forums.moneysavingexpert.com/discussion/comment/81948227#Comment_81948227

Collapsing gilts are a popular way to run a ladder. I'm out of full time work and not contributing to my portfolio currently. I have a cash pot of about 3 years of normal living, having tracked natural yield and capital appreciation for years I'm comfortable enough in my strategy, my fixed interest allocation is 10% or so and I have slack to economise if financial stresses come about.

I do run the numbers on a 20+ index linked gilt ladder every now and again but just kicking tyres.

Firegirl

ok, here we go TYE figures for 2026!

Pension 1-£285, 000 (No more to be added)
Pension 2-£71, 000 (No more to be added)
Pension 3-£48, 000 (Current work pension)
ISA-£119, 500
Money Owed - £10, 000

Total £533, 500

Im way ahead of my Target for Age 47 - 2026 - £420,061

Getting close to my Age 49 target. (See first post on this thread for targets and dreams😆)