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mark_cycling00

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p00hsticks

When you say you want to make some income, do you mean that you want to withdraw monthly interest / dividend income to supplement your reduced monthly income over the period ?

 

El_Torro

I'm not a big fan of funds that focus on income over capital growth but it might be suitable for you. As long as you only spend the income and not sell any of the fund then you should be in a good place in 4 years time. You can invest 75% of the money that way. In 4 years time you can always change the funds you are invested in if you want to.

For the other 25% I would keep it in Cash ISAs. In 4 years time you can spend this money (minus any interest you have spent) on a new car or house improvements.

mark_cycling00

p00hsticks said:

When you say you want to make some income, do you mean that you want to withdraw monthly interest / dividend income to supplement your reduced monthly income over the period ?

 

Good question. Yes I mean withdrawing annually or monthly (I could run down instant savings over the year) to add to my income. Which would have been fine if it wasn't for recent price increases

OldScientist

If you place the lot in a four year fixed rate account (if you can find one - the top rates for 3 year are currently about 4.3%) then you will definitely receive 4.3% of the capital in income and still have the capital at the end of the period.

A 4 year gilt (e.g., TS28, https://www.yieldgimp.com/) held to maturity would also provide a fixed income of 4.3% and at the end of the period you would have all the capital.

Investing in shorter period savings accounts or an MMF will provide an unknown future income and will definitely (in the case of savings accounts) and almost certainly (in the case of MMF) retain your capital.

Investing in anything else will mean that future income and future capital is unknown. Since you are willing to risk about 75% of your capital, then you could invest up to 75% in equities and 25% in cash/maturing gilts. This would assure 25% of your capital but would leave 75% of your future income at risk. Lower proportions of equities decrease the risk on capital and income.

Albermarle

 about 75% can be invested for long term 

Normally for the long term, investing via a pension is best, due to the tax relief.
However the money will not be available until your late Fifties.

mark_cycling00

Albermarle said:

 about 75% can be invested for long term 

Normally for the long term, investing via a pension is best, due to the tax relief.
However the money will not be available until your late Fifties.

Yes. This is something of a dilemma. 

I do salary sacrifice into a pension and this increases my overall wealth faster. But the cash is unavailable and once I try to access any of this pension, adding to it whilst working is more limited I believe. I can't dip into it after age 57 and carry on working and doing salary sacrifice 

I could run down my ISA savings and do more pension but I honestly don't know how much money children cost and what my partner's salary is likely to be. Therefore I feel it's safer to have a decent cash amount for the next 10-15 years just in case