Iran war and investment

[Boogieboogiedelboy]

So I see my pension going down and down in this IRan war. Any proactive steps I can take or just leave it? I’m 55 and want to retire around 57/58 but I’m worried that won’t be possible now and my funds are supposed to go somewhere less risky. What are you doing or just riding with the downturn

Same age as you and same plan, though may be being too optimistic. I have enough in cash to keep me for a year and hope to increase that to close to two years, which means that I shouldn't need to draw anything until I am 59. I would then just draw down until I think I get the right combination of reasonable stock market performance and reasonable annuity and take that.

That is the optimistic route if not, I will do a different much less stressful job if I can find one and ease into retirement that way.

I too am disappointed to see things slumping. But we just have to hold our nerve, I think. Since you have a few years before you need to access your pension, just grit your teeth and try not to fret too much about it.

The old saw is that 'markets dislike uncertainty' so once things settle down either way, the markets should also settle and the financial people will find the new deals. You may remember that after the US election, there was a big drop but you'll also know that the markets recovered and had been gently rising for months.

The time to mitigate risk is before a drop happens. Changing investments now locks in the loss.

The markets are still higher than they were a year ago. I would do nothing as at the moment you haven't lost anything. If you started panicking now and sell you will just be crystalising any loss. Leave it be and let things run their course. Presumably you wouldn't be drawing the whole pot at once anyway even when you do retire, you would be leaving it invested to continue to grow?

I’m trying not to panic as I’m also watching my small pension go down. I semi retired 4 months ago and I’m drawing down on my pension. I get my SP in 2.5 years and my pension is supposed to get me to SP age and then have about £50,000 left for savings. I’m trying to keep my nerve but it’s hard when you are already drawing down. DH luckily has a good pension but it still makes me nervous.

It was rising nicely this year, more than I’d have anticipated and was starting to feel the finances were moving in the right direction. Esp with children starting to go to uni they may need financial help. I was made redundant last year before I could take
a Lump sum so that really scared me. i have a new job but its a small company so want to know I have money to fall back on if that happens again! But I don’t want to lose loads of money and then for it to take ages to build up again!

Don't do anything now.

In the slightly longer term, have a think about whether your investments are allocated appropriately for someone a few years off retiring. Most of your money can stay in equities and continue to grow (and should- too much derisking can be as bad as too little). But you also need to be able able to ride out any downturns without having to sell, so you should have a decent allocation to cash and other asset classes that are either lower volatility or negatively correlated to shares.

Have a read about sequence of returns risk and retirement cashflow ladders/buckets.

You haven't lost any money though. You would only lose money if you sold now and crystallised the loss. Leave it as it is you still have a couple of years.
Do you normally keep a close eye on your pension fund. Could you say for certainty how much it was worth a year ago, 2 years ago, how much it has risen / fallen in the last 2 years? There will always be fluctuations. The problem with big global events like Trumps tarrifs and the situation in the ME is that the press start sensationalist headlines and people who would never normally check their pensions from one year to the next star looking. They see it going down in that moment and panic. What they haven't seen is the daily, weekly and monthly rise and fall of the funds value for the preceding 5 years.
As said before, even when you do start drawing down you won't be taking the whole lot at once. The balance that is left invested will continue to grow.

Well if you’re retiring within 3-5 years you should already have substantial cash/money market funds in your pension, at least 2 years of income, unless you have a big pension that pays out enough dividends to provide an income.
We have 3 years income in short term MMFs followed by 5 years in a Gilt ladder which will take us just past State pension age. Retiring at the end of next year.
I was about to buy index linked Gilts maturing in 2035-40 but the price is going up and up.
The next year or two is going to be ‘interesting’ , hopefully the markets will turn upwards again but I’m pleased I realised a lot of the gains of the last 6 years.
Still investing but in a balanced fund, 50% still invested in global trackers for the long term.