Edinburgh Black Cat
Striker
Agreed.
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Retirement
- Thread starter Shieldsman
- Start date
Agreed.
kevinarnott
Central Defender
I’m 56 will go until 60 ish but then plan to leave the % the same, leaving it all invested and dripping it out as required, I see the timescale as life expectancy, not the retirement date
Keb
Winger
That's my situation. Retired in the summer at 60 to do up mine and wife's parentals homes and collect £350k. Double it with my house and add £150k pension.
Taken £30k tax free to keep me going until I sell at least one of them. Wife still working. I'll be sorting a garage roof out this week, drinking whisky, going to the match and doing a spot of gardening. Might get up about 11 tomorrow unless I open another bottle tonight.
Hoping there's no housing crash in the next 12 months, but If there is, I'll just rent the properties out instead.
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Copacabana
Midfield
If DC and planning on drawdown isn't there an argument to remain fully invested in equity's right the way through retirement?
Had a great 24 days in crete with mates , started 3 of us ,1 flew back ,another came out .
Living from a bag non stop around the island
1 thing we've all said is it's tiring .So something to consider. I'm not complaining but we've always been active and our early 60s bodies are feeling it now . Bear it in mind camper van, long holiday ,travelling types. Plus you get sick of each other lol
Living from a bag non stop around the island
1 thing we've all said is it's tiring .So something to consider. I'm not complaining but we've always been active and our early 60s bodies are feeling it now . Bear it in mind camper van, long holiday ,travelling types. Plus you get sick of each other lol
NYMackem
Striker
This is my plan. Switching into bonds and gilts as you approach 60 makes no sense to me if you've potentially got another 20-40 years of life left after that.
I could see the sense in having 3 to 5 years drawing always in gilts to avoid short term swings, but other than that equities should see higher returns over those time periods.
I like gilts to maturity as a way to lock in guaranteed interest rates, but bonds have always seemed a loser to me. Most of the risk for none of the upside. I have had historically low interest rates throughout the life of my pension saving like, which is the thing that made them a bad one way bet.
Happy to have one of the IFA types in here tell me why I'm mental...
Copacabana
Midfield
How do you go about buying gilts? I like the sound of having a few years' worth of living expenses in gilts,
NYMackem
Striker
You just buy them on whatever platform you use to invest in shares and funds. Just search for "treasury" and a list of them should pop up. They usually have a name or code starting with T, TG or TN filled by a 2 digit number where the number is the year that they mature.
There's loads of gilt calculators online to work out yield to maturity, or you can use the YIELD formula in excel.
Matt Hopkins
Winger
Don't think that's mental at all, not that I'm an IFA type mind
It all comes down to what you are comfortable with in my opinion.I keep about 3 years in an STMM the rest is all equities
42
Striker
Just something to consider, a large proportion of your drawdown will come in the 1st 10-15 years as it'll be massively front loaded for 2 reasons, 1 bridging the gap to state pension age & 2, when you lose mobility you spend next to nowt. So its not really a case that youll be invested for 40 years uniformly anyway & a big market downturn in those first 10 years will do some big damage. Unless of course you have the usual 2 or 3 years worth of money sitting in cash or mmf to cover such eventualities.
Fletch
Striker
good post.. makes semse
if you're 96% invested in equities then rewards are higher in the good years and risks higher in any downturns
things I've read seemed to indicate most folk would be higher equities when younger then when approach retirement and into retirement then de-risk accordingly (according to your risk profile) to protect from those downturns while retired, obviously you still need to be invested just not as high - as say though guess its down to personal preference , but that does seem common practice if google it
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i've not long been back from the algarve where we spend a month. tbh, i was ready for home and you're right, it can be tiring doing bugger all.
we're lucky that we have a place out there but once all the jobs in the house were done i was chomping at the bit to keep busy, i do enjoy relaxing but the mind's always wanting to do something productive. it was nice to get back to have a bit tinker in the garage tbh.
kevinarnott
Central Defender
Yes I’d say that is common practice, inflation is the real long term risk so I’m happy to ride out the lows and take the extra additional returns for the volatility, will be different for everyone though!
