Retirement portfolio for someone in their 60's

westv

Linton wrote: »

It could be reasonable to hold say 5 years drawdown requirement in cash or close to cash so you could withstand a crash without selling investments.

5 years of cash seems an awful lot. I'd think more like 2 years.

chucknorris

Linton wrote: »

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

I use a multiplier of 28.5, which is based upon annuities of similar criteria (but with a slightly lower multiplier, because I don't think annuities are the best products, although I don't entirely dismiss them either).

Linton

westv wrote: »

5 years of cash seems an awful lot. I'd think more like 2 years.

One can argue that 5 years is too long, though 2 years seems rather tight especially if it also provides an emergency and larger one-off purchases fund as well. One reason I would give for extra cash is that it is about the only alternative to safe bonds for the short/medium term. But they look unattractive at the moment. Shorter term P2P may be a viable alternative for some of the money though whether it is worth the extra hassle could be questioned.

Another influencing factor is the % of one's income provided by drawdown.

Hopefully one has retired with a lot of slack in the plans. Under those circumstances there is little incentive to squeeze the utmost out of one's investments. Knowing one is safe for 5 years and has more than enough cash available to do whatever one wants to do avoids a lot of stress.

Stirfry

OP we have similarities in that I am 59 and I wine is my weakness. Myself and OH have money to invest from house sale and inheritance. At the moment in a ladder of fixed rate interest savings bonds.

As money becomes available I intend to move it to S&S isa's. Investments so far 15k VLS 60 (so very interested in your talk of holding separate bonds). Then went a bit off piste with Investment Trusts for high dividend yield, DIG 10%, FCI 30%, HFEL 20%, SCAM 40%. I am struggling with geographical asset allocation. About to invest another 20k.

I also like the idea of investing different amounts for different purposes, growth and income, not so worried about eroding the pot as long as it lasts the next 30 years.

I have a SIPP to take advantage of the 20% uplift while it lasts, but intend to take out the funds tax free further down the line so am holding in cash.

I am glad that I am not trying to invest the whole amount in one go, and hopefully will continue to learn.

OH has no interest in making investment decisions so has left it all to me, no pressure there then!

chucknorris

Stirfry wrote: »

OP we have similarities in that I am 59 and I wine is my weakness. Myself and OH have money to invest from house sale and inheritance. At the moment in a ladder of fixed rate interest savings bonds.

As money becomes available I intend to move it to S&S isa's. Investments so far 15k VLS 60 (so very interested in your talk of holding separate bonds). Then went a bit off piste with Investment Trusts for high dividend yield, DIG 10%, FCI 30%, HFEL 20%, SCAM 40%. I am struggling with geographical asset allocation. About to invest another 20k.

I also like the idea of investing different amounts for different purposes, growth and income, not so worried about eroding the pot as long as it lasts the next 30 years.

I have a SIPP to take advantage of the 20% uplift while it lasts, but intend to take out the funds tax free further down the line so am holding in cash.

I am glad that I am not trying to invest the whole amount in one go, and hopefully will continue to learn.

OH has no interest in making investment decisions so has left it all to me, no pressure there then!

Obviously you have to invest in something that you are entirely happy with (not just something that I mention in passing), but I have a little in Vangaurd's VHYL which pay's about 3.1% dividend income and it is extremely diversified both in sector and geographically. I intend to move towards making that my main equity investment, the other etf VWRL is probably even more diversified, but more for growth than income.

The only help I can give you with the wine, is offer to sacrifice my liver, by drinking yours for you.

I always feel quite good about it when I top up my SIPP or ISA, or especially buy additional pension in the TPS (teachers pension fund, I am a university lecturer) which is exceptional value. I feel as if I am doing something positive for my future.

I've never really looked at investment trusts, what if anything do they offer, over funds/ETFs?

