Calling all LGPS Pru AVC members - What are you investing in has you near retirement date?

jamjar92

@bonnyrigger see thread "Problem with LGPS AVCs with Prudential"

Durban

AlanP_2 said:

Laycity said:

JohnWinder said:

If I understand the issue clearly: close to retirement one wants less risky6 assets; but if retirement investing will last another 25 years after retirement, then one might need to have some 'risky' assets because risk-free assets usually have low returns.

Here's someone's thinking on the matter:

https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/

And there's a lot here: https://earlyretirementnow.com/2018/07/25/why-is-retirement-harder-than-saving-for-retirement-swr-series-part-27/

That’s more relevant to a SIPP or a DC pot.
Most people want to take their AVC pot as 100% cash when they can and hence want to avoid a market drop just before they do this.

I disagree, it is exactly the same as a DC or SIPP pot if you intend to invest the AVC lump sum once taken. 

Our LGPS uses Standard Life as opposed to Pru but the principles are the same. Whether an example £100k of funds is worth £80k or £120k on Retirement Day does not particularly matter as it will buy the same value in non-AVC investments on Retirement Day plus 1 theoretically.

In practice there will be a delay between provider cashing in and you reinvesting after the cash has hit your bank account where market prices will move. You might win or you might lose but again that will be the same whatever the value in the AVC when sold.

Again practically, many of us may not intend to invest he whole pot and will want some as cash to perhaps repay mortgage or buy a new car or something. In that case judicious de-risking of the "must be in cash" portion would be sensible. 

That's interesting , I hadn't thought of it like that. I was going to de risk the nearer I got to retirement.

I am hoping for a pot of around £100,000 - £120,000 and whilst I would like to use some of that money, most of the money will be reinvested.  I guess the money would need to be split into stocks and shares isa's. 

Depending on the timing , I could probably get around £80,000 into an ISA if retirement taken around the month of March.

I could put £20,000 into each of mine and my husbands ISA split over the two tax years.

I wish the website would show a graph though of how the funds are doing and what profit has been made on each 

jamjar92

Durban said:

I wish the website would show a graph though of how the funds are doing and what profit has been made on each 

I have a spreadsheet which I track the units held, money invested and monthly charges (AMC), created a portfolio on https://www.morningstar.co.uk/uk/ to keep a track on the prices to easily update the spreasheet.