What age to move from investments to cash savings

littlemoney

My understanding is that investments in stocks and shares are for the long term due to short term ups and downs but over time will give a better return.

Whereas savings have a lower return but you can't loose your money.

At what age does long term investments become less prudent in relation to life expectancy and the need for funds in a few years rather than 10 years.

Just seeking peoples thoughts on getting older and investing and the need to move investment funds to savings. Thanks

Niv

In my opinion it depends on your attitude to risk and how much there is. My plan when I approach retirement is to hold a higher amount in cash but I certainly have no intention of liquidating all my stock. I may go as high as two years of expenditure in cash, probably no more.

luci

It depends on whether you already hold investments or are just starting out.

We have S&S ISAs via an IFA which have done very well. We also have around £120,000 in cash ISAs and other accounts. We bought a car and did a lot of home improvements last year. I withdrew some money from the S&S ISAs to go towards that. I will be leaving the investments until such time as I have run down to cash to a level I’m happy with as a buffer. I don’t see any need or reason to turn the investments into cash.

brewerdave

My wife and I are in our mid 70s - currently I have ~ 20% of our total savings in cash and the rest in S & S ISAs or wholly owned shares.

Of the cash the majority is held in Premium Bonds with ~ 2 years of "normal" expenditure in instant cash ISAs ,and a further 2 years approx in fixed cash ISAs. As we get older ,we are slowly passing our cash savings on to our daughters.

InvesterJones

https://forums.moneysavingexpert.com/discussion/6668247/what-age-to-move-from-investments-to-cash-savings

Rather than think of all or nothing move at a certain age, why not consider a cash buffer at all times whose size depends on likely short term costs.

Vitor

I'd start to move to lower risk positions from age 55 and be completed by age 65

QrizB

Just seeking peoples thoughts on getting older and investing and the need to move investment funds to savings.

A common rule of thumb is to have money for your next five years in cash or cash-like investments (gilts, bonds) and the longer-term money invested in higher-risk equity assets.

EthicsGradient

Life expectancy for the UK overall at 65 is another 19 years for men, and 21 for women.

https://cy.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2022to2024

You might try to modify that with a realistic estimate of your own health compared with others. But everyone really needs to still be planning for long-term investment at 65 - or an annuity. This of course is after the income from state or other pensions you have.

redpete

https://forums.moneysavingexpert.com/discussion/comment/81998019#Comment_81998019

A lot earlier than me. I'm 67 and possibly 20+ years from outliving my savings and investments. I've got approx half of my savings and investments in S&S funds, mainly trackers.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81998019#Comment_81998019

'Lower Risk' can mean almost anything. If you were 100% equity, then 90 % equity is lower risk.

In reality most people at 65/retirement will be in a medium risk portfolio ( most UK investors have a medium risk profile anyway , even at younger ages) . So lets say 60% equities/20% bonds/20% cash or something similar.

Maybe by 75 this could derisk further to 40/30/30, which should still be OK at a 4% drawdown/beating inflation.

After that it probably depends on what your plans are, although some further derisking maybe prudent in your 80's

jaypers

Been retired a since 2022 and I’ve been OTT on cash……finally got my head around this and slowly lowering cash in favour of stocks and shares ISA (mainly funds, mid-risk). I’ll keep about 10-15% non pension savings as cash going forwards.