Time to Sell Investments (Take the profit)

Audaxer

masonic wrote: »

Sue mentioned in her OP that she was holding enough cash to last "quite a few years". £100k in total won't get you very far in retirement.

Oh right, I missed that bit. So that is a really large amount in equities she holds. I think Sue is right to stay invested, but if it was me I'd want to de-risk a bit by taking some gains or converting some of the holding to lower risk investments.

masonic

Audaxer wrote: »

Oh right, I missed that bit. So that is a really large amount in equities she holds. I think Sue is right to stay invested, but if it was me I'd want to de-risk a bit by taking some gains or converting some of the holding to lower risk investments.

It's all relative. It depends on your objectives and how much you need in retirement. Some people aim for £1m in assets for a comfortable retirement, others would be happy with quite a lot less. When you reach a figure that's 'enough', then going defensive can make sense, but defensive assets might not protect very well against some risks, such as high inflation combined with low interest rates.

bostonerimus

masonic wrote: »

It's all relative. It depends on your objectives and how much you need in retirement. Some people aim for £1m in assets for a comfortable retirement, others would be happy with quite a lot less. When you reach a figure that's 'enough', then going defensive can make sense, but defensive assets might not protect very well against some risks, such as high inflation combined with low interest rates.

If you have a pension pot that is far larger than needed to provide your income, you can either go defensive to preserve capital (or even buy an annuity) as you don't need much growth, or you can be aggressive and keep a high equity allocation because you can afford to lose money some years. But most people cannot afford to be at those extremes and need to get some growth while also keeping a good safety net of cash and bonds for the bad years. So most people should probably start from something like a 50/50 allocation and tweak to their personal preference and circumstances.

Sue58

masonic wrote: »

Sue mentioned in her OP that she was holding enough cash to last "quite a few years". £100k in total won't get you very far in retirement.

Agreed, however, as I mentioned I am still working and will continue to do so therefore at the moment we can live on my wage and rentals from an apartment we own in Spain. We have a relatively simple lifestyle and cheap holidays because we only pay for flights and spending money to go to our apartment several times a year. So the £100K in cash is our buffer against a fall/crash in our equity investments. Maybe, as others have mentioned I should look at de-risking the equity further.

We will not be adding further funds to our investment portfolio because we want to retain the £100K in cash. However, as my husband is now 60 and has about £150K in his SIPP, I think he will have to go into drawdown this year and take the TFLS plus his personal allowance and move this money sideways into our S&S ISA accounts using the same funds. He can then also take his personal allowance out for the next 6 years before receiving his state pension - I presume this is quite usual?

Linton

Sue58 wrote: »

...... He can then also take his personal allowance out for year the next 6 years before receiving his state pension - I presume this is quite usual?

Very usual. He should have been doing it since he stopped earning. It may even be worthwhile looking into defering state pension to get more of the SIPP out tax free.

bostonerimus

This thread all comes down to asset allocation. The rental apartment should also be folded into that and considered along with the cash and the equities and any other assets and pensions, including SP. The OP seems to be doing sensible things, but we still don't know the equities owned; 100% global large cap will be far less risky that 100% Asian small cap. So the OP needs to clearly understand the financial goals, appetite for risk and the chronological income stream requirements to develop a plan rather than looking at recent gains and going on a gut feeling that it's time to move into cash. For example if any of the pensions are DB then those can be considered a fixed income allocation and selling equites might not be sensible.

Sue58

Linton wrote: »

Very usual. He should have been doing it since he stopped earning. It may even be worthwhile looking into defering state pension to get more of the SIPP out tax free.

Thanks Linton, he retired about 3.5 years ago and I've been talking with him about going into drawdown for some time as it is more tax efficient. Now he is 60 it has made him more focused and come to the top of his agenda, although a little late. We won't be adding to our investments in the future apart from money transferred from our SIPP's to our ISA's.

MPN

Sue58 wrote: »

Thanks Linton, he retired about 3.5 years ago and I've been talking with him about going into drawdown for some time as it is more tax efficient. Now he is 60 it has made him more focused and come to the top of his agenda, although a little late. We won't be adding to our investments in the future apart from money transferred from our SIPP's to our ISA's.

You could also consider UFPLS, so your husband can take his full personal allowance each year and an additional 25% tax free until he receives state pension. This will leave his pension uncrystallised, however you would have to work out which way will take the greater amount out of his SIPP before in SP age at 66?

Sue58

MPN wrote: »

You could also consider UFPLS, so your husband can take his full personal allowance each year and an additional 25% tax free until he receives state pension. This will leave his pension uncrystallised, however you would have to work out which way will take the greater amount out of his SIPP before in SP age at 66?

Thanks, we will look into UFPLS before deciding which is the best route to go.

ArchBair

I would sell 50% and keep the other 50% invested in equities. The remaining 50% you could invest in cash accounts or maybe even in wealth preservation funds/IT's. Then if there is a big correction in the market or crash and the share prices in the funds/IT's you are interested in are sufficiently low then that is the time to re-enter the market in my opinion.

OP, regarding your husbands drawdown dilemma, I don't think UFPLS will extract more money from your SIPP than taking the 25% TFLS plus his personal allowance in the first year and thereafter until his SP age but maybe you could ask advice on this point on the Pensions board of the forum?