what percentage of equity do you hold in your retirement pension ?

Mick70

https://global.morningstar.com/en-gb/personal-finance/how-make-your-money-last-retirement

i know some posters on here say they have 100% equity , and 60:40 seemed to be most common, but this gives food for thought , for once retired , if your exposure should be lower

Mick

Marcon

Depends on attitude to risk, age, health, other assets and so many other factors, so pretty pointless looking at what other people do; just focus on your own situation.

NormalNorman

95% equities.

5% STMMF

Reason - If I get the chop and decide not to or can't get another FT role there is buffer money if need be.

Originally I did plan on perhaps invoking one of my DB schemes early with an NRA of 60 if I got the chop but with Capita at the helm I can no longer count on that in a reasonable time frame. So I got a PT job that will not only give some peace of mind but hopefully carry onto the first stage in retirement.

I do have ready funds elsewhere but would like to use the personal tax allowance first.

DavidT67

https://forums.moneysavingexpert.com/discussion/6668827/what-percentage-of-equity-do-you-hold-in-your-retirement-pension

Defined Contribution pension pots are just one small element of retirement planning. If you have a defined benefit scheme or other guaranteed annuity then you can be more adventurous with your DC pot.

Plus you could well be holding significant assets in ISA, GIAs, Govt. bonds, bank deposits, commodities, etc. etc. So looking at DC pension pots in isolation is a blinkered view.

Roger175

42% equities/16% bonds/42% cash (or cash like, STMMF etc).

Reason. We have way more than we need and don't need to risk anything chasing gains, as long as we can keep ahead of inflation, that's all that concerns us.

MK62

https://forums.moneysavingexpert.com/discussion/6668827/what-percentage-of-equity-do-you-hold-in-your-retirement-pension

Currently, a 30yr index linked gilt ladder will offer an SWR of about 4.5%.......so there's a bit more food for thought....😉

leosayer

I've been retired for 18 months and my target it 75% global equity index funds and 25% Short-term gilt fund / MM fund and Cash. I rebalance about once a year to raise sufficient funds for drawdown - the recent gains have more or less replenished what I have sold.

Arguably this is quite a high allocation to equities but my wife has a gilt ladder in her SIPP which pays out for the next 5 years.

We also both have a DB pension entitlement that we haven't started yet. I'm treating this as a shock absorber if equity markets crash - it comes with an optional large tax free cash element.

tigerspill

Both myself and wife have reasonable work DB pensions and will have full state pensions when the time comes.

I have defined a yearly sum that I need to have to live very comfortably.

Each year will require a top up of cash on top of our pensions to meet that need.

For the next 5 years I am holding this top up money in cash

For years 6 to 15 I am holding this top up money as Indexed Linked Gilts (and a bit of cash left over form years 1-5 unless I spend it). All of these ILGs will have a little real growth when held to maturity - but the main reason for these is to lock in longer term retention of real value.

The remainder is in equities with a few MA funds.

Overall my asset split (ignoring pension income) is -
Cash - 14%, ILGs/Bonds - 19%, Holiday home/classic car - 13%, equities - 54%

My plan is to convert equities to ILGs each year in April (assuming reasonable equity prices - I can await a recovery if needed). My aim is not to chase significant growth, but protection in real terms of what I have.

So I have pretty much zero risk funds for the next 15 years which allows me to sleep easily at night.

Aylesbury_Duck

71% across our joint DC pots, aged 53, planning to retire at 57. We do have reasonable DB pensions and full state pensions that will provide almost all of our required income from 67 so we could arguably take more risk, but it's a balance between giving the DC pots a good opportunity to grow, and not being forced into changed plans should there be a large and sustained drop in equity markets in the next few years.

Albermarle

https://forums.moneysavingexpert.com/discussion/6668827/what-percentage-of-equity-do-you-hold-in-your-retirement-pension

Worth remembering that all investment advice like this, is just opinion and experts rarely agree.

However if we take the comments at face value ( I saw the original article and posted a link to it a couple of weeks ago) . Then my take is that a SWR is based on there being only a small possibility of running out of money over a long period. The article is saying by having a lower level of equities at 30%, this small possibility is even smaller than if you had a high level.

The other side of the coin though is that on the balance of probabilities, having a higher level of equities will mean it is more likely you will end up either with a bigger pot to pass on, and/or you can increase the withdrawal rate at some point.

tacpot12

90% Equity, 7% Bonds, 3% Cash. Been retired 8 years

Mine is higher than you might expect because I have some DB pension income that is about to start, a full state-pension entitlement and some rental income.