simple pension review

Albermarle

If you search on google for something like 'low cost financial advice ' you should get at least a couple of hits .
There a few companies that offer a telephone/online advice service that appear to be fully regulated . They appear to cut costs by having a standardised model that just focuses on investment/portfolio advice and no add ons like tax planning ,inheritance issues, personal touch  etc 
However whether they would be willing to review /work with your portfolio, or want you to follow their suggestions, I do not really know.

bostonerimus

Marcon said:

bostonerimus said:

Why not just ask your questions here. You'll get a lot of good comments that might help. 

OP will get plenty of comments, but given they will be based on minimal information, it'll be complete pot luck as to whether they are any use.

OP has already said it's his wife who thinks he needs advice, so might be worthwhile the pair of them comparing notes on what she believes that advice will achieve and whether it's worth the cost being quoted. So often 'advice' isn't actually necessary - it's information that is required.

The OP will have to give us some information and then people can make reasonable comments about drawdown portfolios and strategy. I agree that the OP probably just needs some information and a little hand holding and reassurance in the transition to drawdown.

One thing that I will advise the OP to do (and yes I said advise) is to do a budget with all the outgoings and income sources and use this as a foundation to control spending and inform drawdown.

mcn99

Ok so some details

SIPP  700k, have combined all DC pots into single SIPP

Wife has PP 270k

Savings approx 40k

Should be debt free this year

Both myself and wife will have full SP

wife plans to retire in 12 years time when 60

my plan to retire at 57, 2.5 years from now

I’m hoping to place another 80k in pot before I jump. So lets say min pot at retirement 750k, assuming poor performance.

My plan was to only take part of the taxfree lumpsum, then for next 10 years just take my PA tax out. Wife will retire near my SP age. Most of lumpsum will be re-invested in ISAs

We can quite comfortably live off wife’s salary, especially with no mortgage. I still want to grow pot until I really need to start living on it. I may pull more money out before SP age, if I think I should reduce pot quicker using the  lower tax threshold before receiving SP, all depends on how things unfold. The closer the wife gets to retirement, the safer our plans are.

Wife is nervous on the figures, the only risk I see is poor growth due to my portfolio choices and if she loses her job, then suddenly my pension needs to fully support us.

So I really just wanted to go through my figures and forecasts with an IFA, and also to re-balance what I have invested in. I know I need to rebalance what I have invested in, too much is invested in overseas funds, so currency changes could hurt me.

I have a call with another local IFA on Monday.

eskbanker

mcn99 said:

the only risk I see is poor growth due to my portfolio choices

Which are....?

And what do you anticipate changing them to, both in the short term and then when approaching or within the drawdown phase?

How have you factored in sequence of returns risk to your planning?

mcn99

This is the  reason I want to basically take a day with an IFA, to sit down and go through my plans and come up with a more balanced portfolio. I quite like my SIPP platform and im trying to keep all fees to a minimum, I have been researching on risk and balancing my investments.
My spreadsheets I created have a number of possible returns, I even coded some random approach to model it, and I have used a few online tools as well, to get some spread of performance. I suspect my drawdown will be too cautious for the first few years.

bostonerimus

mcn99 said:

This is the  reason I want to basically take a day with an IFA, to sit down and go through my plans and come up with a more balanced portfolio. I quite like my SIPP platform and im trying to keep all fees to a minimum, I have been researching on risk and balancing my investments.
My spreadsheets I created have a number of possible returns, I even coded some random approach to model it, and I have used a few online tools as well, to get some spread of performance. I suspect my drawdown will be too cautious for the first few years.

Have you done a budget and worked out how much you need your portfolio to generate and when you'll need the money. Have you looked at withdrawal strategies like Guyton and Klinger? and considered what you'd do if your wife lost her job? You seem to be on top of the tax strategy. What does your portfolio look like now...you might want to keep 2 years of cash spending around to survive market down turns and as insurance against your wife losing her job, but other than that a 60/40 equity/cash fixed income type of portfolio using total return for income should see you ok. The easiest and most impactful thing you can do to ensure success is to control your spending.

LHW99

Most of lumpsum will be re-invested in ISAs

Unless you expecting LTA issues, if you don't need the money why take it out of the pension? If you did pass on before 75, pensions are not counted as part of your estate and your wife could inherit it tax free.

bostonerimus

LHW99 said:

Most of lumpsum will be re-invested in ISAs

Unless you expecting LTA issues, if you don't need the money why take it out of the pension? If you did pass on before 75, pensions are not counted as part of your estate and your wife could inherit it tax free.

I didn't think inheritance tax was an issue between spouses...

mcn99

I hadnt heard of  Guyton and Klinger strategy, just read up on it. I was basing my withdrawal on a simple safe withdrawal of 3.5%. First few years I'm only planning to withdraw just my Personal allowance, so well under the safe level. Roughly move 160k into withdrawal,  take 40k tax free, re-invest that into both our ISAs. So 80k would be easily available if anything happened. Plan to leave rest of SIPP untouched for first 10 years if possible. I'm never going to breach LTA or  wife paying IHT. IHT for the kids is another topic. So again assuming the wife keeps in a job she really likes, my figures look quite good. As for budgeting, we know we can reduce it substantially once I retire.

Thrugelmir

mcn99 said:

This is the  reason I want to basically take a day with an IFA, to sit down and go through my plans and come up with a more balanced portfolio. I quite like my SIPP platform and im trying to keep all fees to a minimum, I have been researching on risk and balancing my investments.

While fees are an important aspect they shouldn't be the overriding factor when selecting some types of investments. Performance gains will soon outweigh the fees.