Investment choices approaching retirement

bostonerimus

I think the OP has a couple of options.

1) Conservative
Put 200k into cash/savings bonds ie something that guarantees principal so that you can bridge the gap between between DB pension and SP starting. I'd leave the rest in equities and you could rebalance each year to keep you at 50:50.

2) Be a little more aggressive
maybe keep 2 years of spending in cash and stay invested at 60:40 or 70:30 with the rest of the money and put your faith in the markets to fund your "bridge income" and give you maybe a bit of extra along the way. You could also do 1) and just spend down the cash so that you end up with 100% equities when SP and DB are both on line.

AnotherJoe

intowhere wrote: »

Just out of interest, what is it that you do that allowed you to achieve a £340k DC pension pot and still have a DB pot in the background.

I don't see anything unusual in that, many people have DB pensions that were stopped at some point and and then switched to DC. That would include me, I had a DC that started in the 80's and a DB that lasted for about ten years from the late 90's and then was replaced with another DC. So it's not what you do but how much time, very easy to accumulate that sort of DC pot over 30+ years

bostonerimus

AnotherJoe wrote: »

I don't see anything unusual in that, many people have DB pensions that were stopped at some point and and then switched to DC. That would include me, I had a DC that started in the 80's and a DB that lasted for about ten years from the late 90's and then was replaced with another DC. So it's not what you do but how much time, very easy to accumulate that sort of DC pot over 30+ years

+1, time, consistent contributions and the compounding of returns can produce large pots......if you invest 10k each year for 30 years and average 8% return you'll end up with 1.2M

shinytop

1) Conservative
Put 200k into cash/savings bonds ie something that guarantees principal so that you can bridge the gap between between DB pension and SP starting. I'd leave the rest in equities and you could rebalance each year to keep you at 50:50.

2) Be a little more aggressive
maybe keep 2 years of spending in cash and stay invested at 60:40 or 70:30 with the rest of the money and put your faith in the markets to fund your "bridge income" and give you maybe a bit of extra along the way. You could also do 1) and just spend down the cash so that you end up with 100% equities when SP and DB are both on line.

thanks, something to think about.

Triumph13

I'm in a similar position, although with a rather longer gap before the DBs kick in (11 years). My approach is roughly on the lines of having half my planned spending for the next several years in cash / near cash and the rest in global equities. If the market crashes 40% I just reduce my spending by 20%. It's a bit more complicated than that in reality, but that's the basic idea. I'm avoiding long dated gilts as at current valuations they seem to have minimal return and significant capital risk.