800k CETV Figure, is £28k p.a. sensible
Comments
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Or just use cfiresim which lets you include state pension starting later etc.bostonerimus wrote: »True...DB and state pensions are not relevant and the withdrawal rate is constant. However, the safe withdrawal rate is usually calculated on a 95% probability of the portfolio lasting for a period such as 30 years. You can always tweak the withdrawal downwards if you wantI think....0 -
Bigadaj, there is no starting fee, "just" his 0.5% for advice etc.
I suppose I could move to another IFA later on ("shop around") if I feel I am being fleeced. Is it easy to move to another IFA anyone?0 -
Bigadaj, there is no starting fee, "just" his 0.5% for advice etc.
I suppose I could move to another IFA later on ("shop around") if I feel I am being fleeced. Is it easy to move to another IFA anyone?
Right now you are spending fully half of your drawdown income on fees. Personally I would ditch the IFA asap, go DIY and look to reduce fund and platform fees as much as possible.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Say if I have not got the experience and the the nous to DIY?
Suspect it would turn out very much more expensive making the wrong choices.
In time my knowledge and capability may grow as I learn more. But for now, I would not have a clue how to invest.
Can see though if you are confident and comfortable in your abilities, then DIY is the way to go to save money.0 -
Personally I'd haggle with the ifa if I felt comfortable with him in your shoes.
£4000 is a lot, though dressed up as 0.5% because that looks like not a lot, I'd settle for maybe £2500 as his fee, if he says there's work in setting it up and wants comfort you'll stay with him then maybe agree that you'll continue with him for two or maybe three years which will cover his initial work.
Platform fee is what it is I guess, little point in trying to haggle that when there probably hundreds of millions on the platform. 0.4% is high for large amounts though, the diy fixed fee providers would work out at well under 0.1% even with some trading and dealing costs for rebalancing.
I'd also want some assurance from him that his asset allocation would be hybrid, which I think is probably the best compromise between active and passive. If he does that and uses us trackers and a couple of other areas then the fund management fees are likely to to drop to 0.5% or less, which is quite a saving in a portfolio of that size.
That would leave your fees at close to 1% rather than closer to 2%, leaving another £4K or more in your pocket. In that scenario you'd still be paying out a total of maybe £10k a year, but it's something you could look to take over in a few years after doing some research. Total day costs on a similar basis could be £5k or less on a similar basis, so a significant saving.0 -
Thank you for your thoughts.
When you do put my fees alongside what I "may expect" to receive in fund growth, it does seem there will be little chance of growing (forget each year in isolation, looking more over a period).
If he is around, be interesting to hear from dunstonh who accepts that total fees around 1.7% are about right, and his view on growth these charges will eat into. Apart from trying to get fees down later on, is there anything else to offset and provide some growth in the fund.0 -
for what its worth ...your whole approach seems quite simplistic
your IFA should look at "everything" with you. Of course you don't seem to have selected who you will work with anyway. there is lots to consider. here are are a few for starters
- you should have some cash (1 -3 years of income)
- you should both have some tax free investments . Maximise S&S ISA potential
- you should fully appraise your risk tolerance.
- you should appreciate that 55 is young to fully retire?
- you should be prepared to stomach a 20-50% drop in your fund at some point?
- you may wish to consider continuing to pay into investments
- have you fully addressed your income needs for your household0 -
Say if I have not got the experience and the the nous to DIY?
Suspect it would turn out very much more expensive making the wrong choices.
In time my knowledge and capability may grow as I learn more. But for now, I would not have a clue how to invest.
Can see though if you are confident and comfortable in your abilities, then DIY is the way to go to save money.
A little reading and you can learn what you need. I would bet that your returns will be similar to using an IFA and you'll save 1.5% so you'll be way ahead after fees. DIY and you could double your income, don't spend half of you income before you even begin.
FYI I invest a considerably larger portfolio than you in the US and my total fees are 0.1%. I have it set up as a simple "3 fund lazy portfolio" with around 50% US stocks, 20%, International stocks and 30% US bonds. You might want a couple more funds and obviously the weighting would change for the UK, but this is not rocket science. My portfolio produces around 2% to 3% in dividends and then capital gains can be taken for some extra income. Here is a little wiki about "lazy/passive" investing in the UK. The sample portfolios are a little conservative for me, but it's a starting point.
https://www.bogleheads.org/wiki/UK_investing“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Thanks Bostonerimis,
Already you have lost me with the spread of money and I have a lot to learn, so at this stage would not invest DIY.
I will take a look at that link thanks.0 -
bostonerimus wrote: »A little reading and you can learn what you need. I would bet that your returns will be similar to using an IFA and you'll save 1.5% so you'll be way ahead after fees. DIY and you could double your income.
FYI I invest a considerably larger portfolio than you in the US and my total fees are 0.1%. I have it set up as a simple "3 fund lazy portfolio" with around 50% US stocks, 20%, International stocks and 30% US bonds. You might want a couple more funds and obviously the weighting would change for the UK, but this is not rocket science. My portfolio produces around 2% to 3% in dividends and then capital gains can be taken for some extra income. Here is a little wiki about "lazy/passive" investing in the UK. The sample portfolios are a little conservative for me, but it's a starting point.
https://www.bogleheads.org/wiki/UK_investing
The reference suggests the following for a UK investor in early retirement:
Domestic stocks : 10% using a FTSE100 or FTSE All Share tracker
World Stocks: 30%
Intermediate term bonds: 30% VGOV, a UK Gilt ETF is suggested
Inflation protected securities: 30% eg ICVC an IShares UK index linked gilt tracker
Is this a sensible portfolio for someone with a drawdown portfolio? Is this appropriate advice for an inexperienced investor? What would happen to an IFA who recommended such a portfolio? Discuss!
First question:
How will having 60% of your portfolio in UK Gov Bond funds contribute the return to sustain a 3.5% drawdown? At current gilt prices the non inflation linked bonds are showing yields to maturity in 2027 of under 1%. Index linked bonds are showing negative real (ie relative to inflation) yields to maturity, assuming average inflation is 3%.0
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