Derisking SIPP

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82017696#Comment_82017696

 Why have you chosen "wealth preservation trusts"?

The ones mentioned are popular in the UK. They are long established, not that expensive, and they are actively managed by experienced teams.

Don't fall into the trap of assuming that "wealth preservation trusts" have some magic sauce to protect your money.

Of course they are not magic, but they do tend to hold up pretty well when the markets drop, whilst still offering some modest long term growth.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82017868#Comment_82017868

Because of my bias and general skepticism regarding active managers I am not a fan of such funds. I asked the questions to see if the OP was doing more than defaulting to "long established" solutions in a belief that "wealth preservation" necessarily meant a de-risked retirement portfolio.

I actually own a similar actively managed fund that contains 60% bonds and 40% dividend equity, but it's mostly for sentimental reasons. The fund fee is 0.15% and it has a yield of 3.73% and many people use it for income. Using such funds that look to provide consistent returns rather than spectacular growth is a good solution for many situations, but as with any portfolio understanding the costs, the investments inside and management philosophy is important.

spg1

https://forums.moneysavingexpert.com/discussion/comment/82017457#Comment_82017457

Apologies for confusion, I meant largest fall in portfolio value rather than % I was planning to draw down

Linton

I do not believe any arbitrary % equity figure makes sense. Better in my view is to base your allocation on your needs putting say 5 years withdrawal in cash or safe bonds and money you dont expect to touch for 10 years or more in 100% equity. Thinking in that way means your short/medium term needs are covered securely whilst you still gain significant returns from the equity portion without worrying about short term events.

tigerspill

https://forums.moneysavingexpert.com/discussion/comment/82017497#Comment_82017497

Agree.

This is exactly what I have done in part. I no longer need growth to have the lifestyle I require so have cash for 5ish years and ILGs for the following 10 years. So 15 yearss pretty much locket in income. And equities beyond this. I will sell equities each April from my GIAs to use CGT allowances and more to ISAs for a further year ILG this always having a 15 year guarenteed income while still retaining some flexibility should I need to sell some ILGs (not planning to and very unlikely). An annuity might be better, but I can't get comfortable with handing over a large sum of cash.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82019125#Comment_82019125

The lump sum payment for a lifetime annuity can be rather intimidating. It's another argument for a deferred annuity that you pay into over your working life…oh yes that's basically a DB pension ;-), I wonder what happened to them? The other hurdle to overcome is the idea that you might die early and not get very good value for money. I always think that Spock would choose the annuity because it provides for "the many rather than the one".