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Linton said:I dont understand your question. Surely you have a target because you need a particular sum of money to meet some objective in your life. eg buy a house or retire. Once you have reached your target you do whatever it was you wanted the money for.
You seem to be suggesting that you have arbitrary targets with no wider objectives. I dont see why you would do this.I 'should' have enough money for retirement, (I say 'should' as I don't know when I will die nor do I know my unexpected expenses eg health care etc, and this has been worrying me for a long time so posting here helps me to think things through with the help of others.)What am I thinking of doing is when the value reaches my target value, I will sell / switch the amount which is above my original investment and leave the original amount invested and hopefully the cycle repeats itself. This maybe equivalent to some people selling their funds for an income, but I will take the money and keep it in a less risky vehicle eg cash ISA etc and gradually build up another pot for health care etc.As no one knows what the market will do, my target value is an indicator for me to know when I need to switch or sell and also helps me sleep at night as I know I have realised my gain (some may get eaten up by inflation etc up will accept that). I know some people have 5 years cash and the rest in investment, I am just 'dipping my toes' to test.
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kempiejon said:I will sell or switch to other funds when I have made the value I need,
Ah cool,. So am I right, when you have made the value you'll stop investing for growth/profit?
Would it be all Cash/nrCash holding or annuity, perhaps something else, a big purchase perhaps, what's next?
I have a target income to harvest from my investments so I look for instruments that will achieve that long term and generally hold them rather than trading or ultimately stopping investing. I don't have a predetermined value goal with a plan to then cash out.
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20122013 said:Linton said:I dont understand your question. Surely you have a target because you need a particular sum of money to meet some objective in your life. eg buy a house or retire. Once you have reached your target you do whatever it was you wanted the money for.
You seem to be suggesting that you have arbitrary targets with no wider objectives. I dont see why you would do this.I 'should' have enough money for retirement, (I say 'should' as I don't know when I will die nor do I know my unexpected expenses eg health care etc, and this has been worrying me for a long time so posting here helps me to think things through with the help of others.)What am I thinking of doing is when the value reaches my target value, I will sell / switch the amount which is above my original investment and leave the original amount invested and hopefully the cycle repeats itself. This maybe equivalent to some people selling their funds for an income, but I will take the money and keep it in a less risky vehicle eg cash ISA etc and gradually build up another pot for health care etc.As no one knows what the market will do, my target value is an indicator for me to know when I need to switch or sell and also helps me sleep at night as I know I have realised my gain (some may get eaten up by inflation etc up will accept that). I know some people have 5 years cash and the rest in investment, I am just 'dipping my toes' to test.
I suggest you simply start on your long term retirement strategy about 5 years before you plan to retire without actually drawing down any money. So when you retire you are certainly safe for the following 5 years and the majority of your investments will have had time to grow further.
This will help provide the funds for long term health care. You are likely to find that if you have planned prudently you will actually get richer in £ terms during retirement as most of the calamities you have tried to cover dont actually happen. However this depends on your long term funds staying fully invested.
I think you are paying insufficient account of inflation. Keeping your retirement money in cash will barely match inflation if you are lucky, so in real terms you wont be building up a pot. The most likely way to beat inflation in the long term is by investing. If you stop when you reach your target you could be badly hit.1 -
kempiejon said:I will sell or switch to other funds when I have made the value I need,
Ah cool,. So am I right, when you have made the value you'll stop investing for growth/profit?
Would it be all Cash/nrCash holding or annuity, perhaps something else, a big purchase perhaps, what's next?
I have a target income to harvest from my investments so I look for instruments that will achieve that long term and generally hold them rather than trading or ultimately stopping investing. I don't have a predetermined value goal with a plan to then cash out.0 -
Linton said:In retirement you will need a strategy to manage your finances for perhaps 30 years. If you are planning to drawdown your money over that time period not a lot actually changes on the day when you retire. You only need to have protected perhaps 5 years of income plus emergency savings, the rest of your investments can stay fully invested. It would be most efficient to use the time when you dont need the money to increase your wealth.I have not worked for some years but had a rental income until 2024. so this has given me an idea of my spending pattern. I have less than £100K in my SW pension, and I have read that it is better to start withdrawing before SP kicks in, would I still benefit from a draw down plan with this size of pension pot?Most of my money are in ISAs apart from the sell proceeds from my BTL and still thinking of where to put them to beat inflation.As at the moment I am thinking of bank accounts.My plan is to have 5 years in cash savings account0 year - easy access and from year 1 to 4 will be in highest fixed rate accounts? (not sure whether there is a better way to do this so I can still access the funds as scheduled), my plan is if I do need cash, I have credit cards and also can sell some funds. Also, I am thinking of rejoining the NHS, so I get a pension of £500 / year.. and aim to work for 10 years so it will allow my investment to grow longer and also build up some surplus for health care etcYear 5 - The below will be a new plan for me:If I invest all the rest of my money into funds, what is a way to take out my 1 year Spend? Do I sell in one go or sell it when I think it is a good price (my 'target value') or buy INCOME funds? and put the money in an easy access account. I think I will sell the funds that incur CGT first as I will have personal allowance as I would have used up all my SW Pension and not yet reach SP age.) and do the same for subsequent years?
Great idea!
I suggest you simply start on your long term retirement strategy about 5 years before you plan to retire without actually drawing down any money. So when you retire you are certainly safe for the following 5 years and the majority of your investments will have had time to grow further.This will help provide the funds for long term health care. You are likely to find that if you have planned prudently you will actually get richer in £ terms during retirement as most of the calamities you have tried to cover dont actually happen. However this depends on your long term funds staying fully invested.I am worry about the market going down (or noticing too late when there is a 'market correction' when I need to sell. (as I have seen others' pensions going down earlier this year when they need access). Hence my Original Post of 'selling / switching' when my funds have reached 'my target value' and leaving the original capital invested. But I see your point about having 5 year cash and this should minmise that risk because I still have 4 years cash as a backup if the market do drop.I think you are paying insufficient account of inflation. Keeping your retirement money in cash will barely match inflation if you are lucky, so in real terms you wont be building up a pot. The most likely way to beat inflation in the long term is by investing. If you stop when you reach your target you could be badly hit.Thanks for the explanation. I do not find Maths easy so I have added £10K per year on my yearly spend for inflation - I rather over budget than not enough any left overs will go back to the pot or should it back to investment ?I will wind down on investing when I am about 80. or as long as I am able.The other matter I am thinking about is which one to use and how?Investing:Cash, Cash ISA, S&S ISA, S&S , State Pension and SW PensionFor example, if I want to buy more funds, I will transfer my CASH ISA into S&S ISA (as the S&S ISA tend to make more gain than a cash ISA)As the sell of my BTL should complete soon I was looking to buying some GILTS to save CGT or PB but the winnings have not been as great as before. Again, bank accounts until I have learn more about funds and asset allocations.Spending:SW Pension (make sure I use up all the Personal Allowance before SP kicks in)Cash = State Pension = Cash ISAS&S ISAS&SIf I get a paid job I think I will do the maximum salary Sacrafice instead of investing the funds into S&S because my ISA will be maxed out for some years. I may have to pay some tax when I withdraw but I will still benefit from the tax relief.
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