Retirement Investment portfolio thoughts

csgohan4

Considering retiring soon Aged 45 with a view to living until 90 or so, current portfolio in a variety of single stocks totalling around 1.5mil all in tax wrappers, Thank you Rolls Royce

Our FIRE numbers Here have pension income/lump sum kicks in at 60yrs, 25k / yr and 144k lump sum. We have no children and no plans on having any

I have around 175k as emergency money to weather any stock market bear periods so I can ride it out. It is in a savings account drawing 4.42% at present variable after 1 year ofc, will just keep moving it to the highest rate.

My retirement strategy is based on a previous post I seen on here by Dunstoh, Bowelhead99 and friends more than 10 years ago which I have bookmarked all those years ago.

I am assuming worst case scenario 70k spend a year, which includes any property repairs or large purchases such as new car. Realistically we spend around less than 50k

1/3 Wealth preservation

CGT

1/3 Income

CTY 3.86%

? LWDB 2.91%

?MUT 4.05%

DIG 6.3%

1/3 Equities/Growth

VWRP

Would like your thoughts on this and any other suggestions for ITs/ Funds etc. I might drop LWDB and MUT as they are low performing dividends wise.

I am considering working till 49 to further bolster savings and contribute more to ISA/ SIPP and have even more of a safety net. But would like to look ahead in ensuring my fund allocations seem reasonable

Middle_of_the_Road

You're undoubtedly in a good position as things stand. If this is on the back of investing in single companies, you've been very lucky so far. Rolls Royce has been remarkable, no doubt.

Retirement in your forties is a luxury most cannot imagine, and whilst certainly possible for you, nothing is guaranteed as to how long a healthy retirement will last.

You might want to consider how much money you are likely to leave as an inheritance and the associated tax implications.

Personally, In your situation, I would consider myself as having ' won the race' and simplify my finances. From your figures, you could comfortably live on the interest alone, as long as interest rates don't revert to levels that led to unrealistic levels of borrowing.

I wouldn't want to be exposed to any higher risk than necessary, but lower risk equities might be acceptable. If a stock market correction occurs, how would you feel, having to rebuild that very healthy retirement fund.

I'm sure you'll get some responses from others with more insight, and wish you well with your future plans.

ETA: interest not internet

MeteredOut

https://forums.moneysavingexpert.com/discussion/comment/82070360#Comment_82070360

"you could comfortably live on the internet alone"

Are you suggesting Only Fans as an extra income stream in retirement?

Middle_of_the_Road

https://forums.moneysavingexpert.com/discussion/comment/82070376#Comment_82070376

Funny, you could have included the first three words of that sentence for added effect...

Linton

One thought - All your income seems to come from equity. You may want to diversify into higher rate bondsor infrastructure which give a better % yield. In my view you could also diversify your equity income more - or example far east equity income yields are significantly higher than available from the UK.

csgohan4

https://forums.moneysavingexpert.com/discussion/comment/82070360#Comment_82070360

Sorry forgot add no children and all in Tax wrappers except my emergency money, updated my OP

Yeah I got lucky. In fact it was on here that I put it in RR as well as IAG. I did start out with CINE, but bailed at 20% gain before it went bankrupt. I regret not putting more in RR instead of IAG, but it seemed cheap at the time @ 90p

I was tempted to put my emergency money into investments but any dip like we saw in 2020, can take 5 or so years to level out, so I don't want to crystallise my losses too soon and cash is king as so to speak. Sure I might lose interest, but better than withdrawing at 20-50% loss

csgohan4

https://forums.moneysavingexpert.com/discussion/comment/82070406#Comment_82070406

That dividend yield @ 9+% is insane. I used to have B+G China fund but bailed after the Ant group fiasco. I always anxious investing in Asia

csgohan4

https://forums.moneysavingexpert.com/discussion/comment/82070637#Comment_82070637

Would something like CGT, a wealth preservation fund be better than say ILG, or you would say they do similar things except that ILG are more safer as so to speak with guaranteed returns

masonic

https://forums.moneysavingexpert.com/discussion/comment/82070804#Comment_82070804

CGT is around 50% ILG, and 15% nominal gilts. I'd argue you don't need an active fund manager for those. What's left is a slither of corporate credit and a few ETFs and Investment Trusts, but you already have your risk-on portion that will dominate.

For comparison, ILG now make up close to 25% of my portfolio. Clearly I see inflation as a major risk and headwind. The lion's share is liability matched to give me the option to purchase an index linked annuity locked to today's rates after age 60. The remainder is a ladder covering the prior few years. This gives me a secure income floor, one way or another. I have a small allocation to long duration conventional gilts held as a barbell strategy with cash/STMMF - the size is in proportion to my conviction level (of a traditional recession where interest rates fall and gilts go up) at around 8% overall and aggregate duration of 5 years. This gives me the benefit of the belly of the curve while not exposing me to too much duration risk and providing options for rebalancing.

Doing it myself has allowed me to tailor my exposures to my specific circumstances, and these are assets that can be well understood if self-managed.

But coming back to your portfolio, at a basic level, everything has a purpose and you have the main risks covered, so we are just picking over the detail, which is a much better starting point than for most reviews.

Bostonerimus1

The amount or risk you have in your retirement income portfolio might be influenced by your spending budget and how much of that is covered by SP, DB pension and annuities. Also if you have debt going into retirement ie a mortgage I'd probably want less risk in my investments. If you are thinking about Wealth Preservation funds make sure you understand the investments they own and how they are managed becasue by owning them you are just paying a manager to manage a portfolio for you.

csgohan4

Thanks for the advice, The other more simpler thing to do is 70% in VWRP and 20% ILG and 10% in MMF for emergency cashflow rather than than going CGT,VWRP and an income fund which may or may not produce a yield above 4% which is my aim