advice on regular payments into a SIPP please

redpete

sadexpunk said:

so the question is...... whats the easiest way of chucking this in the fund?  do it manually every now and then?  or is there something i can set up to invest any balance every now and then? 

I assume you have Free Regular Investment set up for your monthly subscriptions (I haven't read through the whole thread to check).  If so, it is easy to add a one-off additional investment using the "Extra investment this month" column. So still a manual adjustment but easier than setting up a completely new one-off investment.

sadexpunk

redpete said:

I assume you have Free Regular Investment set up for your monthly subscriptions (I haven't read through the whole thread to check).  If so, it is easy to add a one-off additional investment using the "Extra investment this month" column. So still a manual adjustment but easier than setting up a completely new one-off investment.

yes ive got £100 DD set up to go into the fund each month.  i couldnt see the 'extra investments this month' column anywhere so i just went into the fund and hit the 'buy more' tab and have set up a one-off payment from there, so its pending now.

thank you

sadexpunk

in the same position again, i have £150 cash, but cant see any 'extra investment this month' column anywhere, only 'buy more' and 'sell' buttons.

am i missing something obvious, or should i just click the 'buy more' button and just go ahead?

LHW99

If you get a free trade every month then use "Buy more" - I tend to leave cash until I've around £500 and do a buy then, but if you don't pay for trading there's no particular benefit in waiting.

MallyGirl

In the app at the bottom of the setup regular investment page there is a toggle to add extra investment

sadexpunk

https://forums.moneysavingexpert.com/discussion/comment/81860362#Comment_81860362

under 'portfolio' i have 'free regular investing', but no 'regular investments', and certainly no toggle anyway for an 'extra investment'. i note yours mentions funds from your ISA, this may be different then as mines a SIPP?

https://forums.moneysavingexpert.com/discussion/comment/81860340#Comment_81860340

i guess i just need to use this method then and just 'buy more' and hope i dont get charged for it.

thank you

sadexpunk

well ive been regularly putting in £100 p/m into my SIPP which is invested in HSBC FTSE All-World Index App, via ii. i very rarely check it due to not wanting kittens when it drops due to the trump factor or whatever.

ive just been having a 'chat' with chatgpt about a strategy for retiring. im 62 and 65 is my definite cut-off for retirement but it would be nice to retire a little earlier if possible. so ive been asking 'what ifs' around going at 63, 64 etc.

it recommends the '3 bucket' approach which i hadnt heard of so have been researching it. it recommends stopping investment into the fund, and putting any further money now into an SMMF so that its safe from any drops in the market. obviously this could have the reverse effect of the markets rising and my money isnt, but i guess its a safer option, just helping to tide over until state pension age of 67.

i suppose im just after advice or experiences on this 3 bucket method, is it a sound strategy? any of you do it? im hesitant to just accept chatgpt advice cos…. you know…. :-)

FWIW i come out with just over £3000 p/m, my current works DB pension forecasts to pay out £15,000 and my SIPP is worth just short of £200,000 atm. our outgoings are frugal, no tv packages, cheap phones etc, but as we love our greek holidays, we'd like to be able to maintain around my current wage if possible, probably get by on a little less. mortgage is only £300 p/m and will be paid up on 65th birthday.

so im thinking start this SMMF thing going, and start drawing from the SIPP at retirement date to top up to say £3000 per month until SP when ill need to draw less then.

can you see any flaws in my thinking, or might i be way off?

thank you

DRS1

Lots of people do this sort of thing - draw more from a SIPP until a DB pension or SP kicks in and then reduce what they take out of the SIPP.

As to the three buckets it sounds like you are going for two instead of three and maybe you don't need three. I think the idea is that bucket 1 has what you need for say the first 5 years; bucket 2 has what you need for the next 5 and then bucket 3 has your long term equity investments (ie your all world index thing). Bucket 1 is where the STMMF would be. If that has enough to cover you till SP starts then maybe that is all you need really and bucket 2 is redundant? Bucket 2 might have things like index linked gilts in it. The idea being that they would mature when you need the money and you wouldn't be worrying about selling some of the equities when they are in a downturn.

dunstonh

i suppose im just after advice or experiences on this 3 bucket method, is it a sound strategy? any of you do it? im hesitant to just accept chatgpt advice cos…. you know…. :-)

I frequently use bucketing. Often limited to two buckets rather than three but it largely depends on risk profile, size of the withdrawal, external funds held outside of the pension etc.

Bucketing is one of the number of different valid strategies available.

so im thinking start this SMMF thing going, and start drawing from the SIPP at retirement date to top up to say £3000 per month until SP when ill need to draw less then.

I disagree with the method is has suggested. You should be de-risking before you get to retirement and building that short term bucket and medium term bucket up in advance. Diverting to the short term bucket alone with the regular contribution is unlikely to fit. For example, what if there was a large market crash in the 12-24 months? You would only have the regular contribution built up in the short term bucket. Would that see you through 3-5 years of withdrawals?

What is your plan for the medium term bucket? You haven't mentioned how you are adjusting for that?

How much do you hold outside of the pension wrapper in cash? Bucketing doesn't need to use just one wrapper. It could be spread across multiple wrappers or unwrapped.

sadexpunk

What is your plan for the medium term bucket? You haven't mentioned how you are adjusting for that?

yes i think youre right, for me it looks like 2 buckets makes sense, so just a short and medium or long? .

How much do you hold outside of the pension wrapper in cash? 

i dont have any disposable cash as such if thats what you mean, or do you mean money for the SMMF?

i have 23 months until proposed retirement at 64 (£15000 pa DB pension), and then at 65 a smaller DB pension kicks in (£8000 p/a) then 2 years until SP.

chatgpt suggests from this month keeping on paying the £100 pm into the SIPP but not investing it, making use of the 25% HMRC contribution. and then also selling around £2000 pm from the HSBC fund which will then also sit as cash. and then, using all of this cash per month to buy Royal London Short Term Money Market Fund.

it states that this will give me the correct amount in bucket 1.

is this what you disagree with? apologies but im not very financially savvy so often need things explaining to me in simple terms :-)

thank you