Rising SIPPS and DIY learnings

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81868913#Comment_81868913

Most drawdown plans are designed to stretch much longer than 75 years of age . At 55 you should be looking at another 35 years at least , so for the OP 45 years +.

OP

A few similar threads recently . e.g

US Markets Risk — MoneySavingExpert Forum

Rt90

It sounds like you went for a passive approach with the global trackers. The argument for that is as strong now as it was 10 years ago.
There’s plenty of noise at the moment about US valuations and A.I. You could come to a bearish or bullish response to those and come up with a valid argument to support either. You could then make an active decision on your portfolio, but there will always will be noise about the market.

Personally it would have to be an extremely convincing argument to take my equities out of a diversified global tracker ( not all of them are that diversified). I haven’t heard it yet.

tigerspill

What I have done is to look at the funds I need over and above any income I will receive form occupational and state pensions) 15 years out. I have around 5 years in cash and set up an Indexed Linked Gilt ladder for years 10 to 15 out. Then equities (mainly global trackers now) for 16+ years out.

The answer really depends on your tolerance to financial risk. With 11 years to go, being all in equities isnt terrible as long as you understand the risk. Do you need real growth or not? If not, you could start an ILG ladder that starts kicking in from your retirment date?

SpeedSouth

https://forums.moneysavingexpert.com/discussion/comment/81869197#Comment_81869197

So this is driving some of the thoughts I think. That would leave me a pot of around £400k so assuming 2 x state pensions, and only needing £22k from that point on gives me another 17 years. At that point im getting close to winning the game.

Ignoring the fact ive got 11 years of accumulation, plus a rental that provides circa £7k a year and the picture looks pretty good. Especially if you consider that zero growth in relation to inflation is unlikely over a 29 year period.

It's not wanting to time markets as such, I need to think if I need to take the same risks going forward I guess, and if I am comfortable with that still.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81870403#Comment_81870403

Ah yes, another £7K of income certainly makes a difference!

In terms of "zero growth in relation to inflation is unlikely over a 29 year period", that obviously comes full circle back to what you choose to invest in to try to keep ahead of inflation if that continues to be part of your planning….

chiang_mai

I hold 6 figures in a SIPP that is not central to my retirement or future financial well being, nor that of my heirs. Last year I questioned the logic of holding 60%+ in US assets, especially when there are so many other markets that offer solid, if not oustanding returns. Global trackers determine their geographic ratios based on the size and wealth of each market, it doesn't seem to me that the US should automatically grab the lions share, just because there are more wealthy US investors than investors in other countries. That journey of discovery led me to reduce my US holdings to around 26% and to more evenly allocate funds to other markets, a decision I don't regret, one year later. The fact the US market P/E is so high, reaffirms to me that reducing the risk of being in that market, is important.

The second part of this story concerns trackers versus managed funds, about which I didn't previously hold a firm view, indeed I held both. The realisation that trackers don't have a downhill brake made me realise that I don't really want to be holding them in any quantity, if markets fall or worse, if they crash….simply, at age 75 I wouldn't have time for recovery, if the falls were excessive. I hear the argument that most managed funds don't even reach the index, let alone beat them. But it's certain that an index fund will never beat the index whilst a managed fund is at least capable of doing so.

The magic sauce for me is more evenly balanced geographic ratio's, managed funds that are out performers and diversification across sectors/capitalisation, all within an asset allocation framework that allows me to sleep well at night (I'm currently 48% equities).