Age 60, should my pension investment move to 'cash'?

Hi Gordon

In my example, €50k was drawn down in year 1 and the same amount (not a % of the portfolio balance at that time), adjusted for inflation, was drawn down in each subsequent year.

Obviously with a fixed percentage (such as 5%) of a variable amount, drawdowns would be, well, variable! And would never completely exhaust the portfolio.
 
Sarenco said:
Hi Gordon

In my example, €50k was drawn down in year 1 and the same amount (not a % of the portfolio balance at that time), adjusted for inflation, was drawn down in each subsequent year.

Obviously with a fixed percentage (such as 5%) of a variable amount, drawdowns would be, well, variable! And would never completely exhaust the portfolio.
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Ah, okay.

But for an ARF, that typically wouldn’t be the case.

Makes sense.

Thank you.
 
Cathdel said:
With just under 5 years left to work, should I look at moving the majority of my pension pot into cash now?
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The answer depends on your financial position.
If you have exactly enough money to last your retirement (no more, no less) then you can make an argument that you can't afford to risk any losses and moving the majority of your money to cash is the safe bet.

If you have significantly less than you need, then you need to max your contributions and take as much risk as you can bear on the equity side.

If you have significantly more than you need then it makes sense to take a balanced approach with 25 to 50% in cash the rest in equities.
 
AJAM said:
If you have exactly enough money to last your retirement (no more, no less) then you can make an argument that you can't afford to risk any losses and moving the majority of your money to cash is the safe bet.
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How on earth would you know this?

Cash is never a safe bet except in the very short term. It will be greatly wiped out by inflation.
AJAM said:
If you have significantly less than you need, then you need to max your contributions and take as much risk as you can bear on the equity side.
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So bomb out earlier.

The key point is that if you do not have enough money for your retirement, you can't solve the problem by financial engineering.

You can solve the problem by cutting your expenditure.

Brendan
 
Brendan Burgess said:
if you do not have enough money for your retirement, you can't solve the problem by financial engineering.
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Of course you can. It's just not guaranteed. If you don't have enough money for retirement, your guaranteed to not have enough money for retirement. You may however, end up with enough by loading up on equities, if things go well. But it is a gamble.
Brendan Burgess said:
You can solve the problem by cutting your expenditure.
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Probably what most people end up doing but I would argue a better way is to extend your time to retirement. This also gives you more time for your gamble to work out.
 
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