Interesting week for pension fund value

dharm999

My SIPP is down around 7%, which is painful, but is still higher than 12 months ago. I took the decision to switch to income funds from acc funds and any income stays in the SIPP and goes into a MMF, in preparation for drawing down from the SIPP. Fortunately have a good level of cash savings, so will just use those to avoid touching the SIPP and will wait it out. It’s easy to say, but this is just another blip that, if history is anything to go by, will sort itself out. As long as you’ve got good diversification, then things should be ok

Cobbler_tone

I think it is more impactful for those just or about to retire, unless you have minimal equities. Most people 30-50 probably haven’t even checked. Whilst the current drops may be poles away from Covid, the uncertainty is the longer term impact, plus of course the cost of living pressures again. Cutting back on Easter eggs. 😋

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81931694#Comment_81931694

I’ve been thinking about retiring in the next year or two myself and it seems like a sensible strategy, to use any cash savings you have first whilst you can before touching the pension pot, allowing it to recover from this current uncertainty.

My only concern is how far into those cash savings do you go before you think you need to start taking from the pension? Sounds like you have a decent cash reserve if you can last 5 to 7 years. I could probably last 2 years, maybe a little more on my cash savings but I don’t like the idea of using most of that as it gives me piece of mind, I would rather just dip into it here and there over the years when I need to and keep it as a safety net.

westv

My portfolio fell slightly more last March.

Notepad_Phil

EverythingCounts: My only concern is how far into those cash savings do you go before you think you need to start taking from the pension? Sounds like you have a decent cash reserve if you can last 5 to 7 years. I could probably last 2 years, maybe a little more on my cash savings but I don’t like the idea of using most of that as it gives me piece of mind, I would rather just dip into it here and there over the years when I need to and keep it as a safety net.

If you use Inc rather than Acc funds then you could use the cash dividends to naturally boost any cash reserve. And if markets are down then you don't need to fund everything from the cash savings e.g. say markets are down 20% then withdraw 80% of your needs from equity funds and 20% from your cash. That way your 2 years would last for 4 years even if markets crashed 50%.

ali_bear

The dip this March is only a fraction of the gains made over the last year or two.

Anyone planning a large annuity purchase this year should have already moved the necessary into, say, an index linked gilt tracker fund or similar 😗

SouthCoastBoy

https://forums.moneysavingexpert.com/discussion/comment/81931802#Comment_81931802

I intend to try and keep a 5 year rolling cash reserve in my sipp and s&s isa, but only selling equities when prices seem reasonable, so it may not necessarily be 5 years of cash reserves.

Just calculated how much I've lost since start of Iran war, seems to be around 80k

Think I will carry on working for a little longer

Bobziz

"Think I will carry on working for a little longer"

I really hope you're joking and that you've finally conquered OMYS ?

EverythingCounts

https://forums.moneysavingexpert.com/discussion/comment/81931815#Comment_81931815

Can you explain a bit further as I don’t quite get what you’re suggesting. What do you mean use Inc rather than Acc funds?

Sorry I’m still learning some of these things, how can I make my money last 4 years rather than 2? It sounds like a good option so I’m keen to understand it.

MallyGirl

https://forums.moneysavingexpert.com/discussion/comment/81932143#Comment_81932143

a bit of reading on here will raise your level of understanding now that you have found yourself needing to know more.

Inc funds pay out dividends from the shares held within the fund - generating an Income

Acc funds reinvest any dividends in the fund itself- accumulating more value

if you are old enough to be able to access your pension then you could take income from the pension (to make use of your 0% personal tax allowance as a minimum) to supplement cash. That pension income could be taken from dividends or from selling funds.