How good are vanguard

dunstonh

manninman wrote: »

I am more focused on why there is this fixed 5 year period and not open ended until death or something similar.


I understand the 'death' bit: bit uncertain about the 'something similar'!


Regards all round ...

Some people prefer to erode their wealth over time and enjoy a chunk of it before death. So, they may allocate £x for the retirement to 75* part of their life (*or thereabouts). Splash money for their more active years with a core amount for the life.

Sceptic001

manninman wrote: »

I understand the 'death' bit: bit uncertain about the 'something similar'!

A Corbyn government, perhaps? :eek:

grey_gym_sock

Sceptic001 wrote: »

A Corbyn government, perhaps? :eek:

makes sense. a corbyn government would fund health and social care adequately. so there'd no longer be a need to aside money to pay for your own health or social care in case the system failed for you.

that's what you meant, right?

AnotherJoe

le_loup wrote: »

This "five year too short, ten year OK" mind-set is really strange when used for all situations.

If the guy is soon to retire and wants a growing income, I can see nothing more sensible

But the guy didnt say that. He said he wanted the money in 5 years time.

le_loup wrote: »

Getting older? Reduce the risk, put it in the building society. What? Nonsense.

Strawman argument, no one said that. Indeed I've said many times that there's no need to "go safe" as you approach retirement given you could be invested for another 20--30 years.

However that is NOT what the OP asked for, he wants to invest this for 5 years.

le_loup

dunstonh wrote: »

I am more focused on why there is this fixed 5 year period and not open ended until death or something similar.

And that surely is the point. For many people the investment income is the important thing. What is left for the beneficiaries should be entirely secondary. So, if you survive for one or thirty years you will not starve and, in fact, you are more likely to leave more to your chosen beneficiaries with average stock market movement.

le_loup

AnotherJoe wrote: »

But the guy didnt say that. He said he wanted the money in 5 years time.

You are right but I was musing (ranting) on the received wisdom of 5 years bad 10 years good and risk reduction to cash in later years which seems to pervade a lot of thinking.
That has never made sense to me. Invest it or blow it, never keep it in the building society 'cause "that's safe".

jamesd

penpon wrote: »

Hi I'm interested to know from people how good or bad the life strategy plans with vanguard are ?.
I see a lot people referring to the vanguard plans, and would like to know more about them.
I'm 57 yrs old trying to decide where to invest say around 50k maybe a bit more.
Then will decide which one to go 80/20, 60/40. Not sure yet,as im looking to finish work a little earlier than normal retirement age (12 HR shift worker factory).

They are OK for what they are though with a little work you can match them for about half their cost.

The questions about five years and such are in part because investment values go up and down. If you planned to spend all of the money in exactly five years, as people used to do to buy an annuity for producing income that could be quite nasty if it happened at a low time.

More bonds cuts the amount of up and down movement and average expected growth rate. Useful for that all spent at once situation.

These days you can plan to use income drawdown instead of buying an annuity. Since this involves taking money as you need it to spend there isn't a cliff edge effect. Instead you just arrange to draw on some cash and sell bonds if equities (shares) are down and wait for the equity selling until there has been some chance for a recovery.

It's also worth knowing that you can get at pension money from age 55. This means that if you have non-pension savings and investments it is likely to be a good idea to move those into a pension now. Each pound moved saves you at least 25p of income tax, a good deal for people like you whose money is no longer locked up inside a pension. The 25% tax free lump sum can be taken any time. Taking any of the taxable 75% will cause your annual allowance for pension contributions to be cut from £40k to 4k a year, though it's currently cut to £10k. You're also limited to paying in and getting tax relief on no more than your earned income in the tax year of paying in. You get the 25% for 20% basic rate relief added even if you don't pay income tax on the money because it's within your income tax personal allowance.

racey

jamesd wrote: »

They are OK for what they are though with a little work you can match them for about half their cost.

How can you match them for half the cost?

bowlhead99

racey wrote: »

How can you match them for half the cost?

Well, the text from Jamesd that you quoted literally contained a clickable link to a post where he mentioned buying examples of the type of tracker funds held by the Lifestrategy product for a lower cost than you would pay for the Lifestrategy product.

Essentially, you can look at what they hold (a selection of equity indexes and bond indexes) and buy those components yourself. For example you can get a UK equities tractor and a US equities tracker (the largest holdings in the 80% or 100% equities fund) each at under 0.1% instead of over 0.2%.

You would obviously need to perform the rebalancing yourself which would leave you doing more work. And if the amounts involved were substantial enough for a 0.1% saving to be worth having, you'd likely be using a provider who charges their platform/broker fees on a transactional basis rather than as a percentage of asset values, hence you might be incurring higher trading fees for the extra rebalancing trades that you have to do to periodically to keep the allocation profile in line with your target.

Still, 0.1% saved every year on £100k invested is about an extra £1k at the end of the decade, with which to buy more investments or retirement treats.

eskbanker

bowlhead99 wrote: »

For example you can get a UK equities tractor

....if you're keen to invest in the agricultural sector? Might be of interest to our deluded farmer friend on a recent thread