Not all of it, and not all at once: move the money you will need in the first few years of retirement, gradually, and leave the rest invested for growth.
Retirement can last 30 years, so the money still has a long life ahead. Moving everything out of equity at 55 protects you from a fall in the next five years, but leaves you exposed to inflation for the next thirty.
A common way to think about it is in buckets:
- The first 2 to 3 years of spending in safe, easy-to-reach places, such as savings, fixed deposits or short-term debt funds.
- The next 5 to 7 years in a mix that is mostly debt with some equity.
- Money you will not need for 10 years or more can stay largely in equity.
Shift money into the first bucket a little at a time over the five years, rather than in one go. That spreads out the risk of selling on a bad day. Remember that selling equity funds can trigger capital gains tax, so plan the timing across financial years. Our guide to retiring in the next 5 years has a year-by-year checklist.
Your own answer depends on how much you will spend, what pension or other income you will have, and how you feel about falls. If you want someone to look at your numbers, you can book a free call.