Triumph13

One question no-one seems to have asked is what are the investments for? Do you plan to leave a large inheritance? Are you trying to squeeze every last penny out as annual income and spend it? Are you actually so well provided that you are going to have more income than you'll spend whatever happens?

chucknorris

Triumph13 wrote: »

One question no-one seems to have asked is what are the investments for? Do you plan to leave a large inheritance? Are you trying to squeeze every last penny out as annual income and spend it? Are you actually so well provided that you are going to have more income than you'll spend whatever happens?

That's a good question, actually we have no children and we have a lot to spend, which we probably won't achieve. Mainly because all the things I (we) like doing cost next to nothing, i.e. taking my dog out, hiking, cycling, jogging, weight training, swimming, lawn bowls, chess, cooking, restaurants (we really prefer average to the extremely expensive type), cinema/tv and just catching up with friends. Probably the most expensive thing we will do is spend the winters in Southern Spain, my wife joked only last week 'this is like Brewster's Millions, we'll probably buy a holiday home in Spain and it'll turn out to be a great investment, instead of expenditure'. I don't even appreciate what some people would class as 'fine wines' my favourite wine is only £5 a bottle.

Probably the worst part is that I don't want to retire, I did actually hand my notice in to retire last December, but they asked me to continue working one day a week (really its a half day a week), and I honestly think that is better than retirement. I will only stop working if it interferes with going to Spain. At the moment I can get away for almost 6 weeks between the semesters, from December to January, if we end up loving it, and want longer, then I will retire, otherwise I will work beyond my state pension age of 66.

Thrugelmir

chucknorris wrote: »

I'm not worried, dying is easy

I wasn't referring to dying. More health in general. I still think back to a good friend of mine who never drank or smoked in his life. Very fit in fact. At 38 years of age, he suddenly developed an untreatable brain tumour. Spent the best part of the following 8 and half months in a hospice. Slowly deteriorating before passing away.

For me puts worrying about ones financial affairs for the next 10, 20, 30 years into perspective. I've my bucket list. probably never complete it. But I'll have fun and enjoyment every day along the way.

chucknorris

Thrugelmir wrote: »

I wasn't referring to dying. More health in general. I still think back to a good friend of mine who never drank or smoked in his life. Very fit in fact. At 38 years of age, he suddenly developed an untreatable brain tumour. Spent the best part of the following 8 and half months in a hospice. Slowly deteriorating before passing away.

For me puts worrying about ones financial affairs for the next 10, 20, 30 years into perspective. I've my bucket list. probably never complete it. But I'll have fun and enjoyment every day along the way.

I'm honestly not worrying about my financial affairs, I enjoy investment, it is like a hobby to me.

Also I can't do anything about ill health like that, I have to assume that I might live a long time, and plan accordingly. As for making the most of things, I pretty much do what I like (within reason). I don't see the point in going out and buying things like a Ferrari, I would much rather have an S max (probably our next car) so I can easily transport our foldable bikes and dog for days out in the countryside.

When people get closer to me and eventually find out how much I have, they are always very surprised, I just don't see the point in being over the top extravagant. Right now my car is a 9 year old Zafira, with a few dents, but it is all I want from a car (apart from we are going to buy a caravan soon, and it won't be able to tow it). Money doesn't make you happy, but it does eliminate the stress that poverty can sometimes bring, which is of course a very good thing.

One thing that we are going to do though is buy a much higher value house, as we both would appreciate that, we are on the lookout right now.

cogito

chucknorris wrote: »

I am in reality working to my early 90's but I just wanted to make it clear that I don't have any health problems, without making it an essay (but I have now edited my OP).

Thanks for your other comments, I'll read about 'strategic bond funds' although I suspect that I would still prefer holding individual bonds until maturity, I am trying to keep an open mind (otherwise it wouldn't be worth asking for other opinions).

I like the idea about investing in LifeStrategy 100 as it is more passive (OK, perhaps lazy). Do you consider that to be a bit too tame (I did note that the dividend yield is quite low at 1.8%), hence the mention of higher risk funds?

The dividend yield is of no relevance. It's the total return that matters.