Could anyone comment on taking a CETV who has done it??

bostonerimus

grocerjack wrote: »

Because we still have 12 years on the mortgage left. Why would we not use the money to fully own a house we've lived in for 20 years?

I was talking about the credit crd and non-mortgage loan you mention. You seem to have the resources to pay them off and if they are at regular rates it's silly to pay that interest.

It's still just a statistic. I'd rather plan for events like dementia etc...the sort of things you can't really leave to a stat.

I don't understand this at all. You need to plan for all reasonably possible events and they would certainly include dementia, paying for some level of care and living into your 90s.

My life insurance doesn't cover the pension pot fund, and if we both die the money for each of us dies with us.

Life insurance should protect your loved ones who would be put in financial difficulty by you or your spouses death. Naturally it doesn't cover the pension. it covers the risk of your death.

Agreed, but the older you are the more 'conservative' and risk averse you're likely to be. Middle of the road is fine. Ny DC fund is all into medium risk investments and is doing nicely.

People might get more conservative in their investments as they age, but that's been shown to not necessarily be the optimum approach. I am retired and the percentage of my money in equities is growing. If a "medium" risk will sustain you plan then that's just fine, but you need to think about what you will )or your IFA) will do in the bad times as well as the current good time. Markets will fall and the fall will be significant, that's a 100% certainty.

10%? Wow. Would you cross the road on a 10% chance you wouldn't get run over?

I think you need to recalibrate your idea of significant probability. A 1 in 10 chance must be planned for. So would you see a 1:4 chance as something to plan for. There's over a 25% chance that you or your spouse will live past 90 if you are 60 years old today.

Agree on the market crash aspect though, and yes it's a worry, but the IFA and Wealth team come very highly rated by 3 of my friends from work and my brother who did this last year. Word of mouth is always quite powerful and my dealings thus far have been very forthright but good. It's not like I'm doing this without researching it. And I still haven't hit the 'go' button until I see the figures in front of me to compare with the DB forecast.[/B]

Make sure you fully understand any advice that is given. Also look out for initial and ongoing fees as these might eat up 25% or more of your annual drawdown.

bostonerimus

fjh wrote: »

BMO MM Navigator Cautious D Acc 6.31%
Jupiter Merlin Income Portfolio I Acc 5.88%
Quilter Investors Cirilium Balanced Portfolio R Acc GBP 5.67%
Quilter Investors Cirilium Conservative Portfolio R Acc GBP 5.63%
Threadneedle Managed Equity & Bond ZNA GBP 5.88%
Vanguard LifeStrategy 40% Equity A Acc 5.97%
Pru PruFund Cautious Fund Pn Ser A 15.95%
Pru PruFund Growth Fund Pn Ser A 48.71%

Welcome any thoughts /comments

Yep looks similar to other IFA generated portfolios that have been posted in the past.

ianthy

In 2017, I took the CETV on my DB pension £930k. Our circumstances - no kids and OH has a Civil Service pension and SIPP. I also have a healthy balance in my Limited Company, ISA savings and a small number of rental properties. Plus full State Pensions at age 67. We are in the process of selling our family home in London to downsize. We are now aged 57.

Our IFA managed the DB transfer and then I have self-managed the pot since. I take a balanced attitude to risk and I'm happy with the returns to date.

For us the decision to take the CETV was based on the concern that the original company was no longer trading and also the benefits of greater flexibility. Thanks to research and postings on MSE, my confidence in self managing has grown and so has my attitude to risk and investments. I am not concerned with growing my pot by the max sum with increased risks, just getting a return of 5% is enough, as I would like to generate the £30k a year. At present, I plan to start drawing down in in 3-4 years, subject to another conversation with our accountant.

