Vanguard accumulation to income

ColdIron

MarcoM said:

masonic said:

Qyburn said:

The VLS funds all have Income versions. How much of his 4% would they be likely to return?

Unlikely to be more than half. Given the seismic shift in monetary and interest rate policy recently, which will impact both bond interest and company dividend policy, it's a difficult figure to predict. However, the significant US allocation, where dividends are disfavoured due to local tax policy, will tend to keep the figure relatively low.

It is not clear whether the OP holds Inc or Acc units, or whether holdings are wrapped or unwrapped. However, it probably isn't worth changing from Acc to Inc just to obtain a portion of the desired income to be taken from this pot.

do you think there is no way of achieving a 4% return at all within Vanguard with the funds?

You will struggle to get a yield of better than 2.00% with any of their multi-asset funds. If what you want is a 4.00% return (rather than a simple dividend yield) you could take on a total return approach with them and sell down periodically. This is your best bet if you want to stay with the same profile as your VLS funds

You could go all in on a FTSE100 tracker or one of their corporate bonds but that would be a huge shift in, well, just about everything. Don't do it

If you want simple yield approaching 4.00% VHYL might be worth a look but of course there are no bonds in it and the geographic allocations are different etc

bostonerimus

MarcoM said:

masonic said:

Qyburn said:

The VLS funds all have Income versions. How much of his 4% would they be likely to return?

Unlikely to be more than half. Given the seismic shift in monetary and interest rate policy recently, which will impact both bond interest and company dividend policy, it's a difficult figure to predict. However, the significant US allocation, where dividends are disfavoured due to local tax policy, will tend to keep the figure relatively low.

It is not clear whether the OP holds Inc or Acc units, or whether holdings are wrapped or unwrapped. However, it probably isn't worth changing from Acc to Inc just to obtain a portion of the desired income to be taken from this pot.

currently all in an ISA on  an accumulation basis.
do you think there is no way of achieving a 4% return at all within Vanguard with the funds?

Well as stated above some of the income units will produce a yield of 1.75% and the rest of your 4% will come from capital gains (hopefully) or just straight capital. Read up on "Total Return" retirement income strategies.

masonic

MarcoM said:

masonic said:

Qyburn said:

The VLS funds all have Income versions. How much of his 4% would they be likely to return?

Unlikely to be more than half. Given the seismic shift in monetary and interest rate policy recently, which will impact both bond interest and company dividend policy, it's a difficult figure to predict. However, the significant US allocation, where dividends are disfavoured due to local tax policy, will tend to keep the figure relatively low.

It is not clear whether the OP holds Inc or Acc units, or whether holdings are wrapped or unwrapped. However, it probably isn't worth changing from Acc to Inc just to obtain a portion of the desired income to be taken from this pot.

currently all in an ISA on  an accumulation basis.
do you think there is no way of achieving a 4% return at all within Vanguard with the funds?

A 4% return is quite reasonable. It just won't all come from dividends and interest. The level of dividends is artificially decided by the paying companies anyway. As discussed above, there are other ways to generate a return for shareholders, such as growing the business or share buybacks.

GeoffTF

Here is a helpful article from Vanguard:

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/retirement/four-steps-safeguard-retirement