Am I right ?

Rodz1300

I am quite new to active investing after deciding a couple of years ago that i wanted to be in a position by 55 to have options in respect to how much work i do each week and what that work is.

I am just about maxing my annual pension allowance (dependent upon bonus)

I am max salsac with employer DC to get maximum NI benefit and full employer contribution. I AVC around 18% in addition

This pot has around 250K and mainly invested in passive funds ( split, world 50% UK 25% and Emerging markets 15%) the remainder is in cash type assets that i use to time the market- i know this is a frowned upon strategy but i have been reasonably successful.

I also have a SIPP with HL that i use to buy small cap shares ( investing my bonus ) it is worth about 15% of my main pot.

i am 50 now and would expect to crystalise some funds between 55 and 62 - depending on what work i am doing and how well my investments have done.

My assumption (and question) is this
Given pension freedoms and having the flexibility to determine the balance of income between work and investments over the next 15 years approximately. and then when fully relying on investment income (after 17 years say) having only to sell equities if i want to as i will have some cash and state pensions, i may as well continue to invest for growth, to the level i can stomach, as there is no effective point that i actually retire in the traditional sense. i.e no point in time that i have to convert my shares / funds to cash and then annuity.
am i about right or have i got this very wrong.
I have read a lot of good advice on this forum so look forward to some interesting perspectives :-)

Marcon

How secure is your employment/earnings capacity?

Rodz1300

Hi,

Quite secure for several reasons- income level is good and salary based ( other than the bonus element that is genuinely a bonus and not relied upon .

Prism

My feelings are about the same. I am 47 and fully invested for growth within my pension. If things go well over the next few years I might well semi retire early and if not I am flexible. Having savings, plus a flexible job and flexible retirement age allows for lots of options. Once retired I would suggest having a bit more of a plan to follow though. Volatility and equities/fixed income ratios become more important once its your only income

Rodz1300

Thanks Prism,
Good to hear i am not alone.
That is a good point about adjusting investments once not working. my plan in that respect is to hold some cash in the pension ( uncrystallised up to 75) and use that along with ISA cash / state pensions to provide income during bad investment times.

i have also considered the merits of taking advantage of poor years to crystallize some funds if i do well and am getting close to LTA ( nice problem to have to deal with - I know )

tacpot12

All the analysis done supports the idea that you should invest in equities/for growth if you expect to have a long retirement, as only equities are likely to outperform inflation.

My own retirement plan has about 8% invested in bonds to provide a reserve of low volatility assets I can sell if the equity market appears to have crashed given I need a regular income. About 3% is also held in cash for the same reason, the remaining 89% is invested in equities, and I will always sell some bonds even in years the stock market is doing well with the intention that after 10 years I will have no bonds in the portfolio and just the 3% cash buffer. (You might see this described elsewhere as a equity glideslope).

Rodz1300

tacpot12 wrote: »

All the analysis done supports the idea that you should invest in equities/for growth if you expect to have a long retirement, as only equities are likely to outperform inflation.

My own retirement plan has about 8% invested in bonds to provide a reserve of low volatility assets I can sell if the equity market appears to have crashed given I need a regular income. About 3% is also held in cash for the same reason, the remaining 89% is invested in equities, and I will always sell some bonds even in years the stock market is doing well with the intention that after 10 years I will have no bonds in the portfolio and just the 3% cash buffer. (You might see this described elsewhere as a equity glideslope).

Thank you for this Tacpot.
I will have a read up on equity glidesope. sounds interesting

kidmugsy

Rodz1300 wrote: »

the remainder is in cash type assets that i use to time the market- i know this is a frowned upon strategy but i have been reasonably successful.

I am an advocate of market timing, but not of fannying around with 10% cash.

By "market timing" I mean only the attempt to avoid large, rare market crashes, and to screw up the courage to reinvest after them. Trying to "market time" in detail from month to month or year to year is, I'd have thought, likely to be fruitless, and probably costly.

kidmugsy

tacpot12 wrote: »

All the analysis done supports the idea that you should invest in equities/for growth if you expect to have a long retirement, as only equities are likely to outperform inflation.

"All": now that's just silly. Stock promoters are generally agreed in promoting stocks - I'll give you that.