Good time to add to SIPP or not? (w/ US shenanigans)

[Jade]

Any advice on holding off or not atm with trumps recent tariffs?

[ExitViaTheCashRamp]

I know what you are thinking, is the drop 6% or only 5 ? Well, to tell you the truth, in all this excitement, I've kinda lost track myself. But being as this is a mad orange man, the most powerful lunatic in the world, and would blow your stashes head clean off, you've got to ask yourself one question: "Do I feel lucky?" Well, do ya, punk?”

[Jay Ritchie]

I think it depends on your broader tax position and aspirations? I'm not sure that global events should necessarily put you off moving money into a SIPP if investment risk is your concern - you can use much safer funds than index trackers while you ponder. Very different matter if job security and or inflation are your concerns.

[Jade]

I think it depends on your broader tax position and aspirations? I'm not sure that global events should necessarily put you off moving money into a SIPP if investment risk is your concern - you can use much safer funds than index trackers while you ponder. Very different matter if job security and or inflation are your concerns.

I think we might try some other funds whilst we ponder...

[Affable Bear]

I agree with Jay in that it depends where you are really, we are still closer to the begining than the end of our journey so will likely be buying for at least the next 15 years. Interestingly I have started putting more money through my SIPP as the tax relief will allow me to buy more whilst stocks are low, at least in my head anyway!!

I'm about 85% US 15% UK and I am continuing to buy at this ratio at the moment, who knows what will happen but I have faith in the process. I think if I was 5 years out I would have a more cautious/defensive approach maybe somewhere between 60-80% equities and the rest a mix of cash, bonds, gold etc.. But I havent thought much about it yet

[Jade]

I agree with Jay in that it depends where you are really, we are still closer to the begining than the end of our journey so will likely be buying for at least the next 15 years. Interestingly I have started putting more money through my SIPP as the tax relief will allow me to buy more whilst stocks are low, at least in my head anyway!!

I'm about 85% US 15% UK and I am continuing to buy at this ratio at the moment, who knows what will happen but I have faith in the process. I think if I was 5 years out I would have a more cautious/defensive approach maybe somewhere between 60-80% equities and the rest a mix of cash, bonds, gold etc.. But I havent thought much about it yet

Thanks @Affable Bear .. I think as we're nearing ER, we're going to put the annual £2880 into hubby's SIPP and then look at a more traditional savings account for overflow of the emergency fund as there's some pretty good rates atm.

[Affable Bear]

Thanks @Affable Bear .. I think as we're nearing ER, we're going to put the annual £2880 into hubby's SIPP and then look at a more traditional savings account for overflow of the emergency fund as there's some pretty good rates atm.

I think thats sensible given your timeline to ER, tax relief will help mitigate potential losses if you are able to get 20/40%+ relief but having a cash buffer heading into retirement is always a good idea IMO. I think its a good idea to have this even if the markets are at record levels when you retire just in case there is a sudden drop you can use your cash buffer and give your stocks a chance to bounce back (sequencing risk). As to how much you keep back depends on your risk tolerance and flexibility.

Theres a guy nicknamed the Mad Fientist thats done loads of work around the 4% rule and simulations and I think he liked to look at how much you actually need to withdraw every year to sustain your retirement pot. He talks a lot about being flexible and when calculating your FI number you can seperate your costs into 2 piles, essential can't live without and optional can live without or delay. Everybody is differnet and its not just about core bills its more about whats the minimum lifestyle you would be happy with (that will be your essential spending) and what lifestyle you would love to live but could do without, for example travelling could be a core lifestyle spend or an optional one. If you are in a downturn and its optional you could choose to delay the trip until markets recover, alternatively if its a core spend you go on the holiday anyway etc..

Basically you draw up a list of what you would like your minimum lifestyle to be and what your maximum lifestyle would look like, you could then use your maximum lifestyle FI number as your target but then if you are in a downturn you could switch down to your core lifestyle budget and this actually massively decreases sequencing risk. Using this and being slightly more defensive in your portfolio would go hand in hand that you shouldnt run out of money!!

I stumbled across it on the BiggerPockets money podcast a while ago (2024 I think), I found it quite interesting!

[Jade]

Yes, I think so too but you've made some extra points that help validate our decision, thank you @Affable Bear

I've looked a little at Mad Fientist before.. I'll check him out again for sure. We (couple) usually live quite comfortably on £11k (p.a.) and have done for quite a few years but could trim it to 8-9 k if needed and our plan should see us having 14k when we're both retired so hopefully there's plenty of wiggle room. We're both pretty good at enjoying life without spending a lot luckily. I'll also check out the bigger pockets podcast...

[Jay Ritchie]

Yes, I think so too but you've made some extra points that help validate our decision, thank you @Affable Bear

I've looked a little at Mad Fientist before.. I'll check him out again for sure. We (couple) usually live quite comfortably on £11k (p.a.) and have done for quite a few years but could trim it to 8-9 k if needed and our plan should see us having 14k when we're both retired so hopefully there's plenty of wiggle room. We're both pretty good at enjoying life without spending a lot luckily. I'll also check out the bigger pockets podcast...

Have you looked into the tax benefits of a SIPP for your circumstance? It could be that these are as significant as the choice of what to invest in.

[Jade]

Yes, I think so too but you've made some extra points that help validate our decision, thank you @Affable Bear

I've looked a little at Mad Fientist before.. I'll check him out again for sure. We (couple) usually live quite comfortably on £11k (p.a.) and have done for quite a few years but could trim it to 8-9 k if needed and our plan should see us having 14k when we're both retired so hopefully there's plenty of wiggle room. We're both pretty good at enjoying life without spending a lot luckily. I'll also check out the bigger pockets podcast...

Have you looked into the tax benefits of a SIPP for your circumstance? It could be that these are as significant as the choice of what to invest in.

We have, thanks @Jay Ritchie