Drip feeding out of investments and into cash or not?

SVaz

I have my first 3 years of early retirement income already sat in STMM for 2027/28/29,  I’ll need another £25k or so for the following 3 years but I’m wondering how to go about preparing for it.
I’m not contributing to it currently,  we are putting everything we can afford into my Wife’s Sipp ( all her wages) instead as she can get it all out tax free. 
Dividends on my two inc. funds are around £1200 so that will take care of £6k. I want to leave my other fund ( the largest) as acc. for future growth. 

I don’t want to leave it till the last minute to sell funds in case of a crash but I’m unsure whether to sell yearly in bits and pieces or wait a couple of years and do it in one go.  Is it best to sell proportionally or sell more of the best performer? 

I funded my cash pot by selling my entire holding of Fundsmith, which had done very well and now I’m left with VLS 80 and HSBC GS Dynamic with my largest fund being Fidelity index world. 

It all seems so easy when everything is growing nicely or you can just ignore dips. 

leosayer

If you have a specific income requirements for all these years then a gilt ladder (if your provider supports it) is a way of locking that in using risk-free assets.

I wouldn't want to have much in STMM because you will be exposed to the risk of interest rates falling.

Whether you sell now or later depends on your capacity for loss, other sources of income and ability to reduce spending requirements because those funds have the potential for major dips - just look at what they did during early 2020.

kempiejon

When repositioning a pension pot, moving from accumulation to drawdown my plan was to have a cash float of a couple of years expenses and a portion (say 20%) in gilts/corporate bonds with staggered maturity dates out 5/7 years. That should mean when I want to draw some income those non equities will be maturing or can be sold down without selling my main equity investments. I can keep an eye over the years to see how the balance of fixed interest to equities and rebalance to more FI on equity bumps if possible.
I had a plan but the reality is more sketchy and haphazard than that. My cash/fixed interest percentages fluctuate a lot so does my cash flow 
I heard of a neat idea where you spend on interest free credit cards for everything you can and settle them annually or when offers expire to keep even more of the pot invested.

SVaz

A Gilt ladder was my plan starting in 2030 but I cant buy Gilts in my Charles Stanley Sipp and I don’t think I can transfer it as it’s part crystalised. 

I suppose I could fully crystalise, take the remaining TFC and then transfer it to a Sipp where I can buy Gilts. 
Tbh,  as long as interest rates don’t drop much below 3.5%,  there’s not much in it. 

I do have another, newer Sipp that is uncrystalised and is fully invested in equities and a DB pension that kicks in this year. 

Nebulous2

SVaz said:

A Gilt ladder was my plan starting in 2030 but I cant buy Gilts in my Charles Stanley Sipp and I don’t think I can transfer it as it’s part crystalised. 

I suppose I could fully crystalise, take the remaining TFC and then transfer it to a Sipp where I can buy Gilts. 
Tbh,  as long as interest rates don’t drop much below 3.5%,  there’s not much in it. 

I do have another, newer Sipp that is uncrystalised and is fully invested in equities and a DB pension that kicks in this year. 

I thought you could buy gilts in a SIPP from Charles Stanley, but you had to call them to do so? 

I hope that's the case, as I've just switched to them, with the intention of buying gilts. 

SVaz

Oh right,  I tried to buy them on the app and haven’t got a desktop computer, never thought of ringing them!  

Bostonerimus1

Looking at a "buckets" strategy might help you organize your drawdown. That might keep around 5 years of spending in cash and short term bonds and you rebalance maybe once a year after you've spent a years worth of cash by selling some equities or longer term bonds that have gains.