Bear Market/Crashes: how do Retirees Deal with it?

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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    DairyQueen wrote: »
    We have a choice: buy a (poor value?) annuity

    What level of payment from an annuity do you regard as poor?

    Or is it the loss of your capital that concerns you. In that you expect not only to derive an increasing income from your pot, but be left with a capital sum as well.
  • Audaxer
    Audaxer Posts: 3,512 Forumite
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    Cash-Cows wrote: »
    When I retire I hopefully 5 years time I will have to psychologically get my head around actually withdrawing money. I!!!8217;ve never spent any investments and will take some getting used to.
    I know what you mean, but when you are retired if you need investment income to supplement your pension it shouldn't be too difficult. I think psychologically it would be easier to take natural income via dividends rather than sell capital, so I have set up an income portfolio for that purpose, although currently reinvesting the dividends until I need to take them.
  • OldMusicGuy
    OldMusicGuy Posts: 1,761 Forumite
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    ams25 wrote: »
    managing to stay calm in the face of £50k or so of paper (online?) loses this month...not interested in knowing the exact amount. :D My asset allocation has helped to moderate losses a little and gains over the last 18 months since I stopped working/retired reassure. Quietly pleased with myself that I have handled this first, albeit small, test satisfactorily. Even my wife was surprised by my response...fearing a less tranquil reaction to plunging markets.
    I'm about 40K down thus far, a bit sobering as I retire in just over 2 weeks. I'm regretting moving 50K of cash into the market 3 days before the correction, but it's a lesson that I have had reinforced - don't fiddle.

    I was a bit stressed initially but ok now. My strategy for retirement is not one based on safe withdrawal rates and I am glad because it looks like a period of volatility means increased risk of pound cost ravaging for those about to retire.

    This correction has given a good insight into how my funds perform and I will be readjusting my holdings a bit once the market has settled, but not doing anything right now.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    edited 10 February 2018 at 5:19PM
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    My main SIPP has dropped £35 [Edit!] £35k between recent peak and current level despite being 50% bonds. Ah well.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • ams25
    ams25 Posts: 260 Forumite
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    gadgetmind wrote: »
    My main SIPP has dropped £35 between recent peak and current level despite being 50% bonds. Ah well.


    Wish I was only down £35. ;)
  • Sea_Shell
    Sea_Shell Posts: 9,445 Forumite
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    Yeah...I bet a 'k' is missing!!!55357;!!!56832;
    How's it going, AKA, Nutwatch? - 12 month spends to date = 2.38% of current retirement "pot" (as at end April 2024)
  • pip895
    pip895 Posts: 1,178 Forumite
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    Audaxer wrote: »
    Gosh, that's a lot! I'd be interested to know which has fallen most in the last month - your active or passive portfolio?

    I have recently converted 50% of my portfolio to passive investments - leaving just my SIPP in active funds. I thought initially that my passive investments had fared a lot worse but now and after taking into account the different valuation points its pretty much a dead heat ~3.5% last week and ~5% since mid Jan.

    Its a sobering amount of money but par from the course - I am 100% up since I started investing actively 8 years ago and you cant expect those sort of returns without risk and some bad years.

    I am retired, but we have a few years worth of funds out of the market - probably more than we need really. After all there is little problem selling out of bonds/gold etc during a crash/correction indeed ending up with a higher equity percentage in depressed markets would be no bad thing - provided of course you rebalance as the markets recover.
  • ams25
    ams25 Posts: 260 Forumite
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    Cash-Cows wrote: »
    When I retire I hopefully 5 years time I will have to psychologically get my head around actually withdrawing money. I!!!8217;ve never spent any investments and will take some getting used to.

    Glad its not only me. After 30+ years of saving and accumulating, starting to withdraw was and is, for me anyway, quite a challenge.

    It's helped a lot that over the past 18 months since I stopped accumulating and went into withdrawal mode that markets have been good so my withdrawals are much lower than my investment growth (though that's maybe changing now). But I find 18 months later I am becoming more relaxed about going into withdraw mode. Apart from just the passage of time helping me to get used to the idea, the specifics that have helped me most are:

    - just getting that this is what the money is for.. to live on.... you can't take it with you.
    - reading a lot about retirement planning and thus understanding that with a conservative withdrawal approach (c.3% is my plan), cash buffer and rising equity glide path, that bar the mother of all bear markets/high inflation and personal spending shocks, there is a good probability of having more money when I die than I do now so I can leave a decent legacy to my children (and/or gifts while alive) and still spend. Given that knowledge which i did not have previously, it is easier to feel ok about spending.
    - recognizing that once you hit your 50s and 60s, you have a limited number of active years ahead of you, and once you pass 75 spending will decline as your ability to do stuff does, so better to front load spending while you can enjoy it.
    - and of course, you see too many people pass away in their 50, 60 and 70s. who knows how long you have.

    all that said, i don't see myself becoming a spendthrift anytime soon. old habits die hard:money:
  • ams25
    ams25 Posts: 260 Forumite
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    Audaxer wrote: »
    Gosh, that's a lot! I'd be interested to know which has fallen most in the last month - your active or passive portfolio?

    good question... made me check.

    my passive (VLS60) has fallen from 102939 at end Jan to 99152 (-3.7%)
    My active 60:40 has fallen from 103210 to 100651 (-2.5%)

    so far the active is doing a little better in a falling market, as you would hope. previously there was not much in it.
  • TBC15
    TBC15 Posts: 1,456 Forumite
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    gadgetmind wrote: »
    My main SIPP has dropped £35 between recent peak and current level despite being 50% bonds. Ah well.

    You little tease, I take it this SIPP was all the loose change you have accumulated over the years before putting your trousers in the press.
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