Thoughts ahead of first annual SIPP review

fjh

Looking for your thoughts- suggestions ( with rationale) ahead of my first review of my SIPP holdings( total 885k)
Looking to retire in 2/3 years at 65/66. Mgte will be paid off- state pension £147 + wife £155 in addition to SIPP will have app 30k in cash
.
I currently pay IFA 0.5% pa but no action in past 12 months.
Risk stance is cautious
PruFund Growth Fund Series E 51% of SIPP fee 0.89%
PruFund Cautious Fund Series E Fee % of SIPP 15% 0.75%
VANGUARD LIFESTRATEGY 40% EQUITY FUND (GBP) ACC % of SIPP 6% fee 0.22%
JUPITER MERLIN INCOME PORTFOLIO "I" ACC % of SIPP 6%fee 1.47%
THREADNEEDLE MANAGED EQUITY & BOND "Z" (GBP) ACC % 6% fee 0.75%
QUILTER INVESTORS CIRILIUM BALANCED PORTFOLIO "R" (GBP) ACC % of SIPP 6% fee 1.24%
QUILTER INVESTORS CIRILIUM CONSERVATIVE PORTFOLIO "R" (GBP) ACC % of SIPP 6% fee 1.09%
BMO MM NAVIGATOR CAUTIOUS "C" (GBP) INC Cash SIPP % of SIPP 5% fee 1.63%

Linton

As long as you are happy that £885K is sufficient to provide the income you need the portfolio seems fine to me. The use of Prufunds with their targetted long term smoothing is in my view appropriate for a seriously cautious investor as it allows for greater equity exposure than would otherwise be possible.


So I think there is not a lot to discuss regarding the current portfolio. Perhaps the time could be best spent in discussing the strategy for drawdown in retirement if that is what you plan to do. Though with your level of caution you may choose to go for an annuity.


Two other thoughts
- if you have the opportunity, paying an extra year or 2 of NI would be worthwhile.
- do you need to wait 2-3 years before retiring?

lisyloo

Have you considered retiring now.
You haven’t said how much you are putting in but are you at risk of breaching the LTA now or in future?

barnstar2077

lisyloo wrote: »

Have you considered retiring now.
You haven’t said how much you are putting in but are you at risk of breaching the LTA now or in future?

I second this. My mum retired and fell sick straight away, You never know what is coming next and you have a large sum of money there, well over three times what I will retire on. Enjoy your life now my friend! :beer:

fjh

My aim is to retire 65/66 - currently 'enjoying' work. I pay app 7k pa into AVC.
I was previously 'opted' out on NI and like most now back in which is why State pension quote not max albeit I have been paying NI for 47 years !

kinger101

fjh wrote: »

My aim is to retire 65/66 - currently 'enjoying' work. I pay app 7k pa into AVC.
I was previously 'opted' out on NI and like most now back in which is why State pension quote not max albeit I have been paying NI for 47 years !

Is there any scope at least to reduce yourself to four or three days a week during your remaining working life. It may allow you to transition better into retired life.

Linton

fjh wrote: »

My aim is to retire 65/66 - currently 'enjoying' work. I pay app 7k pa into AVC.
I was previously 'opted' out on NI and like most now back in which is why State pension quote not max albeit I have been paying NI for 47 years !

Yes but if there is a spare NI year between when you retire and your State Pension Age an extra voluntary payment will still increase your SP at a very low cost.

ffacoffipawb

kinger101 wrote: »

Is there any scope at least to reduce yourself to four or three days a week during your remaining working life. It may allow you to transition better into retired life.

Seconded. I went down to a 4 day week at 53. If I don't retire at 55 I intend to go down to a 3 day week. I have already breached LTA.

zagfles

I'd be asking the IFA why you're investing in some very high charge funds, there might be a good reason for this but I'd be asking him to justify them

Thrugelmir

fjh wrote: »

I was previously 'opted' out on NI and like most now back in which is why State pension quote not max albeit I have been paying NI for 47 years !

You paid a lower rate of employees national insurance contributions though during this period.

Reluctantpensioner

I think you need a serious look at LTA risk and your strategy to handle it.
You have 12 years of pension growth ahead of you before the 75 limit.
Here is a very rough sum: £885000*((1+1.5%)^12)=£1058122
LTA is index by CPI, so if your funds perform 1.5% better than CPI, you will be over the LTA limit.

I am at a similar place to you (two years older, and retired) and started a major plan to move SIPP funds to ISA, to keep my pension from the taxman.