how do i build a portfolio for retirement?
age 52 single
1.mortgage paid off(value £100k)
2.10k emergency fund(cash isa)
2.no pension/no savings
i hav £800 a month to invest
retire 70
thx
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879MikeGG1 postedDo you expect to be on a lower tax rate after retirement than you are on at the moment? If so, concentrate on pension saving via a SIPP.
If not, concentrate on your ISAs. They have fewer expenses than pensions.
Pensions are 25% tax exempt and 75% tax deferred on both contributions and yield. ISAs contributions are from taxed income but the yield is tax free.
Mike
Posted on 29 August 2012 |
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24AlanThomas posted
Put your money in a savings a/c or ISA, you will always have your money +2% or 3%
Forget the pension provider route you will loose money, I have!
Good luck
Alan
Posted on 30 August 2012 | Love 1 love
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7sippag posted
Hi Compound 200. A strange name for someone who appears to have no compounding growth apart from your mortgage free property.
You do not make it clear whether you are and will be a 40/50% tax payer for a long time. If you are a Sipp pension is essential. The 800 per month could increase. You could run that for five years, reduce it to half and put the other half into an ISA. To round it off to 10,000 per year. With the tax added this would be 12,000. If you bought for example a number of Irredemable Preference shares at 7.5% at present your money would double every 9.6 years by compounding If you reinvest in dividend shares paying at least 4% with inflation covering dividend growth and reinvesting during the downturns you switch on supercompounding and who knows what you may end up with.
Remember that if you die before reaching retirement date the fund can be paid out tax free to a number of nominated beneficeries.
Also if you were unable to work, you can I believe get a dispensation to switch on your pension early due to ill health.
Drawdown rules are very bad at present, if and when they change drawdown could become very attractive with the right combination of income and dividends.
I have three Sipps all are producing far more income than I am allowed to take. I am working on this.
I also have to say that I have been making full contributions to PEPs and ISA's for years. Investing as described.
Hope this helps
Cheers
Posted on 30 August 2012 | Love 1 love
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879MikeGG1 posted
The main inflexibility with pensions is the minimum drawing age of 55. However, Compound200 has only 2+ years to go before then so I didn't mention that.
The main losers on pensions have been those invested in with-profits, especially with Equitable Life.
With 17+ years to go, I would suggest FTSE All-Share units for the first 12 years and then gradually switch to 25% Corporate Bonds, but there might be a better alternative before then.
Mike
Posted on 01 September 2012 | Love 1 love
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24AlanThomas posted
Dear MikeCC1,
I have pension plans with 3 providers (26th year) I pay the same amount to each scheme per month
1. Equitable life
2. Royal Sun Alliance (now in a Zombi fund )
3 Prudential
No Mike! Equitable has performed badly but schemes 2 & 3 are dreadful
Advice given based on experience
Posted on 04 September 2012 | Love 1 love
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7compound200 posted
I've decided to in pound/cost ave monthly into a lowcost vanguard lifestyle 80%/20% bonds equity isa
They hav 60%\40%\20% options which I will look at as I approach retirement
Ps-----I'm very late to savings an investment because ive never been financially aware/my bank offering me a loan every other year kept me in there debt.the Internet has been an eye opener---I wish I knew about compound interest at school.better late then never.
Thx for the replys
Posted on 07 September 2012 | Love 0 loves
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879
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