What investments would you hold in your SIPP in our shoes?

stoozie1

Sorry just really nervous, but aware time is ticking and it's in cash.

I ran my approximate plan past a Wesleyan financial advisor and he seemed to think it was sound.

My plan (low earner) to put 2880 annually into a SIPP, OH to put c.5-10k annually in depending on self employed earnings.

I have a deferred DB pension but only worth 2.5k annually LS 4900 I think i can take this at 60

OH has effectively 2 DB pensions (both nhs but v different rules) 10k at 60, c. 17500 at age 69 (best guess based on Cridland)

SLIPs will be used to top up between 60 and 69 hopefully.

I'm 43, OH 41 his earnings before sipp conts last tad year were 46k

I originally thought of putting all of years 1-4 in vls 100, next 4 yrs in vls80, then 60 and so on.

I appreciate I could have used a different model but it is where it is and I can't berate myself!

masonic

Seems reasonable to buy your equities first, then add bonds later. It may be simpler if you pick the lowest VLS you were thinking of holding and just split between VLS100 and that in the later years. That way rebalancing will be straightforward when the time comes. Much depends on how you are planning to take an income from the SIPPs.

stoozie1

Given that I don't know how our health will pan out or our life expectancies or even things which might sound silly but when our first grandchild came and whether we were to be involved in helping, I find it very difficult to predict how we might draw the income.

However I take your point that these things are unknowns for everyone but people must be able to answer these questions at my age without a crystal ball, so I think I'm reading too much into it and it must be more basic than I imagine?

masonic

You have to start by making a lot of assumptions and then revising the plan as the years go by and more is known. You will have some idea how much income you'll be getting from your other pension arrangements, so you can estimate how much additional income you'll need to be comfortable yourselves, which is a start.

What you do know is that your contributions over the next few years are going to be locked away for the best part of 20 years (or more) and those contributions will therefore have the best chance of getting a decent return if invested in equities, while this may be less true of contributions made some years in the future. That will need reviewing every few years. There's no need to map everything out right now, in my view, beyond having a rough idea where you want to be as you approach retirement.