What Should I Be Doing With My Pension?
Discussion
My pension assumes I am retiring in 8 years time although I was planning to at the end of this year. I keep an eye on what my pot is doing every few days and can see that it has dropped about 5% since the last statement in November after it had grown 5% to the end of February, so has dropped 10% in 3 weeks.
What to do? Stop paying AVC's and pay into a cash ISA so at least it'll be worth the same in 6 months time, then make a lump sum deposit into my pension. Change my pension to a less risky portfolio, accept the losses and hope it'll grow a bit. Leave it alone, delay my retirement and hope I don't catch it. Cash it in and accept the loss.
What to do? Stop paying AVC's and pay into a cash ISA so at least it'll be worth the same in 6 months time, then make a lump sum deposit into my pension. Change my pension to a less risky portfolio, accept the losses and hope it'll grow a bit. Leave it alone, delay my retirement and hope I don't catch it. Cash it in and accept the loss.
At the moment, the best thing to do is nothing. If you sell anything now, you're just crystallising a loss that you have no need to incur.
FWIW my pension fund is down by 50 grand since last week - but that still only puts it back to where it was at this time last year. I'm not worried in the slightest.
FWIW my pension fund is down by 50 grand since last week - but that still only puts it back to where it was at this time last year. I'm not worried in the slightest.
Edited by outnumbered on Friday 13th March 18:03
outnumbered said:
At the moment, the best thing to do is nothing. If you sell anything now, you're just crystallising a loss that you have no need to incur.
FWIW my pension fund is down by 50 grand since last week - but that still only puts it back to where it was at this time last year. I'm not worried in the slightest.
Agree with most of that except the bit in bold!FWIW my pension fund is down by 50 grand since last week - but that still only puts it back to where it was at this time last year. I'm not worried in the slightest.
Edited by outnumbered on Friday 13th March 18:03
I don't know, nor does anyone else, how long and how deep the markets will fall. This will impact all my decisions from now on, including the one I made today postponing the next (last?) phase of my life which, with good luck, may be another 5-10 years.
Easier decisions when you have time on your side.
I'm going in august, have a DB railway pension, so the main body is not affected by market swings, also have a avc part which unfortunately is, been watching that fall and decided to move it to a deposit fund to protect it, lost a few 10k but thinking its not going to get back to where it was in 5 months, and most likely lose more keeping it invested.
Sheepshanks said:
Some people’s attitude that they feel sure markets are going to keep falling but they’ll sit it out is a bit bizarre.
It is the only way to guarantee you get all of the gains when it does bounce back (which history has shown it always has).Basically, it is the difference between long term investing and short term trading.
I get your point though, different people have different mindsets and this is only natural!
JulianPH said:
It is the only way to guarantee you get all of the gains when it does bounce back (which history has shown it always has).
That's true, of course, and I've left mine, as I just don't know what's going to happen. But I already have way too much in cash. I looked at my pensions and they've hardly moved - they're on some sort of lifestyle thing. I know that may not be completely appropriate, but it looks OK now!
I still haven't used 19/20 ISA allowance for wife & I. What to do.....?
Sheepshanks said:
JulianPH said:
It is the only way to guarantee you get all of the gains when it does bounce back (which history has shown it always has).
That's true, of course, and I've left mine, as I just don't know what's going to happen. But I already have way too much in cash. I looked at my pensions and they've hardly moved - they're on some sort of lifestyle thing. I know that may not be completely appropriate, but it looks OK now!
I still haven't used 19/20 ISA allowance for wife & I. What to do.....?
My guess is that there will be continued volatility for a while before the dust settles.
If your pension is life styled then the closer you get to your anticipated retirement date the more it will move away from equities to bonds. We do this and so I know the glide paths very well.
Happy to hear you have not been hit badly because of this.
What to do? I bought into the markets to take advantage of the discounts a couple of weeks ago. Obviously that didn't work out particularly well, but but it at least gained over 7% yesterday.
Investing is all about the long term and people are trying to become short term traders - which usually results in losses. I would say stick to your long term plans rather than cutting your losses and/or seeking to make gains from investments you would not otherwise have considered.
Either that, or just do nothing!
Edited to strongly add that you should get your money into an ISA before losing this year's allowance. You can always hold this is cash pending any investment decisions.
Edited by JulianPH on Saturday 14th March 15:11
CAPP0 said:
Any recommendations for a new ISA Julian?
Hi CAPP0I can make a specific recommendation as this would be regulated financial advice (and I don't know your personal circumstances in any event).
In terms of guidance, however:
Many people are looking at markets and/or stocks that have taken the biggest hits to buy in at the highest discount. Whilst this seems logical on the face of it, it involves timing very volatile markets on the way in and on the way out, so they are effectively switching from long term investment to market trading.
If these stocks/markets were not suitable for your investment strategy before the falls you have to ask yourself why they are suddenly suitable now.
Given that pretty much everything is at a big discount then it may be wiser to simply buy more of your preferred funds/shares as currently held to get a greater benefit from the inevitable bounce back when it arrives without changing your long term investment strategy and risking this trying to chase a potential higher gain from something you would not otherwise have considered investing in.
And as for information:
If you are concerned about going into markets right now then don't lose your ISA allowance for the year (and pension allowance for that matter).
You can put the money in and keep it as cash. This secures your tax allowances and allows you to go into the markets at a later date or drip the money in markets on a regular basis, giving you the benefit of pound costs averaging if markets continue to fall (but obviously this works against you if the start to rise.
If in doubt, you could do a combination of both.
I hope that is helpful and if it raises further questions please get back to me on the IM sticky.
BTW, this is a good example of the difference between fre information and guidance without a product recommendation at the end of it, compared to paying for financial advice which would be telling you (hopefully) the same things, but with an initial and ongoing annual charge for the product recommendation bit!
CAPP0 said:
JulianPH said:
Hi CAPP0
I can make a specific recommendation as this would be regulated financial advice (and I don't know your personal circumstances in any event).
In terms of guidance, however:
etc etc
Thanks Julian! Read and understood!I can make a specific recommendation as this would be regulated financial advice (and I don't know your personal circumstances in any event).
In terms of guidance, however:
etc etc
"can't", not "can" (though I know your realised this)!!!
Just get in touch here or send me a PM if I can be of further assistance.
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