Oh what fund to go with - Standard Life

Buxomblonde0

Hi all I am going down a rabbit hole with lots of different corridors in which I am getting totally lost.

I want to retire in 3 years and want to start throwing some extra £££ at my local government pension in the form of an avc. Is Lifestyle a good choice for me? I am a bit risk adverse with my money, so medium risk is as far as I want to go

Albermarle

It depends on what your plans are with the AVC.

Do you want to take most/all of it when you retire or in the following couple of years?

Will you most likely leave it alone for a few years and take it later?

Or do you plan to withdraw a small amount from it each year, and for it to last 20 or 30 years?

Basically the shorter the time scale, the less risk to take, and vice versa.

DRS1

If you are in the LGPS does that mean you might be taking all of the AVC fund as a lump sum when you retire? If that is in three years time then investment of any sort may not be what you want; you might be wiser to stick with a cash fund (if there is one). It won't grow much but it won't go down either.

Check what the Lifestyle fund would put you into - they usually reduce the equity investments as you get closer to retirement but some are geared to drawdown so don't do it as much as the older style ones. With three years to go you may find it is all in cash or bonds. Bonds sound safe but they took a big hit not so long ago.

Also check if three years is what they think will be your retirement date. If they are targeting 67 and you are targeting 57 then that could make quite a difference.