early retirment.

John1965

This is a follow on from a thread I posted recently. Having received some invaluable advice on this forum I am now contemplating opening a SIPP via HL. I plan to fund this via regular payments up to approx. 10k per year inc tax relief for next 8 years. If I were to invest this in a cautious multi-asset fund such as HSBC/L&G/Vanguard and in 8 years time use this to fund a 5 year gap to SP would this would be reckless? I am aware that there is a risk attached but the other option is to keep funds in cash within SIPP? I believe I can take annual lump sum + 25% tax free and would run pot down over the 5 years.I am basic rate tax payer and will be using SIPP funds plus savings to provide retirement income of approx. 18K. If there are any other options please go ahead as I am open to all advice.
Thanks for reading.

lisyloo

Why do you think it would be reckless to invest in a cautious fund over 8 years? (Just concerned I’m missing something).

The only thing I can see is an issue (same for everyone) is that it makes sense to have a buffer of cash available if there is a crash when you want the money.

Linton

Your proposal seems sensible to me. You may wish to move some of the money to cash when you are closer to retirement and every year thereafter so you have a 2-3 year cash buffer, though this perhaps could be provided from your current cash savings.

John1965

Thanks lisyloo and Linton. New to investments therefore a bit cautious. I have approx. 25k cash as a buffer but I need reassurance that the 80K I am looking to invest has a reasonable chance of showing some positive return. Totally appreciate that risk is part of the picture hence looking at cautious funds to mitigate as far as possible. I really would be satisfied with a figure close to 80k to part fund gap to RA.