simple pension review

bostonerimus

Thrugelmir said:

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. 

Performance is always uncertain, saving on fees is guaranteed.

Dansmam

mcn99 said:

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.

Chill dear one just chill. You won't starve. Why are you worried about overseas? If it helps just go for a bit of balance with a vanguard type thing? US is looking bonkers but looking east not so much. And tomorrow is another day entirely 😉

LHW99

bostonerimus said:

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...

As I understand it, a DC pension is generally passed on outside the estate, so inheritance tax is not the point. If you passed away before you were 75, then whoever inherits it (wife / children / other) can withdraw all the remaining funds tax-free. If you pass after age 75, then whoever inherits would pay tax on what is taken out at their normal income tax rate.

mcn99

Just to thank everyone for comments. So just to wrap this thread up.
 I have given up trying to get a local IFA, they simply don't offer advice on a fixed fee, on my terms. I was obviously being naïve trying to pay a local IFA for a set number of hours, they all want to get a slice of the pot and sell me their standard service. 
I will  continue DIY for now,  may look at low cost web based IFA in future.

Thrugelmir

bostonerimus said:

Thrugelmir said:

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. 

Performance is always uncertain, saving on fees is guaranteed.

Then there'd be no markets once passive funds rule the world. 

xylophone

ok looks like i'm on my own then, and have to take responsibilty for any mistakes i make. I am close to 700k in pot, so a fixed fee is what im after , if i take the IFA advice or i ignore it, still my responsibility. I'm not intrested in moving or buying anything, just some advice. It cant be that difficult can it ?

I wonder would this  https://adviserbook.co.uk/  help?

I notice that when the menu comes up on the left hand side you can tick "offers fixed fee".

You can also tick the  method of giving advice, confirmed independent, qualifications of adviser etc.

dunstonh

I will  continue DIY for now,  may look at low cost web based IFA in future.

Web based FAs (most of which are not IFAs but FAs) are low cost as they restrict their service and offer their own portfolio of passive funds but wont move away from that.   So, that probably wont be an answer.

bostonerimus

Thrugelmir said:

bostonerimus said:

Thrugelmir said:

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. 

Performance is always uncertain, saving on fees is guaranteed.

Then there'd be no markets once passive funds rule the world. 

The potential "performance gains" offered by moving away from the average will keep stock picking and active funds alive. I'm glad about that, not for any financial reason, but because maybe it points the the optimism of human beings. Of course I'm a pessimist and I wonder what happens to all the people who do worse than the average...we never hear from them, but they are out there.

bostonerimus

mcn99 said:

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.

At 3.5% drawdown you have a sensible starting point as long as your portfolio has enough growth potential. So what do you have in your portfolio right now? It's good that you are thinking about future scenarios, which is vital so that you are prepared. It sounds to me as if you don't really need much advice, just a little reassurance that you are doing things right. This is not rocket science and it really only needs a little common sense to get things right. There are plenty of online tools to help you that will do the compound interest calculations to test variations to your plan, or if you have some basic understanding of compound interest you can put a spreadsheet together in five minutes.

It's a scary step moving from the accumulation phase to withdrawal, it's like setting sail onto an unknown ocean, but if you prepare well then you soon find that the water is quite nice. I had a plan for my early retirement - doing it was still scary, but after a few months of spending and deposit cycles I entirely stopped worrying. You are easing into things as your wife is still working, so I'd keep some cash in the bank for emergencies and stay fairly aggressive with your portfolio as you say you have about 10 years before serious drawdown starts.