Novice Vanguard investor

Alice_Holt

poppy10 wrote: »

If you've already retired the last thing you should be doing is shifting more investments into equities. Stick to what you have

I think this is too sweeping (and simplistic) a statement, to be of any use to the OP.

When cash deposits fail to match inflation over a 25-30 year retirement, the resultant inflation risk is significant.

It depends entirely on individual circumstances.
Investing timescales in retirement can also stretch to cover the dependent partner's needs.

Retirement investment planning requires careful thought tailored to the individual requirements.

Alexland

Yes just because someone has missed the opportunity of investment for some of their life doesn't mean they shouldn't increase their exposure now if it means they get to a sensible asset allocation for their current position.

Wentthedaywell?

Exactly, I could be good for another 20 odd years - who knows? - and with inflation higher than most bank savings rates, I don't feel I should just give up on it all yet.

badger09

Wentthedaywell? wrote: »

I'm recently retired, though work a bit part-time, mortgage-free, have a DB index-linked pension which I can live on and will get my state pension in another 4 years.

I know I have too much in cash, but feel I may need/want to spend - a new car, a big holidays while I'm "young' enough/able to enjoy such things.

As I'm writing this I can see how illogical my approach is, especially at a time of such low interest rates for savings accounts. I need to be a little bolder and start shifting the balance.

Wentthedaywell? wrote: »

Exactly, I could be good for another 20 odd years - who knows? - and with inflation higher than most bank savings rates, I don't feel I should just give up on it all yet.

Thanks for the clarification.

FWIW, I was in a similar situation. Early retirement @ 56 with a DB index linked pension sufficient to cover day to day living, mortgage free, with 4 years to go to state pension and substantial savings mostly in cash.

Its a very fortunate position to be in, as it means you (and I ) don't have to take any big risks. But it really doesn't make sense to keep large amounts in cash in the long term to be eroded by inflation.

The usual caveats regarding an emergency fund don't apply in the same way. Unlike salary, your DB pension isn't going to stop for 6 months leaving you unable to pay your bills. Its also unlikely that you'll want to move to a bigger, more expensive property. So what might you need large amounts of cash for? How much are you really likely to splash out on a new car? Round the world cruise?

I've been gradually shifting from cash to investments and am currently at almost 25% to 75%, which I'm comfortable with.

I've also realised, quite late in my life, that I might not be 'young enough' to fully enjoy the fruits of my labours and lifelong savings habit, for many more years. But I have decided to indulge in a few luxuries while I'm still here - because I'm worth it:T

newatc

Wentthedaywell? wrote: »

I'm recently retired, though work a bit part-time, mortgage-free, have a DB index-linked pension which I can live on and will get my state pension in another 4 years.

I know I have too much in cash, but feel I may need/want to spend - a new car, a big holidays while I'm "young' enough/able to enjoy such things.

As I'm writing this I can see how illogical my approach is, especially at a time of such low interest rates for savings accounts. I need to be a little bolder and start shifting the balance.

Everything depends on your personal situation, I don't think you can necessarily say you have too much cash. I think you need to ask yourself do you need growth to meet your expectations of your future and what you want to leave to your beneficiaries. If you don't need the growth then you can allow yourself a more risk and worry free situation of large cash reserve.

Wentthedaywell?

badger09 wrote: »

I've also realised, quite late in my life, that I might not be 'young enough' to fully enjoy the fruits of my labours and lifelong savings habit, for many more years. But I have decided to indulge in a few luxuries while I'm still here - because I'm worth it:T

There are no pockets in a shroud! It's a bit of a metal shift to move from saving to spending though, isn't it? I don't have children, so would like to shuffle of this mortal coil with a solitary quid in the bank.

Thanks everyone for your views. I will definitely shift the ratio of cash to savings - perhaps 50:50 this year and see how that feels.

badger09

Wentthedaywell? wrote: »

There are no pockets in a shroud! It's a bit of a metal shift to move from saving to spending though, isn't it?

Couldn't agree more. Its taken me years to make that switch, and I still find some decisions very difficult.

Wentthedaywell? wrote: »

I don't have children, so would like to shuffle of this mortal coil with a solitary quid in the bank.

I have a son (42:eek:) living in Hong Kong and a stepson in the UK. If I don't spend some, my son certainly will. Annual business class flights to visit him have become essential, rather than a luxury, to me. I'm too old to sit folded up for more than a few hours, and the comfort on the flight back eases the sadness each time I leave:o

Spending all but your last £1 is going to be impossible though, unless you have your trip to Switzerland planned:p

Wentthedaywell? wrote: »

Thanks everyone for your views. I will definitely shift the ratio of cash to savings - perhaps 50:50 this year and see how that feels.

If I've interpreted your figures correctly, just paying this years ISA allowance into your S&S ISA will take you a little over 50:50. If you're moving to IWEB and paying in £20k in one go feels uncomfortable, you could split it in 2. Additional cost = approx a couple of coffees/bottle of supermarket wine/bunch of flowers from the local Co-op:)

Albermarle

I will definitely shift the ratio of cash to savings - perhaps 50:50 this year and see how that feels.

Presume you meant cash to investments ,not savings?
In any case an important point is that investments in a S&S isa can be very varied. So when you are looking to move more cash to investments , then what type of investment is very critical.
eg a 100% equities stock market tracker fund is a lot more risky than a fund with only 20% equities.
On the other hand the one with 20 % equities will struggle to return much more than some long terms cash savings accounts .

badger09

Albermarle wrote: »

Presume you meant cash to investments ,not savings?
In any case an important point is that investments in a S&S isa can be very varied. So when you are looking to move more cash to investments , then what type of investment is very critical.
eg a 100% equities stock market tracker fund is a lot more risky than a fund with only 20% equities.
On the other hand the one with 20 % equities will struggle to return much more than some long terms cash savings accounts .

OP is currently invested in VLS 60, and has said nothing to suggest that is inappropriate

Albermarle

Yes you are right , now I have checked , I even commented on it earlier in the thread !