Early-retirement wannabe
Comments
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To change tack slightly.
The elephant in the room in our retirement planning at the moment is what to do with our retirement cash?
In the space of the next 12 months we will have around €1 million burning a proverbial hole in our retirement pocket and the question is what to do with it?
Of course we could lob it into a range of low cost trackers but I am slightly nervous about investing when stock markets are near their peak and in additional with the current global political uncertainty I feel a little bit exposed to a sudden shock happening right after I drop the money.
On the other hand I don't relish the thought of getting 2% on my savings (although with inflation at less than 1% if does not feel so bad) although psychologically it will hurt to start eroding capital.
For those at or approaching retirement - what are you thinking?Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
Did you have to go to cash with your retirement funds, or could you have kept them invested?
Could you drip feed back into equities if you have already cashed out?0 -
Did you have to go to cash with your retirement funds, or could you have kept them invested?
Could you drip feed back into equities if you have already cashed out?
My retirement pensions are still tied up (which includes defined benefit pension plans which will deliver around €60,000 (today's money) per annum and another - legal in Germany - deferred benefit scheme with around €850,000 gross value).
The cash basically represents our savings and proceeeds from the sale of our house which we will require to tide us over until the pensions kick in (so they need to last us around 10-11 years).
I have thought about drip feeding in and I already have around €2,000 per month drip feeding into a mixture of funds (and we already have a decent chunk on money in funds). But there does not now seem to be a home for a big chunk of cash. I would happily deposit most of it for 5 years of so if I could get 4-5% on my money!Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
If you sold your buy-to-let, perhaps you could reduce your tax bill lol.
It was a mistake telling my OH about your massive gain, because he now talks buy-to-let at every opportunity lol. Seriously, you did so well there - well done again
Remember that buy-to-let is a business. Would you have the time to focus on it? You've said that your OH is a GP - would he want the additional stress? In your situation I might be inclined to plough as much money as possible into pensions - but I'm an architect and not an accountant, so might be completely wrong - I often am lol
With respect to my buy-to-let - more luck than judgement 0 -
Marine_life wrote: »In the space of the next 12 months we will have around €1 million burning a proverbial hole in our retirement pocket and the question is what to do with it?
How about going for a multi-asset income portfolio? Global equity income, global bonds (mix or sovereign and corporate), commercial property and infrastructure should spread it around nicely. No-one can say the capital value won't fluctuate, nor that now is the right time to buy, but the income will almost certainly keep flowing and you should be fairly inflation-proofed.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
ManofLeisure wrote: »Remember that buy-to-let is a business. Would you have the time to focus on it? You've said that your OH is a GP - would he want the additional stress? In your situation I might be inclined to plough as much money as possible into pensions - but I'm an architect and not an accountant, so might be completely wrong - I often am lol
With respect to my buy-to-let - more luck than judgement
To be honest, I think you are right about us having a buy-to-let. The problem we have is our income, which is about £150,000 annually. We do invest in pensions, equities etc, but OH wants to invest more in property.0 -
Marine_life wrote: »......with the current global political uncertainty I feel a little bit exposed to a sudden shock happening right after I drop the money.....
Um, is it better to invest at times of global political 'certainty'?
a) they are rare (around 2000 comes to mind: no Soviet threat, peace in NI, Middle East relativly quite (Arafat/Rabin/Clinton accord), not much terrorism)
b) Market seems to be at peak then.....0 -
Marine_life wrote: »To change tack slightly.
The elephant in the room in our retirement planning at the moment is what to do with our retirement cash?
In the space of the next 12 months we will have around €1 million burning a proverbial hole in our retirement pocket and the question is what to do with it?
Of course we could lob it into a range of low cost trackers but I am slightly nervous about investing when stock markets are near their peak and in additional with the current global political uncertainty I feel a little bit exposed to a sudden shock happening right after I drop the money.
On the other hand I don't relish the thought of getting 2% on my savings (although with inflation at less than 1% if does not feel so bad) although psychologically it will hurt to start eroding capital.
For those at or approaching retirement - what are you thinking?
Are you planning to buy an annuity or drawdown the 1M?
Assume the latter and the likelihood that you are perhaps going to be around for the next 30 years. So half your money wont be needed for at least 15 years. This is plenty of time for volatile investments to show good gains. You will need these gains to protect your income from inflation.
What I am doing is to keep say 3 years expenditure in cash, another 5 years in bonds and the rest in a broad range of equity investments including significant amount of EM, Small Companies etc and rebalance fully or partially each year.
If the market falls badly I have 8 years income pretty much guaranteed without needing to sell equity at a low price, plenty of time for a recovery.0 -
To be honest, I think you are right about us having a buy-to-let. The problem we have is our income, which is about £150,000 annually. We do invest in pensions, equities etc, but OH wants to invest more in property.
Being an architect, MOL has skills and good judgement in the property area.
Unlike most people, you and the OH seem to have the cash and other resources to give it a flutter.
But as said, you do need to look at it as a business, buy less expensive property in a good rental area, and if you dont want to manage it yourself, pay someone to do it. The best rental yields are smaller properties in areas people dont own their home, or HMOs in student towns.0 -
Are you planning to buy an annuity or drawdown the 1M?
Assume the latter and the likelihood that you are perhaps going to be around for the next 30 years. So half your money wont be needed for at least 15 years. This is plenty of time for volatile investments to show good gains. You will need these gains to protect your income from inflation.
What I am doing is to keep say 3 years expenditure in cash, another 5 years in bonds and the rest in a broad range of equity investments including significant amount of EM, Small Companies etc and rebalance fully or partially each year.
If the market falls badly I have 8 years income pretty much guaranteed without needing to sell equity at a low price, plenty of time for a recovery.
Not planning to buy an annuity and broadly we hope to live off this money for 10-11 years. We expect to erode the capital but would be preferred if we can avoid that as much as possible.
I think the split you suggest sounds quite sensible given the time horizons.
My wife hates have money in the stock market as she hates volatility and everytime the market goes up she wants me to sell everything we have! So i think having a significant portion of funds in low to middle risk investments will ease here anxiety.Money won't buy you happiness....but I have never been in a situation where more money made things worse!0
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