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Inc. or Acc. units in Retirement?

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Comments

  • af1963
    af1963 Posts: 425 Forumite
    Fourth Anniversary 100 Posts Name Dropper
    Triumph13 said:
    Inc for unwrapped, ...
    Is that just because it avoids the tedious paperwork of tracking the price paid for each tranche of units ?
  • westv
    westv Posts: 6,509 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    af1963 said:
    Triumph13 said:
    Inc for unwrapped, ...
    Is that just because it avoids the tedious paperwork of tracking the price paid for each tranche of units ?
    Why would you need to do that?
  • RogerPensionGuy
    RogerPensionGuy Posts: 890 Forumite
    500 Posts Third Anniversary Photogenic Name Dropper
    I searched "units income accumulation" and got more more old threads on here, before I just searched "Inc & Acc" the link below maybe helpful for information, I'm reading them all over. 

    **'

    https://forums.moneysavingexpert.com/search?domain=all_content&query=Units income or accumulation&sort=-dateInserted&scope=site&source=community
  • redpete
    redpete Posts: 4,738 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper

    I actually switched a few Acc to Inc units last year, all vanguard LS100. 

    Looking at performance I can see the Acc has grow more than Inc and think the Inc will pay out about £6 a unit in these next two weeks.

    It looks very like the Acc & Inc(+div) will look very similar in value terms. 
    I would expect any difference in performance to just be down to income returns compounding in the Acc units and being withdrawn from the Inc units.
    loose does not rhyme with choose but lose does and is the word you meant to write.
  • dunstonh
    dunstonh Posts: 120,195 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    INC units reinvested would give the same return as ACC units unless you have an unusual charging arrangement for repurchases.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • OldScientist
    OldScientist Posts: 904 Forumite
    Fourth Anniversary 500 Posts Name Dropper
    Hi,

    I am just looking for a bit of a steer here as to whether I should move all of my investment units to Inc. units.

    A little bit about my circumstances.

    I retired at 53 (nearly 4 years ago) and took my DB pension on my 55th birthday.  My wife will take her DB pension in just over 3 years when she is 60.

    My DB pension will cover the basic spending and we are currently funding discretionary spend from cash savings.  This will obviously reduce when my wife takes her pension.  When we get to SP age, the total income will easily cover all spend.

    We have quite a lot in cash and investments - mostly in ISAs.  I have cash to cover around 5 years of need (pension top ups).  I know that some will find this very high, but this provides a degree of comfort and I have accepted the inflation risk.

    All my investments (generally in Vanguard LS funds and global trackers, some PNL and CGT).  All of my VLS and trackers are in Acc. units.  I am now wondering that now I am in a decumulation phase, should I be moving some or all of these to Inc. units.  We are not planning inheritance and hope to actually spend the majority of our assets so will sell them over time and will allow ourselves to increase our spending over time (mainly travelling while we are able).

    Thanks for reading.
    Apart from the ease of tax reporting mentioned elsewhere in this thread for unwrapped investments, I think inc or acc is a matter of convenience in retirement.

    For some, having 'dividends' from inc units automatically delivered to their cash account (some/most platforms can do this?) is simple and convenient even if the amount varies from month to month.

    For others, logging in to their broker account to periodically sell acc units to provide cash is a convenient approach and can provide more control over the amounts withdrawn. Of course, those with inc units can also sell units if required or reinvest dividends.

    FWIW, most of our basic spending is covered by a DB pension and we sell acc units every 6 months to provide additional income.

  • Hoenir
    Hoenir Posts: 7,742 Forumite
    1,000 Posts First Anniversary Name Dropper
    Hi,

    I am just looking for a bit of a steer here as to whether I should move all of my investment units to Inc. units.

    A little bit about my circumstances.

    I retired at 53 (nearly 4 years ago) and took my DB pension on my 55th birthday.  My wife will take her DB pension in just over 3 years when she is 60.

    My DB pension will cover the basic spending and we are currently funding discretionary spend from cash savings.  This will obviously reduce when my wife takes her pension.  When we get to SP age, the total income will easily cover all spend.

    We have quite a lot in cash and investments - mostly in ISAs.  I have cash to cover around 5 years of need (pension top ups).  I know that some will find this very high, but this provides a degree of comfort and I have accepted the inflation risk.

    All my investments (generally in Vanguard LS funds and global trackers, some PNL and CGT).  All of my VLS and trackers are in Acc. units.  I am now wondering that now I am in a decumulation phase, should I be moving some or all of these to Inc. units.  We are not planning inheritance and hope to actually spend the majority of our assets so will sell them over time and will allow ourselves to increase our spending over time (mainly travelling while we are able).

    Thanks for reading.
    Apart from the ease of tax reporting mentioned elsewhere in this thread for unwrapped investments, I think inc or acc is a matter of convenience in retirement.

    For some, having 'dividends' from inc units automatically delivered to their cash account (some/most platforms can do this?) is simple and convenient even if the amount varies from month to month.

    For others, logging in to their broker account to periodically sell acc units to provide cash is a convenient approach and can provide more control over the amounts withdrawn. Of course, those with inc units can also sell units if required or reinvest dividends.

    FWIW, most of our basic spending is covered by a DB pension and we sell acc units every 6 months to provide additional income.

    This post was made in 2023,  ;)
  • redpete
    redpete Posts: 4,738 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Hoenir said:
    This post was made in 2023,  ;)
    Sucked in by a zombie thread, doh!
    loose does not rhyme with choose but lose does and is the word you meant to write.
  • Bravepants
    Bravepants Posts: 1,651 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    redpete said:
    Hoenir said:
    This post was made in 2023,  ;)
    Sucked in by a zombie thread, doh!

    Nah! Some of us are still interested! :) 
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
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