Vanguard Pension

barnstar2077

Deleted_User said:

shell145 said:

Deleted_User said:

ersonally, I would go for 100% equity if I were your age. You will likely get a better return. Then you can start adding bonds within 10 years from retirement. 

VLS100 is a good option. There are a couple of other good options discussed in another thread, eg HSBC’s all world fund. 

If you are with Vanguard SIPP then there are no entry or exit charges. There is an ongoing account charge of 0.15%. 

I've bit the bullet and done it! I set up a pension with vanguard 100% equity. My 15k lump sum became 18.75k, 650/month by d/d. it feels good! I was umming and ahhing for over 18 months. Something is better than nothing. thank you

Well done. Its all about putting the money in and maximizing your time in the market. Keep putting the money in and try not to look at the value more than once a year. Its all noise until you get closer to retirement.

I second the trying not to look at the balance too often.  Seriously, you will drive yourself mad watching the numbers go up and down! 

Thrugelmir

Deleted_User said:

Linton said:

Mutton_Geoff said:

Deleted_User said:

Returns in the first 10 years are the opposite of critical. 

I disagree, and so does Einstein. It would be more advantageous to put in 10 years then stop than delay any/increased contributions until later.

https://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html

Contributions in the first 10 years are critical, returns far less so.  Assuming contributions increase with inflation It could well take 10-15 years before the annual return exceeds the annual contribution and a few years beyond that before cumulative returns exceed cumulative contributions.

If you dont believe me do what I did and spend 5 minutes setting up a spreadsheet model firstly with normal returns in the first 10 years and then with zero returns in the first 10 years.

Right. In fact, someone with a 40 year investment horizon benefits from a few really deep bear markets through the first half of his career. Does not work for someone approaching retirement or retired. 

What you are omitting to factor in. Is that many companies and investments continue to generate income for reinvestment. Markets aren't just mathematical indices.  Compounding kicks in the later years. 3% real return over 40 years makes a small sum significant. Fable of the hare and the tortoise. Who won the race?