Cash out? Enough is enough

Mistermeaner

Hi all , musing and would appreciate thoughts 

im 46 and have ‘enough’ saved in my dc pension ; as of today £1.02mil, I’ve saved well and growth has been excellent 

my partner 41 has 200k in her dc pension and she’s now got a few years local government pension and will likely stay in it 

additionally we have 80k between us in Lisa’s 

outside of retirement vehicles we have 14k in cash isa and 60k in S&s isa

Our only debt is 170k mortgage on our house worth 500k+

we don’t live lavishly and our outgoings kids mortgage bills etc are met from income with plenty left to save 

it feels like we have more than enough saved for retirement and we will continue to save into pensions etc because of the tax benefits 

what im musing on is whether to convert a good chunk of my DC into something ‘safe’ like money market funds - fully accepting I won’t get the potential growth but in my mind im thinking why risk it? Earlier this year my pension dropped from 930k to 750k over night, obviously it recovered snd then some but being as I don’t need more would it be sensible to turn say 25% or more of that 1mil into money market and preserve it ? 

What would you do ? 

Thanks 

Aylesbury_Duck

At your age I would consider that premature.  You can't access any of it for 11 years which should be enough time for any serious devaluation to recover.  You rode out a bumpy period earlier this year and it served you well.  It's not like you're retiring in the next few years and need access to it.  In any case, if your plan is to continue to add to it, in the event of any market reductions you'll be buying cheap units that will serve you well in any inevitable recovery.

DRS1

You aren't going to retire for at least 10 years maybe 20.  By that time £1million won't be what it is today.  

Of course you are bumping up against the LSA so maybe there is a justification for saving more outside the pension.

dunstonh

what im musing on is whether to convert a good chunk of my DC into something ‘safe’ like money market funds - fully accepting I won’t get the potential growth but in my mind im thinking why risk it? 

So, you are looking to remove investment risk and replace it with shortfall risk and inflation risk.

Earlier this year my pension dropped from 930k to 750k over night, obviously it recovered snd then some but being as I don’t need more would it be sensible to turn say 25% or more of that 1mil into money market and preserve it ?

That level of drop suggests you are 100% equities invested.  That is high risk.  Its been a fantastic period to be 100% equities but most consumers don't have the risk profile to do that.

So, moving back to 70-80% equities would be normal and commonplace for someone your age.
STMM may not be the optimal choice at this time.  Certainly ok for part of it but ignoring bonds now that they have realigned would be missing an opportunity.

HedgehogRulez

I’d move a couple of £100k from equities into cash in your pension and time the market for the incoming market apocalypse in 3 months time (then rebuy those sweet cheap stocks).

it’s what I’ve done and I’m pretty awesome (similar position to you: 46 yo, £910k DC pot, wife in TPS with a few hundred in ISAs etc)

BlackKnightMonty

HedgehogRulez said:

I’d move a couple of £100k from equities into cash in your pension and time the market for the incoming market apocalypse in 3 months time (then rebuy those sweet cheap stocks).

it’s what I’ve done and I’m pretty awesome (similar position to you: 46 yo, £910k DC pot, wife in TPS with a few hundred in ISAs etc)

Why are you anticipating market apocalypse in 3 months?

artyboy

BlackKnightMonty said:

HedgehogRulez said:

I’d move a couple of £100k from equities into cash in your pension and time the market for the incoming market apocalypse in 3 months time (then rebuy those sweet cheap stocks).

it’s what I’ve done and I’m pretty awesome (similar position to you: 46 yo, £910k DC pot, wife in TPS with a few hundred in ISAs etc)

Why are you anticipating market apocalypse in 3 months?

Quite.

everyone knows it is going to be in 2 weeks.

HedgehogRulez

BlackKnightMonty said:

HedgehogRulez said:

I’d move a couple of £100k from equities into cash in your pension and time the market for the incoming market apocalypse in 3 months time (then rebuy those sweet cheap stocks).

it’s what I’ve done and I’m pretty awesome (similar position to you: 46 yo, £910k DC pot, wife in TPS with a few hundred in ISAs etc)

Why are you anticipating market apocalypse in 3 months?

Just to annoy Dunstonh mainly.

michaels

You can protect against inflation using index linked gilts to preserve the current real value vs prices but this won't keep up vs incomes (should we ever go back to the 'norm' of incomes rising faster on average than prices).

Historically the 'safest' in terms of highest worst outcome (that does make sense) asset mixes have been about 70/30 stocks to bonds.

BlackKnightMonty

artyboy said:

BlackKnightMonty said:

HedgehogRulez said:

I’d move a couple of £100k from equities into cash in your pension and time the market for the incoming market apocalypse in 3 months time (then rebuy those sweet cheap stocks).

it’s what I’ve done and I’m pretty awesome (similar position to you: 46 yo, £910k DC pot, wife in TPS with a few hundred in ISAs etc)

Why are you anticipating market apocalypse in 3 months?

Quite.

everyone knows it is going to be in 2 weeks.

Sssh keep quiet and we can short it an become trillionaires!

Roger175

A subject very close to my mind .... once you have won the game, why do you need to keep taking the risk?

Our circumstances (wife and I) are different insofar as we are recently retired, but we have certainly reduced risk, given that we have achieved our objective and don't need the worry of having to win the game all over again in the event of a crash. We all know one is coming at some point - be it 2 week, 2 months, 2 years, 5 years...does it matter when, it will happen, history tells us this and if you've achieved your objective, you would be daft not to do a bit of de-risking - remember if markets crash 50%, they need a 100% rise to put you back to where you were.