Is it all too good to be true?

squirrelpie

Bostonerimus1 said:

You might consider some rebalancing of your assets. 

Indeed. I don't know what the OP's invested in but I speculate there's a bunch of American stocks, perhaps some of which are tech stocks. It might well be time to consider something else. Gold, silver and platinum all come to mind.

dunstonh

In the last 7 years my investments when excluding new subscriptions have approximately doubled, on 60:40 equity:cash portfolio. Has this put me in a false position and the reality is there will be some poor years on the horizon?

General equities (i.e. a global spread to market cap) have doubled in 7 years but bonds are flat over 7 years.   So you would not expect a 60% equities fund to have doubled in that period unless the equities are heavily weighted to tech or US.  (indeed, it is likely that any contributions with less than 7 years in bonds are showing a loss).  Or you got lucky with timing with extra contributions during negative periods.

At what point were you 60% equities as without rebalancing you would no longer be 60% if you started that way.  i.e. if you were 60/40 7 years ago you wont be now.

cfw1994

squirrelpie said:

Bostonerimus1 said:

You might consider some rebalancing of your assets. 

Indeed. I don't know what the OP's invested in but I speculate there's a bunch of American stocks, perhaps some of which are tech stocks. It might well be time to consider something else. Gold, silver and platinum all come to mind.

Indeed #2🤪
I can see my reply to his 2020 message suggested I felt there was enough back then 🤷‍♂️

I think SCB secretly enjoys work….& that is absolutely fine, but don’t agonise too hard for reasons not to step away 👍

FWIW, looking at my last comment on that threadm I stepped away 2021…& my wife hasn’t wanted to go back to work 🤣

barnstar2077

At this point you are just torturing yourself, your plan could survive anything short of a direct nuclear strike.

OldScientist

SouthCoastBoy said:

In the last 7 years my investments when excluding new subscriptions have approximately doubled, on 60:40 equity:cash portfolio. Has this put me in a false position and the reality is there will be some poor years on the horizon?

I know nobody knows the answer but sometimes I feel the last few years of growth is not representative of the long term average and some difficult years may be just around the corner, therefore maybe I shouldn't count on the current balance being so high when I retire?

Maybe I should strip 30% of the balance and plan based on that?

To remind you, this is what you wrote 2 years ago (https://forums.moneysavingexpert.com/discussion/6393887/annuity-drawdown-mix )

"As annuity rates increase is anybody thinking of moving to a split annuity drawdown model? Personally it is something I would consider when I get a little older (65+). I would only be interested in an RPI linked annuity. I'm thinking maybe put £200k into an annuity (will receive around 8k per annum at today's prices) when added to my state pension and my wife's plus her 10k final salary that should be enough to live off. We then have the remainder of the DC as back up."

I'm not sure how old you are at the moment, but is it time to revisit an annuity purchase? A joint life RPI annuity (with 100% survivor benefits) currently has payout rates ranging from 3% (at 55), 3.4% (at 60), to 3.8% (at 65). A joint life with lower survivor benefits or a single life annuity would have a higher payout rate.

Assuming you now need about £10k income from your annuity (as opposed to the £8k of a couple of years ago), you are talking about committing between £260k and £330k depending on your age. If the 30% of your balance you refer to is anywhere near these amounts, then this would be a good place to park it where it will no longer be affected by future market conditions.

SouthCoastBoy

dunstonh said:

In the last 7 years my investments when excluding new subscriptions have approximately doubled, on 60:40 equity:cash portfolio. Has this put me in a false position and the reality is there will be some poor years on the horizon?

General equities (i.e. a global spread to market cap) have doubled in 7 years but bonds are flat over 7 years.   So you would not expect a 60% equities fund to have doubled in that period unless the equities are heavily weighted to tech or US.  (indeed, it is likely that any contributions with less than 7 years in bonds are showing a loss).  Or you got lucky with timing with extra contributions during negative periods.

At what point were you 60% equities as without rebalancing you would no longer be 60% if you started that way.  i.e. if you were 60/40 7 years ago you wont be now.

I don't have, and never have, anything invested in bonds. I am still around 60 40 (maybe more 63 37, not actually calculated as cash is held in many places) as I have also saved a substantial amount of cash during that time, plus had a small inheritance which is also in cash, so as well as doubling my equities I've also approx doubled my cash holdings so ratios stay the approx the same

Sarahspangles

You don’t have to answer this, but do you know what your family think?

I remember when my dad was late 50s he was a linchpin of his company, with lots of responsibility and gruelling foreign travel, including a period where it made sense for both parents to relocate to the US. This had knock on effects on care arrangements for some of the family left behind, and as young adults I and siblings took this on. I don’t resent this, it’s just an example of the way some high flyers need to draw on family support, which I don’t think is fully acknowledged.

He was grey-faced never mind grey-haired. He was finally persuaded to retire at 59 and had a great retirement. He didn’t stop being an ‘achiever’ but his interests were less stressful. He got time with my mother before her health declined, and she got time to do things she’d deprioritised to keep his show on the road. He spent time with the younger batch of grandchildren that he didn’t have with his own children and older grandchildren.

I know while he was working he was really focussed on financial security in old age, he achieved that but I feel its importance fell as soon as he retired. If you’re mostly around other people who have a fixed income, those are ‘the Joneses’. He’s leaving a respectable inheritance but we wouldn’t have cared if we’d found he’d done equity release!

Maybe if you had a conversation, or a series, about what retirement will be like, you’d be retiring TO something, and won’t feel you have to cover any eventuality?

cfw1994

Those are great points!
To put it simply: when do you want to retire, & what to?
& how do your family view it?

Albermarle

Sarahspangles said:

You don’t have to answer this, but do you know what your family think?

I remember when my dad was late 50s he was a linchpin of his company, with lots of responsibility and gruelling foreign travel, including a period where it made sense for both parents to relocate to the US. This had knock on effects on care arrangements for some of the family left behind, and as young adults I and siblings took this on. I don’t resent this, it’s just an example of the way some high flyers need to draw on family support, which I don’t think is fully acknowledged.

He was grey-faced never mind grey-haired. He was finally persuaded to retire at 59 and had a great retirement. He didn’t stop being an ‘achiever’ but his interests were less stressful. He got time with my mother before her health declined, and she got time to do things she’d deprioritised to keep his show on the road. He spent time with the younger batch of grandchildren that he didn’t have with his own children and older grandchildren.

I know while he was working he was really focussed on financial security in old age, he achieved that but I feel its importance fell as soon as he retired. If you’re mostly around other people who have a fixed income, those are ‘the Joneses’. He’s leaving a respectable inheritance but we wouldn’t have cared if we’d found he’d done equity release!

Maybe if you had a conversation, or a series, about what retirement will be like, you’d be retiring TO something, and won’t feel you have to cover any eventuality?

South Coast Boy has plenty of plans, ( water sports in Australia if I remember rightly) , so that does not seem to be the issue. Just more ultra caution/anxiety about financial matters.

Sarahspangles

Albermarle said:

Sarahspangles said:

You don’t have to answer this, but do you know what your family think?

South Coast Boy has plenty of plans, ( water sports in Australia if I remember rightly) , so that does not seem to be the issue. Just more ultra caution/anxiety about financial matters.

We do have to take care of our health to guarantee we’ll be able to do this stuff. One of my motivations for retiring is to get fit. I already can’t keep up with OH, even though he’s older. Maybe I never will, but I’d like to try.

Dad did break his ankle on holiday at one point, but he was jumping over walls, not falling out of bars!