How to Start a Pension in the Face of Economic Armaggedon - The Bear and Badger

drumbeg

LivDiv wrote:

I know general advice is "leave, dont touch, everything will even out" but it might be worth looking at what funds people have right now and where they are centred. A couple of previously healthy global funds I had just dropped. I ditched both and put the big one in America and the other into Asia. If you have British funds you could wait for a potential BoE rate rise but personally I would move them on.

Huh, you sold a global fund because it decreased in value? What's the thinking here? How long were you planning to hold this fund?

Aren't you just turning a paper loss into a real loss and then having to pay more for the US fund?

My own fund has dropped off a little. This month's units are going to be cheaper.

RamSteelwood

yeah i don't really know what i'm doing with all this, but if your fund drops in value isn't that the time to buy more (if you can) rather than sell at a loss? Isn't the basic concept of these funds that they'll always eventually rebound and grow over a long period of time?

drumbeg

Buying something when it's cheap is obviously good, but considering it is so hard to time the bottom of the market, I just put the same amount of £ in each month to the same fund. Each month, I get a slightly different amount of units for my £. During Covid when the fund dropped by about 30%, I got a lot more for my money (it fully recovered).

I pretty much never put in a lump sum, although maybe I should in times of crisis.

Bear in mind I am taking a long term view - 15-20 years or so.

GooberTheHat

SpaceGazelle wrote:

Hopefully it's all American in here, or at least it should be.

I put a tone in a UK fund, it lost 6% so I moved it to S&P500. I think it's down 12% now from when I bought it.

LivDiv

I haven't lost anything on it yet but I've got shot before I do and moved it into a fund that is on the up.
I wouldn't switch funds every five minutes but when something big is going on its worth looking at. I could have more of a shit fund but it could take a long time to catch the gains of better funds.

I generally have 6 or 7 funds on the go spread across different territories.

drumbeg

Just been reading this...

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/how-it-works/how-currency-movements-affect-returns

The fund I use is global. It is US weighted, but also has some UK stuff (as well as rest of world). In theory, the US stuff I've already invested in is worth more to me now due to the weak £, therefore selling up now could be a mistake. That's my take anyway. I'm far from an expert.

What's the deal with bonds at the moment? Does it make sense to shift a little towards them?

LivDiv

Yeah I mean that is U.S weighted so you will be fine.
I think my global ones were EU heavy and they are only doing well in comparison to the UK. (or Russia of course).

drumbeg

It's an actively managed fund, so may rebalance further away from the UK. At the moment UK makes up 19% of the fund. The FTSE 100 has been the strongest element of the fund in the last year with the S&P500 being the worst.

SpaceGazelle

There's no doubt the S&P has tanked over the last year but it'll be fine.

drumbeg

It's a cheaper buy at the moment as I see it.

SpaceGazelle

Yep. Just keep buying at regular intervals as per.

Dominar_Fybogel_XVI

Medigel has gone to the moon. U shd af listened to your Dominar

SpaceGazelle

About every year I'm going to check in. How's everyone doing? This bump is only to really find out if people are following the rules, and those rules are to think longterm and not really give a shit about current markets, even though I'm asking yearly.

It's essential to keep putting money in on a monthly basis depending on what you can afford. The biggest rule is not to take out until you're nearing pension age, ever, but the other rule is to keep putting money in.

GooberTheHat

Sticking it in every month. Hopefully I'm buying the dip at the moment because the S&P500 has been essentially flat for a year.

SpaceGazelle

Buy in the dip, buy in the surge. Just keep buying and don't worry about any single year even though I'm asking. The trend is always upward longterm, always. Just follow the rules.

poprock

Yeah. My statements tell me I’m still up overall despite everything being in the shitter for a couple of years. Can’t really complain at that.

SpaceGazelle

And yes this is the shit time. Buying when it's not doing much is more beneficial than buying the surge, longterm.

SpaceGazelle

But then again you shouldn't just buy when it's not doing amazeballs. It's the monthly investment that'll make you the money, whatever it's doing.

tigersgogrrr

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-1.13%

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acemuzzy

I have three pensions from working at three different companies, and have no idea how any of them are doing. I should probably check I can still access them somehow...

GooberTheHat

I have a pension that's goin to mature in 2 years. Not enough to retire on but it'll come in handy.

tigersgogrrr

I really need to investigate buying more years / contributing more to my teacher's pension.

TheBoyRoberts

So far so good for me…….kinda!

My Gregg’s shares are standing at 100.28% profit. I bought them during COVID and when they recovered the first time I sold half and bought £230 worth of Virgin galactic which have tanked. So overall in my fund share account I’m only 0.4% in the black. I’m hopeful once they get into space the virgin shares will “rocket up in value”!

My ISA’s are all over the shop. I’ve got the UBS S&P 500, Vanguard US Equity and a HL US Fund. They are up and down all of the time, but currently they are sitting at 1.88% profit.

Still putting in money every month into the ISAs it’s only £50 as I’m sticking money into a rainy day fund that I can access when needed. Once that’s built up, I’ll start sticking more into the ISAs.

acemuzzy

I have no idea if my pensions mature at a specific point. Isn't that kinda the point you decide to retire (which may be early/late depending how life leaves you)? Does it just dictate the things the fund invests in?

Funkstain

Army pensions are things you can take advantage of sooner. Police too for example

acemuzzy

As in, before you've retired? Ah maybe that's a good thing if it's salary not contribution based... otherwise isn't it kinda going against the point of having money for when you've stopped earning? The income is still taxable, right?

hylian_elf

There’s a difference between actual retirement (in life) and taking ‘retirement’ from a pension pot/scheme.

The minimum ‘retirement age’ in the U.K. is currently 55. That is, you can’t access your pension before that age. Government has been thinking for a while to increase it.

If your pension is a DC pot (like in a SIPP), no penalties for when you take it out as you’re just taking whatever it’s grown to. If it’s a workplace pension based on salary and service (a rare beast), your scheme will have its own ‘normal retirement age’. Usually 65-ish. If you want your pension earlier or later, it will be adjusted for the fact the scheme has to pay you for longer/shorter period (using estimated life expectancies and mortality rates and scheme assumptions etc etc).

TheBoyRoberts

I’ve got two healthy pension pots from my time with Accenture and a few years at another tech company.

I’m currently with a civil service pension which, if I stay there for another 15 years or so will provide a fair pension with a chunky payout.

My rough plan is to draw down on one of the two pension pots when I hit 55 and pay off what’s left of my mortgage. Then with the extra I now don’t need to spend, start putting more into my ISAs, having some ultra nice holidays and perhaps even start an affair with a hot younger lady who’s only after my money!

Funkstain

Yes - goobs will need to complete self assessments every year I would’ve thought

acemuzzy

hylian_elf wrote:

There’s a difference between actual retirement (in life) and taking ‘retirement’ from a pension pot/scheme.

The minimum ‘retirement age’ in the U.K. is currently 55. That is, you can’t access your pension before that age. Government has been thinking for a while to increase it.

If your pension is a DC pot (like in a SIPP), no penalties for when you take it out as you’re just taking whatever it’s grown to. If it’s a workplace pension based on salary and service (a rare beast), your scheme will have its own ‘normal retirement age’. Usually 65-ish. If you want your pension earlier or later, it will be adjusted for the fact the scheme has to pay you for longer/shorter period (using estimated life expectancies and mortality rates and scheme assumptions etc etc).

So what pension can't you access before 55? Sounds like you can with both DC and DS (obviously neither we big as of you waited), and state pension is later right?

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