As for your fantasy house - if your sums add up then I would go for it. Life is for living and money is for spending and enjoyment.

bostonerimus

fjh wrote: »

BMO MM Navigator Cautious D Acc 6.31%
Jupiter Merlin Income Portfolio I Acc 5.88%
Quilter Investors Cirilium Balanced Portfolio R Acc GBP 5.67%
Quilter Investors Cirilium Conservative Portfolio R Acc GBP 5.63%
Threadneedle Managed Equity & Bond ZNA GBP 5.88%
Vanguard LifeStrategy 40% Equity A Acc 5.97%
Pru PruFund Cautious Fund Pn Ser A 15.95%
Pru PruFund Growth Fund Pn Ser A 48.71%

Welcome any thoughts /comments

So you're ok with the 5% front end load that some of these funds have?

ffacoffipawb

bostonerimus wrote: »

So you're ok with the 5% front end load that some of these funds have?

Depends on who holds them. Hargreaves Lansdown rebate most of any initial charge. Others may do the same.

fjh

bostonerimus wrote: »

So you're ok with the 5% front end load that some of these funds have?

I didn’t pay 5%

bostonerimus

ffacoffipawb wrote: »

Depends on who holds them. Hargreaves Lansdown rebate most of any initial charge. Others may do the same.

I'm always dubious about discounts and rebates, it's invariably a sales pitch to get you to buy something....oh great I'm getting a deal.

[Deleted User]

fjh wrote: »

BMO MM Navigator Cautious D Acc 6.31%
Jupiter Merlin Income Portfolio I Acc 5.88%
Quilter Investors Cirilium Balanced Portfolio R Acc GBP 5.67%
Quilter Investors Cirilium Conservative Portfolio R Acc GBP 5.63%
Threadneedle Managed Equity & Bond ZNA GBP 5.88%
Vanguard LifeStrategy 40% Equity A Acc 5.97%
Pru PruFund Cautious Fund Pn Ser A 15.95%
Pru PruFund Growth Fund Pn Ser A 48.71%

Welcome any thoughts /comments

Amazing how popular are the Pru funds which are artificially suppressing volatility. This has to mean significant deviation from NAV/actual asset value. Which in turn means that some investors subsidize others. Does not appeal.

Lifestrategy funds are designed to stand alone. You can also have it at the core of your portfolio and then add a couple of factors, say up to 30%. In this example when Pru is the core and Vanguard’s multi asset fund is at just 5%, it looks odd.

Basically the primary concern appears to be minimization of volatility and then small percentages of a few brand names were thrown into the soup with an attempt to keep the overall asset allocation.

jamesd

Mick70 wrote: »

nobody (or tiny minority) can predict a market crash/slump , no matter how good an IFA they say they are, this is always the one risk of a switch to DC , it may never happen in our lifetime but nobody can guarantee that, just my opinion of course

Recon on a 20% equity drop two or three times a decade and 40% once, then assume 30+ years and they are routine.

On the other side, the overall gain for my fund investments has been about 28% in the last year.

Just routine ups and downs to get used to.

Albermarle wrote: »

The 'trick ' is to be prepared for them and don't panic. If you are relying on a DC scheme , then the main tactic is to stop with drawing from the fund as much as possible , ideally stop altogether, until markets/ the fund recovers. This is to stop the so called 'sequence of returns ' risk . In reality it means if you can fund your income from another source for a couple of years ( cash savings?) then you should be able to live through any normal market crash without too many problems . A prolonged slump would be an issue but unlikely to happen, but not impossible.

There's no need to stop drawing, just take the money from the cash and bond parts of the mixture when equities are down. Drawdown rules like Guyton-Klinger will say reduce income when needed.

jamesd

bostonerimus wrote: »

So you're ok with the 5% front end load that some of these funds have?

There's no front end load in practice in the UK fund market for at least the last 10-15 years.

If you want to pay one nowadays you'd have to hunt for the rare broker that hasn't negotiated it away.

There are occasional exceptions, like Vanguard's global growth fund charging me around 0.3% quite a few years ago. But that's memorable because it was unusual. I did pay around 50% of the advertised load on one fund back in 2006.

You should just ignore advertised loads as not charged in practice.