We've been canny busy , riding between digs ,sometimes off road .( motorbikes) Gorge walking , and some chill out . The different beds thing is a factor too .
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This blog post does a really good job of demonstrating the risks of a market crash in the first few years of retirement if you dont have a backup to equities.
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I think the logic behind that is mostly rooted in the past when you would buy an annuity with your pension pot. All that mattered was its value on the day you buy the annuity, but with drawdown you need to care about the next 20-30 years.
Ned Land
Winger
I’ve learned a lot from this thread so thank you to people for being really helpful.
It’s illustrated to me that even if I accumulate enough to retire at 57/60 or whenever that the management of the investment vehicles requires some planning and knowledge.
If I wanted to withdraw e.g. the maximum tax free amount annually from a SIPP (16670?) for 3 years then should I have approx £51k in money market funds in the SIPP?
Or in year 1 do I decide whether to withdraw from cash savings if the stock market has tanked?
Or do I have e.g. 20% money market funds in the SIPP and move enough into drawdown to cover the amount that I need?
From my understanding of vanguard SIPPs is it possible to decide each tax year that I want £x in drawdown in a particular fund?
It’s illustrated to me that even if I accumulate enough to retire at 57/60 or whenever that the management of the investment vehicles requires some planning and knowledge.
If I wanted to withdraw e.g. the maximum tax free amount annually from a SIPP (16670?) for 3 years then should I have approx £51k in money market funds in the SIPP?
Or in year 1 do I decide whether to withdraw from cash savings if the stock market has tanked?
Or do I have e.g. 20% money market funds in the SIPP and move enough into drawdown to cover the amount that I need?
From my understanding of vanguard SIPPs is it possible to decide each tax year that I want £x in drawdown in a particular fund?
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Matt Hopkins
Winger
£16760 is the amount quoted as the max but you could crystallise the whole of the £51k at once and get £12750 tax free then withdraw £1047/ month for the next 3 years and pay no tax. This is what I'm going to do now as it seems to be a bit of a chew getting in touch with Vanguard, so at least now it'll just be once every 3 years instead of every year
If the stock market tanked then it wouldn't affect your £51k, I keep reading there is a tiny risk of STMM being affected but not so sure. I'd always aim to take my PA out of my pension every year
Yes if you put money into drawdown you can have it invested in any fund you like, although as it's money you need I would have it in an STMM. Unless of course you crystallised the whole of your pot, or certainly a big chunk, then you'd probably just have it invested in the same funds you already have.
I've just edited your post, and to be fair made a right mess of it
I'm also not an IFA just a retired fitter
Ned Land
Winger
Thank you for that. I appreciate that you’re not able to give advice. I will find a retirement planning specialist for something more ‘official’ and have a plan in place.£16760 is the amount quoted as the max but you could crystallise the whole of the £51k at once and get £12750 tax free then withdraw £1047/ month for the next 3 years and pay no tax. This is what I'm going to do now as it seems to be a bit of a chew getting in touch with Vanguard, so at least now it'll just be once every 3 years instead of every year
If the stock market tanked then it wouldn't affect your £51k, I keep reading there is a tiny risk of STMM being affected but not so sure. I'd always aim to take my PA out of my pension every year
Yes if you put money into drawdown you can have it invested in any fund you like, although as it's money you need I would have it in an STMM. Unless of course you crystallised the whole of your pot, or certainly a big chunk, then you'd probably just have it invested in the same funds you already have.
I've just edited your post, and to be fair made a right mess of it
I'm also not an IFA just a retired fitter
It’s scary to think how much one wrong decision could balls up the next 20-30 years, worse than choosing the wrong wife.
Matt Hopkins
Winger
I just did it all myself mainly due to, as I'm sure I've said before, a deep mistrust of almost everybodyThank you for that. I appreciate that you’re not able to give advice. I will find a retirement planning specialist for something more ‘official’ and have a plan in place.
It’s scary to think how much one wrong decision could balls up the next 20-30 years, worse than choosing the wrong wife.
