Getting slightly cold feet about SIPPs

justcheckin

Hi,

I consulted the forum before setting up SIPPs for myself and DH accessible at 55th birthdays now aged 50 and 51. These are both fully invested in VLS lifestrategy 100% equity as at the time, the horizon was quite long.

Plan is to use TFLS/PCLS as uni fees/help for children.

Increasingly as we approach the time we could take the TFLS,  I am concerned about a tech-related market crash. We have combined (also in ISAs) £920k in vls 100 equity.

Would you consider rebalancing SIPPs/isas? We both also have DB pensions and likely full new SP.

Triumph13

No-one can answer that without knowing your attitude to risk and how much you need the money.

Dazed_and_C0nfused

justcheckin said:

Hi,

I consulted the forum before setting up SIPPs for myself and DH accessible at 55th birthdays now aged 50 and 51. These are both fully invested in VLS lifestrategy 100% equity as at the time, the horizon was quite long.

Plan is to use TFLS/PCLS as uni fees/help for children.

Increasingly as we approach the time we could take the TFLS,  I am concerned about a tech-related market crash. We have combined (also in ISAs) £920k in vls 100 equity.

Would you consider rebalancing SIPPs/isas? We both also have DB pensions and likely full new SP.

Do you have other funds invested in anything else or is the £920k everything from a DC pension and ISA perspective?

molerat

First blip is MPA is changing to 57 from 6 April 2028 so you need to replan where your age 55 funds are coming from !

sheslookinhot

justcheckin said:

Hi,

I consulted the forum before setting up SIPPs for myself and DH accessible at 55th birthdays now aged 50 and 51. These are both fully invested in VLS lifestrategy 100% equity as at the time, the horizon was quite long.

Plan is to use TFLS/PCLS as uni fees/help for children.

Increasingly as we approach the time we could take the TFLS,  I am concerned about a tech-related market crash. We have combined (also in ISAs) £920k in vls 100 equity.

Would you consider rebalancing SIPPs/isas? We both also have DB pensions and likely full new SP.

If you have almost £1M in a single fund, then yes, I would consider rebalancing the SIPP/ISA.

Marcon

justcheckin said:

Hi,

I consulted the forum before setting up SIPPs for myself and DH accessible at 55th birthdays now aged 50 and 51. These are both fully invested in VLS lifestrategy 100% equity as at the time, the horizon was quite long.

Plan is to use TFLS/PCLS as uni fees/help for children.

Increasingly as we approach the time we could take the TFLS,  I am concerned about a tech-related market crash. We have combined (also in ISAs) £920k in vls 100 equity.

Would you consider rebalancing SIPPs/isas? We both also have DB pensions and likely full new SP.

Not much of a consultation when nobody here knows anything about you, so deeply unwise to rely on what can only be speculative comments, however well meant. Free 'advice' is often worth only what you pay for it - and in this case possibly even less!

How about a proper consultation with a professional - an IFA, who can advise based on a full understanding of all relevant facts?

gm0

The question of derisking - I believe is best approached like this

If you were (as was the case historically) buying an annuity - on a fixed date.  An ill timed dip or crash - would be a disaster - locking in a lower income for the rest of your life.  From this problem came lifestyling and auto-derisking products aka lifestyling - locking in bonds in the ten years to retirement. And approaching the fixed date fairly unexposed to equities and their possible volatility.  This happened because of problems real people had.  Derisking for drawdown is not the same - and nor are the lifestyling target products that appeared later.

Away from our extreme example of forced whole of pot annuity purchase - the one time pension.

Now to take TFLS on a date (at an age) - if not flexible - by years - is a requirement for secured value at a point in time. A point in time that is not flexible to an "investible" duration in the future - say 10 years plus.   Which is not to say there is no flexibility either.  But if you want 25% tfls available to cash out - and have a purpose for it.  

(It is not obvious why you would take it if you don't have one - as the alternative tax treatment of income along the way may suit better - i.e UFPLS.).  So say you do want it "out".  

Then it needs to be available to get out - which means selling units.  either the day you do it - or in the lead up to it - a little bit at a time.  That fundamentally is all there is.  

You don't want the 30%+ dip to arrive two weeks before you do it and to sell a lot (25% units) at a "new low".  That's basically it.  All at once at the last minute, or profit taking (and possible returns foregone by doing it bit by bit ahead).

If you can remain invested - it's all about risk tolerance.  100% is "game" in deaccumulation in retirement.  But some people do it.  Many of those have other income streams be it BTL, DB pensions or other things.  And the SIPP is not the primary baseline income. So situational.  Some people trying to stretch a too small pot vs aspirations. Others with excess assets over needs.

Your risk appetite is "your risk appetite" not mine.  I was 100% equities in accumulation.  Now I am not.  More like 70-80%.  You need to work it out - for you.  As the target you can sleep well with it under the pillow.  And then consider the cashflow point in time issue.

kinger101

sheslookinhot said:

justcheckin said:

Hi,

I consulted the forum before setting up SIPPs for myself and DH accessible at 55th birthdays now aged 50 and 51. These are both fully invested in VLS lifestrategy 100% equity as at the time, the horizon was quite long.

Plan is to use TFLS/PCLS as uni fees/help for children.

Increasingly as we approach the time we could take the TFLS,  I am concerned about a tech-related market crash. We have combined (also in ISAs) £920k in vls 100 equity.

Would you consider rebalancing SIPPs/isas? We both also have DB pensions and likely full new SP.

If you have almost £1M in a single fund, then yes, I would consider rebalancing the SIPP/ISA.

Balance doesn't come from number of funds. A single fund can achieve the required balance.  One can hold a dozen funds but have a heavy bias.

HedgehogRulez

Time to move those equities into cash for the incoming bloodbath!

Albermarle

OP-  With markets forging ahead in recent times, there have been a number of similar threads recently on this and the Investments forum, so worth a look for them. 

Beddie

Yes, you need to rebalance, if you want at least some of the money out within 5 years. No need to chase huge gains, you've already won the game with that much money.

Perhaps Lifestrategy 60, if you want to stay with Vanguard. Or sell part of the current fund and move it into bond funds. Don't dither!