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Interesting week for pension fund value
Comments
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Think I will carry on working for a little longer
In an unpredictable world, it nice to see something so predictable 😄
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If you were considering retirement, but a blip like this makes you think again, then clearly you have not built up a big enough fund to retire. Especially when as others have pointed out, you should still be well ahead over the last 12 months.
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Thank you, that’s really useful information.
I will certainly be doing plenty of reading as want to be as clued up as possible before making any decisions.
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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.
As MallyGirl says, Inc funds will pay out any dividends rather than adding it to the fund value and over time this can help build up cash within the pension which can be taken out at a later date should it be needed. However the bigger part of making your money last longer is to still sell some of your equity funds during market declines rather than taking everything from your cash savings.
e.g. say you started with £50,000 as a cash emergency pot and had decided that at the end of the first year you would sell £25,000 from your pension fund and draw that out. But during the first year there's been a big market fall and your fund is only worth half of what it was at the start.
You could decide to take the full £25,000 from cash, but in this situation I personally would only use £12,500 of cash and the other 50% would come from selling £12,500 from the pension fund. So there's still £37,500 in cash rather than just £25,000 and you could continue doing that for another 3 years even if the pension remained at the exact same value.
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I feel lucky in that me and my wife have come into some money so we will be adding £40k to our S&S ISAs next week and £40k on April 6th. All in VWRP. I see this as a great buying opportunity. The war in the middle east will not go on for long due to oil and gas prices. Trump will not be able to sustain the increases at home.
As soon as its over the markets will rally back up.
early retirement wannabe0 -
I found the Guiide online tool interesting for this, it gives a rolling illustration of how you could withdraw from your cash, ISA and pension pots.
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You are in danger of making the assumption that the war can be controlled. Very possibly Trump may be able to wriggle out of being involved but he wouldn't hesitate if it meant leaving the rest of the world in the !!!!!!.
A little FIRE lights the cigar2 -
Are you referring to the free retirement planner or pension calculator, or both?
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A couple of questions on this as I’m still not quite clear…
So I have my pension pot and also a separate account with £50000 in cash savings.
If I plan to take £25000 one year, I can take £12500 from the cash savings leaving £37500 in that account, and £12500 from my pension pot. And you’re saying this is a good strategy when there has been a market fall? A market fall would mean the pension pot is smaller yes, so why does it make sense to take £12500 from it when it’s lower, aren’t you locking in losses? Wouldn’t it make sense to take from the pension pot when it’s had a good year and bigger?
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Maybe because if you took all £25K from your savings your savings pot would only last 2 years
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