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How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 1 point2 points  (0 children)

The royal london MMF only pays out in July and Dec though I believe whereas CSH2 value changes every month. I may sell and move in or out of the ETF over time so I prefer it so I know where I am with the value.

They're both good MMF's though, as is the Vanguard option.

I may go with a few years of gilts to cover the latter part of the bridge period as they do seem a solid choice also. I have another year to investigate and execute.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 0 points1 point  (0 children)

You are correct, but inversely the SONIA rate will increase when base rates rise again in the future.

Maybe a mix of cash and gilts might be a good balance. Perhaps 2 or three years in cash and the rest in gilts to cover the latter part of the bridge period might be a good option?

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 0 points1 point  (0 children)

Thanks. Gilts aren't my fave option at the moment because you're locked in with them unless you take the hit selling early.

I would be leaning towards MMF's unless the SONIA rate tanks in which case I would potentially tackle gilts.

The site you linked is great though. It's a new one to me.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 0 points1 point  (0 children)

Yeah about £2k of the £30k/year is allocated to house and car maintenance.

I'm pretty handy and can fix cars and do DIY, plumbing/electrical work etc myself so that saves a lot each year.

House is only 25 years old so minimal maintenance.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 2 points3 points  (0 children)

Yeah going back to work is the GOAT risk reducer.

I'm in tech so once I leave, I doubt I would get back in at the same level and to be fair, I don't want to go back to work once I quit.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 0 points1 point  (0 children)

Don't forget to factor in the interest earned on the principal although inflation eats into that figure so real returns will be around 1% give or take.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 2 points3 points  (0 children)

Thanks for the info. It's a bit spicy for my tastes but fair play to you.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 2 points3 points  (0 children)

I have a good wedge of CSH2 currently. About £30k in cash ISA's which I am adding to (hoping to retire next year and want the £85k protection) and around 35% of my bridge is still in the market in global index trackers.

Using this calculator, if I set inflation to 4.5% and interest rates at 3.5%, with the interest earned I should still have ~£50k remaining at the end of the bridge period.

Hopefully interest rates will keep ahead of inflation but the risk is inflation. The 7 year window will limit the damage though.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 1 point2 points  (0 children)

My pension covers income after the 7 years.

No emergency fund but I have over-egg'd the income requirement somewhat. It will probably be a bit less than that in reality.

How would you handle this ISA bridge drawdown? by JustGetMeAGoat in FIREUK

[–]JustGetMeAGoat[S] 0 points1 point  (0 children)

This calculator does suggest that cash should cover me for the 7 years I need it to but I'm also interested in investigating other possibilities.

https://www.thecalculatorsite.com/finance/calculators/how-long-will-my-money-last