What age to move from investments to cash savings

UKX69

I’m in my mid 70s and after 40 years investing in stocks and shares moved almost everything into cash. This is a result of considering my outlook on life.

oldfella

late 70s and the policy has been to keep 15% in cash savings. Worked well, gradually reducing investments now to fund family and reduce Inheritance tax.

dunstonh

You can't have a 100% one size fits all answer to this.

For example, what happens to the money on your death? If the beneficiaries are investors, then whether you are 75, 80, 85, or whatever, it doesn't matter that you're still invested because it will continue when they inherit it.

It also depends on how much money there is. If you're 75, for example, you're still looking at typically around another ten to twelve years just for 50% life expectancy. 99 is the typical age for 10% life expectancy.

It's unusual to find people that are 100% equities post-retirement but sitting at around 40 to 70% is very normal right up until death.

But of course it depends on how much money you have, how much you spend, what your future plans are, etc.

I don't assume that cash is lower risk than investing. If you are drawing an income from the investments and move it to cash, then you could well be increasing the risk. Yes, it will have lower investment risk, but it will have increased shortfall risk and inflation risk.

jimjames

https://forums.moneysavingexpert.com/discussion/comment/81998262#Comment_81998262

My parents are mid 80s and both still fully invested but expenses generally covered by pension & other income

UKX69

https://forums.moneysavingexpert.com/discussion/comment/81998341#Comment_81998341

Same here, but investments were just mostly a hobby anyway - but will say that my work related share options did eventually pay off my mortgage. Happy days!

GeoffTF

I am 76 and in excellent health. It is likely that I will live another ten to twenty years. It is possible that I could die sooner, but there is an outside chance that I will live longer. I have got to the point where I have far more income and assets than I need. Most of my money will go the charity on my death. Do I optimise the expected return, or play safe? Either would be reasonable. 60% equities has been my choice, but it has gone up to 65% recently (despite all my cash flows being fed into bonds). I do not believe that matters.

Aristotle67

I am 59 and all of my funds are in cash ISAs and interest accounts ranging from one year to five years. I keep £25k in an instant access account to cover any sudden expenses.

I have never found investing appealing as I am risk averse when it comes to capital; which considering I have been a professional punter for twenty years probably sounds either contradictory or crazy. Or both.

I have been utilising my ISA allowance each year with a cash ISA but from 2027 I will be putting £8000 a year into a Stocks and Shares ISA up to and including my 2029 allowance. That way I can leave those amounts invested for 7,6 and 5 years until I draw my state pension in 2034. When that year comes around I will reassess. That is enough risk for me over the next few years. If the cash portion of ISAs had not been limited to £12,000 I would not have even considered the S&S option. I understand the inflation argument, but it is a combination of my own aversion to risk (it is mostly that) and my age which deters me from further investment.

Eco_Miser

Logically, 10 years before you die (and give it away 7 years before you die to avoid IHT), but the lack of a functional crystal ball makes that difficult, so, so far I haven't reduced my S&S ISA, in fact I increased it last year. Age 76, 17 years retired.

chiang_mai

At age 76 I've recently moved from 80+% equities to 48%, I've invested some of the difference in Bond funds but I've also increased my cash and MA holdings. I don't expect to ever move below 50% equities. One caveat here is that my investment funds are totally separate from my retirement income and savings hence my answer is focussed on how to manage investment money rather than total wealth.

There are many different points on the risk scale, between equities and cash. If you think about it in very simple indicative terms and assign a risk value of 100 to equities and 0 to cash, Mixed Asset funds might be assigned a value of say 70, Strategic Bond Funds say 40, Investment Grade Global Bond Funds say 25 and short term gilts around 10. There is therefore little need to move entirely from 100 to 0 when a move from 100 to say 30 will satisfy your risk profile. (Note: the preceeding scale is used to illustrate a point, ONLY).

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81999151#Comment_81999151

I think you first came to the forum just over 4 years ago, when you had a nervous dabble at investing. However you then retreated 100% back into cash after some small losses.

During that period a global index tracker has grown by nearly 75%, whilst a more middle of the road fund will have grown around 35%.

Hopefully it will continue like that, but who knows ?