Retirement portfolio for someone in their 60's

chucknorris

ColdIron wrote: »

You don't have to increase risk to increase income. The components of VLS are self selecting by market capitalisation and have no income focus

I know, but nevertheless it currently approximates to 1.8%, so what i was thought was, instead of going 60% with that, perhaps go say 40% with that, and 20% with Vhyl (which I already have a small investment in and it approximates to 3.1%).

chucknorris

economic wrote: »

1.8% seems low but what you are getting is a very well diversified global equity porfolio that includes both value and growth stocks. my target stock portfolio will look something like this:

1) [30]% in VLS100
2) [30]% in good managed funds
3) rest in single stocks and "exotic" like biotech or em (value and growth)

1 is the core of the portfolio to provide relative stability. 2 is try to beat the market using something like fundsmith (although it may fail in which case 1 helps a lot). 3 is to add some spice in terms of growth and dividends.

Yes I agree, I am glad that I (finally) started this thread, my thoughts are fluid, and will continue to be so, so far (just this weekend) I have moved to something like for my (excludes my wife's assets, but she has a mind of her own) entire retirement portfolio:

This is my starting point, no doubt it will be refined:
2.5% P2P
2.5% Cash
10% DB/state pension
20% investment property
20% individual bonds (but look at strategic)
20% Vanguard Vhyl etf
25% Vanguard Vwrl

Edit: Thanks everyone for your comments, this thread is definitely helping me focus on what I feel that I should be doing.

ColdIron

chucknorris wrote: »

I know, but nevertheless it currently approximates to 1.8%, so what i was thought was, instead of going 60% with that, perhaps go say 40% with that, and 20% with Vhyl (which I already have a small investment in and it approximates to 3.1%).

I'm employing the 3 bucket or waterfall strategy. Bottom tier or pool is a 5 year cash buffer. Middle pool is three income generating portfolios, SIPP/ISA/unwrapped. Top pool is longer term growth ISA/unwrapped. Spend from cash which is regularly replenished from the mezzanine tier and periodically, (every year or two or whatever, when valuations make sense), sell from top into middle. Low maintenance and resilient. Not dissimilar to many approaches but I find categorising them like this helps me focus on the job of each pot

chucknorris

ColdIron wrote: »

I'm employing the 3 bucket or waterfall strategy. Bottom tier or pool is a 5 year cash buffer. Middle pool is three income generating portfolios, SIPP/ISA/unwrapped. Top pool is longer term growth ISA/unwrapped. Spend from cash which is regularly replenished from the mezzanine tier and periodically, (every year or two or whatever, when valuations make sense), sell from top into middle. Low maintenance and resilient. Not dissimilar to many approaches but I find categorising them like this helps me focus on the job of each pot

I was thinking about where my tax wrapped investments belong, did you go for the middle to get a bit of both of a mix between safer/higher income?

ColdIron

The SIPP is the biggest pot so that was always going to be income for me. The ISAs are just how it worked out. The income ISA is frozen to new contributions for now and I'm Bed & ISAing the growth tier to make the most use of my CGT allowance for several years. The middle unwrapped pot is fairly high yield so I'm not expecting much in the way of capital gains which suits me and helps make most use of the £5,000 dividend allowance (thank you Mr Hammond )

chucknorris

After matching my actual 'wealth spreadsheet' content to my approx. %'s of my ideal retirement portfolio (subject to further adjustment) it looks like this:

P2P 2.0%
Cash 2.7%
DB/state pension 12.5%
Investment property 10.1%
Individual bonds 20.2%
Vanguard Vhyl etf 32.3%
Vanguard Vwrl etf 20.2%

Linton

ColdIron wrote: »

The SIPP is the biggest pot so that was always going to be income for me. The ISAs are just how it worked out. The income ISA is frozen to new contributions for now and I'm Bed & ISAing the growth tier to make the most use of my CGT allowance for several years. The middle unwrapped pot is fairly high yield so I'm not expecting much in the way of capital gains which suits me and helps make most use of the £5,000 dividend allowance (thank you Mr Hammond )

I operate a similar 3 tier approach, well actually 4 tier: equity growth, income, wealth preservation and cash/near to cash, though the income sort of runs in parallel being topped up from growth when neceessary. Allocating the tiers to the various environments isnt straightforward. And if one is running these tiers across his and hers S&S ISAs and his and hers SIPPs as a single set of investments things can get messy. Fortunately I dont need to keep unwrapped investments. One complicating factor is rebalancing. The environment rules limit the movement of money from one to another and so you may eventually end up with parts of all the tiers scattered across all the environments.

My policy is to use the SIPPs for the wealth preservation investments and withdraw the maximum each year whilst keeping within the current tax bands. The objective is to clear the SIPPs as soon as possible. I am deferring taking the State Pension to achieve this and to gain from the generous pre 2016 benefits. Any money drawn down but not used is passed to one of the ISAs. Once my SIPP is cleared there will be plenty of tax band available for the enhanced State Pension and all income other than on-going pensions will be tax free.

chucknorris

Linton wrote: »

I operate a similar 3 tier approach, well actually 4 tier: equity growth, income, wealth preservation and cash/near to cash, though the income sort of runs in parallel being topped up from growth when neceessary. Allocating the tiers to the various environments isnt straightforward. And if one is running these tiers across his and hers S&S ISAs and his and hers SIPPs as a single set of investments things can get messy. Fortunately I dont need to keep unwrapped investments. One complicating factor is rebalancing. The environment rules limit the movement of money from one to another and so you may eventually end up with parts of all the tiers scattered across all the environments.

My policy is to use the SIPPs for the wealth preservation investments and withdraw the maximum each year whilst keeping within the current tax bands. The objective is to clear the SIPPs as soon as possible. I am deferring taking the State Pension to achieve this and to gain from the generous pre 2016 benefits. Any money drawn down but not used is passed to one of the ISAs. Once my SIPP is cleared there will be plenty of tax band available for the enhanced State Pension and all income other than on-going pensions will be tax free.

What is the reason for drawing down the SIPP ASAP?

Linton

chucknorris wrote: »

What is the reason for drawing down the SIPP ASAP?

- To avoid higher rate tax in the future, or in the case of Mrs L to make maximum use of the zero tax band before she gets her SP.
- To reduce the number of environments and make portfolio management easier. One cant transfer or add significant money to SIPPs so they lead to the same investments being held in multiple environments.
- Easy access to large amounts of cash without worrying about tax implications.

Linton

chucknorris wrote: »

After matching my actual 'wealth spreadsheet' content to my approx. %'s of my ideal retirement portfolio (subject to further adjustment) it looks like this:

P2P 2.0%
Cash 2.7%
DB/state pension 12.5%
Investment property 10.1%
Individual bonds 20.2%
Vanguard Vhyl etf 32.3%
Vanguard Vwrl etf 20.2%

How do you get a capital value for the DB and SP to compare them against the other assets?